Tech giants could face huge fines for breaking antitrust laws

Tech giants face fines of up to 15pc of their US sales and will be forced to prove that takeovers will not hurt competition under proposals being put forward by a prominent US Senator.

Democrat Amy Klobuchar, the incoming head of the Senate’s antitrust committee, proposed the biggest overhaul of US competition laws in more than a century.

The proposed laws would allow regulators to seek penalties of 15pc of total US revenues, or 30pc of revenues in the relevant market, if companies are seen to act anti-competitively. It would also shift the burden of proof to companies seeking to make deals to show they will not harm competition. Currently, regulators must show they would hurt competition.

“We have a major monopoly problem in this country, which harms consumers and threatens free and fair competition across our economy. Companies need to be put on notice that exclusionary behaviour that threatens competition cannot continue,” Ms Klobuchar said.

Although US regulators are taking more aggressive action against companies like Facebook and Google, recently launching lawsuits against the companies, many believe current laws are not fit for the modern age.

6:00PM

That’s it for today

Thanks for reading, we’ll see you tomorrow.

5:59PM

Klarna chief urges execs against promoting Bitcoin 

Sebastian Siemiatkowski, the chief executive of buy now, pay later firm Klarna, has hit out at executives that have publicly encouraged people to buy Bitcoin.

The payments boss warned it was a major risk for consumers around the world.

“Whatever you think about Bitcoins, what cannot continue is advertising this as a financial investment product with no protection,” the CEO of the Swedish payment provider said on a virtual panel hosted by German news outlets Thursday, Bloomberg reported.

Mr Siemiatkowski did not specifically call out any individuals but said that if he had encouraged the public via Twitter to invest in a stock he would have been “put in jail for breaching laws around how you promote investments”.

“That has to stop, that is a major risk right now blowing up for consumers all over the world,” the Klarna CEO said. “Politicians have to act on that now.”

5:22PM

Google phone cameras to conduct heart scans 

Cameras on Google Pixel phones will soon be able to measure heart and breathing rates, the tech giant has said.

Starting next month the smartphone cameras will be able to pick up the measurements using artificial intelligence.

While apps have existed in the past to provide the scans their accuracy has been called into question. Leaders in Google Health said that the had advanced the AI powering the measurements.

It also said that it would publish an academic paper on how it conducts the scans in the coming weeks.

Cameras on Google's Pixel phones will soon be able to pick up heart rates

Cameras on Google’s Pixel phones will soon be able to pick up heart rates

Credit:
AFP

3:48PM

23andMe goes public with help from Richard Branson

23andMe, a consumer-facing DNA testing company, has gone public thanks to a deal to merge with VG Acquisition, a special purpose acquisition company (SPAC) founded by Billionaire Richard Branson.

Bloomberg reported that the US company was valued at $3.5bn (£2.52bn) as part of the deal with both Anne Wokcicki, 23andMe’s chief executive, and Mr Branson investing $25m into a private investment in its public equity offering.

Fidelity, Altimeter Capital, Casdin Capital, and Foresite Capital, also invested in the firm. The deal is expected to close in the second half of this year with current shareholders expected to own more than four fifths of the combined company.

The merger with Mr Branson’s SPAC allows the DNA firm to go public without holding an initial public offering.

3:08PM

Janet Yellen wants to “understand deeply” GameStop rush before taking action

Janet Yellow, the US Treasury secretary, said that regulators needed to “understand deeply” what occurred throughout the GameStop frenzy before action is taken.

GameStop, a beleaguered retailer, was one of a handful of stocks that had their valuations inflated by a rush caused by Reddit traders. Traders from the subreddit r/WallStreetBets helped drive a frenzy in the stocks that led to GameStop shares rising by more than 1,000pc. Shares have since sunk.

In her first interview since taking office Ms Yellen addressed the situation.

“We really need to make sure that our financial markets are functioning properly, efficiently and that investors are protected,” she told AMC’s Good Morning America.

2:30PM

Tech giants could face antitrust fines of up to 15pc of annual revenues under US proposals

Tech giants in the US could face vastly more substantial fines for breaking antitrust laws as part of new proposals brought forward by Democratic Senator Amy Klobuchar.

Companies like Facebook, Apple, and Amazon, could be fined up to 15pc of their annual revenues for taking advantage of their unprecedented power to minimise competition.

The proposed rules, reported by Protocol, aim to make it more difficult for bigger firms to acquire smaller companies and would also introduce a ban on mergers that presented an “appreciable risk of harming competition”.

Republicans are expected to oppose Senator Klobuchar’s proposals while some of her own colleagues fear the new rules do not go far enough.

The fines included in the Competition and Antitrust Law Enforcement Reform Act would be considerably higher than what has been sought in the UK.

The Competition and Markets Authority is looking to fine big tech companies up to 10pc of their worldwide revenue if they behave unfairly.

The act would also heavily resource the agencies tasked with monitoring the big tech companies. As part of the regulations, the Department of Justice’s antitrust division would receive $484.5m (£348.9m) while the Federal Trade Commission would receive a boost in funding of $651m.

Senator Amy Klobuchar aims to come down hard on Big Tech

Senator Amy Klobuchar aims to come down hard on Big Tech

Credit:
Reuters

1:53PM

Why Mark Zuckerberg is the last founder-CEO tech titan left standing 

With Jeff Bezos stepping back, the youthful Facebook boss is the only ‘big five’ founder still in charge. But will he ever give up his baby? My colleague Laurence Dodds reports:

Steve Jobs, the volatile Apple founder who used to go on long walks with Zuckerberg, resigned in 2011, two months before his death from cancer. Larry Page and Sergei Brin, the founders of Google (both coincidentally 47 years old), have also left their executive roles.

That naturally raises the question of when Zuckerberg himself might step down – or whether he ever will.

Read his full story here.

1:17PM

Revolut shifts toward permanent flexible working

Revolut, the digital banking app, will repurpose all of its offices into “flexible collaborative spaces” and allow its employees to choose how and when they work from home or visit the workplace.

The fintech said the permanent shift to flexible working was in response to its 2,000 employees “clearly expressed preferences”.

Around 70pc of the company’s office space will be devoted to collaboration as part of its “RevLabs” real estate strategy. Revolut said that 98pc of its employees said they had adapted well to remote working while 90pc of team leaders said performance was unaffected. The unicorn said that 65pc of its workers said they wanted the freedom to come and go from the office when they wanted when restrictions eased.

Jim MacDougall, Revolut’s vice president of people, said that its staff said they “loved” the better balance from remote working.

“But they said they missed colleagues and the chance to collaborate face to face on key projects and to balance the convenience of home with the camaraderie of the office,” he said.

“We’ll be completing the flexible working policy over the coming months,  to be attractive to our current colleagues and the hundreds who will be joining us as we grow around the world.” 

12:43PM

Apple on track to top $3 trillion valuation with autonomous car push 

Apple could hit a $3 trillion (£2.17 trillion) valuation for the first time should it finalise a deal to build its own car. As Michael Cogley reports:

The Cupertino-based giant, which became the first US company to surpass a market capitalisation of $2 trillion in August, is believed to be in talks with Hyundai-Kia to manufacture an Apple-branded autonomous electric vehicle.

It took Apple 42 years to reach a $1 trillion valuation but just two more years to break the $2 trillion mark.

A team at the tech firm is working on the “Apple Car”, which has tentatively been lined up for a 2024 release. It follows years of speculation that the iPhone-maker would enter the auto industry.

Read the full story here.

12:11PM

Dogecoin soars as much as 65pc and tops $6.85bn valuation

Dogecoin, a cryptocurrency that first started out as a joke, is now valued at around $6.85bn (£4.94bn) as investors continue to pile in after renewed interest from Elon Musk.

The digital asset is up 65pc so far today as of 11.50am and the price of a single coin stands at around $0.0546.

Mr Musk ended his brief self-imposed hiatus from Twitter when he began posting about Dogecoin again this morning. He first tweeted a meme of his face superimposed on a still from the Lion King holding a Doge aloft. He later went on to say the currency was the “people’s crypto” and that there was “no need to be a gigachad to own”. He also said there were “no highs, no lows, only Doge”.

The latest rally in Doge follows on from a similar rush last week after the currency spiked off the back of posts on an investment Reddit forum called r/SatoshiStreetBets. At the time Redditors called for the currency to be pushed to a value of $1. It also received a further boost when it was tweeted by WSB Chairman, an account that insists it is not linked to the hugely influential WallStreetBets subreddit.

11:34AM

TikTok rival Kuaishou surges by 181pc in gray market trading ahead of IPO

Shares in Kuaishou Technology, the Tencent-backed TikTok competitor, surged 181pc in gray market trading ahead of its blockbuster initial public offering.

Trading by institutional investors on the Hong Kong market suggested that one of the city’s biggest public floats in years was off to a good start, according to a report on Bloomberg.

Kuaishou, which translates to “fast hands”, was valued at around HK$322.80 (£30.15) on Thursday. It has been tipped to be the biggest public tech listing since Uber in 2019.

Kuaishou, which is second only to Douyin – the Chinese version of TikTok, will raise around $5.4bn from the IPO.

The success of the listing gives an insight into the demand for a listing of ByteDance, the parent company of TikTok.

11:02AM

Social media firms should have UK-based moderators, say MPs

Social media companies should have UK-based moderators so they can better understand nuances of the English language when dealing with abusive posts, MPs were told today.

Speaking in the Commons, Conservative MP Saqib Bhatti said: “If I was to make a report of online abuse to a social media company, it’s very likely a team halfway across the world may look at it and it’s very likely that I won’t get a response for a few weeks, and then it may even be classed not as abuse because the team may not understand nuances in the English language.

Culture Secretary Oliver Dowden claims he has raised the issue social media companies. It comes after Dowden said he had met a number of footballers last week to discuss racism and misogynistic abuse affecting those involved in the sport, telling MPs: “To be clear, we will not tolerate racism in any form and we’re committed to holding platforms to account through our new online safety laws, which we set out to the House in December.”

10:51AM

Cocobot: The robot that can deliver your lunch

Hungry? Soon, you won’t have to move from your seat to get a snack. 

Officials in San Pedro are this week testing Cocobot, an electric robot that can deliver supermarket shops and takeaway order directly to customers. The robots are helping small shops, that would otherwise have been forced to shut down during the pandemic, reach their customers in a Covid-safe way. Most deliveries take around 20 minutes. 

Cocobot

These Cocobots are operated by a human via a computer link, but he UK already has a fleet of Starship robots that can do the same thing autonomously. Currently, they are trying to win over locals in Milton Keynes. 

10:31AM

Hedge fund made $700m from GameStop 

A New York hedge fund made $700m from a long bet on GameStop, which soared last week amid a retail investing revolt coordinated on Reddit.

Senvest Management, managed by Richard Mashaal and Brian Gonick, started buying the video games retailer’s shares in September, and cash in when its price soared, the Wall Street Journal reports.

  • Read this and other live business updates here
10:21AM

EU to investigate Nvidia’s $40bn Arm takeover

The EU and Britain’s Competition and Markets Authority (CMA) are expected to launch in-depth investigations into Arm’s $40bn (£30bn) takeover by US rival Nvidia.

Officials expect the deal to be “thoroughly investigated”, the Financial Times reported, although paperwork has yet to be filed in Brussels. A European Commission spokesperson said: “This transaction has not been notified to the Commission. It is up to the parties to do so.”

My colleague, Matthew Field, has more here

Industry insiders have said that the two companies may be required to make concessions in order to assuage competition fears. Cambridge-headquartered Arm creates designs used in processors, used by chipmakers and tech companies. Nvidia, meanwhile, is the world’s leading graphics chip maker. Industry officials fear the takeover could harm Arm’s “neutrality” and give Nvidia control over the roadmap of technology used by many of its competitors.

10:08AM

Amazon’s new boss pledges support for struggling video game division 

Andy Jassy


Credit:
Reuters

Andy Jassy, the Amazon executive who will take over from Jeff Bezos later this year, pledged his support for the company’s struggling video game division in an email sent to staff earlier this week.

Amazon Game Studios (AGS) has struggled to develop a hit game and scrapped a series of projects.

“Some businesses take off in the first year, and others take many years,” Jassy wrote in an email seen by Bloomberg, “Though we haven’t consistently succeeded yet in AGS, I believe we will if we hang in there.”

“Being successful right away is obviously less stressful, but when it takes longer, it’s often sweeter,” he continued. “I believe this team will get there if we stay focused on what matters most.”

9:57AM

US venture capital fund General Catalyst opens new London office 

Multiverse chief executive Euan Blair

Multiverse chief executive Euan Blair

Credit:
Shutterstock

General Catalyst, an American venture fund, is opening a new London office and has recruited British investor Chris Bischoff to lead it.

The fund has already backed British businesses such as Cazoo, Deliveroo, Euan Blair’s business Multiverse and flower delivery company Bloom & Wild.

Bischoff joins the fund from Swedish investor Kinnevik, where he backed start-ups including London healthcare business Babylon.

9:30AM

US securities watchdog investigates trader at centre of GameStop frenzy 

US regulators are investigating Keith Gill, the trader at the centre of the GameStop frenzy, Margi Murphy reports.

Mr Gill, known online as RoaringKitty, resigned from MassMutual’s securities and investment advisory arm, MML Investors Service last month.

Licensed traders have an obligation to alert employers about outside investing activities. MassMutual reportedly told William Galvin, the Massachusetts secretary of the commonwealth, that it would have fired Mr Gill if it had known about his digital persona. A company spokesman confirmed that it was reviewing the matter but had no further comment. 

Mr Gill, who was not available for comment, writes on his YouTube channel that his live streams “are for educational purposes only”. 

He said: “I don’t provide personal investment advice or stock recommendations during the stream.”

9:00AM

Nokia beats revenue expectations 

Nokia announced its latest results this morning, with the company beating analyst expectations of its revenues.

The telecoms business said revenues fell 5pc to €6.57bn (£5.8bn) in the final three months of 2020, beating a €6.42bn estimate.

New chief executive Pekka Lundmark, who took the role in August, is hoping that the business can become a major 5G supplier as countries turn their back to Chinese vendor Huawei following political pressure and security concerns.

The results come after Nokia’s share price has seen turbulent swings following attention from the same group of retail investors who also drove frenzied buying into GameStop.

8:34AM

Dogecoin  price rockets after Elon Musk tweets

Elon Musk’s two-day Twitter break is most certainly over. The richest man in the world has spent close to an hour tweeting about Dogecoin, a cryptocurrency that was initially started as a joke.

Mr Musk’s posts saw the value of a single Dogecoin spike as much as 42pc to £0.0425, up from £0.03 before he began tweeting about it this morning.

8:10AM

UK needs a strategy on ‘critical’ emerging technology, parliamentary committee warns 

The UK needs a strategy on how it deals with emerging technology such as artificial intelligence and quantum computing  to avoid another “supplier squeeze” such as the one experienced with Huawei and its 5G equipment.

That’s the verdict of the Science and Technology Select Committee which today published its report into the country’s dependence on just two 5G vendors.

The committee is calling on the Government to “identify critical emerging technologies” in order to prevent a similar “supplier squeeze” to the one the country experienced with 5G.

Telecoms experts have warned that the Government’s decision to allow installation of Huawei equipment before banning its use will be costly and is likely to delay the rollout of 5G networks.

“We must learn from this experience to avoid making our economy and security vulnerable from a lack of acceptable alternatives in emerging technologies,” said Greg Clark, the chair of the committee.

“AI and quantum technologies are just two examples of fields of development which can greatly advance the prospects for our economy and society, but can pose potential threats,” he added.

7:49AM

Elon Musk has ended his Twitter break 

Elon Musk has returned to Twitter, ending a break that lasted just two days, and has immediately sent the price of a cryptocurrency soaring.

Mr Musk announced on Tuesday that he would be “off Twitter for a while.” He resumed tweeting this morning, posting about his space company SpaceX’s latest experiments.

He also tweeted “Doge,” a reference to the Dogecoin cryptocurrency. His social media post sent the value of a single Dogecoin soaring as high as 22pc to £0.0359.

Mr Musk seemed pleased with his efforts.

Mr Musk’s previous social media posts have caused upswings such as a 20pc spike in the price of Bitcoin and similar share price rallies for Etsy and game developer CD Projekt.

7:32AM

Parler boss says he was fired by board 

Parler


Credit:
Reuters

Parler, the “free speech” social media app that received a flood of users after the US Capitol riots, has been struggling to return to the internet for weeks.

Now, chief executive John Matze says he was fired by the company’s board without a settlement. 

“On January 29, 2021, the Parler board controlled by Rebekah Mercer decided to immediately terminate my position as CEO of Parler. I did not participate in this decision,” Mr Matze said in a memo sent to Parler staff seen by Reuters.

The app has been offline for weeks after Amazon yanked its web hosting services and both Apple and Google removed it from their virtual app stores.

The technology companies said they decided to pull their support for the app over what they described as lax moderation policies that allowed posts supporting violence to stay online.

Parler has been attempting to return to the internet in recent weeks, having turned to services like niche American web host Epik and a Russian internet business to bring its website back online.

7:19AM

Five things to start your day  

1) Amazon’s British revenues soared 51pc last year The company raked in £290 for every man, woman and child

2) Parler’s chief executive was fired by the social network’s board It came as the company seeks to get its services back online after being dumped by Amazon Web Services

3) Facebook has been blocked in Myanmar Military leaders who seized power in a coup several days ago ordered internet providers to block the service

4) Apple and Hyundai-Kia are reportedly pushing closer to a car deal CNBC reports that the forthcoming Apple Car, which will be built in North America, will be fully autonomous

5) The space rivalry between Elon Musk and Jeff Bezos is set to heat up Bezos will devote more time to his rocket company Blue Origin after stepping down as Amazon boss

Coming up today

Snapchat, Pinterest and Unity will announce their latest results this evening.

Leave a Reply

%d bloggers like this: