The week’s news included; Microsoft to buy Activision Blizzard for $69bn, Mastercard fined £31m for running cartel, Amazon reverses ban on Visa credit cards, UK government mulls crypto legislation.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram 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:
- Standard – Why UK businesses are experimenting with a four day week.
- BBC News – Are motorists being overcharged for petrol?
- City A.M – The unstoppable rise of the challenger bank: Canary Wharf’s retail giants have reasons to be worried
- The Fashion Law – What Do Brands Stand to Gain in Fights Over Their Marks in the Metaverse?
1. MICROSOFT TO BUY ACTIVISION BLIZZARD FOR $68.7BN
Microsoft has bid a huge $68.7 billion for Activision Blizzard in what could be the largest ever takeover of a game studio. Activision Blizzard is behind big titles such as Call of Duty, World of Warcraft and Candycrush. Microsoft already has a solid game library but this acquisition would make it the third largest game studio behind Sony and Tencent. Microsoft is also behind the Xbox consoles so could benefit from making new releases exclusive to Xbox. Major titles, like Call of Duty, are unlikely to become Xbox exclusives simply due to the huge amount of revenue generated from other platforms like PlayStation and PC. The deal is still subject to regulatory hurdles.
2. MASTERCARD AND OTHERS FINED £33M FOR RUNNING CARTEL
Five payment card providers, including Mastercard, have been fined £33 million for operating an illegal cartel. Mastercard, allpay, APS, PFS and Sulion agreed not to compete with each other when providing prepaid cards for UK local authorities. The cards were distributed to vulnerable people such as homeless people and asylum seekers in various localities. Due to this cartel, the Payments Systems Regulator (PSR) said local authorities could have lost access to cheaper products, ultimately affecting vulnerable people. Although the vulnerable people received full benefits, councils would have paid higher fees than they would have done in a competitive market. The unlawful conduct took place between 2012 and 2018. Mastercard was fined the lion share, £31.5 million. It accepted the ruling and confirmed new controls have been implemented to prevent the issue occurring again.
3. AMAZON REVERSES VISA CREDIT CARD BAN
In a last minute U-Turn, Amazon has reversed its decision to block Visa credit cards. Amazon is “in talks” with the payment giant to find a solution. Amazon had initially planned to stop accepting payments from Visa credit cards issued in the UK from next year. The tech giant blamed Visa’s high cost of payments for the decision. While Visa is talking with Amazon, payments from Amazon will continue to be accepted.
Amazon had been criticised for the decision to block Visa cards. Industry experts suspect the move was designed to encourage uptake of its own Amazon credit card which is issued by Mastercard. Finding a solution will save much inconvenience for consumers.
4. UK CRYPTO LEGISLATION ON THE WAY
The government has announced that legislation will soon be introduced to bring crypto-assets under the oversight of the Financial Conduct Authority. This will see many crypto-assets subject to the same rules as bonds, shares and other financial instruments. Many see these new regulations as the end to the “Wild West” of the cryptocurrency era. A bill is currently being drafted and will be put forward when “parliamentary time allows”.
Furthermore, new measures will be introduced to crack down on misleading cryptocurrency advertising. The Advertising Standards Agency (ASA) is leading a campaign against misleading ads and has banned several ads over the past few months. The ASA plans to release guidance on crypto asset advertising later this year. Over 2.3 million are thought to own crypto-assets in the UK.
5. LOUIS VUITTON LOSES IP REGISTRATION BATTLE
The EU Intellectual Property Office (“EUIPO”) rejected Louis Vuitton’s attempt to block the registration of a trademark by Aina Yang. Yang is seeking to register an interlocking “N” and “L” but Louis Vuitton believes this could confuse consumers with its own interlocking “LV”, when placed on clothing or other items. The EUIPO rejected Louis Vuitton’s claim and held that the marks were not similar enough to confuse consumers about the origin of the products. The court also did not anticipate any reputational damage to Louis Vuitton as a result of Yang’s mark. The Fashion Law looks at the case in more detail.
6. UNILEVER REFUSES TO INCREASE GSK BID
Unilever had its £50 billion bid to acquire GlaxoSmithKline’s (GSK) healthcare arm rejected but has said it will not increase its offer. The consumer goods giant is still keen for the deal to go ahead but felt that its valuation of the business was accurate. GSK’s healthcare business includes household names like Sensodyne, Panadol and Centrum vitamins. GSK has already rejected 3 offers from Unilever as they felt the bids undervalued the business. Unilever is worth nearly £100 billion and has 150,000 employees across the globe.
7. PELOTON SUSPENDS PRODUCTION
Fitness good producer Peloton is suspending the production of its bikes and treadmills due to falling demand. Production of its bikes will be suspended for two months and its treadmills for six weeks. Production of some of its more expensive products had already been halted. Peloton’s bikes start at £1350 and the company says growing customer price sensitivity along with increased competition has slashed demand. The company enjoyed a bumper period during the pandemic as consumers looked for home exercise solutions but this boost has since worn off. Peloton has also suffered a PR nightmare after a number of technical problems with its treadmills caused injuries and even deaths. This has been reflected in its share price which has crashed around 80% over the past year, shaving $40 billion off its value.
8. PRIMARK TO CUT JOBS
Primark has announced that it will slash 400 management jobs. The cuts are designed to simplify its operations. Although sales are up 36% for the quarter till January 2022, like for like sales were down 11% compared to two years ago. Due to its lack of online presence, Primark suffered from Omicron restrictions and a general consumer shift to online shopping. As the government announced the imminent end of Plan-B restrictions the company can expect a bounce back for the rest of the year. Primark employs 29,000 staff in the UK and turned over £5.5 billion last year.
9. AMAZON STEPS INTO FASHION
Amazon has stepped further into fashion and announced its launch of a clothes store in the US. The store will be upgraded with technology to enhance the user experience. Customers will scan items on display then enter a virtual queue for dressing rooms which will then be unlocked. Customers will then find all scanned items in the dressing room. Furthermore, every dressing room has a touchscreen which allows shoppers to select new clothes available in store while in the dressing room. Staff will then bring the requested clothing to the dressing room. While in dressing rooms, the screens will make suggestions for new clothes to try and will track all items scanned by customers. The Amazon store will host hundreds of brands. It will not however, be checkout-less like Amazon Go .
10. LACOSTE REVIEWS DJOKOVIC DEPORTATION
Fashion brand Lacoste is reviewing recent events regarding Novak Djokovic’s deportation debacle in Australia. The world number one tennis player sought to defend his title in the Australian Open. He was, however, stopped by the Australian border force and had his Visa cancelled. Djokovic had not been vaccinated against COVID-19 and failed to provide a valid medical exemption, contrary to Australia’s immigration rules. After a short legal battle, Djokovic was deported. As Djokovic’s major sponsor, Lacoste, said it would speak with the player to discuss recent events. Whether this issue will affect their sponsorship agreement remains to be seen.