The week’s news included; Microsoft – Activision Blizzard merger blocked, LVMH reaches $500bn market cap, Katy Perry loses trademark lawsuit against Australian fashion company, Muzz loses appeal against Match.com.
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:
- City A.M. – Explainer: The Brexit bonfire of EU laws turns into dust
- BBC News – Is the UK a bad place for tech firms?
- CNN – How Elon Musk upended Twitter and his own reputation in 6 months as CEO
- City A.M. – A crackdown on betting firms can stop profits from problem gamblers
1. MICROSOFT – ACTIVISION BLIZZARD MERGER BLOCKED
The UK Competition regulator has blocked Microsoft’s attempt to buy Activision Blizzard for $68.7 billion. The deal would see Activision Blizzard’s collection of titles such as Call of Duty fall under Microsoft’s umbrella.
Despite an apparent softening of its stance in recent weeks, the Competition and Markets Authority (CMA) found that the deal would reduce innovation and consumer choice in the cloud gaming sphere. The CMA had recently said that it did not expect the deal to distort competition in the sector. Many experts had anticipated that the CMA would go on to approve the deal so last week’s decision was a shock. Microsoft had even signed agreements with competitors to ensure that access to key titles remain available on other platforms after the takeover. Microsoft has lashed out at the decision stating that “clearly the UK is closed for business”. The tech giant has said it will appeal the decision. Further concessions may be made over the coming weeks.
This is a significant stumbling block for Microsoft. The deal needs approval from the UK, US and EU competition authorities. To face rejection from the first regulator to rule is a huge setback and holds out little hope for the remaining two. Given the scale of the investment and the potential upside from acquiring Activision’s library, Microsoft will undoubtedly fight this until the end.
2. LVMH HITS $500BN
French luxury fashion giant LVMH has become the first European company to reach a $500 billion valuation. The company reached the milestone last week as its share price soared by 30% over the past year alone. LVMH’s share price hit €902, giving it a market capitalization of €454 billion ($500 billion). LVMH has brands such as Louis Vuitton, Sephora, Christian Dior and Bvlgari under its umbrella. The conglomerate achieved a 17% increase in sales for the first quarter this year and last year reached record sales of €79.2 billion.
Chairman and CEO Bernard Arnault has well overtaken Elon Musk to become the world’s richest man. His stake in LVMH is now worth a whopping $212 billion. Arnault founded LVMH in 1988 and has now appointed his children to key positions within the group.
3. NEW GAMBLING LEGISLATION PROPOSALS
The UK government has unveiled new rules to better regulate the gambling sector. The proposals would mark the largest regulatory change in the sector since the Gambling Act 2005. Some of the changes proposed in the white paper include:
- Limits of stakes of between £2 and £15 per spin on slot machines
- Safety checks on gamblers losing large amounts of money
- Extra powers for the Gambling Commission to block illegal gambling sites in conjunction with internet service providers
- Closing loopholes to prevent under-18’s from gambling online and providing greater protections for high risk 18-24 year olds.
With an estimated 300,000 people affected by problem gambling, it is hoped that the changes will help address this. This will bring the gambling laws in line with the modern era, particularly with smartphone gambling. BBC News looks closer at the changes.
4. KATY PERRY LOSES TRADEMARK BATTLE
Musician Katy Perry has lost a trademark lawsuit against Australian fashion company Katie Perry. The fashion company sued Katy Perry, the musician, for infringing upon their trademark by selling merchandise with the name during her 2014 Australian tour. Katie Perry was founded by Katie Taylor who named the company after her birth name. The brand had been trademarked in 2008.
The court found last week that Katy Perry did infringe on Katie Perry’s trademark. Katy Perry was not found however, to have used the trademark in bad faith and therefore does not owe personal compensation to the fashion company. The musician must now however, pay damages to Katie Perry. Katie Perry described the case as a “David and Goliath” type victory.
5. MUZMATCH LOSES APPEAL AGAINST MATCH
Muslim marriage app, Muzz, lost its appeal against Match.com over it’s right to use its former name, Muzmatch. Last year, Muzmatch was ordered to change its name as the court held it would wrongly give consumers the impression that they were associated with Match Group. Match Group owns dating sites such as Match.com, Tinder and Hinge. Muzmatch subsequently rebranded to Muzz but appealed the decision. Last week, the Court of Appeal upheld the initial ruling and agreed there was a likelihood of confusion. Muzmatch used “Match” as part of its search engine optimization (SEO) keywords and this proved a significant factor in the judgement.
Match Group welcomed the decision and claimed Muzmatch was “unrightfully riding Match Group’s coat-tails for its own gain”. Muzz however, says the decision is worrying for dating app startups. They have also criticised Match for using “predatory tactics” against rivals to maintain its position as opposed to innovating. Match had attempted to buy Muzmatch four times over the past few years but all bids were rejected.
6. MANCHESTER UNITED FINAL BIDS
The race to acquire Manchester United is reaching the final stage. Sheikh Jassim bin Hamad-al Thani and Sir Jim Ratcliffe have submitted their third and final bids for the club. Sheikh Jassim is bidding to take over 100% of the club for roughly £5 billion in cash. This would mark the world’s largest ever sports club takeover. Sheikh Jassim also promised significant investment in Old Trafford and the local area. Ratcliffe will simply opt to buy a majority stake in the club. This would see Ratcliffe hold just over 50% of the club, leaving the Glazer family with a 20% stake. Ratcliffe would probably also need to borrow money to fund this deal. Elliott Management, a US-based hedge fund, has also submitted a bid for a minority stake. There were no other publicly declared bidders before the Friday 28th 10pm deadline. All bids however, fall short of the Glazer’s own £6 billion valuation of the club.
7. META PROFITS
Meta has surprised markets by posting a $5.7 billion profit for Q1 of 2023. This comes as the tech giant has slashed 20,000 jobs over the past few months. Meta’s profits have been driven by growth in artificial intelligence (AI). CEO Mark Zuckerberg has said that 2023 will be the year of efficiency as the company seeks to boost profits. He recognised that 2022 was a “disaster”. Meta’s metaverse investment has not yet paid off and is still suffering billions of dollars in losses. The company saw Facebook reach a huge 3 billion users recently and posted $28.6 billion in revenue in the quarter.
8. SNAPCHAT LAUNCHES AI CHATBOT
Social media app Snapchat has launched its own AI chatbot. The chatbot is contained within the app and is powered by OpenAI’s GPT, the same system behind ChatGPT and Microsoft’s Bing search engine. The chatbot is pinned to the top of users’ chat feeds and performs the standard tasks we’ve come to expect from AI chatbots. Snapchat calls it “My AI” and it is capable of answering questions, offering advice and carrying out tasks. Snap’s example shows just how keen tech firms are to integrate AI into our everyday lives.
There are some concerns however, over how Snap collects personal and location data. The company released a blog post to address these concerns. It claims that no “new location information” is collected from users and that location data is never collected without consent.
9. PWC AI INVESTMENT
Big Four accountant PwC has announced $1 billion of new investment in AI tools. The tools will be implemented across its US audit, tax and consulting businesses. PwC will collaborate with OpenAI, the company behind ChatGPT, to help develop custom AI products to improve efficiency at the company. The company stressed however, that the introduction of AI would not lead to job cuts. KPMG and Blue J Legal have also invested in AI tax tools, showing how quickly AI is being introduced in these sectors.
10. PREZZO STORE CLOSURES
Prezzo is set to close 46 stores as it struggles with rising costs. The Italian restaurant chain has seen utility bills rise by 100% while the costs of ingredients have also risen significantly. Wage inflation has also contributed to its financial woes. Prezzo has said that most loss making sites with footfall below pre-Covid levels will now close. This puts 810 jobs at risk. While many restaurants in busy tourist or shopping areas have recovered reasonably well since the pandemic, a lot of sites have not. Around a third of Prezzo’s restaurants will now close. The restaurant will attempt to internally redeploy as many staff as possible.