The EU Eyes Tech Giants
The European Union has been busy over the last week going after U.S. tech giants for antitrust violations.
Last week, news broke that the European Union is preparing to file formal antirust charges against Amazon for using third-party sellers data to compete against them. If found guilty, Amazon could potentially pay a fine of as much as 10% of its annual revenue.
Yesterday, the EU continued its campaign against potential antitrust violators as it launched two separate antitrust probes into Apple’s App Store and Apple Pay. The Commission, which is the EU's executive arm, will determine whether Apple's guidelines for app developers regarding the distribution of apps violates EU competition rules.
Apple takes 30% from in-app purchases and 30% from subscriptions during the first year an app is in the store, after which the amount declines to 15%. Spotify and Kobo have both filed complaints with the EU regarding the practice.
"It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple’s popular devices," said Margrethe Vestager, head of competition policy at the EU. "I have therefore decided to take a close look at Apple’s App Store rules and their compliance with EU competition rules."
As for Apple Pay, the Commission will investigate Apple's terms and conditions for integrating Apple Pay, limitation of access to NFC technology and allegations of refusals of access to Apple Pay.
"It is important that Apple’s measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices," Vestager said. "I have therefore decided to take a close look at Apple’s practices regarding Apple Pay and their impact on competition."
Apple didn't take the news of the probes particularly well.
"It’s disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don’t want to play by the same rules as everyone else," Apple said in a statement. "We don’t think that’s right — we want to maintain a level playing field where anyone with determination and a great idea can succeed."
Similar to the potential implications of Amazon's antitrust charges, the EU could fine Apple as much as 10% of its annual revenue. Additionally, the EU has the power to shut down tech services if it so chooses.
With the EU stepping up its campaign against tech giants for antitrust violations, it may only be a matter of time before they set their sights on other technology companies that have grown in dominance.
But do valuations even matter anymore? A record 78% of investors believe the market is currently overvalued, according to the Bank of America Global Fund Manager Survey. The tally is the highest since the survey began in 1998 and exceeds the readings during the dot-com bubble. 53% of respondents believe the move from the March low is a "bear market rally," while just 37% believe it is a new bull market. 72% of respondents said U.S. growth and technology stocks are the most crowded trade.
Retail sales bounce back. U.S. retail sales jumped 17.7% last month, marking a new single month record since data began in 1992. April's drop in retail sales was revised to a 14.7% drop from the previously reported 16.2% decline, which still marks the worst month on record. Despite May's increase, retail sales still remain 8% below their February level and are down more than 6% from the same period a year earlier.
No mask, no flying. Seven U.S. airlines are set to punish passengers who refuse to wear a face mask while flying. Penalties for not wearing a face mask will vary by airline, but could include having flying privileges suspended. "US airlines are very serious about requiring face coverings on their flights," Airlines for America CEO Nicholas Calio said. "Carriers are stepping up enforcement of face coverings and implementing substantial consequences for those who do not comply with the rules."
FCC slams T-Mobile. The Federal Communications Commission will open a probe into T-Mobile after a network outage left customers unable to make calls and send text messages for 12 hours on Monday. "The T-Mobile network outage is unacceptable. The @FCC is launching an investigation. We’re demanding answers - and so are American consumers," FCC Chairman Ajit Pai tweeted. T-Mobile CEO Mike Sievert blamed the outage on an "IP traffic related issue."
Amazon installs Distance Assistants. Amazon has installed camera systems it calls "Distance Assistants" in its warehouses to alert employees if they are violating social distancing guidelines. The system, which uses Amazon software, uses machine learning and depth sensors to flash red if an employee is too close to another employee. Amazon has rolled out the system at a handful of facilities and expects to roll it out at hundreds more in the coming weeks. The software is open source so other companies can use the system at their facilities.