The payment networks said they would adopt the International Organization for Standardization’s new merchant code for gun store sales.
A group of Republican attorneys general are pushing the major payment networks — Visa, Mastercard and American Express — to drop their plans to start tracking sales at gun stores, arguing the plans could infringe on consumer privacy and push legal gun sales out of the mainstream financial network.
The letter comes more than a week after the payment networks said they would adopt the International Organization for Standardization’s new merchant code for sales at gun stores. The merchant code would categorize sales at gun stores not unlike how payment networks categorize sales at airlines, restaurants, and department stores.
Related StoryMajor Credit Card Companies Will Soon Categorize Gun Store Purchases
In their letter, the AGs threaten to use all legal tools at their disposal to stop the payment networks from tracking gun sales.
“Categorizing the constitutionally protected right to purchase firearms unfairly singles out law-abiding merchants and consumers alike,” the letter said.
In recent weeks gun control advocates argued that separately categorizing gun store sales could potentially flag a surge of suspicious sales activity to public safety officials. They have used the example from the 2016 Pulse Nightclub shooting in Orlando, where the shooter purchased $26,000 worth of ammunition ahead of the massacre.
But the Second Amendment lobby and its advocates have argued that the merchant code would do a poor job of tracking potential red flags and could unfairly flag legal gun purchases. A sale of a gun safe worth thousands of dollars would be categorized as a gun store sale just as much as someone buying thousands of dollars worth of ammunition, for example.
Related StoryManufacturers Made Over $1B Selling AR-15-Style Guns Over Past Decade
The payment networks said when they adopted the policy that they are just following the guidance from ISO. It will be largely up to the banks who issue the credit and debit cards to decide whether they want to stop sales under certain merchant codes.
The CEOs of the major banks will appear in front of Congress on Wednesday and Thursday this week, and they are almost certainly to be asked questions on the gun store sales tracking controversy.
Companies that allow consumers to complete a purchase after the point of sale are often unregulated and can lead users into deeper debt.
There’s a long history of paying for things in installments: There’s the way old commercials advertise, there are rent-to-own products, or shoppers can put purchases on a payment layaway plan.
But recently, more options have popped up that give consumers the items right away and takes away the threat of repossession.
Companies like Afterpay, Klarna and Affirm have become a more frequent resource for people looking to buy things using a stretched-out payment plan. They have increasingly been showing up as payment options on websites of major retailers, including Target, Bed Bath & Beyond and Amazon.
It’s a huge business. A report from the California Department of Financial Protection and Innovation found that 91% of consumer loans taken out in the state in 2020 were from buy now, pay later lenders.
But unlike leasing a car or taking out a new credit card, there isn’t much regulation of this space because of how new it is. Buyers get both the instant gratification of getting their purchase right away, and it doesn’t necessarily affect their credit score.
“A significant portion of people take out multiple buy now, pay later purchases,” said Nadine Chabrier, litigation policy counsel at the Center for Responsible Lending. “There’s no consideration of the ability to repay, and there’s no specific date on which a person can count on their final pay later coming out of their account. So, people tend to take on multiple purchases and get overwhelmed.”
Chabrier is concerned that the short-term nature of these loans has helped buy now, pay later providers avoid existing rules.
“Some of the things that we’ve advocated for is to regulate buy now, pay later like a credit card,” Chabrier said. “There are really important protections there for consumers that you have under credit cards that you don’t have when you take out a financial planner.”
Related StoryWhite House Officials: Inflation Relief Is Coming
These types of services often have a younger, more diverse user base. A Morning Consult poll conducted earlier this year found that Gen Z, as well as Black and Hispanic Americans, were more likely to use a buy now, pay later service than the average American.
Elyse Hicks, from the consumer advocacy group Americans for Financial Reform, says that lines up with other trends in economic inequality.
“On a basic level, BIPOC communities have less, so they’re more inclined to use products like Buy Now, Pay Later, Klarna, in order to get the things that they need or want because it puts those bite-sized pieces or bite-sized installments, something that they feel like they can handle, in front of them,” Hicks said.
The same Morning Consult poll found that one in five borrowers using buy now, pay later missed a payment in January, the month they took the survey.
It can spiral into some big fees for consumers.
In August, after President Biden announced his intent to forgive $10,000 or more for Americans with student loan debt, one Twitter user’s question about whether President Biden would forgive AfterPay debts too went viral.
For now, consumers like Grace Oppy, who is an Afterpay user currently in debt, and the millions of others who use these services are at the mercy of the companies. Affirm, for example, does pitch consumers on the fact that it has no late fees, but it does note that it would charge up to 36% APR depending on your credit, which is higher than even the highest APR on most credit cards.
But in the moment, the seemingly great deals can be really tempting.
“It started with a lot of strategy,” Oppy said. “I was like, ‘If I just do this, then I will be glam and perfect. I will definitely get my promotion.’ And now… I have $90 earrings. So really, it’s a slippery slope in my mind. My dopamine receptors are just, boom, firing away when I use it.”
The advocates Newsy talked to said that dopamine hit Oppy feels — a rush of satisfaction — is exactly what makes it so tempting to use these services when shopping.
“It just feeds on millennials and Gen Z, of how we like to get things very instantly,” Hicks said. “We all know we want something, that we can get it at a discounted price and get it to our doorsteps very quickly. It hits that dopamine, and we’re onto something else. So, it kind of it puts you in a cycle, and kind of like a debt trap, as well.”
Influencers on social media are pitching buy now, pay later as a life hack for those who want something and don’t want to worry about the cost today.
“You have people who you admire, who look like they have great lives, who then have this clothing item or this product, and it’s just aspirational,” Chabrier said. “It’s understandable for people to aspire to a particular lifestyle or feeling, and that’s what I think this type of marketing plays on.”
Related StoryThe Imbalanced Structure Of How Influencers Make Money
It’s not lost on consumers either.
“They make it seem so frivolous… like a fun app,” Oppy said. “They’re partnering with influencers. It’s really nefarious, and it’s subtle. But, making these people that we all try to base our lives on advertise this pretty predatory lending practice that’s so unregulated: sneaky. And they got me. They got me there.”
But regulation and standards could be on the way soon. Many buy now, pay later loans aren’t reported, meaning that while there’s no guarantee your credit score takes a hit if you miss payments, you also might not be building credit that can help you get other loans or credit cards in the future.
Equifax, Experian and TransUnion — the three largest credit bureaus —announced plans this year to incorporate buy now, pay later loans into their files, but implementation of that is still to be determined.
Meanwhile, state and federal regulatory authorities are looking at how to account for buy now, pay later services.
A group of 21 state attorneys general wrote a letter calling for federal officials to set standards on this. The Consumer Financial Protection Bureau announced during last year’s holiday season that they had started a review of the buy now, pay later industry, with an eye toward federal regulations protecting consumers from debt and ensuring companies tell consumers what fees they could incur.
Advocates are hoping rules will lift the burden from consumers and make the companies themselves have to give more information up front. But until then, they say to make sure to read the fine print.
“Please look at all of your products or your apps,” Hicks said. “See how much you currently owe these buy now, pay later companies, and just be aware of your spending habits. It’s so easy to get out of control with this, but just be aware until regulation comes.”
This trial was part of a broader constellation of about 3,000 federal opioid lawsuits.
A federal judge in Cleveland awarded $650 million in damages Wednesday to two Ohio counties that sued CVS, Walgreens and Walmart over the way the national pharmacy chains distributed opioids to their communities.
U.S. District Judge Dan Polster said in his ruling that the money will be used to fight the opioid crisis in Lake and Trumbull counties outside Cleveland. Attorneys for the counties put the total price tag at $3.3 billion for the damage done.
The judge admonished the three companies, saying they “squandered the opportunity to present a meaningful plan to abate the nuisance” after proceedings last spring to determine what the counties were owed.
Lake County is to receive $306 million over 15 years. Trumbull County is to receive $344 million over the same period. Polster ordered the companies to immediately fork over nearly $87 million to cover the first two years of payments, but it was unclear whether they had to pay that money during their appeals.
“Today marks the start of a new day in our fight to end the opioid epidemic,” Lake County Commissioner John Hamercheck said in a statement.
A jury in November returned a verdict in favor of the counties after a six-week trial. It was then left to the judge to decide how much the counties should receive. He heard testimony in May to determine damages.
Related StoryCDC: U.S. Overdose Deaths Hit Record 107,000 Last Year
The counties convinced the jury that the pharmacies played an outsized role in creating a public nuisance in the way they dispensed pain medication.
It was the first time pharmacy companies completed a trial to defend themselves in a drug crisis that has killed a half-million Americans since 1999.
The decision on damages came on the same day that attorneys general from numerous states announced they had reached an agreement with opioid maker Endo International to pay as much as $450 million over 10 years. The payments settle allegations the company used deceptive marketing practices “that downplayed the risk of addiction and overstated the benefits” of opioids.
Attorneys for the pharmacy chains insisted they had policies to stem the flow of pills when pharmacists voiced concerns and would notify authorities about suspicious orders from doctors. They also said it was doctors who controlled how many pills were prescribed for legitimate medical needs, not pharmacies.
Walmart issued a statement Wednesday saying the counties “sued Walmart in search of deep pockets, and this judgment follows a trial that was engineered to favor the plaintiffs’ attorneys and was riddled with remarkable legal and factual mistakes.”
Walgreens spokesperson Fraser Engerman said: “The facts and the law did not support the jury verdict last fall, and they do not support the court’s decision now.”
He said the court “committed significant legal errors in allowing the case to go before a jury on a flawed legal theory that is inconsistent with Ohio law and compounded those errors in reaching its ruling regarding damages.”
Related StoryWhy More Teens Are Overdosing On Drugs
CVS spokesperson Michael DeAngelis said the company strongly disagreed with the court’s decision on damages as well as the underlying verdict.
CVS is based in Rhode Island, Walgreens in Illinois and Walmart in Arkansas.
Two chains — Rite Aid and Giant Eagle — settled lawsuits with the counties before trial. The amounts they paid have not been disclosed publicly.
Mark Lanier, an attorney for the counties, said during the trial that the pharmacies were attempting to blame everyone but themselves.
The opioid crisis has overwhelmed courts, social-service agencies and law enforcement in Ohio’s blue-collar corner east of Cleveland, leaving behind heartbroken families and babies born to addicted mothers, Lanier told jurors.
Roughly 80 million prescription painkillers were dispensed in Trumbull County alone between 2012 and 2016 — equivalent to 400 for every resident. In Lake County, some 61 million pills were distributed during that period.
Prescriptions for pain medications such as oxycodone and hydrocodone rose as medical groups began recognizing that patients have the right to be treated for pain, Kaspar Stoffelmayr, an attorney for Walgreens, said at the opening of the trial.
The problem, he said, was that “pharmaceutical manufacturers tricked doctors into writing way too many pills.”
The counties said pharmacies should be the last line of defense to prevent pills from getting into the wrong hands.
The trial was part of a broader constellation of about 3,000 federal opioid lawsuits consolidated under Polster’s supervision. Other cases are moving ahead in state courts.
Kevin Roy, chief public policy officer at Shatterproof, an organization that advocates for solutions to addiction, said in November that the verdict could lead pharmacies to follow the path of major distribution companies and some drugmakers that have reached nationwide settlements of opioid cases worth billions of dollars. So far, no pharmacy has reached a nationwide settlement.
The agreement with Ireland-based Endo calls for the $450 million to be divided between participating states and communities. It also calls for Endo to put opioid-related documents online for public viewing and pay $2.75 million in expenses to publicly archive those documents.
Endo can never again market opioids, according to the agreement. It filed Tuesday for Chapter 11 bankruptcy protection.
The company, which has its U.S. headquarters in Malvern, Pennsylvania, did not respond Wednesday to telephone and email requests for comment about the agreement.
Endo produces generic opioids and name brands such as Percocet and Endocet. The company’s Opana ER opioid was withdrawn from the market in 2017.
The attorneys general say Endo “falsely promoted the benefits” of Opana ER’s “so-called abuse deterrent formulation.” The attorneys general said the formulation did not deter abuse of the drug and led to deadly outbreaks of hepatitis and HIV resulting from people injecting it.
A district judge ruled for 20 state attorneys general who sued claiming President Biden’s directives infringe on states’ right to enact certain laws.
A judge in Tennessee has temporarily barred two federal agencies from enforcing directives issued by President Joe Biden’s administration that extended protections for LGBTQ people in schools and workplaces.
U.S. District Judge Charles Atchley Jr. in an order on Friday ruled for the 20 state attorneys general who sued last August claiming the Biden administration directives infringe on states’ right to enact laws that, for example, prevent students from participating in sports based on their gender identity or requiring schools and businesses to provide bathrooms and showers to accommodate transgender people.
Atchley, appointed by President Donald Trump in 2020, agreed with the attorneys generals’ argument and issued a temporary injunction that prevents the agencies from applying that guidance on LGBTQ discrimination until the matter can be resolved by courts.
“As demonstrated above, the harm alleged by Plaintiff States is already occurring — their sovereign power to enforce their own legal code is hampered by the issuance of Defendants’ guidance and they face substantial pressure to change their state laws as a result,” Atchley wrote.
The attorneys general are from Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee and West Virginia.
The directives regarding discrimination based on sexual orientation was issued by the U.S. Department of Education and the Equal Employment Opportunity Commission in June following a landmark civil rights decision by U.S. Supreme Court in 2020 that, under a provision called Title VII, protects gay, lesbian and transgender people from discrimination in the workplace.
The Department of Education guidance from June 2021 said discrimination based on a student’s sexual orientation or gender identity would be treated as a violation of Title IX, the 1972 federal law that protects sex discrimination in education.
The Equal Employment Opportunity Commission released guidance that month about what could constitute discrimination against LGBTQ people and advised the public about how to file a complaint.
With its guidance, the Biden administration in part took a stand against laws and proposals in a growing number of states that aim to forbid transgender girls from participating on female sports teams. The state attorneys general contend that the authority over such policies “properly belongs to Congress, the States, and the people.”
The education policy carried the possibility of federal sanctions against schools and colleges that fail to protect gay and transgender students.
The attorneys general argued that a delaying a legal review of the directives would “cause them significant hardship, as Defendants would be allowed to use the ‘fear of future sanctions’ to force ‘immediate compliance’ with the challenged guidance,” Atchley wrote.
“The Court finds that Plaintiffs have shown a credible threat of enforcement,” Atchley wrote. “Plaintiffs highlight that private litigants are relying on Defendants’ guidance to challenge Plaintiffs’ state laws.”
Atchley noted that the U.S. Department of Education has filed a statement of interest in a West Virginia lawsuit taking a position that Title IX prohibits the state from excluding transgender girls from participating in single-sex sports restricted to girls.
There is no clear blueprint for corporate engagement on abortion. After numerous companies came forward to announce that they would cover travel expenses for their employees to get abortions, executives have had to move swiftly to both sort out the mechanics of those policies and explain them to a work force concerned about confidentiality and safety.
Few companies have commented directly on the Supreme Court’s ruling in Dobbs v. Jackson Women’s Health Organization, which ended nearly 50 years of federal abortion rights. Far more have responded by expanding their health care policies to cover travel and other expenses for employees who can’t get abortions close to home, now that the procedure is banned in at least eight states with other bans set to soon take effect. About half the country gets its health care coverage from employers, and the wave of new employer commitments has raised concerns from some workers about privacy.
“It’s a doomsday scenario if individuals have to bring their health care choices to their employers,” said Dina Fierro, a global vice president at the cosmetics company Nars, echoing a concern that many workers have expressed on social media in recent days.
Popular Information. Match Group declined to comment.
tweet: “I believe CEOs have a responsibility to take care of their employees — no matter what.”
The transactions that created Chemours and reinvented DuPont laid the groundwork for a blame-shifting exercise that has made it difficult for regulators and others to hold anyone accountable for decades of contamination in North Carolina and elsewhere.
State attorneys general in Ohio, New Jersey, New Hampshire, Vermont and New York each sued the companies for having released toxic chemicals into the air, water and soil and for concocting a spinoff to shield DuPont from responsibility. Dutch prosecutors began criminally investigating Chemours for the use of PFOA at a factory in Dordrecht from 2008 to 2012, before Chemours was created.
Yet in courts, in the media and in public settings, DuPont and Chemours have used the spinoff to distance themselves from the problems.
In a court filing in Ohio, where the state has sued over pollution from the Washington Works factory on the West Virginia border, Chemours claimed that the contamination happened before “Chemours even came into existence.” In a securities filing this summer, Chemours stated that it “does not, and has never, used” PFOA. Yet Chemours continues to manufacture other versions of PFAS, including GenX.
DuPont adopted a similar stance. Because Chemours was independent and had assumed responsibility for Washington Works, DuPont claimed it had nothing to do with the pollution. In fact, DuPont insisted, because it was technically a new company, it had never even made the toxic substances in question.
In 2019, Chemours, deep in debt, sued DuPont. Chemours contended that the spinoff was conceived to get DuPont off the hook for its decades of pollution. According to the complaint, DuPont executives decided against a $60 million project that would have stopped Fayetteville Works from discharging chemicals into the Cape Fear River. Instead, DuPont executives made a $2 million change, which they abandoned shortly before they announced the Chemours spinoff.
The lawsuit asked, “Why bother spending money to fix the problem, DuPont apparently reasoned, when it could be conveniently passed on to Chemours?”
John Tye, the founder of Whistleblower Aid, a legal nonprofit that represents people seeking to expose potential lawbreaking, was contacted this spring through a mutual connection by a woman who claimed to have worked at Facebook.
The woman told Mr. Tye and his team something intriguing: She had access to tens of thousands of pages of internal documents from the world’s largest social network. In a series of calls, she asked for legal protection and a path to releasing the confidential information. Mr. Tye, who said he understood the gravity of what the woman brought “within a few minutes,” agreed to represent her and call her by the alias “Sean.”
She “is a very courageous person and is taking a personal risk to hold a trillion-dollar company accountable,” he said.
On Sunday, Frances Haugen revealed herself to be “Sean,” the whistle-blower against Facebook. A product manager who worked for nearly two years on the civic misinformation team at the social network before leaving in May, Ms. Haugen has used the documents she amassed to expose how much Facebook knew about the harms that it was causing and provided the evidence to lawmakers, regulators and the news media.
knew Instagram was worsening body image issues among teenagers and that it had a two-tier justice system — have spurred criticism from lawmakers, regulators and the public.
Ms. Haugen has also filed a whistle-blower complaint with the Securities and Exchange Commission, accusing Facebook of misleading investors with public statements that did not match its internal actions. And she has talked with lawmakers such as Senator Richard Blumenthal, a Democrat of Connecticut, and Senator Marsha Blackburn, a Republican of Tennessee, and shared subsets of the documents with them.
The spotlight on Ms. Haugen is set to grow brighter. On Tuesday, she is scheduled to testify in Congress about Facebook’s impact on young users.
misinformation and hate speech.
In 2018, Christopher Wylie, a disgruntled former employee of the consulting firm Cambridge Analytica, set the stage for those leaks. Mr. Wylie spoke with The New York Times, The Observer of London and The Guardian to reveal that Cambridge Analytica had improperly harvested Facebook data to build voter profiles without users’ consent.
In the aftermath, more of Facebook’s own employees started speaking up. Later that same year, Facebook workers provided executive memos and planning documents to news outlets including The Times and BuzzFeed News. In mid-2020, employees who disagreed with Facebook’s decision to leave up a controversial post from President Donald J. Trump staged a virtual walkout and sent more internal information to news outlets.
“I think over the last year, there’ve been more leaks than I think all of us would have wanted,” Mark Zuckerberg, Facebook’s chief executive, said in a meeting with employees in June 2020.
Facebook tried to preemptively push back against Ms. Haugen. On Friday, Nick Clegg, Facebook’s vice president for policy and global affairs, sent employees a 1,500-word memo laying out what the whistle-blower was likely to say on “60 Minutes” and calling the accusations “misleading.” On Sunday, Mr. Clegg appeared on CNN to defend the company, saying the platform reflected “the good, the bad and ugly of humanity” and that it was trying to “mitigate the bad, reduce it and amplify the good.”
personal website. On the website, Ms. Haugen was described as “an advocate for public oversight of social media.”
A native of Iowa City, Iowa, Ms. Haugen studied electrical and computer engineering at Olin College and got an M.B.A. from Harvard, the website said. She then worked on algorithms at Google, Pinterest and Yelp. In June 2019, she joined Facebook. There, she handled democracy and misinformation issues, as well as working on counterespionage, according to the website.
filed an antitrust suit against Facebook. In a video posted by Whistleblower Aid on Sunday, Ms. Haugen said she did not believe breaking up Facebook would solve the problems inherent at the company.
“The path forward is about transparency and governance,” she said in the video. “It’s not about breaking up Facebook.”
Ms. Haugen has also spoken to lawmakers in France and Britain, as well as a member of European Parliament. This month, she is scheduled to appear before a British parliamentary committee. That will be followed by stops at Web Summit, a technology conference in Lisbon, and in Brussels to meet with European policymakers in November, Mr. Tye said.
On Sunday, a GoFundMe page that Whistleblower Aid created for Ms. Haugen also went live. Noting that Facebook had “limitless resources and an army of lawyers,” the group set a goal of raising $10,000. Within 30 minutes, 18 donors had given $1,195. Shortly afterward, the fund-raising goal was increased to $50,000.
WASHINGTON — When the nation’s antitrust laws were created more than a century ago, they were aimed at taking on industries such as Big Oil.
But technology giants like Amazon, Facebook, Google and Apple, which dominate e-commerce, social networks, online advertising and search, have risen in ways unforeseen by the laws. In recent decades, the courts have also interpreted the rules more narrowly.
On Monday, a pair of rulings dismissing federal and state antitrust lawsuits against Facebook renewed questions about whether the laws were suited to taking on tech power. A federal judge threw out the federal suit because, he said, the Federal Trade Commission had not supported its claims that Facebook holds a dominant market share, and he said the states had waited too long to make their case.
The decisions underlined how cautious and conservative courts could slow an increasingly aggressive push by lawmakers, regulators and the White House to restrain the tech companies, fueling calls for Congress to revamp the rules and provide regulators with more legal tools to take on the tech firms.
David Cicilline, a Democrat of Rhode Island, said the country needed a “massive overhaul of our antitrust laws and significant updates to our competition system” to police the biggest technology companies.
Moments later, Representative Ken Buck, a Colorado Republican, agreed. He called for lawmakers to adapt antitrust laws to fit the business models of Silicon Valley companies.
This week’s rulings have now put the pressure on lawmakers to push through a recently proposed package of legislation that would rewrite key aspects of monopoly laws to make some of the tech giants’ business practices illegal.
“This is going to strengthen the case for legislation,” said Herbert Hovenkamp, an antitrust expert at the University of Pennsylvania Law School. “It seems to be proof that the antitrust laws are not up to the challenge.”
introduced this month and passed the House Judiciary Committee last week. The bills would make it harder for the major tech companies to buy nascent competitors and to give preference to their own services on their platforms, and ban them from using their dominance in one business to gain the upper hand in another.
including Lina Khan, a scholar whom President Biden named this month to run the F.T.C. — have argued that a broader definition of consumer welfare, beyond prices, should be applied. Consumer harm, they have said, can also be evident in reduced product quality, like Facebook users suffering a loss of privacy when their personal data is harvested and used for targeted ads.
In one of his rulings on Monday, Judge James E. Boasberg of U.S. District Court for the District of Columbia said Facebook’s business model had made it especially difficult for the government to meet the standard for going forward with the case.
The government, Judge Boasberg said, had not presented enough evidence that Facebook held monopoly power. Among the difficulties he highlighted was that Facebook did not charge its users for access to its site, meaning its market share could not be assessed through revenue. The government had not found a good alternative measure to make its case, he said.
He also ruled against another part of the F.T.C.’s lawsuit, concerning how Facebook polices the use of data generated by its product, while citing the kind of conservative antitrust doctrine that critics say is out of step with the technology industry’s business practices.
The F.T.C., which brought the federal antitrust suit against Facebook in December, can file a new complaint that addresses the judge’s concerns within 30 days. State attorneys general can appeal Judge Boasberg’s second ruling dismissing a similar case.
fined Facebook $5 billion in 2019 for privacy violations, there were few significant changes to how the company’s products operate. And Facebook continues to grow: More than 3.45 billion people use one or more of its apps — including WhatsApp, Instagram or Messenger — every month.
The decisions were particularly deflating after actions to rein in tech power in Washington had gathered steam. Ms. Khan’s appointment to the F.T.C. this month followed that of Tim Wu, another lawyer who has been critical of the industry, to the National Economic Council. Bruce Reed, the president’s deputy chief of staff, has called for new privacy regulation.
Mr. Biden has yet to name anyone to permanently lead the Justice Department’s antitrust division, which last year filed a lawsuit arguing Google had illegally protected its monopoly over online search.
The White House is also expected to issue an executive order this week targeting corporate consolidation in tech and other areas of the economy. A spokesman for the White House did not respond to requests for comment about the executive order or Judge Boasberg’s rulings.
Activists and lawmakers said this week that Congress should not wait to give regulators more tools, money and legal red lines to use against the tech giants. Mr. Cicilline, along with Representative Jerrold Nadler of New York, the chairman of the House Judiciary Committee, said in a statement that the judge’s decisions on Facebook show “the dire need to modernize our antitrust laws to address anticompetitive mergers and abusive conduct in the digital economy.”
Senator Amy Klobuchar, a Democrat of Minnesota who chairs the Senate Judiciary Committee’s subcommittee on antitrust, echoed their call.
“After decades of binding Supreme Court decisions that have weakened our antitrust policies, we cannot rely on our courts to keep our markets competitive, open and fair,” she said in a statement. “We urgently need to rejuvenate our antitrust laws to meet the challenges of the modern digital economy.”
But the six bills to update monopoly laws have a long way to go. They still need to pass the full House, where they will likely face criticism from moderate Democrats and libertarian Republicans. In the Senate, Republican support is necessary for them to overcome the legislative filibuster.
The bills may also not go as far in altering antitrust laws as some hope. The House Judiciary Committee amended one last week to reinforce the standard around consumer welfare.
Even so, Monday’s rulings have given the proposals a boost. Bill Baer, who led the Justice Department antitrust division during the Obama administration, said it “gives tremendous impetus to those in Congress who believe that the courts are too conservative in addressing monopoly power.”
Facebook and the tech platforms might like the judge’s decisions, he said, “but they might not like what happens in the Congress.”
Exclusive: L Brands will spin off Victoria’s Secret
L Brands has decided to spin off Victoria’s Secret rather than sell it, DealBook is first to report. The company said last year it was considering separating Victoria’s Secret from the rest of its business, and we previously reported that it was testing private equity’s interest. Ultimately, sources say, L Brands has decided to split itself into two independent, publicly listed companies: Victoria’s Secret and Bath & Body Works. The deal is expected to close in August.
Bids didn’t match what Victoria’s Secret expects to get in a spinoff. DealBook hears that L Brands received several bids north of $3 billion. It turned them down, because it expects to be valued somewhere between $5 billion and $7 billion in a spinoff to L Brands shareholders. Analysts at Citi and JPMorgan recently valued Victoria’s Secret as a stand-alone company at $5 billion.
The pandemic torpedoed a sale last year for much less. That agreement, announced in February 2020 with the investment firm Sycamore Partners, valued Victoria’s Secret at $1.1 billion. Apart from a pandemic that was about to upend the retail industry, Victoria’s Secret was dealing with a series of challenges: a brand that had fallen out of touch, accusations of misogyny and sexual harassment in the workplace and revelations about the ties between Les Wexner, the company’s founder and former chairman, and Jeffrey Epstein. (Wexner stepped down as C.E.O. last year and said in March that he and his wife are not running for re-election on the company’s board.)
As the pandemic shuttered stores and battered sales, Sycamore sued L Brands to get out of the deal, and L Brands countersued to enforce it, heralding a spate of similar battles between buyers and sellers. Eventually, in May 2020, the sides agreed to call off the deal.
Dick’s Sporting Goods, Michaels and others were able to accelerate digital transformations that may have otherwise taken years. Direct sales at Victoria’s Secret in North America rose to 44 percent of the total last year, from 25 percent the year before. It’s unclear whether pandemic shopping trends will stick, and “it would be reasonable to expect some reversion,” Stuart Burgdoerfer, the L Brands C.F.O., said at a March event. “But I also think that people have very much enjoyed some of the benefits that were forced on us or triggered through the pandemic.”
bump in inflation and that factory-gate prices in China rose more than expected last month. April’s Consumer Price Index data is set to be released today, and is expected to show a sharp rise from a pandemic-depressed level last year.
China’s birthrate slows again. The country’s population is growing at its slowest pace in decades, posing grave social and economic risks to the world’s second-largest economy. While the U.S. also reported a drastic slowdown in population expansion, China “is growing old without first having grown rich,” The Times’s Sui-Lee Wee writes.
President Biden defends federal unemployment benefits. He rejected claims that $300-a-week supplemental payments are deterring unemployed Americans from seeking work, but he ordered the Labor Department to help reinstate work search requirements. Separately, Chipotle said it was raising wages, to an average of $15 an hour, to attract workers.
The Colonial Pipeline is expected to “substantially” reopen within days. The pipeline, which supplies nearly half of the East Coast’s fuel, is expected to restore most services by the weekend after a ransomware attack. U.S. authorities formally blamed a hacker group and pledged to “disrupt and prosecute” the perpetrators.
12- to 15-year-olds in the U.S., potentially helping reopen schools and other parts of the economy more quickly. But while cases are declining worldwide, they are surging in countries that lack vaccines. And the W.H.O. labeled a virus variant spreading fast in India as “of concern.”
Does Amazon need more money?
Amazon sold $18.5 billion worth of bonds yesterday, joining other corporate giants taking advantage of ultralow interest rates to raise money because … well, why not? The e-commerce titan sold some of its debt at a record-low interest rate for a corporate issuer — barely above what the U.S. government pays.
About $1 billion worth of two-year bonds has a yield just 0.1 percentage points above the equivalent in Treasuries. That’s a huge vote of confidence in Amazon, which has emerged as a winner during the pandemic. The company also set a record for yields on a 20-year bond, besting Alphabet. Over all, investors placed $50 billion worth of orders, underscoring enthusiasm for debt that yields next to nothing.
Today in Business
It raised another $1 billion in the form of a sustainability bond, which is meant to finance investments in environmentally minded projects like zero-carbon infrastructure and cleaner transportation. Amazon is the latest company to sell bonds aimed at E.S.G. investors, a market that reached $270 billion last year and could double this year.
To be sure, the bulk of the offering will finance typical corporate maneuvers like share buybacks, acquisitions and capital expenditures, according to the bond prospectus. It will add to the nearly $34 billion in cash that Amazon had on hand at the end of March — as will profits that are growing at extraordinary rates for a company of its size.
a bold bet by the beleaguered retailer that shoppers and workers will flood back there after the pandemic.
offshore tax evasion. “The tax gap is a massive problem, especially the part driven by ultrarich individuals and corporations stashing income overseas,” Senator Sheldon Whitehouse of Rhode Island, the subcommittee chair, told DealBook. That gap “could be as much as a trillion dollars,” he said. “That’s trillion with a ‘T.’” This money would help fund President Biden’s spending plans, which also run into the trillions.
It’s difficult to quantify just how much money goes uncollected each year, officials say. Corporate tax collections in the U.S. are “at historic lows and well below what other countries collect,” according to a recent Treasury report. U.S. multinational companies can be taxed at a 50 percent discount compared with their domestic peers, an incentive to shift profits abroad. “Bermuda, a country of merely 64,000 people, shows 10 percent of all reported U.S. multinational foreign profit,” the report explained.
“The Biden administration is serious about stopping tax cheats and so are we,” Whitehouse said. The hearing, which features I.R.S. and Treasury officials, will discuss legislation to end corporate tax breaks that incentivize profit shifting, a proposed $80 billion investment in I.R.S. enforcement, a new approach to international tax diplomacy and proposed changes to the tax code.
THE SPEED READ
The investment firm TPG named Jon Winkelried as its sole C.E.O.; Jim Coulter, who previously shared the role, will become executive chairman and lead the firm’s E.S.G.-focused funds. (Bloomberg)
Vice Media is closing in on a deal to merge with a SPAC at a $3 billion valuation, which would leave existing investors in control. (WSJ)
Elliott Management has reportedly taken a stake in Duke Energy and plans to push for a change in strategy, after the utility rejected a takeover bid by NextEra Energy. (WSJ)
Politics and policy
In Wall-Streeters-seeking-political-office news: Glenn Youngkin, the former Carlyle Group co-C.E.O., won the Republican nomination for Virginia governor; and Alex Lasry, the son of the hedge fund mogul Marc Lasry, is running for the U.S. Senate in Wisconsin as a Democrat. (NYT, WaPo)
Big semiconductor makers and their customers have formed a new group to push for billions in federal funding to promote chip manufacturing in the U.S. (NYT)
Forty-four state attorneys general warned Facebook against plans to introduce a version of Instagram for children. (NYT)
The Pentagon reportedly may scrap its JEDI cloud-computing program, the subject of a lawsuit by Amazon and criticism from lawmakers. (WSJ)
Veteran traders are bringing old Wall Street tricks to crypto market-making. (Bloomberg)
Best of the rest
NBC said it won’t air next year’s Golden Globes ceremony, the biggest blow yet to the awards show as its organizers face criticism over a lack of diversity. (NYT)
An American court rejected an Australian company’s bid to scrap Ugg as a U.S. trademark. In Australia, it’s a catchall term for sheepskin boots with fleece linings. (NYT)
“How the Zoom era has ruined conversation” (WaPo)
We’d like your feedback! Please email thoughts and suggestions to firstname.lastname@example.org.
HONG KONG — The U.S. Embassy in Beijing had good news to share: Student visa applications for Chinese nationals were resuming after a yearlong hiatus.
“Spring has come and the flowers are in bloom,” the embassy wrote in a Chinese-language social media post on Wednesday that included a video of a dog trying to jump over a fence. “Are you like this doggy who can’t wait to go out and play?”
It backfired, big time.
The post on Weibo, a Twitter-like platform in China, could be read as a ham-handed attempt to be cute. But at a moment of heightened nationalism on the Chinese internet, it set off criticism — and accusations of racism — that were amplified by the ruling Communist Party’s formidable propaganda machine.
The embassy quickly removed the post and apologized, but the damage was done. The spat is the latest thorn in a diplomatic relationship that is prickly at the best of times and has lately been at its most delicate point in decades.
aggregating criticism of the post and criticizing former President Donald J. Trump’s visa policies.
Fang Kecheng, a professor of journalism and communication at the Chinese University of Hong Kong, said the response was a typical example of how nationalistic news outlets and social media users in China wage “public opinion warfare.”
“They pay close attention to what the U.S. government and media say, and amplify any inappropriate expressions to discredit them,” he said.
Professor Fang said that such campaigns sometimes drew attention to statements that he said deserved to be criticized, such as Mr. Trump’s use of the term “China virus” to describe the coronavirus. That phrase has been widely criticized in the United States and beyond as racist and anti-Chinese.
“In this case, it’s amplifying a misstep,” he added, referring to the embassy’s social media post.
Early last year, Mr. Trump imposed restrictions on travelers from China, including students, prompting criticism from Beijing. The Weibo post on Wednesday by the U.S. Embassy’s consular section announced that student applications had resumed under President Biden’s administration.
technology Cold War, among other issues. Travel between the two counties has largely been frozen by strict visa controls, a result of both Covid-19 protocols and souring relations. Even attempts to restore diplomatic normalcy have been fraught.
There are potential financial implications for the U.S. education sector, too.
About a million international students enroll in American universities every year. More than a third were from China in the 2019-2020 academic year, according to data compiled by the Institute of International Education.
But experts say that universities in the United States and other English-speaking countries could lose billions of dollars in the coming years because of travel restrictions and anger among Chinese students and parents about what they see as a permissive attitude toward public health during the pandemic.
abandoned a plan to strip international college students of their visas if they did not attend at least some classes in person. Harvard, the Massachusetts Institute of Technology and attorneys general of 20 states had sued over the proposed policy, saying it was reckless, cruel and senseless.
Paul Mozur contributed reporting and Lin Qiqing contributed research.