The week’s news included; M&S settles Cuthbert the Caterpillar dispute with Aldi, Sony buys Bungie for $3.6 billion, Nike sues StockX for selling unauthorised NFTs, KPMG sued by government over Carillion audit.
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:
- Fashion Law – From Data to User Interactions: Legal Issues Facing the Metaverse
- BBC News – Can the UK really improve inequalities without big spending?
- City A.M – London’s status as a safe haven for dirty foreign money relies on our own complicity
1. COST OF LIVING CRISIS SUPPORT
The UK government has announced a new £9 billion support package to help with the cost of living crisis. Most households in the UK will receive support of £350 to offset rising energy prices. The UK energy regulator, Ofgem, announced that the energy price cap will increase by nearly 40% from April, seeing a £693 increase to average annual household bills. This huge increase is due to the rapid rise in wholesale energy costs. The government support will be issued in two ways. Firstly, a £150 rebate to those living houses in council tax bands A-D. Next, a £200 rebate on energy bills will be issued on energy bills from October. This amount will however, be paid back in five £40 instalments over five years. These measures are designed to dampen the shock of the steep rise in energy prices. The government did not however, announce any changes to plans to postpone the 1.25% increase to national insurance scheduled in April.
2. M&S SETTLES COLIN THE CATERPILLAR DISPUTE
Marks & Spencer has settled its trademark dispute with Aldi over its Cuthbert the Caterpillar cake. An out of court agreement was reached last November but the terms of the deal have not been disclosed. The dispute arose when M&S sued Aldi claiming Aldi’s Cuthbert the Caterpillar cake was too similar to its own Colin the Caterpillar cake. Aldi took a somewhat lighthearted approach to the litigation. Aldi’s official Twitter page began the hashtag “#FreeCuthbert”. The supermarket also tweeted “This is not just any court case, this is #Free Cuthbert”, mocking M&S’s slogan.
3. SONY BUYS BUNGIE FOR $3.6 BILLION
Sony has announced it will buy video game developer Bungie for $3.6 billion. Bungie is best known for making the popular Halo and Destiny series. Halo is one of the most popular Xbox exclusive titles and helped make Microsoft’s Xbox as successful as it has become. Sony, the maker of PlayStation, will not get the intellectual property of the Halo title as part of the deal as this is owned by Microsoft. Bungie will continue to operate independently. Despite this, the deal will bring a highly successful game studio under Sony’s extensive umbrella.
This move follows a hectic month of blockbuster M&A activity in the gaming industry. Microsoft announced a $69 billion takeover of Activision Blizzard. Take-Two also bought Zynga in a $12.7 billion deal. The value of these three deals alone exceeds the total value of all M&A activity in the gaming sector in 2021.
4. NIKE SUES STOCKX FOR SELLING UNAUTHORISED NFTS
Nike has sued online reseller StockX for selling unauthorised non-fungible tokens (NFTs) of Nike trainers. The sportwear giant said that the sale of these NFTs infringes upon its intellectual property rights. Nike will seek damages and an injunction to block the sale of the unauthorised NFTs.
The sale of the NFTs forms part of StockX’s new Vault NFTs platform on its website. On this platform, users can buy digital tokens of clothing and footwear from and can redeem the physical item itself at any time using the token. Nike alleges that StockX has sold over 500 NFTs of Nike-branded products without any prior authorisation. Nike also plans to launch its own “virtual products” later this month, so is keen to protect its intellectual property.
5. META FINED OVER GIPHY ACQUISITION
The owner of Facebook, Meta, has been fined £1.5 million by the Competition and Markets Authority over its $400 million purchase of Giphy. The CMA had ordered Meta to sell GIF platform Giphy, requesting that they maintain competition and not integrate the business while the CMA investigation was ongoing. Meta “flagrantly” failed to comply with certain orders and as such the regulator deemed it necessary to fine the tech giant. Facebook has said it will accept the fine.
Separately, Meta announced that it will provide more details on its new metaverse business. The tech giant will provide more detailed financial results, despite the tech giant warning that the business would not be profitable “any time in the near future”.
6. KPMG SUED OVER CARILLION AUDIT
KPMG is facing a £1.3 billion lawsuit over its audit of collapsed contractor Carillon. The government is suing the accountancy giant for negligently failing to spot misstatements of over £800 million in Carillion’s accounts. KPMG gave the company a clean bill of health despite an unmanageable £7 billion debt pile. Carillion has 450 government contracts and employed 43000 people before going bust in 2018. As part of the lawsuit, the government seeks to hold KPMG accountable for some of the losses incurred by Carillion’s creditors and it could pay out £1 billion in damages. KPMG audited Carillion for 19 years and earned £29 million in fees. The audit giant argued the case was without merit and said it would defend the case.
7. BANK OF ENGLAND RAISES RATES
The Bank of England has raised interest rates up to 0.5%, marking the first back to back rate increases since 2004. Inflation is already at 5.4% and could reach 7.25% by April and raising rates is designed to combat these concerning inflationary pressures. Four of the nine Monetary Policy Committee (MPC) members wanted to raise rates to 0.75%, which would have been the highest rate since 2018. Just 6 weeks ago, the Bank raised rates from their record lows up to 0.25%. In the UK, the cost of living is set to spike in April as the energy price cap is raised along with a 1.25% increase in National Insurance. Furthermore, the Bank also suggested that it would end its quantitative easing programme.
8. WORDLE BOUGHT BY NEW YORK TIMES
Popular online word game Wordle has been bought by the New York Times. The New York Times confirmed the game will remain free to play and that no changes to the gameplay will be made. The game was only released in October 2021 and boasts millions of users. The founder, Mr Wardle, initially made the game by himself, just for something new for his girlfriend to play. Although the exact value of the deal was not disclosed, it was confirmed to be “in the low seven figures”. The New York Times has been on a spending spree, after buying the Athletic for $550 million 6 weeks ago.
9. TESCO SHUTS JACK’S
Just four years after launching its answer to Lidl and Aldi, Tesco is shutting down its discount retailer Jack’s. The first stores opened in 2018 in the midlands and north, promising cheap deals. Tesco had initially eyed plans to rapidly expand nationwide but ultimately they were unable to gather enough footfall. All 13 of the Jack’s stores will cease trading, with six of the sites being converted to Tesco superstores. Jack’s products are still available at independent stores. Despite the closure, Tesco seem positive about their Jack’s venture and say they have learnt a number of lessons which have helped it provide better offerings.
In addition to the closure of Jack’s, Tesco will also close the meat, fish and hot deli counters at 317 stores where demand is low. Affected staff will be offered alternative jobs.
10. AMAZON UNVEILS ADS REVENUE
For the first time ever, Amazon has revealed its ad revenue. Amazon has historically kept details of its advertising business private. The tech giant generated $31.2 billion in advertising revenue in 2021, with sales soaring 32% in Quarter 4. Amazon’s advertising business is larger than the likes of Microsoft, Snapchat and Pinterest. Despite this, advertising accounted for just 7% of Amazon’s total revenue in the fourth quarter. By comparison, Amazon cloud services business, AWS, turned over $17.8 billion in the fourth quarter of 2021 alone.