The week’s news included; TikTok sues over Divest or Ban bill, FTX creditors set to be compensated 18 months after collapse, Disney and Warner to bundle streaming services in the US.

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. – How long-term mortgages could help solve the UK housing crisis
  • Lawcareers.net – What’s the regulatory landscape surrounding influencer marketing and why should businesses be aware of it?
  • BBC News – Could Ofcom ban social media for under-18s 
  • City A.M. – Sunak’s green U-turn has been a strategic mistake

1. TIKTOK PUSHES BACK ON BAN

TikTok is suing the US government in order to block the new “divest or ban” bill. President Joe Biden approved a bill that gives TikTok owner, ByteDance, until January 19th 2025 to sell TikTok to a US company. Failure to complete a sale would see TikTok banned in the US. App stores would be prevented from offering TikTok and internet service providers would be prohibited from supporting the app. US lawmakers claim this bill is necessary to protect national security. They expressed concerns that TikTok could share data of US users with the Chinese government. TikTok and ByteDance have staunchly denied all allegations. 

ByteDance and TikTok are now suing the US government claiming the bill infringes upon the US constitution including the right to free speech. TikTok has 170 million users in the US alone. Any sale would require Chinese government approval and China has already said it would block such a move. Furthermore, TikTok has said it would rather close the app than sell to a US company. Even if TikTok wanted to sell, there are very few companies capable of buying a multibillion dollar giant like TikTok. 

Bytedance is 58% owned by global institutional investors such as BlackRock. Chinese founder Zhang Yiming owns 21% and ByteDance employees also own 21%. This includes 7,000 Americans.

2. SELF-DRIVING CAR FIRM RAISES $1BN

Self-driving firm Wayve has raised £840 million in its latest funding round. Wayve is developing AI technology to power self-driving cars. Major players including Microsoft and Nvidia have invested in the company. This is also the largest AI investment in a British firm and in Europe. As AI technology gets smarter, this will propel self-driving cars into the mainstream. The UK hopes to allow self-driving cars on some roads by 2026. In the US, Fatal crashes involving autopilot systems in Fords and Teslas have led regulators to probe the technology more deeply

The UK’s competition watchdog is exploring the risks of large firms like Microsoft and Amazon having too much power in the budding AI space. The pair have spent billions buying and partnering with small players (see previous top 10).

3. FTX RECOVERY

The vast majority of FTX creditors will now get their money back, 18 months after the cryptocurrency exchange collapsed. A reorganisation plan has been devised and up to $16 billion of dollars in assets have now been recovered. The plan needs approval by the bankruptcy courts but it looks promising. Under the plan, 98% of creditors will receive their money back plus interest. FTX collapsed after it was found to have defrauded customers and founder,  Sam Bankman-Fried, along with associates had embezzled funds. Bankman-Fried was recently sentenced to 25 years in prison earlier this year for fraud and conspiracy. Check out our previous article exploring the collapse. 

4. CHINESE EVS FACE 100% US TARIFF

Joe Biden is set to increase tariffs on imported Chinese electric vehicles and green goods from 25% to 100%. The US government believes that China is heavily subsidising clean energy products in order to flood the market. Along with electric cars, solar panels and batteries will also be subject to the tariff hikes. The US is sending their Treasury Secretary, Janet Yallen, to encourage other Western allies to take similar action to prevent China dominating this critical market. Full details of the plans will be disclosed in the coming weeks. The Wall Street Journal first reported the planned increase. 

5. US BLOCKS CHIP SALES TO HUAWEI

The US government has revoked the permits of US chipmakers to export microchips to Chinese tech firm Huawei. Huawei is a large player in the telecommunications space and is a forerunner in 5G technology. The US however, has claimed the company has links to the Chinese government. In 2019, under Donald Trump, they restricted some exports to Huawei. Since then, US companies have been obliged to obtain permits from the US government before exporting to Huawei and other companies related to the Chinese government. Now,  many remaining export permits granted to US companies like Intel and Qualcomm have been revoked. The specific permits that have been revoked have not been disclosed. China claimed US lawmakers are suppressing Chinese companies without justification. 

6. LVMH SUES VISA AND MASTERCARD

Visa and Mastercard are being sued by luxury fashion conglomerate LVMH, reportedly over fees. According to the Telegraph multiple lawsuits have been filed in the High Court. Full details of the lawsuits have not been disclosed. 

It is believed however, that this is related to interchange fees. These fees have long caused legal battles as retailers claim the charges set by Visa and Mastercard are uncompetitive. In the US, the pair recently settled its dispute with retailers and agreed to reduce their fees. This reduction could save retailers $30 billion over five years. Similar lawsuits are still ongoing in the UK and EU. Visa and Mastercard have always denied wrongdoing and claim the fees are fair.

7. DISNEY AND WARNER TO BUNDLE STREAMING SERVICES

Walt Disney and Warner Bros Discovery are set to bundle their offerings to US customers from this summer. Disney+, Hulu and Max streaming services will all be available to customers on any of these platforms. The trio face increasing competition from Netflix and Amazon Prime and this move should help counter the pressure. By offering content from all three services on their platforms they can draw in and retain more subscribers. The cost for the plans have not yet been revealed. 

Streaming companies are exploring ways to boost subscriptions and better monetise their user base as demand has weakened. Netflix most notably introduced new subscription plans with ads and also cracked down on password sharing. Disney’s ESPN already struck a deal with Fox Corp and Warner Bros Discovery to launch a new sports platform. The platform will host a range of sports including Formula 1, NFL, NBA and Major League Baseball.

8. UK OUT OF RECESSION  

The UK is officially out of recession although growth remains slow. The UK economy grew by 0.6% in the 1st quarter of 2024. In the last two quarters of 2023, the UK fell into recession after consecutive quarters of decline. With the latest growth figures however, the economy exited decline, marking one of the shortest recessions on record. While there was optimism that the UK was on a road to growth, there was still much hesitation about the overall economy from the Bank of England. Interest rates remained at 5.25% in the latest MPC meeting. The Bank has hinted that interest rate cuts could come as soon as June. This however, is heavily tied to inflation which may not hit the target rate of 2% as early as anticipated.

9. CAZOO NEARING COLLAPSE

Online car retailer Cazoo is nearing collapse just shortly after a sales frenzy during the pandemic. Cazoo is a second hand car sales platform that launched in 2018. The pandemic coincided with a semiconductor chip shortage and car production slump. Demand for second hand cars soared and Cazoo hit a $7 billion valuation in its IPO. Now, its close to entering administration and worth just $30 million. It has failed to retain customers and struggled to attract investment. Even at its peak, Cazoo never turned a profit and posted heavy lossee for 2021 and 2022. Cazoo has already slashed over 75% of its workforce and now the jobs of its remaining 1000 staff are at risk. The company already announced it would wind down its European business. It is struggling to raise cash or a new buyer for all or even part of the business.

10. NQE SALARY BUMPS

US law firm Quinn Emanuel has bumped up salaries in its London office, breaking new records. Newly qualified (NQ) solicitors will receive a 18% pay rise bringing their salary to a staggering £180,000. Quinn Emanuel does not offer training contracts and as such will be looking to attract top talent trained at other firms. Two weeks ago, Magic Circle law firm Freshfields increased its NQ salary to £150,000. This pushed a range of firms to bump up their pay packets to remain competitive. Quinn Emmanuel specialises in business litigation.