Happy New Year!
The week’s news included; Google settles claims of tracking users on incognito mode, New tax rules for online sellers, NYT sues OpenAI for copyright infringements, McDonald’s sales hit by boycott.
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:
- The Guardian – Britain’s housing market may be ‘past peak pain’ but what will 2024
- BBC News – How will the UK economy compare to other countries in 2024?
- City A.M. – Doctors must be paid more, but money alone won’t solve the NHS’s recruitment woes
1. GOOGLE SETTLES LAWSUIT OVER TRACKING INCOGNITO BROWSING
Google has settled a $5 billion lawsuit which alleged that they tracked users’ browsing in private mode. According to the lawsuit, the tech giant continued to track users in incognito mode on Chrome or in private mode on other browsers. Although user activity on private mode isn’t saved to their browser, website usage is reportedly collected and is made available to website owners. A California court had previously rejected Google’s attempt to get the case dismissed and allowed it to proceed. Last week however, the judge put the case on hold as a preliminary settlement had been agreed. The details of the settlement were not disclosed by the plaintiffs who were seeking over $5 billion. A formal settlement will be presented to the court by next month. This comes as Google introduced a new feature in Chrome to disable third party cookies, see BBC News article.
2. SPACEX HIT BY LABOUR COMPLAINT
Elon Musk’s SpaceX has been hit by a complaint for unlawfully firing workers. The National Labor Relations Board (NLRB) claims SpaceX fired 8 workers who wrote an open letter to executives with their concerns about their workplace. They claimed the working environment was toxic and harassment was commonplace. They also criticised founder and CEO Elon Musk. They were subsequently interrogated by management and ultimately dismissed. US labour law however permits workers to jointly request better working conditions, as was allegedly done by the 8 workers. The NLRB is now taking action against SpaceX. A board appointed by the NLRB will review the case.
SpaceX can settle the case but if it chooses not to do so then the case will be heard by an administrative judge. A hearing is set for 5 March. If it is found the sacking were unlawful, SpaceX may be forced to reinstate the workers and grant them back pay.
3. NEW TAX RULES FOR ONLINE SELLERS
New tax rules means sellers on sites like Vinted, Depop and eBay will be forced to share more information with the tax man. Digital platforms must now report income sellers make through their sites to HMRC. Other platforms including freelance, taxi hire, food delivery sites and even rental sites like Airbnb will also be subject to the rules. Sellers on online platforms and freelancers have a £1000 tax-free allowance and do not have to fill in tax returns. Those earning over £1000 annually may need to contact HMRC. Platforms will need to report tax information on its sellers for the year by the end of January 2025. This follows the UK signing up to the Organisation for Economic Cooperation and Development (OECD) tax rules to clamp down on tax evasion.
4. NYT SUES OPENAI
The New York Times has sued ChatGPT maker OpenAI for copyright infringement. OpenAI is accused of using millions of NYT articles to train the ChatGPT system without consent. Many answers given by ChatGPT appear to use excerpts from NYT articles that are behind a paywall. The publisher claims they are losing out on revenue due to this infringement. NYT is now seeking billions in damages. Microsoft is also named as a defendant. Microsoft is a key backer of OpenAI and integrated the chatbot into its search engine.
OpenAI is being shot at from all angles. A similar copyright infringement lawsuit against Open AI brought forward by authors in September (see previous top 10). Code and programming website GitHub also claimed OpenAI and Microsoft used their code without permission. Meanwhile regulators across the globe are clamping down on AI systems.
5. CHINESE BYD OUTSELLS TESLA
China’s electric car makers are gaining speed in EV sales. One of China’s largest producers, BYD, sold a record 526,000 electric cars in Q4 of 2023. This was roughly 40,000 more cars than Elon Musk’s Tesla in the same period. Throughout the year however, Tesla sold 1.8 million cars, roughly 200,000 more than BYD.
Chinese BYD is a specialist in battery production and is able to produce its own batteries for its electric vehicles. This brings costs of production down significantly and has contributed to its growth in the electric vehicle space. It now offers electric cars for as little as £8000, well below Tesla’s entry level Model 3 which retails at roughly £30,000. Tesla however, markets itself as an aspirational product despite attempts to break into the mass market. BYD’s growth shows the increasing competitiveness in the EV space.
6. VALUE OF X PLUNGES 71% SINCE MUSK’S PURCHASE
The value of X has crashed 71% since Musk’s takeover in October 2022. Elon Musk bought Twitter for $44 billion 14 months ago but it is now estimated to be worth $12.5 billion. This was calculated as fellow shareholder, investment firm Fidelity, wrote down the value of its holdings of X by 71.5%. This write down comes despite Musk’s revenue raising efforts. Musk cut around 50% of staff, reduced moderation and introduced paid subscriptions for X in order to boost cash flow. Some changes however, turned off advertisers and many huge players pulled their ads, significantly hitting X’s revenue.
7. MCDONALD’S BOTTOMLINE HIT BY BOYCOTTS
McDonald’s has been hit hard by boycotts over its position regarding the ongoing conflict between Israel and Palestine. The fast food chain reportedly offered free meals to the Israeli Defence Force following the October 7th attack. Franchises across the Middle East swiftly distanced themselves from the actions and pledged support for civilians in Gaza. This did not stop a global call to boycott McDonald’s. Now, McDonald’s confirmed that this boycott has caused a “meaningful business impact”. It did however, describe the accusations as “misinformation” regarding the position of the organisation. Several markets across the Middle East and other areas have seen sales slump significantly and show no sign of recovery as calls for permanent boycotts remain strong.
8. M&A ACTIVITY HITS 10-YEAR LOW
M&A activity for 2023 slumped to a 10-year low, according to the London Stock Exchange Group (LSEG). The total value of M&A deals was $2.9 trillion, down 17% from 2022. Europe was the hardest hit with M&A activity falling 28% in 2023. There was also a smaller number of deals globally in 2023, 6% fewer than in 2022. The number of deals valued at $10 billion or more was also down 13%.
9. JD ISSUES PROFIT WARNING
JD Sports has issued a profit warning after worse than expected Christmas sales. The company now expects annual profits to be £125 million lower than expected. JD anticipates profits of £935 million. Low demand during the festive period coupled with significant discounting were primarily blamed for the weak sales figures. Shares in the retailer plunged by 20% in response to the news. Analysts have said the poor performance of one of the UK’s largest retailers indicates a continued slowdown in consumer retail spending.
10. AMAZON INTRODUCES CHARGE FOR AD-FREE PRIME VIEWING
Amazon has joined the club and, like its competitors, is introducing a surcharge for ad-free viewing on Prime Video. From January 29, users in the UK, will need to pay an extra £2.99 per month to get ad-free viewing on Prime Video. The standard charge of £8.99 per month for Prime delivery, music and video will remain the same. Users in Canada, Germany and the US will also face the new surcharge.
Like most other major streaming platforms, Amazon’s subscription numbers were hit by the cost of living crisis. Users cut back on non-essentials and streaming subscriptions were among the first things that customers cut. Amazon lost 167,000 subscriptions between January and May 2023. The new charge for an ad-free service aims to recoup some of this lost revenue.