Google ads brawl, missing car parts and what matters in the market

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Google keyword disputes

The explosion of ecommerce in the country has made the search for customers on the internet even more competitive and costly.

At Google, the world’s biggest search engine, companies have adopted the practice of paying more to stay at the top of the search page – even if a competitor’s name is in the search.

In high street retail, this practice would be similar to a company hiring someone to offer flyers from its store in front of a rival’s door.

Understand: companies compete for privileged space on the search engine page in a kind of auction. Whoever pays the most, wins, even if the keyword in dispute has the name of a competitor of the winner.

As was to be expected, the practice has raised questions in the courts. The vast majority of decisions are in favor of the companies that felt harmed.

In numbers: in the wake of the popularization of ecommerce, processes of this type have increased in recent years. In 2015, there were 26 decisions, while last year, 133points out a survey by Juit.

Magalu x Via: one of the ongoing legal disputes that draw the most attention involves the two retailers. Both paid to appear in each other’s search with sponsored links and now exchange accusations of unfair competition.

Other side: Google says Google Ads is a platform that allows “businesses of all sizes” to connect with consumers, in a “common and legitimate practice of market competition”.

Cars: missing and more expensive spare parts

The shortages and rising prices of inputs, which have affected the auto industry since 2020, are not only causing new and used car prices to skyrocket, but also long queues for spare parts.

What explains: the unexpected high demand and logistical nodes at a global level as the effects of the pandemic delayed the delivery of zero kilometer cars, shifting part of the demand to used ones.

• As old cars usually need more maintenance, spare parts are more in demand.
• In addition to having to wait up to months to fix the car, consumers also paid more, as the prices of inputs such as steel and oil, for example, soared.

In numbers: even with the supply challenges, sales of replacement component manufacturers reached BRL 32.3 billion estimated by an industry association. It would be a step forward 30% compared to 2021.

Used car trades were up 18.8% in 2021 compared to the previous year.

Must continue: sector agents point out that the imbalance between supply and demand for parts should continue in 2022.

More about cars:

Negative start: the month of january of this year registered a strong drop in the production of light and heavy vehicles in the country. The combo of parts shortages, collective vacations, absences due to the omicron variant and changes in legislation contributed to the negative result of the automotive industry.

Aiming 2023the automakers announced in the last three months investments in the country that total BRL 20.9 billion.

Open path for Eletrobras privatization

The Eletrobras privatization process took another important step this Tuesday (15), when the TCU (Union Court of Auditors) approved the first stage for the sale of the company.

The judgment was closely watched by the market. The reason was a dissenting vote that could jeopardize privatization plans.

Understand: Minister Vital do Rêgo argued that it would be necessary to redo the calculations for privatization and stated that it should cost BRL 130.4 billiondouble the R$ 67 billion projected by the government.

• He argued that it would be necessary to incorporate in the calculation the capacity of rapid energy delivery (power) of the Eletrobras hydroelectric plants and other factors that could make consumers’ electricity bills more expensive.
• The government says there is no way to price this capacity. All other ministers followed the rapporteur’s vote and rejected the determination proposed by the dissenting vote.

Next steps:

• On February 22, an extraordinary general meeting of Eletrobras shareholders is called to resolve on the company’s capitalization.
• The modeling of the operation –which will need a new approval from the TCU– and the offering of shares must be made by May 13th.
• In the privatization process, Eletrobras will issue common shares (with voting rights) to dilute the Federal Government’s participation – which will become a minority – in the company.

in numbers: From BRL 67 billion grants calculated by the government, BRL 25.3 billion will go into the treasury coffers. You BRL 32 billion remaining will go to the CDE (Energy Development Account), used to reduce the tariff to consumers whenever there are gains in the system.

Putin Moves Troops, Calms Markets

Russia’s announcement of withdrawing part of the troops that were close to the borders with Ukraine relieved the markets on Tuesday.

Stock markets rose around the world, and oil prices, which had been on the rise with the fear of an invasion and its consequences, cooled down and were down by more than 3%, approaching US$ 93 (R$ 483) overnight. of tuesday.

Understand: markets are very volatile with the crisis in Ukraine. In addition to the uncertainties that naturally surround such an episode, an eventual Russian invasion would be met with sanctions.

The country led by Putin is one of the largest oil producers in the world, and punishments would reduce the global supply of the commodity, which would put pressure on inflation in countries and provoke an increase in interest rates to control it.

In the Bags: the Ibovespa followed the external good mood this Tuesday and followed its uptrend, rising 0.82%, to 114,828 points. The dollar retreated 0.72%, the BRL 5,181at the lowest price since September.

• On a day of falling commodities – in addition to oil, iron ore collapsed almost 10% after Chinese pressures–, the banking sector sustained the rise in the Ibovespa.
• Highlight for Banco do Brasil, whose shares rose 4.74% after the institution reported a record profit of BRL 21 billion in 2021.
• Altogether, the four largest banks on the Brazilian stock exchange reported a consolidated net income of BRL 81.632 billion in 2021, following the resumption of activities last year.