Daily Business Briefing
June 30, 2021, 1:45 p.m. ET
June 30, 2021, 1:45 p.m. ET
Amazon on Wednesday demanded that the new chair of the Federal Trade Commission, an avowed critic of the company, recuse herself from any antitrust investigation into the e-commerce giant.
The company argued in a 25-page petition to the F.T.C. that the chair, Lina Khan, could not be impartial in antitrust matters involving the company because she had been intensely critical of Amazon as a scholar and writer and because she had worked as a staff member for a congressional investigation of the company.
“At a minimum, this record creates the appearance that the F.T.C., under Chair Khan’s leadership, would not be a neutral and impartial evaluator of the evidence developed in any antitrust investigation against Amazon or in deciding whether to bring enforcement actions against the company,” the company said in the filing.
Amazon said Ms. Khan should be recused from “at least all of the current antitrust investigations of Amazon of which the commission has notified Amazon.” The company is the subject of an F.T.C. inquiry, as well as investigations by state attorneys general.
A spokeswoman for the F.T.C., Lindsay Kryzak, declined to comment on the petition.
The petition shows how the major tech companies are attempting to defang and discredit efforts by the Biden administration and lawmakers to regulate the industry. They have lobbied against bills that would ban some of their business practices, supported outside advocacy groups that defend their position and hired scores of lawyers to fend off investigations.
President Biden named Ms. Khan chair this month after Congress approved her nomination to a seat on the commission. She has made no secret of her concerns about the country’s biggest tech companies.
She told lawmakers at her April confirmation hearing that she saw a “whole range of potential risks” around the companies and signaled that she intended to try to address those risks while at the agency.
Amazon said that if Ms. Khan played a role in antitrust investigations of Amazon, it would violate federal ethics rules and the firm’s right to due process.
The company attached a statement from Thomas D. Morgan, a George Washington University law professor emeritus, supporting its position. Mr. Morgan said he had been paid by Amazon to provide his opinion.
Robinhood Financial, the huge online trading platform, was fined $70 million by the securities industry’s self-regulator on Wednesday for a series of failures that the agency said hurt Robinhood’s customers.
The regulator, the Financial Industry Regulatory Authority, which is known as FINRA, said that the fine — the biggest it has ever imposed — covered issues like false and misleading information, the harm suffered by customers from systems outages in March 2020 and customers being approved to trade options when it was not “appropriate” for them to do so.
Despite the size of the fines, the sanctions by FINRA may also help lift regulatory uncertainty that had been weighing on Robinhood’s plans to go public. It had been expected to officially publish its initial public offering prospectus for several months.
The Bill and Melinda Gates Foundation on Wednesday pledged $2.1 billion in spending on gender equality over five years, one of its largest single commitments in two decades of work, amid an economic crisis that has driven women out of work in record numbers.
“We are very concerned that the global recovery is failing women,” said Anita Zaidi, president of the foundation’s gender equality division. “We have to use this moment to reignite attention on women and girls’ issues.”
The foundation announced its commitment at the Generation Equality Forum in Paris, convened by U.N. Women, a United Nations entity dedicated to gender equality, where more than $40 billion has been pledged from governments, firms and other philanthropies.
Gender equality has been a longtime priority for Melinda French Gates, who announced in 2019 that she would invest $1 billion over a decade toward advancing the issue through her firm, Pivotal Ventures, noting that gender-focused work has been perennially underfunded. The Gates Foundation’s funding will go toward increasing access to contraceptives and reproductive health, expanding job training and promoting women’s leadership in various fields including health, law and economics.
The foundation noted that the need is heightened as men worldwide regain jobs lost during the pandemic and women continue to lose theirs; two million more women expected to leave the work force this year.
“Women face structural barriers that have made them more vulnerable to the pandemic’s impacts,” Ms. French Gates wrote in a report released Wednesday. “Eliminating these barriers will jump-start the recovery.”
The Gates Foundation’s commitment comes at an uncertain time for the organization, which had a $49.9 billion endowment in 2020. Mr. Gates and Ms. French Gates announced they were divorcing in May and are weighing changes to the foundation’s governance. This month, Warren Buffett, the chairman and chief executive of Berkshire Hathaway and a longtime trustee of the foundation, stepped down.
The French carmaker Renault on Wednesday became the latest to go all in on electric vehicles, saying that by 2030 all but of a fraction of the vehicles bearing its name will be powered by batteries.
During an online presentation, Renault executives outlined a future where electric cars would be cheaper than fossil-fuel models and as practical. Improvements in manufacturing and technology will cut the cost of batteries, the most costly component in an electric car, by more than half by the end of the decade, they said. Vehicles on sale as early as 2026 will be able to recharge to 80 percent of capacity in 12 minutes, Renault executives said.
“We want to democratize electric technology,” said Luca de Meo, who will mark his first anniversary as chief executive of Renault on Thursday.
The auto industry is increasingly divided between companies that have committed decisively to electric vehicles, like Volkswagen, General Motors and Volvo, and those that are more cautious, like BMW and Toyota. Renault joined the converts Wednesday, saying it expected that 90 percent of Renault brand cars would be electric by 2030.
After losing 8 billion euros, or $9.5 billion, last year, Renault has been struggling to fix its partnership with the Japanese carmaker Nissan and show that it can survive technological upheaval in the car industry.
Mr. de Meo argued that Renault can draw on a decade of experience making electric cars, which he said has given the company unique insight into the technology and the behavior of electric car drivers. The compact Renault Zoe is one of the best-selling electric vehicles in Europe but is an aging design and faces increasing competition from Volkswagen and Tesla.
European car companies are effectively required to sell electric vehicles in order to meet increasingly tough limits on carbon dioxide emissions. Volkswagen had to pay a 100 million euro fine after failing to meet the limits for 2020, in part because software problems delayed the rollout of a new line of battery-powered cars.
Mr. de Meo said Renault would be able to comfortably meet the standards even as they become more stringent. Next year the company plans to begin selling a battery-powered version of its mainstay Mégane, part of a fleet of electric cars that will eventually include an S.U.V., an update of the classic Renault 5 hatchback, and a sports car.
Renault’s plan calls for manufacturing to remain concentrated in France, including a battery factory in Douai, in northern France, built in conjunction with Envision AESC, a subsidiary of Envision Group of China. Factories that now make internal combustion engines will convert to production of electric motors.
Mr. de Meo said that the company has reached an “historic” agreement with French labor unions to allow the changes needed to shift to electric car production, and is also receiving strong support from government.
“We have created the conditions for our competitiveness in Europe and France,” he said.
By 2025, Renault will be able to sell electric cars that are at least as economical as internal combustion vehicles, but achieve the company’s goal of a 5 percent profit margin on sales, Clotilde Delbos, the chief financial officer of Renault, said during a question-and-answer session with reporters.
Mr. de Meo acknowledged that there are still some obstacles to electric car adoption, notably lack of public charging stations. “We are going faster than the infrastructure, and this is an issue,” he said.
Outbrain, one of the top purveyors of clickbait ads, filed on Tuesday to raise at least $100 million through an initial public offering — one day before its top competitor starts trading publicly.
The company, which calls itself a content recommendation platform, places so-called chumbox ads on websites, hoping to lure readers the way anglers use pieces of dead fish to lure other fish. It had $767 million in revenue last year and $4.4 million in net income, Outbrain said in its filing with the Securities and Exchange Commission. The company said it had yet to determine a price range, valuation or offering price, and will aim to raise more than $100 million.
Founded in 2006, Outbrain says it funnels ads to more than 7,000 digital destinations, paying sites like CNN, Der Spiegel and Le Monde whenever users click on the ads. More than 20,000 advertisers use its platform, according to the company.
In 2019, Outbrain planned to combine with its chief rival, Taboola, but the arrangement disintegrated last fall. Taboola said this year that it would go public by merging instead with a so-called special purpose acquisition company, or SPAC. It is set to start trading on the Nasdaq exchange on Wednesday.
Banks and investment managers say clients are clamoring for cryptocurrency products, with Citigroup and Goldman Sachs among those launching new services for wealthy clients and institutional traders in recent weeks. But in the United States at least, the prospects for regulatory approval of a truly mainstream crypto investment vehicle, a Bitcoin exchange-traded fund, remain unclear. And it’s not for lack of trying, the DealBook newsletter reports.
Ark Invest is the latest firm to pitch a Bitcoin E.T.F., with the buzzy fund management company run by Cathie Wood proposing an E.T.F. in partnership with 21Shares that tracks the cryptocurrency’s price, according to a filing this week. It joins other established brands like Fidelity and VanEck in asking the Securities and Exchange Commission to approve Bitcoin E.T.F.s, which would give investors exposure to Bitcoin without having to hold the cryptocurrency directly, like the many funds that track the price of gold or oil.
The first to file for S.E.C. approval of such a vehicle, in 2013, were the Winklevoss twins of Facebook fame, who founded the crypto exchange Gemini. This month, the S.E.C. delayed for the second time a decision on VanEck’s request as the agency collects public comments on Bitcoin markets’ liquidity, transparency and susceptibility to manipulation. Bitcoin’s recent volatility likely isn’t helping.
Regulators’ concerns are “outdated and misplaced,” given significant trading volume sand established exchanges with reliable pricing, Matthew Sigel, the head of digital assets research at VanEck, told DealBook. “E.T.F.s are generally the most liquid and transparent way to get exposure to many kinds of assets,” he said. “If we agree that E.T.F.s are good, then why should Bitcoin be unique in its exclusion?”
Brazil just approved a Bitcoin E.T.F., the first in Latin America, and Canada has a few. Britain, like the United States, is taking it slow. Crypto rules do not appear on the S.E.C.’s latest agenda.
Fox News agreed to pay a $1 million penalty under a settlement reached last week with the New York City Commission on Human Rights. The case stemmed from a cascade of sexual misconduct allegations that shook the network several years ago and led to the exits of Roger Ailes, its co-founder, and the anchor Bill O’Reilly.
“This is the largest civil penalty that has ever been levied by the City Commission on Human Rights,” the agency’s chair and commissioner, Carmelyn P. Malalis, said in an interview on Tuesday. “We need to send a message in order to deter future acts of harassment or retaliation.”
The settlement, which was finalized on June 25, will prevent Fox News for the next four years from including in new employment contracts a clause requiring confidential arbitration in cases where an employee lodges a complaint under the city’s Human Rights Law. It also mandates that the network carry out a variety of anti-harassment training and prevention measures.
The Commission on Human Rights is the agency that enforces the city’s anti-discrimination laws in workplaces, housing, public services and other spheres. Ms. Malalis said the commission began investigating Fox News in September 2017, around the time that several employees spoke out about sexual harassment at the network; it formally opened a complaint in December 2018.
In a statement on Tuesday, Fox News said it was “pleased to reach an amicable resolution of this legacy matter.”
“Fox News Media has already been in full compliance across the board, but cooperated with the New York City Commission on Human Rights to continue enacting extensive preventive measures against all forms of discrimination and harassment,” the network said.
In the last few years, Fox News has hired a new human resources team and strengthened sensitivity training requirements, among other measures intended to reform its workplace culture. The network’s agreement last week to pay a $1 million penalty was first reported by The Daily Beast.
The University of North Carolina’s board of trustees is scheduled to hold a special meeting on Wednesday amid intensifying pressure over its failure to approve tenure for Nikole Hannah-Jones, the Pulitzer Prize-winning correspondent for The New York Times Magazine.
A spokeswoman for the NAACP Legal Defense and Educational Fund Inc., which is representing the journalist, confirmed that the board was scheduled to vote on tenure for Ms. Hannah-Jones during the meeting.
Ms. Hannah-Jones, a creator of the 1619 Project, a multimedia series from The Times Magazine that re-examined the legacy of slavery in the United States, had agreed to a July 1 start date as the Knight Chair in Race and Investigative Journalism at the university’s Hussman School of Journalism and Media. In a letter last week, her legal team said she would not join the faculty unless she was granted tenure.
The University of North Carolina announced the meeting of the board, which approves tenure applications, in a news release on Monday. The release did not disclose the meeting’s agenda but said it was expected to include a closed session.
Shortly after the meeting was announced, Susan King, the dean of the Hussman School, said on Twitter that the board was “completing the tenure process begun so long ago to bring Nikole Hannah-Jones to our school.”
Although the dean, the school’s faculty members, the provost and the chancellor had recommended tenure for Ms. Hannah-Jones, the board declined to vote on the matter at a meeting this year. Ms. Hannah-Jones retained legal counsel to address the board’s lack of action in the matter.
The hiring of Ms. Hannah-Jones, who earned a master’s degree from the university’s journalism school in 2003, prompted a backlash from some conservatives who have been critical of the 1619 Project’s reframing of American history. The journalist has also gained the public support of more than 200 academics and other cultural figures who published a letter in The Root last month saying the board had displayed a “failure of courage.”
On Friday, students at the university held a protest in support of Ms. Hannah-Jones. Ms. King, the Hussman School dean, included a link to a video of the demonstration in a Twitter post.
“We so appreciate our great UNC students’ support & other schools’ support,” the dean wrote.
The British government introduced a new exemption to its quarantine rules on Tuesday for business travelers “bringing significant economic benefit” to England, but the move is unlikely to quell frustrations that certain travel routes in and out of Britain remain effectively shut.
The exemption has strict criteria and applies only to executives whose work supports at least 500 British jobs. It is much tighter than one that was in place for about six weeks from early December, when travelers needed to support only 50 jobs in Britain.
There has been a growing concern that Britain’s strict travel rules could lead the country to miss out on business opportunities as other countries welcome the return of travelers, especially from the United States. Since Britain left the European Union, it is also particularly anxious about not losing lucrative business activity to its neighbors across the English Channel.
Parts of Britain, such as the financial and legal district of the City of London, rely heavily on the presence of large multinational corporations. But most people entering the country either must quarantine for 10 days and take coronavirus tests on the second and eighth days or must pay for an additional test to end their self-isolation after five days.
Earlier this month, France reopened its borders to vaccinated American tourists, and last week, Germany said all Americans could enter the country.
Jamie Dimon, the chief executive of JPMorgan Chase, met with President Emmanuel Macron of France this week in Paris and opened up a new European Union trading hub on Tuesday. The bank is increasing the number of staff in Paris to 700 by the end of the year, up from 265 before Britain left the European Union. But Mr. Dimon won’t be stopping in Britain, where the company has 19,000 employees and offices in four cities, as he has in past trips to Europe, because of the country’s travel restrictions.
Any executives hoping to leave quarantine will have to meet strict requirements, including proving that the work being done in England “has a greater than 50 percent chance of creating or preserving at least 500 U.K.-based jobs” at a company that already has at least 500 employees or at a new British business. Executives have to apply to the government and get written approval, which can take up to five days, before traveling. When the executive isn’t doing business activity, they must self-isolate at all other times, the government said.
For more than a year, only a handful of flights each day have operated between New York and London, which used to be one of the world’s busiest travel routes. There are even fewer direct flights from London to other major American cities.
The issue of limited flights between New York and London has been raised several times a day, said Emanuel Adam, the executive director in London of BritishAmerican Business, which represents some trans-Atlantic companies.
“It’s frustrating to many businesses and scary because they don’t know yet what it will mean down the line,” he said.
At the same time, businesses are conscious of the health concerns raised by the spread of the Delta variant of the coronavirus in Britain, he said. And now, restrictions against Britons are tightening; this week, Hong Kong barred all travelers from Britain.
In March 2020, President Donald J. Trump banned nearly all non-Americans traveling from Britain, and President Biden has kept the rule in place. There was a small breakthrough at the Group of 7 meetings in Britain earlier this month when the two sides agreed to set up a working group to restart international travel, but likelihood of an agreement for travel to return before the fall is reportedly getting slimmer.
“Many other countries have introduced similar exemptions, and it is important the U.K. does not lose out on prospective major investments and new jobs as a result,” a government representative said in a statement.
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General Mills reported Wednesday that its net sales dropped by 10 percent in the last quarter as demand for at-home consumption, propelled by the pandemic, started to ebb. The Golden Valley-based company reported a 33 percent decline in net income, earning $416.8 million, compared to $625.7 million a year earlier. Futures for General Mills were down 0.8 percent.
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Facebook debuted a newsletter subscription service on Tuesday, an attempt to court influential writers to its platform as more creators branch out from traditional publications and go independent. To jump-start the service, called Bulletin, Facebook spent months recruiting dozens of writers, including Malcolm Gladwell, and paying them upfront. The new service is part of a newsletter revival across the media industry. Though newsletters are not new, the recent growth of newsletter-focused start-ups like Substack and Revue has renewed interest in the form.
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A federal safety agency told automakers on Tuesday to begin reporting and tracking crashes involving cars and trucks that use advanced driver-assistance technology such as Tesla’s Autopilot and General Motors’ Super Cruise, a sign that regulators are taking the safety implications of such systems more seriously. Automakers must report serious crashes within one day of learning about them, the National Highway Traffic Safety Administration said. Serious accidents include those in which a person is killed or taken to a hospital, a vehicle has to be towed away, or airbags are deployed.
U.S. stocks fluctuated on Wednesday after the release of ADP’s National Employment Report. Private payrolls increased for the sixth straight month to 692,000 in June.
“With new Covid infections and death rates now at their lowest since the pandemic began and most of the adult population now vaccinated, looser restrictions are set to spur stronger job gains,” analysts at Oxford Economics wrote in a note.
The group of oil producers known as OPEC Plus is expected to meet Thursday to discuss goals for the production of crude, while the monthly U.S. jobs report is set to be released on Friday.
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The S&P 500 was little changed in midday trading, while the Nasdaq composite was down 0.1 percent.
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Didi, the leading Chinese ride-hailing platform, made its Wall Street debut on Wednesday, trading on the New York Stock Exchange. It priced its shares at $14, giving the company a market capitalization of roughly $67 billion. The company’s initial public offering arrives as investors continue to embrace fast-growing tech companies regardless of their ability to turn a profit.
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The yield on 10-year U.S. Treasury notes was down 0.02 percentage points to 1.44 percent.
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Shares for Walmart jumped 2.7 percent, the most since September, after the retail giant announced on Tuesday that it would launch its own brand of low-cost analog insulin.
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Most European stock indexes dropped on Wednesday. The Stoxx Europe 600 closed with a 0.7 percent decline, led lower by financial and industrial stocks.
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Oil prices rose. West Texas Intermediate, the U.S. crude benchmark, gained 1.2 percent to $73.91 a barrel. Brent crude, the global benchmark, rose 0.5 percent to $75.17.
