The week’s news includes: Supreme Court rules Uber drivers are workers, Citibank unable to recoup $500m it sent accidently, Bitcoin passes $1 trillion market value, Fortnite maker files antitrust complaint against Apple.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- Tech Crunch – As the SPAC frenzy continues, questions arise about how much the market can absorb.
- Standard – Covid lockdowns are messing up stock market IPOs.
- The Fashion Law – High Street Closures: How Private Equity Helps Push Businesses to the Brink.
- FT – Why the three biggest vaccine makers failed on Covid-19
1. UBER LOSES EMPLOYMENT LAWSUIT
The UK Supreme Court has ruled that Uber drivers are classified as workers and are entitled to rights such as minimum wage and holiday pay. This landmark ruling has huge implications for Uber and the wider gig economy. Although the ruling applies to the specific claimants in the case, this will likely apply to other Uber drivers.
Uber has fought this case since 2015 and lost every court battle. Uber had asserted it was a booking platform, connecting self-employed drivers with passengers. The Supreme Court disagreed and ultimately found that Uber drivers are workers based on a number of factors. These factors include the fact that Uber; sets drivers’ fares, issues non-negotiable contracts and can penalise drivers for rejecting too many rides. The Court also found drivers’ work includes all time while they are logged into the app. This includes any time spent waiting for passengers to book rides.
Uber could now face a huge compensation claim from drivers. Many gig economy companies will be reviewing their relationships with their drivers, couriers, and workmen to ensure they are not caught by the ruling. BBC News looks at the case and the fallout in more detail.
2. FACEBOOK BLOCKS AUSTRALIAN USERS FROM NEWS
Facebook has blocked Australian users from sharing or viewing news content. This is due to the government’s proposed law to make distributors like Facebook and Google pay publishers for content. Facebook and Google dominate digital advertising and Australian authorities sought to “level the playing field”.
All news pages on Facebook, both local and international, became unavailable as of Thursday morning. Facebook says it does not “ask for” news content, users simply publish it. Furthermore, the company claims it makes “minimal” gains from news content. Therefore, Facebook deemed it unfair to pay publishers for this content.
Facebook’s decision to block news content has drawn staunch criticism. 17 million Australians access news from Facebook. It also provides crucial information from emergency services. In contrast, Google signed content payment deals with three Australian outlets as well as a global deal with News Corp. Google had previously threatened to pull out of Australia but changed course.
3. EU ALLOWS DATA FLOWS TO CONTINUE
The EU Commission has said police and financial data will be allowed to flow from the EU to the UK. Its assessment concluded that the UK’s data protection laws were adequate and aligned with EU standards. This is primarily because the UK had incorporated EU law, including GDPR, into UK law. The EU will conduct another assessment in four years to determine whether there has been any divergence from EU standards.
A lack of data adequacy was a major risk of a no-deal Brexit. The police and financial data are crucial for security and intelligence services to effectively collaborate on a cross-border basis.
4. US REJOINS PARIS CLIMATE ACCORD
The US has officially re-joined the Paris Climate Accord. On President Biden’s first day in office, he signed an executive order to begin the 30-day re-joining process. This is significant as it brings the richest nation but also one of the world’s largest polluters back into the global fight against climate change. Donald Trump took the US out of the agreement barely 100 days ago.
Under the Paris Climate Accord nations must aim to limit global warming to under 2°C above preindustrial levels. All nations also pledge to reach net zero carbon emissions by 2050. Over 120 countries have joined the agreement, including China.
5. CITIBANK UNABLE TO RECOUP $500m SENT ACCIDENTLY
A US court has ruled that Citibank cannot recoup $500 million it accidently sent to creditors of its client. Citibank was acting as loan agent for cosmetic company Revlon and was responsible for distributing interest payments to Revlon’s creditors. Creditors were collectively due $8 million in interest payments, but Citi accidently sent $900 million, the total amount due to lenders. This included $175 million to hedge fund Brigade Capital Management. Citibank managed to recoup some funds but filed a lawsuit to seek the outstanding $500 million.
Typically, money sent in error cannot be legally kept by the recipient. New York law, however, makes an exception in cases where a debt is being discharged. In Citi’s case, creditors received the full amount due to them under the loan agreement. Although they weren’t scheduled to receive the full amount immediately, it was money they were owed. The creditors also argued that it was “borderline irrational” to believe that a bank as sophisticated as Citi could send out $900 million by accident. The court recognised that Citi had made a mistake but ruled that creditors were entitled to keep the funds under New York law. Citibank have said they will appeal the ruling.
6. BITCOIN PASSES $1 TRILLION
Bitcoin has a surpassed a $1 trillion market value for the first time. Bitcoin’s price rose to a high of $57,000 pushing the total value of all Bitcoins in circulation past $1 trillion. Bitcoin is up 60% this month and nearly 900% since March 2020.
As mentioned in our previous top 10, Bitcoin has been gaining gradual acceptance from traditional financial institutions. This is driving the price up, along with greater involvement from retail investors.
7. FORTNITE FILES ANTITRUST COMPLAINT AGAINST APPLE
Fortnite-maker, Epic Games, has filed a formal EU antitrust complaint against Apple. This is the latest in an ongoing dispute between Epic and Apple. Fortnite was removed from the Apple App Store because Epic introduced a payment system in the game which bypassed Apple’s fees. Apple takes a 30% cut of all in-app purchases. They claimed Fortnite breached App Store rules and so took the game down and revoked Epic’s developer account.
Epic claim that Apple are abusing their market dominance. It claims that Apple has created a monopoly on IoS by blocking all competition on the App Store. Epic says the fact that developers must pay a cut of all sales to Apple to access any Apple IoS user, is not just unfair but also unlawful. The EU Commission has said it is assessing Epic’s submission.
8. DELIVEROO IPO ON THE WAY
Deliveroo is positioning to launch its IPO. It plans to make a formal announcement in early March, meaning we will see a floatation in the coming weeks. The tech firm could be valued at up to £7.5 billion. The IPO will help the food delivery firm to expand to cities which it does not currently cover. Deliveroo has been highly successful in raising funds from investors. Last year, it secured over half a billion dollars in investment from Amazon. Deliveroo currently boasts 45,000 UK restaurants on its platform. Goldman Sachs and JP Morgan will be leading the IPO.
9. CAR MAKERS GO ELECTRIC
Car makers are going green as they announce plans to stop selling petrol, diesel and hybrid cars.
Ford has said it will sell only entirely electric vehicles by 2030. All passenger cars will be electric or hybrid by 2026 and hybrids will be phased out by 2030. The automaker will be investing $22 billion in electric tech by 2025. Volvo and Jaguar Land Rover also made announcements. Volvo will follow Ford’s path by going fully electric by 2030. JLR will make its full range of vehicles electric by 2030 but all Jaguar vehicles will be fully electric by 2025. Nissan has also said it will invest over £1 billion in the UK over the coming years, as it produces more electric vehicles.
The UK government has pledged to ban the sale of new non-electric cars by 2035. Car makers are targeting 2030 to ditch their petrol and diesel vehicles in anticipation of this ban.
10. NEW WTO HEAD
The World Trade Organisation (WTO) has appointed Dr Ngozi Okonjo-Iweala as Director General. She becomes the first female and the first African boss of the organisation. Okonjo-Iweala was lined up to become Head last year but Trump’s administration blocked her appointment, backing an alternative candidate. When Biden took office, his team endorsed Okonjo-Iweala’s appointment and she obtained the necessary consensus.
Dr Okonjo-Iweala studied economics at Harvard and MIT then spent 25 years at the World Bank, working her way up to become managing director. The 66-year-old has also served as Nigeria’s finance minister between 2003 and 2006 then again between 2011 and 2015.