The week’s news included; Microsoft Activision merger blocked in the US, Vodafone and Three owner to merge, JP Morgan settles Epstein lawsuit for $290m, Beyonce pushes up Sweden inflation.
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:
- CNBC – Why more and more colleges are closing down across the U.S.
- City A.M – Britain’s music industry could be crushed by artificial intelligence if we don’t get it right
- BBC News – Will soaring mortgage costs push the UK into recession?
- CNBC – How restaurants such as Panera and Chipotle are dipping into A.I. to streamline food prep and ordering
- City A.M. – Net zero is a noble cause, but we must be honest about the costs
1. MICROSOFT – ACTIVISION MERGER BLOCKED IN THE US
The US Federal Trade Commission (FTC) has moved to block Microsoft’s $69 billion acquisition of Activision Blizzard. A US court has granted a temporary restraining order, blocking the deal until a trial is concluded. The FTC believes the deal would “lessen competition” in the gaming sector. Consequently, they requested an injunction to block the deal which has now been approved. Microsoft’s ownership of Activision Blizzard could harm competition as huge titles like Call of Duty would fall under Microsoft’s control and competitors could see their access to such titles restricted.
UK regulators also blocked the deal over competition concerns, while EU regulators gave the greenlight, albeit with some concessions. US regulators believe the deal violates antitrust law and the matter will now go to trial. In order for the deal to be completed Microsoft needs approval from all three regulators. This decision is a huge blow for Microsoft and could mean the end of this saga. Microsoft is appealing the decision in the UK. The trial in the US will begin in August and could prove pivotal for the deal.
2. VODAFONE – CK HUTCHINSON MERGER
Vodafone and the owner of Three Mobile, CK Hutchinson have agreed to merge. This deal would create the UK’s largest mobile network operator with 27 million customers. The combined company would be larger than Virgin Media O2 and BT’s EE. When Virgin Media merged with O2 in 2021, Virgin Media’s low market share in the consumer mobile business meant that the deal did not pose a significant risk of distorting market competition. Vodafone and Three however, are the third and fourth largest mobile network operators in the UK so the deal will undoubtedly raise competition concern. The deal could potentially limit consumer choice and lead to higher prices. Analysts expect a drawn out battle with regulators to get the deal approved. The firms are confident however, that they can overcome the challenge. Under the plans, Vodafone and CK Hutchison will hold 51% and 49% of the combined business respectively.
3. UBS CREDIT SUISSE TAKEOVER COMPLETED
UBS has formally completed its rescue takeover of Credit Suisse. Under the finalised deal new restrictions will be brought in at Credit Suisse. These restrictions largely pertain to risk management. Much of Credit Suisse’s portfolio falls outside of UBS’s risk appetite. Credit Suisse bankers will be banned from onboarding clients in high risk jurisdictions like Russia and Libya. New financial products must also be approved by UBS before launch. A number of senior Credit Suisse executives will also be leaving the bank. UBS and Credit Suisse will continue to operate as separate banks, with a view to merge at some point. The combined bank will have assets of $1.6 trillion, roughly double the size of Switzerland’s economy. The Swiss government has even agreed to cover losses of up to 9 billion Swiss francs ($10 billion) once UBS incurs the first 5 billion Swiss francs ($5.6 billion) of losses.
4. EU APPROVES AI ACT
The European Parliament has approved the EU AI Act which will restrict generative AI apps like ChatGPT. This is the first legislative step taken to regulate AI by any western country. Under the rules, generative AI developers will be required to have their applications reviewed by regulators before commercial release. The Act still has to gain approval from the EU Commission and Council of the European Union but this is an important first step. EU lawmakers also agreed to ban real-time biometric identification systems, as well as “social scoring” systems as practised in China.
Generative AI apps are those which respond to complex user prompts with detailed human-like answers. They can produce images, write code, music, provide advice and as well as writing articles and essays. There is concern that misinformation could spread rapidly via these systems without proper oversight.
5. JP MORGAN SETTLES EPSTEIN LAWSUIT FOR $290M
JPMorgan Chase has agreed to a $290 million settlement with a victim of the late Jeffrey Epstein. The investment bank was accused of knowingly facilitating Jeffrey Epstein’s sex trafficking operations. Jeffrey Epstein was ousted as a client of JPMorgan in 2013 after his accounts were deemed “potentially problematic”. An unnamed victim had sued JPMorgan in federal court and sought to launch a class action lawsuit representing 40 victims against the bank. She alleged that she was trafficked by Epstein and subjected to sexual abuse. A huge $290 million settlement was agreed to avoid a court battle. As part of the settlement JPMorgan did not accept any liability but said they regret their relationship with Epstein. Deutsche Bank had also reached a settlement for $75 million over their alleged involvement in Epstein’s operations (see previous top 10).
6. AMAZON GETS IROBOT GREENLIGHT
Amazon has secured approval from UK regulators to acquire iRobot, maker of Roomba. The Competition and Markets Authority (CMA) did not believe the deal would distort competition in the robot vacuum cleaner sector. The UK market is relatively small and the CMA does not believe Amazon would not gain an unfair advantage in the sector. Amazon will buy iRobot for $1.7 billion. Roombas are robot vacuum cleaners and retail in the UK from £249.
7. TWITTER SUED OVER UNPAID MUSIC LICENSING FEES
Twitter has been sued by the National Music Publishers’ Association (NMPA) in the US for $250 million. The NMPA claims Twitter permitted and encouraged the copyright violations of 1700 songs over the past few years. Twitter has failed to pay licensing fees for much of the music on the platform according to the NMPA. It also adds that no improvements have been made since Elon Musk’s takeover in October 2022. The NMPA claims that infringements are regularly ignored by Twitter. Consequently, they are seeking damages of over $250 million. The NMPA represents 17 music publishers including Sony Music Publishing and Universal Music Publishing.
8. BEYONCE TOUR PUSHES UP SWEDEN INFLATION RATE
How influential is your favourite celebrity? Very few can claim they were responsible for causing inflationary pressures to a $575 billion economy. New figures show that Beyoncé did just that in Sweden. Demand for food and hotels soared in May as Beyoncé performed in the Scandinavian country. These were a driving factors in a surprise leap in inflation. Sweden’s inflation hit 9.7% last month, 0.3% higher than anticipated. People travelled from all over the world to attend Beyoncé’s world tour which began in Sweden last month. This tour is her first in seven years and she will be performing 57 shows in 12 countries. The tour is estimated to make £2 billion by September. While high inflation in Sweden has been primarily driven by rising food and fuel prices, Beyoncé’s tour had a noteworthy impact, according to analysts.
9. BUD LIGHT LOSES US TOP SPOT AMID BOYCOTT
Bud Light has lost its place as the US’ best selling beer following a boycott. The brand launched an advertising campaign in April featuring transgender influencer Dylan Mulvaney which sparked a huge backlash. Drinkers then launched a campaign against Bud Light calling for a boycott of the brand. Conservative politicians and celebrities spoke out against Bud Light in support of the boycott. This has hammered revenue as sales crashed by nearly 25% in May. Retailers of Bud Light have suffered heavily as a result. AB InBev, the owner of Bud Light, has been offering compensation to affected retailers.
10. VIRGIN GALACTIC SPACE TOURISM
Richard Branson’s Virgin Galactic is launching its first space tourism flight later this month. The first passengers will be three members from the Italian Air Force and the National Research Council of Italy to conduct microgravity research. This flight will take place between the 27th and 30th of June. The next commercial flight will take place in August and then every month following this. Passengers will fly to the edge of space and experience zero-gravity for a few minutes. Tickets cost $450,000 per person. Over 800 tickets have already been sold. Shares in Virgin Galactic soared by 40% in response to the news.
Virgin Galactic is separate from Virgin Orbit. Virgin Orbit was designed to send satellites into orbit. The organisation was shut down last month after it ran out of cash following a series of failed missions.