The week’s news included; EU to investigate Apple, Alphabet and Meta over potential DMA breaches, Trump Media hits $9bn valuation in IPO, Temu’s £50 giveaway reviewed by ICO over data collection.

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. – Is AI turning recruitment into the new online dating?
  • CNBC – ‘Guilt tipping’ is getting out of control, but signs show consumers are pushing back
  • BBC News – Could artificial intelligence benefit democracy?
  • City A.M. – Will it work? Taxing private school fees

1. EU LAUNCHES INVESTIGATIONS OVER DMA BREACHES

The EU is continuing its antitrust crusade against big tech, announcing new investigations against three companies. Apple, Alphabet and Meta are being investigated for potential breaches of the Digital Markets Act (DMA). The DMA introduced onerous new requirements for the largest tech firms along with huge penalties. Only Amazon, Alphabet, Apple,  Meta, Microsoft and TikTok owner, ByteDance, are subject to the DMA. Now the EU is investigating three of them.

Apple may have breached the DMA by failing to allow apps to freely communicate and contract with users. It also may have failed to give users adequate choices. Alphabet may have also potentially failed to allow apps to communicate with users and may prefer its own services over competitors’ on Google search results. Meta may be unfairly requiring payment from users to stop their data being used for ads. The companies have said they will cooperate with the EU’s investigation but believe that they are compliant with the DMA. This comes as Apple was recently hit by an antitrust charge in the US (see previous top 10)

2. TRUMP MEDIA IPO

Donald Trump’s media company launched its IPO last week and it’s shares soared 16% on its debut. Trump Media & Technology reached a valuation of $9 billion and raised $200 million from the listing. The company went public via a SPAC listing. Analysts argue that the share price has been overinflated. Much of this hype around the stock has been fuelled by wealthy Trump supporters rather than investment firms. Trump Media’s flagship social media site, Truth Social, posted $3.3 million in revenue and $50 million in losses last year. It only has 8.9 million users, only a portion of whom are active. By comparison, Reddit, a platform with 260 million users, only achieved a $11 billion valuation.

This listing comes as Trump has been ordered to pay millions in legal penalties and fees. The former President owns under half of Trump Media’s shares, meaning his shares are now worth $4 billion. Trump is, however, prohibited from selling stock for 6 months. When he does sell, the share price is likely to tumble. 

3. AMAZON INVESTS $2.75BN IN ANTHROPIC

Amazon is investing another $2.75 billion in AI startup Anthropic. This marks Amazon’s largest outside investment in its history. Amazon already invested $1.25 billion in Anthropic and last week used its option to invest a further $2.75 billion. The tech giant hopes this investment will help cement its position in the AI space. Anthropic has developed its own generative AI chatbot called Claude, which competes with OpenAI’s ChatGPT and Google’s Bard. It is hoped the deal could help develop Amazon’s Alexa home assistant and boost its presence in the AI space. Through the deal, Anthropic will have access to Amazon’s vast resources and computing power, allowing it to further improve its own technology.

4. THAMES WATER TROUBLES

Thames Water is scrambling for cash again. Last year, it secured £750 million in fresh shareholder funding to stay afloat. The company struggled under its £18 billion debt pile. A £4 billion turnaround package was announced along with price hikes for customers. But now shareholders refused to provide the first instalment of the £750 million package, which was a £500 million investment. This is because certain conditions had not been met by Thames Water. The Chancellor has said that Thames Water could be brought into public ownership if new funding is not secured. Thames Water however, said it is confident it is not near collapse. A lack of investment in pipes and infrastructure has meant Thames Water has been the UK’s worst polluter of rivers and waterways. Price hikes for customers will inevitably be used to pay for the repairs. 

5. TEMU GIVE AWAY REVIEWED

Temu’s cash giveaway is being reviewed by the UK Information Commissioner’s Office. The Chinese retailer is offering £50 to users in return for signing up and getting others to sign up to the platform. This process involves providing a significant amount of personal data. Furthermore, the terms give Temu the right to use and publish their “photo, name, likeness, voice, opinions, statements, biographical information, and/or hometown and state” for advertising or promotional purposes, in perpetuity. Temu said its original terms for the giveaway were “overly broad” so they recently amended them. The company confirmed that they only ever use username and profile pictures in the promotion for referral functionality and winner announcements.

The ICO is reviewing this giveaway amid concerns over the impact on data privacy. Temu offers a similar platform to Amazon in terms of the range of products it hosts but it is notoriously cheap. There are many claims however, that its products are made using forced labour.

6. GOVERNMENT SELLS OFF NATWEST STOCK

The UK government has sold off more Natwest stock, taking its ownership below 30%. Consequently, the taxpayer is no longer the controlling shareholder of the bank. Natwest, formerly Royal Bank of Scotland, was bailed out in the 2008 financial crisis and taken into public ownership. After the crisis, the government began gradually selling off its 84% stake. In recent years, Natwest has turned its fortunes around and returned to profitability. Now the government owns a 29.82% stake worth roughly £7 billion. The plan is to sell all its remaining stake in Natwest by 2026, provided Natwest’s share price remains at a good level.

This news comes as Natwest also scrapped its own buy-now-pay-later offering. Low usage by customers has been cited as the cause for the decision. Natwest had only launched the offering in 2022.

7. FTX FOUNDER SENTENCED TO 25 YEARS

Co-founder of collapsed crypto exchange FTX, Sam Bankman-Fried, has been sentenced to 25 years in prison. Bankman-Fried was jailed on multiple charges for defrauding customers after FTX had misappropriated $8 billion of customer funds. The funds were used for property purchases, political donations and to fund Bankman-Fried’s lifestyle. Bankman-Fried could have received a 100 year sentence under government guidelines. The judge lessened the sentence given that customers will recover a significant amount of losses and he was a first-time non-violent offender. With a 25 year sentence, Bankman-Fried could be released in just 13 years, aged 45. Bankman-Fried will however, forfeit $11 billion in personal assets to compensate victims. Check out our previous article exploring FTX’s collapse. 

8. UK CAR EXPORTS FACE CANADA TARIFFS

UK made cars exported to Canada now face an additional 6% tariff due to Post-Brexit rules. The UK had been trading on a rollover deal with Canada allowing the UK to trade on the same terms as when in the EU. This deal has expired and now tariffs will apply as no new deal could be agreed. Canada is the UK’s eight largest car export market with 1.3% of UK built cars being shipped there. Post-Brexit negotiations are going poorly with Canada. Free trade deal discussions have halted entirely. Canada had already imposed tariffs on UK exports of cheese. The UK also blocked imports of Canadian hormone-treated beef.

9. FCA CRACK DOWN ON FINFLUENCERS

The UK Financial Conduct Authority has issued new rules to crack down on social media financial influencers. The regulator found many financial influencers fail to adequately highlight the risk of products they promote. These “finfluencers” are now required to include appropriate risk warnings on financial products they promote. These must be displayed throughout the video, not just in the caption. They are also restricted from exaggerating financial gains. With 80% of millenials and Gen Z using social media to source financial advice, the regulator has been keen to monitor this space. As finfluencers gain more prominence in the financial space, greater restrictions will be introduced.

10. RETAILERS CHANGE ENVIRONMENT CLAIMS PROCESSES

Asos, Asda and Boohoo have all agreed to change the way they make environmental claims following a CMA probe. The CMA found that retailers exaggerated their green credentials in their ads and investor promotions. Now, the three retailers will offer “clear and specific” product information. They will provide more detail on how their products are eco-friendly and percentages of how much of each product is made from recycled materials. All environmentally friendly labelled products must meet minimum criteria which can be set by the retailer but must be clear. Greenwashing has been a growing concern of regulators as retailers seek to cash in on ESG investments and environmentally conscious shoppers. The new guidelines by the CMA are an important step forward to bringing greater transparency to environmental claims.