The week’s news included; Meta launches Twitter rival Threads, Libor rate rigger gets UK appeal approval, Wikipedia could pull out of UK due to Online Safety Bill.
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. – Why the FCA and City lawyers could be poised for a Square Mile showdown –
- CNBC – What Apple’s big bet on India means for the tech giant’s future
- City A.M. – The tourist tax is hurting Britain, no matter what Rishi Sunak says
- BBC News – Can Threads make more money than Elon Musk’s Twitter?
- City A.M. – A digital pound can’t come with a trade-off for privacy
1. META LAUNCHES TWITTER RIVAL “THREADS”
Meta has launched a new social media app designed to rival Twitter. The new app, Threads, looks similar to Twitter and is completely free to use. The app secured over 86 million users in the first few days alone. Thread users can share posts of up to 500 characters in length and share videos up to 5 minutes in length. Unlike Twitter, there are no paid subscription plans on Threads. The app is, however, powered by Instagram. Verification on Threads takes place via Instagram. Furthermore, once signed up, users cannot delete their Threads profile without deleting their Instagram account.
Many Twitter users have expressed discontent with Twitter under Elon Musk’s leadership following the numerous changes he introduced. Zuckerberg is aiming to poach as many of these users away from Twitter over to Threads. Musk won’t go down without a fight as he is considering suing Meta. Twitter claims that Meta created Threads through “systematic, wilful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property”. For example, Meta allegedly hired many ex-Twitter employees to help develop the app who may have shared proprietary information.
Threads appears to be yet another attempt by Mark Zuckerberg and Meta to mimic rivals. Meta introduced Reels in 2021, a video centred interface. This was almost identical to TikTok. In 2018, Zuckerberg integrated “Stories” into Facebook and Instagram, copying Snapchat’s ” feature.
2. CANADA DOUBLES DOWN AGAINST META
The Canadian government has doubled down in its stand off with Meta. Canada will now halt all advertising on Facebook and Instagram. This follows Meta’s decision to restrict news access for Canadians due to the new Online News Act. The government has said they will now be intimidated and stand by new legislation. The Online News Act requires platforms like Meta and Google to pay news services for content shared on their platform. Google had initially planned to restrict Canadians’ access to news due to the law but they are working with the government to negotiate a deal. Meta on the other hand, has not shown signs of cooperation. Meta will take a C$10m (£5.93m) hit from the government’s decision to pull its advertising. This however, is relatively insignificant compared to Meta’s $116 billion in advertising revenue.
3. CHINA LIMITS CHIP EXPORTS
The Chinese government is restricting the export of gallium and germanium, two key elements used in production of microchips. China is the largest producer in the world of the materials. Both materials are critical for the production of most modern technology including military equipment, consumer goods and solar panels. This could be in retaliation to the US’s decision to restrict China’s access to advanced microprocessors. Tensions are rising between the US and China in the technology space. US Treasury Secretary Janet Yellen is travelling to China to attempt to ease some of the tensions and improve relations.
4. ONLINE SAFETY BILL
The new Online Safety Bill is receiving staunch criticism from security experts and could even see Wikipedia pull its service from the UK. 68 IT security and privacy experts have warned that the Online Safety Bill poses a material risk to data security. The Bill would require any “user-to-user” service to monitor communications to remove illegal content. This is highly problematic for messaging apps who use end-to-end encryption to protect data from hackers. Apps including WhatsApp, Signal and Element have all threatened to pull out of the UK if the Bill comes into effect. They warn that introducing such changes would lower protection for users and puts user data at significantly greater risk.
Wikipedia has also warned it will withdraw from the UK due to the unmeetable requirements. Another requirement of the Bill would be to verify the ages of users and block children from inappropriate content. Wikipedia has said it will not do this and the proposals are too burdensome. The Bill has already passed through the Commons and is now with the House of Lords. Experts are hoping that the Lords will propose amendments taking their warnings into account.
5. LIBOR TRADER WINS APPEAL
A former UBS trader who was jailed in the Libor interest rate rigging scandal has won the right to appeal the case. The Court of Appeal will now hear his case following a decision in the US that found the cases against Libor traders were flawed. Tom Hayes was sentenced to 11 years in jail in 2015 but has protested his innocence. The London Interbank Offered Rate (LIBOR) is the rates at which banks lend to each other. A scandal erupted when it transpired bankers had been rigging the Libor rate. 37 traders both in the US and UK have been prosecuted for rigging interest rates. If the Court of Appeal overturns his conviction, 9 other traders who were convicted in the UK could also see their convictions quashed.
6. JD AND LEICESTER CITY FC FINED
JD and Leicester City FC have been reprimanded for breaching competition law between 2018 and 2021. The sportswear retailer stopped selling Leicester City clothing online between 2018 and 2019. In 2019, JD agreed not to undercut Leicester with their online offerings and to exclude Leicester’s products from their free delivery promotions. JD brought the activity to the attention of the Competition and Markets Authority and was granted immunity from facing any fines. Leicester, on the other hand, was fined £880,000. JD has said it has taken remedial action and its senior management has changed since the offences took place. JD had faced a similar situation with Rangers in 2022 and was fined £1.5 million for price fixing.
7. EMPIRE CINEMAS FALLS INTO ADMINISTRATION
Empire Cinemas has collapsed into administration and 150 staff will now lose their jobs. Six of Empires 14 UK Cinemas will close immediately. The company had struggled with weak sales and high costs and this ultimately led to its current distress. Customers who bought advance tickets will be refunded. Gift cards will still be accepted at the remaining Cinemas.
This comes as Cineworld prepares to file for administration. The chain failed to find a buyer and is now undertaking a restructuring. Cinemas suffered heavily during the pandemic and many have not recovered. The cost of living crisis has further exacerbated the problem. It is likely that we will see more closures and consolidation in the sector going forward.
8. UK HOUSE PRICES FALL
House prices in the UK have fallen by 2.6%, the fastest rate since 2011. In London, prices also fell by 2.6% but this is the fastest decline since 2009. The average UK house price is now £285,932 and £533,057 in London. The south of England outside of London is seeing the steepest decline of 3%.
The market appears to be correcting itself slightly after a house buying frenzy during the pandemic. Historically low interest rates along with temporary Stamp Duty relief saw house prices soar by 12.5% in the year to June 2022. Now that interest rates have soared to an average of 6% and lenders have tightened their belts, securing finance credit is becoming increasingly difficult for homebuyers.
9. TESLA VEHICLE DELIVERIES
Tesla had reported a record number of vehicle deliveries in Q2, totalling 466,000. These figures beat analysts expectations of 455,000 and were 83% higher than Q2 of 2022. Tesla slashed the price of its most popular vehicles, Model S, 3, X and Y. These price cuts have paid off and Tesla has enjoyed a significant boost in sales. It is now trailblazing in the electric vehicle market. In the US, Tesla is the top electric vehicle seller. The company sold 300,000 more vehicles than its closest competitors Hyundai and General Motors. Tesla accounts for roughly 60% of all electric vehicle car sales.
10. APPLE CUTS FORECASTS
Apple has drastically cut its production forecasts for its new Vision Pro headset. The augmented reality headset is due to retail at $3,499 but instead of 1 million headsets being produced in 2024, just 400,000 will be made. This is primarily due to manufacturing issues. Sales forecasts have consequently been slashed for the first 12 months following release. Initially, Apple had targeted 3 million sales but analysts now anticipate fewer than 500,000 sales. This is partly due to the manufacturing issues but also the high price point coupled with the cost of living crisis.