Illustration: Rebecca Zisser / Axios

The Wall Street Journal reports that Toshiba has basically given up on the proposed $18 billion sale of its memory chip to a Bain Capital-led consortium, due to Chinese regulatory hurdles.

Thought bubble: This deal isn't healthy, but it has a bit more pulse than WSJ seems to think.

For starters, both parties are still wearing their happy faces:

  • Toshiba “still intends to close the memory business transaction as soon as possible, and has not made any alternative policy decisions.”
  • Bain spox: “We continue to work through the normal regulatory process. This process is proceeding and all parties remain strongly committed to closing the transaction as soon as possible.”

Second, part of the Chinese delay is said to have been caused by recent bureaucratic reshuffling that included MOFCOM.

Finally, Toshiba and Bain seem caught in trade war crossfire between Washington and Beijing — kind of like Qualcomm/NXP — and there is still a (declining) possibility that cooler heads will prevail.

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The big picture: This marks a potential evolution of China's "wolf warrior diplomacy" to outright rogue state behavior, putting it in the company of countries like North Korea and Iran, which have also engaged in hostage diplomacy.

Justice Department sues Google over alleged search monopoly

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The Justice Department and 11 states Tuesday filed an antitrust lawsuit against Google, accusing the company of using anticompetitive tactics to illegally monopolize the online search and search advertising markets.

Why it matters: The long-awaited suit is Washington's first major blow against the tech giants that many on both the right and left argue have grown too large and powerful. Still, this is just step one in what could be a lengthy and messy court battle.