The week’s news included; EU approves Microsoft-Activision purchase, Montana bans TikTok, Deutsche Bank settles Epstein facilitation lawsuit for $75m, BT to replace 10000 jobs with AI.

Below are our top 10 stories that you need to know about. Be sure to check our X page, Facebook page, TikTok 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. – Without new water infrastructure, the UK risks running dry
  • BBC News – Ghana IMF loan: Will $3bn solve the economic crisis?
  • Forbes – How Gymshark Founder Ben Francis Built A Sportswear Unicorn.
  • City A.M. – Blocking the Microsoft and Activision deal leaves gamers – and the UK – out in the cold
  • BBC News – Long-term sick: How record number changes UK economy

1. EU APPROVES MICROSOFT TAKEOVER

The European Union has approved Microsoft’s $69 billion acquisition of Activision Blizzard, provided that remedial action is taken. Microsoft will need to adhere to promises to retain access to Activision titles on other platforms such as Sony’s PlayStation and Nvidia’s cloud gaming platform. Activision Blizzard has titles such as Call of Duty and World of Warcraft. Microsoft has already signed a 10 year deal with Nintendo to bring Call of Duty to its platforms if the deal is completed. The tech giant will also offer royalty-free licences to cloud gaming platforms allowing customers to stream Activision games. The EU Commission held that the takeover would not reduce competition in the sector, provided remedial action is taken, particularly given Microsoft’s fierce competition with Sony. They also found that competition in the nascent cloud gaming sector would not be adversely affected by the deal, again, if the remedial action is taken. 

This comes after the UK’s Competition and Markets Authority (CMA) surprisingly blocked the deal on the grounds that it may harm competition in the cloud gaming sector. It stood firm in response to the EU decision, and claimed the remedies offered by Microsoft were not sufficient. Microsoft still faces the huge challenge of convincing US regulators that competition will not be harmed. 

2. MONTANA BANS TIKTOK 

The US state of Montana has banned social media platform TikTok. This is the first US state to take such action as politicians consider imposing a nationwide ban. App stores will be prohibited from listing TikTok for download but users who have already downloaded the app will not be affected. TikTok or any app store offering the platform to Montana residents can be fined up to $10,000 per day.

The law comes into force on 1 January 2024. This move shows how TikTok’s future in the US hangs in jeopardy. Lawmakers believe that TikTok is or can be used as a vehicle for espionage for the Chinese government. TikTok had attempted to assuage concerns during a Congressional hearing in March but this merely compounded lawmakers’ concerns. TikTok argues the ban breaches peoples’ right to free speech and has said it will defend their rights. 

3. DEUTSCHE BANK SETTLES EPSTEIN LAWSUIT FOR $75M 

Deutsche Bank has agreed to settle a lawsuit regarding its involvement in Jeffrey Epstein’s sex trafficking operations for $75 million. Epstein was a client of the German lender between 2013 and 2018 despite the fact that 40 sexual assault allegations had been levied against him. The legal claim was brought forward by affected women who claimed Deutsche Bank helped facilitate Epstein’s operations. Deutsche Bank had already been fined $150 million by New York regulators in 2020 for its relationship with Epstein. 

The banking sector has been heavily linked to Epstein. JP Morgan was Epstein’s bank of choice for 15 years until 2013 and is facing legal action over its involvement. Former JP Morgan employee and Barclays CEO, Jes Staley, was found to have exchanged 1200 emails with Epstein. Some of these regarded the solicitation of young girls. Epstein boasted of his links with some of the richest and most famous people on the planet such as CEOs, Hollywood stars, royalty and even former US presidents. His true client list however, remains a mystery. Epstein died in jail in 2020, supposedly by suicide while he awaited trial. 

4. UK NO-FAULT EVICTION BAN

The UK government has tabled a new law which would ban no-fault evictions for renters. Tenants can no longer be evicted without a valid reason. Valid reasons include situations where the landlord wants to sell the property or they want a close family member to move in. In such cases, landlords must give six months’ notice but can put the property back on the rental market after three months. The new law will also make it easier for landlords to evict anti-social tenants or those who fail to pay. Many have criticised the private rental market in the UK for failing to give adequate protections to both tenants and landlords from bad actors. In the proposals, renters will also have a legal right to request to keep pets and such requests must not be unreasonably refused by landlords. Renters who receive possession notices may also lose the right to immediate homeless protection support help from their council. The Renters (Reform) Bill in full is available to download here.

The rental market, particularly in London, is not fit for purpose. There are simply too few properties for too many people. Competition for properties is making much of London unaffordable and inaccessible. Average rents in London hit £1978 per month with tenants paying as much as £50,000 of advance payments upfront to secure properties. Properties are being secured within 48 hours of listing. Recently, over 50 people queued on one day to view a two-bedroom house in East London.  Critics have said the new proposals will put landlords off renting altogether and this will only exacerbate the shortage of available properties.

5. SPAC IPO MARKS LONDON’S LARGEST

London’s largest initial public offering (IPO) of the year so far surprisingly came from a special purpose acquisition company (SPAC). Admiral Acquisition secured $550 million in its IPO. The company is led by Sir Martin E. Franklin and as yet, has no particular acquisition targets in mind nor any region or industry and no expected target value. This is a huge vote of confidence in the SPAC team. Franklin was one of the pioneers of SPAC listings after raising $1.25 billion in a 2017 listing. 

SPAC listings have fallen out of favour since the boom of 2021. Primary markets as a whole have been exceptionally weak in London due to wider concerns in the economy. In 2021, there were 610 SPAC deals. By 2022, this plunged to just 86 according to S&P. The value of deals also plunged by 90% from $160 billion in 2021 to just $13 billion in 2022. For investors, SPACs are not as attractive as they were. The global economic slowdown and concerns about stricter SPAC regulation has reduced their appeal. Without the investors, SPACs cannot raise the funds to merge with companies. In December 2022 alone, 85 SPACs liquidated.  

6. BT JOB CUTS

BT has announced it will cut up to 55000 jobs by 2030, with 10,000 jobs being replaced by AI. The plans are designed to cut costs and boost profits to keep BT competitive. BT employs 130,000 people currently and will aim to make most reductions through attrition (i.e. people leaving or retiring without being replaced) rather than redundancy. 30,000 of its workforce are non-staff members such as subcontractors. The telecoms giant hopes to finish its fibre optic cable rollout shortly and digitise some processes. Once this is complete, BT will require fewer staff to carry out its work although it will retain much of the human element in its customer services. The Communication Workers Union (CWU) will work with BT to ensure as many cuts as possible are to subcontractors or are achieved via attrition. 

7. UK COMPANIES OVERCHARGING CUSTOMERS

The UK CMA is investigating supermarkets over steep rises in food and fuel prices. There is concern that supermarkets have been profiteering and causing customers to overpay. Supermarkets have said they have been working to keep prices as low as possible despite rapidly rising wholesale costs due to Brexit and the war in Ukraine. The CMA, however, is exploring whether one or more supermarkets increased target profit margins thereby spurring competitors to also raise their margins. Furthermore, as wholesale food and fuel prices have dropped in recent months, there has not been a corresponding fall in prices at supermarkets. This is a preliminary investigation by the CMA and no evidence of competition problems have been identified yet. 

In the energy sector however, problems have been identified. Ovo and Good Energy are to pay £4 million in compensation for overcharging customers. The UK energy regulator Ofgem found that during the energy crisis, the pair overcharged nearly 18000 customers. 

There is good news for bill payers as energy prices are set to drop significantly in July. The energy price cap will be slashed. An announcement with the details will be disclosed later this week. 

8. MANCHESTER CITY APPEAL CHARGES

Manchester City Football Club has lodged a challenge against the 115 charges that it faces for breaches of financial fair play rules. The club claims the barrister overseeing the disciplinary process, Murray Rosen KC, is biased because he is an Arsenal fan. Rosen is head of the Premier League’s independent judicial panel and will appoint the chair of the disciplinary commission. The club also argues that the 115 charges pertain to breaches of recently changed Premier League rules and therefore, such rules should not be applied retrospectively. 

In a worst case scenario for Manchester City they could face a points deduction or even expulsion from the Premier League. Manchester City and the Premier League can appeal to the commission once a decision has been made but cannot appeal to the Court of Arbitration for Sports.

9. VICE BANKRUPTCY

Vice Media Group has filed for Chapter 11 bankruptcy in the US. Lenders have approved a $20 million facility of fresh funding to allow the company continue operating. It will seek buyers during this time. If the search for a buyer proves unsuccessful, the company will be sold to a group of its lenders for $225 million. Vice will continue to operate throughout this bankruptcy process and expects to “emerge stronger”.

Vice Media Group owns websites Vice and Motherboard and targets a young audience with both entertainment and investigative journalism. The company was valued at $5.7 billion in 2017 and was tipped to disrupt traditional media. It has backing from huge investors such as Fortress Investment Group and Soros Fund Management. The company has however, struggled to make a profit and generate steady digital ad sales. Even traditional publishers have struggled to make money in the digital age and Vice has been no exception. 

10. PURPLE BRICKS SOLD FOR £1

Online estate agent Purple Bricks is to be sold to rival firm Strike for just £1. The faltering estate agent put itself up for sale in February but has been unable to find a suitable buyer until now. Purple Bricks saw a steep drop in property listing and it quickly found itself running out of cash. The company expects to lose up to £20 million this year alone. Strike’s offer was considered disappointing by Purple Bricks but no other offer provided better outcomes for shareholders and could have kept the business running.  

Purple Bricks was once the pioneer of online real estate and pushed the UK industry to improve online services. It has no branches but has a team of agents to conduct viewings and aid home buying processes. The company charges a flat fee for every property sold on its platform. In 2017, the company was valued at a huge £1.3 billion but by February 2023 this crashed to just £25 million due to its financial woes. The deal with Strike will see some job losses but will allow Purple Bricks to continue operating.