- In TECH NEWS, EU targets Big Tech and Facebook puts out dodgy ads
- In EMPLOYMENT NEWS, banks tell staff to come home and Silicon Valley companies look at pay cuts
- In NEWS ON CONSUMER & CORONAVIRUS TRENDS, EV sales triple, Levi’s and Hilfiger get creative, McDonald’s and the like boom while your local eatery suffers, UK cinema admissions reach historic lows while vaccine recourse will be limited
- AND FINALLY, I bring you an unusual takeaway option…
So the EU continues to target Big Tech and Facebook puts up dodgy ads…
EU targets Big Tech with ‘hit list’ facing tougher rules (Financial Times, Javier Espinoza) shows that EU regulators are compiling a list of up to 20 major internet companies that will have to adhere to much stricter rules aimed at reining in the power of the behemoths. Large platforms will face more stringent rules than smaller ones and they will be forced to share data with rivals and be more transparent about the way they gather data. * SO WHAT? * The details are still being discussed but it seems that the EU wants to go beyond just imposing fines – which are peanuts to these giants – and make them share their data. This is obviously going to catch US Big Tech and they certainly won’t take something like this lying down. The EU has already been slapped down by one company – Apple – so combined resistance is likely to be formidable.
Facebook approved 200 ‘dangerous’ QAnon ads (Daily Telegraph, Laurence Dodds) shows that the social media giant profited from QAnon conspiracy theory ads placed over the spring and summer before finally removing related groups, pages and Instagram accounts last week. QAnon believers think that a large number of celebs and politicians belong to some Satanist group that kidnaps children to abuse them and then consume their blood in the form of a psychoactive drug. They believe that Trump is waging a secret war against this conspiracy and that he will round up his political opponents and execute them en masse. * SO WHAT? * This kind of thing just goes to show how social media can spread views so quickly and I would have thought this is something that those in the EU (and elsewhere) will be keen to clamp down on. Whether they actually can is another question, but things will no doubt be hotting up on the “fake news” and political ad front in the run-up to the presidential election.
Banks tell staff to return and Silicon Valley companies aim to cut pay…
Banks call back stayaway staff abroad amid tax warning (Financial Times, Laura Noonan and Stephen Morris) shows that the City of London’s biggest banks are clamping down on those who are working from home at overseas holiday villas or home countries – although some say that the threat of having to pay more tax is enough to get workers scrambling back! * SO WHAT? * The accommodating approach that was taken early in the outbreak by the likes of Citigroup, Credit Suisse and Deutsche Banks etc. is now hardening now that tax implications are on the horizon! If staff stay put outside the UK there is a danger that they will be classed as having a “personal establishment” in the country they were working from and thus be exposed to paying more tax.
In Silicon Valley pay cuts ignite tech-industry Covid-19 tensions (Wall Street Journal, Katherine Bindley and Eliot Brown) we see that Silicon Valley employers are
increasingly considering reducing salaries by 15% or more depending on where someone moves. Companies will argue that this sort of thing is standard practice in many areas but opponents to this say that companies are hiring employees for their skills and what they can do rather than where they live. Companies including Facebook, Twitter and Microsoft have been letting increasing numbers of employees work from home and payments company Stripe has gone one further by offering employees leaving San Francisco, New York or Seattle a one-time bonus of $20,000 to relocate whilst at the same time saying that they would have to take a pay cut of up to 10%. * SO WHAT? * I have said since this pandemic started that I think that employers will ultimately use the “option” of home working as a means of lowering the overall wage bill. They will couch it as giving employees more freedom, but in actual fact it’s all about lowering overheads when business conditions are tight! Still, I think having the option is great and will give people more choice in terms of where they choose to live and how to balance their lives. I think that once things die down, though, there will be a move to get people back into offices – and they will be tempted by potentially higher wages. It will be a while before that happens, though.
NEWS ON CONSUMER & CORONAVIRUS TRENDS
EV sales rise, designers get creative, McDonald’s et al. benefit at the expense of the little guys, UK cinemas suffer and any recourse to vaccine side effects will be restricted…
Electric car sales triple in race to meet Europe CO2 rules (Financial Times, Peter Campbell) shows that sales of EVs in Europe this year will be triple the level last year as carmakers continue to release new models to meet emissions rules, according to forecasts from the policy group Transport & Environment. It says that, based on sales data for the first half of this year, the market share of mostly electric cars will go up to 15% next year. * SO WHAT? * All the carmakers are racing to reduce their average emissions to 95g of CO2 per km because if they don’t they face massive fines. The launch of new greener models has been made more problematic by the pandemic as VW, Hyundai and Kia are among those who have had to delay key rollouts due to production shut-downs. FWIW, I think it’s actually misleading to base such projections on data from the first half of this year because I think that the sort of people who decided to buy an EV during lockdown are probably more affluent than most as these cars are expensive new. Recent data has shown that the most popular car purchases have been for vehicles worth less than £5,000 as people seek a run-around to get to work and avoid public transport – an EV will not be in many people’s budgets I would argue.
Then in Levi’s, Hilfiger push a new kind of online shopping. It looks a lot like QVC (Wall Street Journal, Suzanne Kapner) shows that some brands are going all QVC and turning to online live-streams to attract customers who would otherwise avoid their stores during the pandemic. Such events, where shoppers are shown a number of products and given advice on how to wear them, are already popular in China but are quite new to the US. Shoppers and potential shoppers can ask questions to the host and purchase items. * SO WHAT? * I think that this is a very interesting development – and it seems that others do too as Amazon, Facebook and Instagram are among those to have launched (or at least tested) live sales platforms. Given the restrictions of lockdown, this sounds like an entirely plausible alternative – but it may not be great if the clothes manufacturers themselves decide to cut out the “middleman” by swerving shops and going direct to consumer. I think that this trend is something that could continue post lockdown and grow if what’s going on in China is anything to go by!
Meanwhile, McDonald’s, Chipotle and Domino’s are booming during coronavirus while your neighbourhood restaurant struggles (Wall Street Journal, Heather Haddon) shows that well-capitalised chains are gaining ground while loads of smaller local eateries continue to go bust. Larger operators have more leverage on rents, more space to play with and a broader geographical exposure – as well as drive-through capability. * SO WHAT? * Although it would be fair to say that not every big chain has done well, I think that it will definitely be harder for smaller operators to survive in the current environment. They are just more subject to government guidelines on customer movement restrictions and can’t really do anything about it. FWIW, I think that when we are past the pandemic, there will be a huge mushrooming of independents taking on empty spaces and starting again. Hopefully they will be powered by government grants as well and it may give some the opportunity to “reset”.
In other news, UK cinema admissions on course to be lowest since records began (The Guardian, Mark Sweney) highlights something that we already know – that cinemas are getting decimated because of the lack of films – but that we are now reaching levels not seen since records began in 1928! * SO WHAT? * Films just keep getting pulled on a daily basis so this is hardly surprising. I think it’s all about survival now – but whoever manages to stay intact until the cloud of coronavirus is lifted will make huge amounts of money as people flock back to see movies on the big screen!
Then in People harmed by coronavirus vaccines will have little recourse (Wall Street Journal, Peter Loftus and Susan Pulliam) we see that payouts for potential injuries from covid-19 vaccines will not be very generous. In the US, such instances will only be covered by the Countermeasures Injury Compensation Programme that was set up in 2010 to cover harm resulting from vaccines (e.g. side effects from fainting and then falling and allergic reactions etc.) which has a history of not really paying out that much. * SO WHAT? * I think that this article highlights the potentially wider concern of what could happen if we take coronavirus vaccines and then suffer side effects further down the line. We are all going to get vaccinated when the time comes, but I have no doubt that the companies that make them will seek out watertight promises that they will not be subject to massive class actions if things go seriously wrong given the enormous time pressure they have been put under to get them to market. Will that stop me getting a vaccine when I can? No! But I am sure that there will be resistance from some quarters.
…in other news…
Today, I thought I’d bring you a rather unusual takeaway that could give some a pleasant trip down memory lane in Restaurant is doing £15 ‘back to 90s’ takeaway – with Turkey Twizzlers and Potato Smileys (The Mirror, Courtney Pochin). This sounds pretty grim to me, but maybe it will spark fond memories of more innocent times for others!
Some of today’s market, commodity & currency moves (as at hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!
|FTSE 100 *||Dow Jones *||S&P 500 *||Nasdaq*||DAX *||CAC-40 *||Nikkei **||Shanghai **|
|Oil (WTI) p/b||Oil (Brent) p/b||Gold Per t/oz||£/$||€/$||$/¥||£/€||$/₿|
(markets with an * are at yesterday’s close, ** are at today’s close)