May 9, 2024

Archives for July 2022

F.T.C. Chair Lina Khan Upends Antitrust Standards by Suing Meta

“The F.T.C. has no answer to the most basic question — how could Meta’s acquisition of a single fitness app in a dynamic space with many existing and future players possibly harm competition?” Nikhil Shanbhag, Meta’s vice president and associate general counsel, wrote in a blog post.

The company added that it hadn’t decided on whether to challenge the lawsuit, which was filed on Wednesday in U.S. District Court for the Northern District of California.

The F.T.C. accused Meta of building a virtual reality “empire,” beginning in 2014 with its purchase of Oculus, the maker of the Quest virtual-reality headset. Since then, Meta has acquired around 10 virtual-reality app makers, such as the maker of a Viking combat game, Asgard’s Wrath, and several first-person shooter and sports games.

By buying Within and its Supernatural virtual-reality fitness app, the F.T.C. said, Meta wouldn’t create its own app to compete and would scare potential rivals from trying to create alternative apps. That would hobble competition and consumers, the agency said.

“This acquisition poses a reasonable probability of eliminating both present and future competition,” according to the lawsuit. “And Meta would be one step closer to its ultimate goal of owning the entire ‘Metaverse.’”

Rebecca Haw Allensworth, a professor of antitrust law at Vanderbilt University, said the F.T.C.’s arguments would face tough scrutiny because Meta and Within did not compete with each other and because the virtual-reality market was fledgling.

Article source: https://www.nytimes.com/2022/07/28/technology/ftc-lina-khan-meta.html

They Flocked to China for Boom Times. Now They’re Thinking Twice.

While Mr. An said he is concerned about the economic slowdown, he remains optimistic that the market for health products in China, and a familiarity with ginseng — an aromatic root said to have health benefits — will continue to benefit sales. To hedge his bets, though, he is also seeking regulatory approval to sell in Europe.

That is a far cry from the unbridled optimism of the past.

In 2016, when China was its fastest growing and most profitable market, Kasper Rorsted, the chief executive at Adidas, declared that the country was “the star of the company.” Adidas invested aggressively to expand its foothold. It went from 9,000 stores in China in 2015 to its current 12,000, though only 500 are operated by Adidas. Then the music stopped.

After initially projecting that sales in China would accelerate this year, Adidas ratcheted down expectations in May as Covid lockdowns continued to spread. The company said it now expects China revenue to “decline significantly” and that a sudden rebound is unlikely.

For now, Adidas remains undeterred. Mr. Rorsted said on a call with analysts that the company is not planning to slash costs or pull back from the country. Instead, it will “do whatever we can to double down and accelerate the growth.”

Many foreign companies had bet on the rise of a Chinese middle class as a dependable source of that growth. Bain Company, a consulting firm, said it expects China to be the world’s largest luxury market by 2025, fueled in part by what Federica Levato, a senior partner, said is still “a big wave” of a rising middle class.

Article source: https://www.nytimes.com/2022/07/28/business/economy/china-foreign-business-economy-covid.html

Is Beyoncé’s ‘Renaissance’ Rollout (Gasp!) Conventional?

While advance leaks of major albums were common as the CD era gave way to digital downloads, and could devastate a new album’s prospects, a crackdown on digital piracy and the shift to a streaming-first model — along with surprise releases like Beyoncé’s — have greatly reduced that threat.

The last time Beyoncé suffered a major leak was with “4” in 2011, when she told listeners, “While this is not how I wanted to present my new songs, I appreciate the positive response from my fans.” (Representatives for Beyoncé and her label declined to comment on her release strategy, and did not immediately respond to questions about the leak.)

Behind the scenes, the luxury of having advance notice and — hallelujah! — an early promotional single can give industry gatekeepers, like radio stations and streaming services, the runway to get themselves involved before an album’s launch.

“To have anything prior to the drop is a gift,” said Michael Martin, a senior vice president of programming at Audacy, which runs more than 230 radio stations around the country. “When you have time to prepare, you can be a better marketing partner with the artist and label and management. You can have everything ready to push out at the moment the project hits the ecosystem. That’s what you want. You don’t want to scramble.”

Break My Soul,” a throwback to 1990s dance music and the first single from “Renaissance,” was released more than a month ago. With 57 million streams and 61,000 radio spins in the United States, according to Luminate, the song currently sits at No. 7 on the Billboard Hot 100 — its peak thus far and only the third time Beyoncé has hit the Top 10 in the last decade as a principal artist. (Her two most recent chart-toppers came as a guest: “Perfect Duet” with Ed Sheeran, in 2017, and “Savage Remix” with Megan Thee Stallion, in 2020.)

Article source: https://www.nytimes.com/2022/07/27/arts/music/beyonce-renaissance-rollout.html

F.T.C. Sues to Block Meta’s Virtual Reality Deal as It Confronts Big Tech

The F.T.C. said in its request that asking for an injunction was sometimes a prelude to filing a complaint against a merger, which could embroil Meta and the agency in a lengthy trial and appeals process. A F.T.C. spokeswoman said the agency had not filed such a complaint and declined to comment further on the agency’s strategy.

Ms. Khan, 33, who was appointed by President Biden last year to acclaim from the left, has tried to make good on expansive promises to rein in corporate power. She became prominent after she wrote an article in law school in 2017 criticizing Amazon. As F.T.C. chair, she has called for regulators to vigorously enforce antitrust laws and has said she may craft sweeping online privacy rules that would implicate Silicon Valley companies.

The lawsuit drew praise from Ms. Khan’s allies. Sandeep Vaheesan, the legal director of the Open Markets Institute, a liberal think tank, said in a statement that the lawsuit was a “step toward making building, not buying, the norm for Facebook.”

But tech industry allies assailed Ms. Khan’s actions. Adam Kovacevich, the chief executive of Chamber of Progress, an industry group funded partly by Meta, said that with the new lawsuit, “the agency is more focused on getting headlines than results.” He said Meta “isn’t any closer than pickleball or synchronized swimming are to locking up the fitness market.”

Meta said in a blog post that the F.T.C. would fail to prove that the Within deal would “substantially lessen competition,” which is the bar that is typically set to block a deal under federal antitrust law.

In its lawsuit, the F.T.C. said that if Meta bought Within’s Supernatural, it would no longer have an incentive to improve Beat Saber, the virtual reality fitness game it already owns. But Nikhil Shanbhag, an associate general counsel for Meta, said in the blog post that the games weren’t competitors.

Article source: https://www.nytimes.com/2022/07/27/technology/meta-facebook-vr-ftc.html

Federal Reserve Makes Another Supersized Rate Increase to Tame Inflation

“We might do another unusually large rate increase,” Mr. Powell said on Wednesday. “But that is not a decision we have made at all.”

Mr. Powell said the likely path of interest rates that the Fed outlined earlier this year — in which rates rise to about 3.5 percent this year — remains reasonable. The Fed will likely lift borrowing costs to “at least a moderately restrictive level,” at which they are more actively weighing down the economy, he said.

But the mere recognition that growth is cracking and that rate increases will eventually slacken was enough to appease investors. The SP 500 stock index ended the day up 2.6 percent, and the Nasdaq Composite posted its best day since April 2020. Markets can quickly change their tune, though. The last two times the Fed has raised rates, the SP 500 has rallied on the day of the announcement, only to fall the day after.

“At some point it will be appropriate to slow down,” Mr. Powell said. “We are going to be guided by the data.”

For now, the data — at least when it comes to inflation — remain worrying.

Consumer prices climbed by 9.1 percent in the year through June, with costs picking up quickly across an array of goods and services, from food and fuel to rent and dry cleaning.

The Fed will receive a new reading of its preferred inflation measure, the Personal Consumption Expenditures index, on Friday. That report is likely to confirm the signal sent by the more timely Consumer Price Index: Inflation was extremely rapid in June, rising at the fastest pace in decades.

Article source: https://www.nytimes.com/2022/07/27/business/economy/fed-interest-rate-inflation.html

Meta Reports First Revenue Decline and 36 Percent Profit Drop

Beyond the economic tumult, Meta faces its own particular set of challenges. Last year, Apple made privacy-related changes that hampered Meta’s ability to measure and deliver its advertising on Apple-made mobile devices. (Meta makes the vast majority of its advertising revenue from smartphones.)

It is also staring down the barrel of one of its toughest competitors in TikTok, the Chinese-owned video app that has captured the attention of more than one billion people in just a few years. Mr. Zuckerberg has begun to shift his company’s products to mimic TikTok’s offerings, including making sweeping changes to Instagram and Facebook.

At the same time, Mr. Zuckerberg has been spending big on his vision for the metaverse. He has told investors, technologists and others that the effort may take years to come to fruition and that the endeavor will be costly. Some investors are skeptical that the investments will pay off in the long term.

Still, there were bright spots in Meta’s earnings report. The company said its “daily active people,” its term to describe users across its family of apps — which includes Facebook, Instagram and WhatsApp — increased to 2.88 billion, up 4 percent from a year ago. That exceeded analysts’ expectations that the company was losing visitors. The Facebook app also saw user growth within the United States, an area that some believed was saturated.

Mr. Zuckerberg said he was encouraged by other areas of Meta’s business that are driving growth and engagement, like the Reels video product, a feature within Instagram that is similar to TikTok’s video offering. Investments in artificial intelligence recommendation algorithms have also driven more people to use the service and for longer periods, the company said.

His goal, he said, was to eventually make more money from Reels, which is not as lucrative for Instagram as the app’s other advertising formats. Part of the challenge was to push through a “cannibalization” effect, where more people use the new Reels product and shift away from viewing more valuable ads displayed in between the photos and stories portions of the app. Mr. Zuckerberg said he believed it was only a matter of time before Meta figured out how to better make money from Reels.

Article source: https://www.nytimes.com/2022/07/27/technology/meta-earnings-revenue-decline.html

Final ‘Jeopardy!’: Ken Jennings and Mayim Bialik to Split Hosting Duties

But while the show was struggling to find its footing behind the scenes, it continued to generate excitement — and ratings — with a series of star contestants. Within just one season, four new champions were added to the show’s all-time leaderboard, fueling plenty of theorizing among fans about what was behind the new streak of winning streaks. For a while, the growing celebrity of the winning contestants — including Amy Schneider, Matt Amodio and Mattea Roach — offered a welcome distraction from the lack of clarity around who would become the permanent face of the show.

Jennings remains the champion with the highest number of consecutive wins (74) and the highest amount of money won in regular-season games ($2.5 million) in the show’s history. Bialik, who has a Ph.D. in neuroscience and is best known for her role as a scientist in the sitcom “The Big Bang Theory,” has made clear from the beginning that she is interested in getting the job permanently, though she has had to balance it with the demands of her sitcom “Call Me Kat,” and faced criticism for endorsing a “brain health supplement” for a company that settled a lawsuit accusing it of false advertising. Jennings has also received criticism for old social media posts, apologizing for tweeting “unartful and insensitive things” after he was initially revealed as a “Jeopardy!” guest host following Trebek’s death.

After Richards’s departure, Davies, a veteran game-show producer who developed the original American version of “Who Wants to Be a Millionaire?,” took over temporarily as executive producer — and that job, too, soon became permanent.

Under Davies, the show has worked to expand beyond its traditional structure and to cater to its passionate fans, announcing daily statistics for each contestant and, on Wednesday, a new podcast.

And there are more specials coming. Bialik will host “Celebrity Jeopardy!,” which debuts on ABC in September, while Jennings will host the first Second Chance Tournament, as well as the upcoming Tournament of Champions. In his announcement, Davies hinted that there could be more spinoffs ahead, noting that Bialik would also host a couple of new tournaments, in addition to the college championship.

Article source: https://www.nytimes.com/2022/07/27/arts/television/jeopardy-ken-jennings-mayim-bialik.html

The Democratization of Airport Lounges

Now other banks are getting into the lounge game, including Capital One, which opened its first lounge — with a stationary cycling room, showers and craft cocktails — in November at Dallas-Fort Worth, with follow-ups planned for Denver and Washington Dulles outside of Washington, D.C., in 2023. Entry is restricted to owners of the bank’s Venture X card, which costs $395 a year, and their guests; the card’s perks include credits up to $300 for travel purchases.

JPMorgan Chase has announced it will open its own brand, Chase Sapphire Lounge by the Club, with six global locations, including Boston, Phoenix and New York’s LaGuardia Airport beginning next year and available to holders of its Chase Sapphire Reserve card ($550 a year with benefits, including $300 in credits on travel purchases and Priority Pass membership).

In these times of airline mayhem, many travelers are willing to buy themselves out of the airport hell of sitting on the floor to get close to the only available electrical outlet in the concourse, a rescue offered by pay-per-use clubs.

Plaza Premium Group, which has restaurants, lounges and hotels in more than 70 global airports, recently introduced its PPL Pass Americas, which costs $59 for two visits within a year to most of its lounges in North, Central and South America. The pass gets you into stand-alone Plaza Premium Lounges and the airline lounges it operates for the likes of Virgin Atlantic, Avianca and Air France. There are six eligible lounges in the United States, with a new location in Orlando, Fla., expected to open later this year.

Article source: https://www.nytimes.com/2022/07/27/travel/airport-lounges.html

How Will Interest Rate Increases Impact Inflation?

America’s central bank has for decades been what Paul Volcker, its chair in the 1980s, called “the only game in town” when it comes to fighting inflation. While there are things that elected leaders can do to combat rising prices — raising taxes to curb consumption, spending more on education and infrastructure to improve productivity, helping flailing industries — those targeted policies tend to take time. The things that elected policymakers can do quickly generally help mainly around the edges.

But time is of the essence when it comes to controlling inflation. If price increases run fast for months or years on end, people begin to adjust their lives accordingly. Workers might ask for higher wages, pushing up labor costs and prompting businesses to charge more. Companies might begin to believe that consumers will accept price increases, making them less vigilant about avoiding them.

By making money more expensive to borrow, the Fed’s rate moves work relatively quickly to temper demand. As buying a house or a car or expanding a business becomes pricier, people pull back from doing those things. With fewer consumers and companies competing for the available supply of goods and services, price gains are able to moderate.

Unfortunately, that process could come at a hefty cost at a moment like this one. Bringing the economy into balance when supply is constrained — cars are hard to find because of semiconductor shortages, furniture is on back order, and jobs are more plentiful than laborers — could require a big decline in demand. Slowing the economy down that meaningfully could tip off a recession, leaving workers unemployed and families with lower incomes.

Article source: https://www.nytimes.com/2022/07/27/business/economy/interest-rate-inflation-impact.html

The Case of the $5,000 Springsteen Tickets

Since then, Ticketmaster, which is handling most of the U.S. shows on Mr. Springsteen’s tour next year, has tried to wear the white hat, at least some of the time. In an interview in May on a podcast called “The Compound Friends,” Michael Rapino, the chief executive of Ticketmaster’s parent company, Live Nation Entertainment, noted that many tickets for the best concerts and other events had a much higher street value the moment Ticketmaster sold them. Why shouldn’t an artist capture most of that excess? Prices that are too low open the door for scalpers to make more money — via the profit they gain from selling at the true market price — than performers make themselves.

If artists do want to capture that, Ticketmaster is prepared to help — and to take a fee for doing so. And that’s what Mr. Springsteen seemed to be doing here, using Ticketmaster’s “Official Platinum” system, in which seats are “dynamically priced up and down based on demand.”

You already know what happened next: Those platinum prices were plenty pricey. Outrage ensued. A congressman from New Jersey yelled into the wind.

“This broke our spirit,” said Pete Maimone, a real estate agent in North Brunswick, N.J., who coordinates a face-value-only ticket exchange for longtime fans. He has shut it down for now, he told me, while fighting back tears. “We did not want to participate any longer in this clear-as-day scheme to extract money from fans,” he said.

Over the weekend, in an attempt to quiet things down, Mr. Springsteen’s camp gave Ticketmaster permission to release some numbers. Just 1.3 percent of Ticketmaster users paid more than $1,000 per ticket. Also, 88.2 percent of tickets were “sold at set prices,” according to Ticketmaster, though the remaining 11.8 percent are likely to represent more than 11.8 percent of the revenue per show, owing to their higher face value.

Who set these prices? “Promoters and artist representatives set pricing strategy and price range parameters on all tickets, including dynamic and fixed price points,” a Ticketmaster spokeswoman said in an emailed statement. “When there are far more people who want to attend an event than there are tickets available, prices go up.”

Article source: https://www.nytimes.com/2022/07/26/your-money/bruce-springsteen-tickets.html