Danyel Smith used to make a podcast in her kitchen. Smith, an author, journalist and former editor in chief of Vibe magazine, recorded it with her husband, Elliott Wilson, a fellow journalist and the founder of Rap Radar, between the sink and a bowl of fruit.
As one might expect of a show hosted by longtime music journalists, the podcast, “Relationship Goals,” which ran from 2015 to 2016, featured lots of music — in between playfully adversarial banter about domestic and professional headlines. The song placements, like the show itself, were done off the cuff — without much forethought, professional assistance or official permission.
“It was a little bit of pirate podcasting,” Smith said. “We weren’t a part of a network, and this was before podcasting had become super popular. We would just sit at our little kitchen table and play music and talk about it.”
In its lack of authorized music, “Relationship Goals” wasn’t unusual — the process of licensing music from official rights holders often takes resources that many independent podcast publishers don’t have. But when Smith decided to start a new podcast last year, inspired by her work on a coming book about the history of Black women in pop music, she knew she wanted to do things differently.
Black Girl Songbook,” Smith’s new podcast, is one of several music-focused shows introduced on the platform in the last year that take a novel approach to one of the industry’s oldest problems. It uses a hybrid format, which Spotify calls “shows with music” or “music and talk,” that allows creators to incorporate full songs from the service’s vast catalog into their podcasts free of charge. (Spotify takes a 30 percent cut of ads set up through the service.) The format gives podcasters easy access to music that would be difficult or too costly to attain on their own and presents listeners with a seamless interface for learning more about a song or adding it to their library.
Those listeners have to be using Spotify — the format, designed to exploit Spotify’s existing deals with music companies, isn’t compatible with other platforms. And only users with a premium subscription will hear full songs; everyone else gets a 30-second preview. But for Smith and others, the trade-offs have so far been worth it.
“Full songs are where the magic is,” Smith said. “There’s nothing like teeing up a song that means so much to me and that I know will mean so much to others if they just have the opportunity to hear it.”
All podcasters who want to use third-party, pre-existing music have faced the same obstacle. Unlike radio broadcasters, who can purchase blanket licenses that give them rights to most popular songs, copyright law requires podcasts and other forms of on-demand media to license songs individually. The costs, which, for a typical three-year term, can range from $500 to $6,000 per use, add up quickly. Last fall, Hrishikesh Hirway, the host of the popular music podcast “Song Exploder,” announced on Twitter that he would have to remove some episodes of the show because of mounting licensing fees. (The tweets were later deleted. Hirway declined to comment.) “Relationship Goals” faced similar challenges — most episodes of the show are no longer online.
Many podcasts that feature music get around licensing through an exception to copyright law known as “fair use,” which allows for the usage of small portions of copyrighted material for specific purposes, including comment and criticism. But fair-use defenses have an inconsistent track record in court, and as podcasts have grown in popularity, rights holders have become more aggressive.
Put Your Records On,” to her early experiences wearing a natural hairstyle.
remain too small.) Courtney Holt, a vice president at Spotify, compared the format to Spotify playlists, describing it as a new way to deepen the company’s relationship with users.
“We think more people want to have these types of content-based conversations around music,” he said. “It ultimately drives more music engagement, it drives more artist love, and it makes Spotify that much more sticky.”
Spotify allows anyone to create a music-and-talk show through Anchor, the podcast-production software it purchased in 2019. There are currently over 20,000 music-and-talk shows on the service, many of which are similar in tone and structure to FM radio. Most of the more ambitious shows so far are produced by Spotify or its subsidiaries: “Black Girl Songbook,” for example, is produced by The Ringer; and “Murder Ballads,” a story-driven series that spotlights lurid folk songs covered by the likes of Nirvana and Johnny Cash, is from Gimlet.
60 Songs That Explain the ’90s,” said the podcast, his first, affords him a more tactile relationship with the music he covers. Each week, the show dives into a different song from the 1990s — Alanis Morissette’s “You Oughta Know,” Missy Elliott’s “The Rain (Supa Dupa Fly)” — with an opening monologue from Harvilla and a conversation with a special guest.
“What cracked the show open for me was being able to interact with the songs,” Harvilla said. “People listening can hear the tone of voice, the lyrics, the guitar solo — it makes things so much more vivid, whether I’m doing astute critical analysis or just a dumb joke.”
For Smith, who, as the editor of Vibe in the late ’90s, was an early champion of artists like Master P and Lauryn Hill, the new format has meant a return to old principles.
“At Vibe, my entire life was about putting people on the cover that other magazines wouldn’t — people that couldn’t get booked to perform on ‘The Tonight Show,’” she said. “I wanted to create more space to serve the underserved, not only for the women who are featured, but for the listeners who don’t get enough of what makes them happy.”
But the thing is, they don’t know what they’ve done. “What did I do?” Because to know, you have to be a craftsman as well. You have to realize what a good song is. And if you can’t recognize garbage, it’s very hard to know what a good song is. And that’s what time gets you, to become a good craftsman.
In the current model of pop songwriting, you have teams of writers, with a separation of roles like an assembly line — somebody does the beat, somebody else does the melody. Is that good for music, and good for songwriters?
For me, those songs most of the time become products. There’s no sense of, this is coming out of someone’s heart. Take Elton John and Bernie Taupin, “Goodbye Yellow Brick Road.” That’s not a product; that is something else. I prefer the ones where you feel this is who is sending this song out to people — that you get some part of them as well.
I can hear that those pop songs sometimes have really good ingredients, are ultraprofessional and sometimes very catchy. But they lack that sense of personality, I think.
What songwriters do you like today?
Billie Eilish is interesting. And of course I admire Taylor Swift as well. And Rihanna. I think it’s the whole package — the way they develop and the way they partake in the songwriting and create an artistic entity. I find that very interesting, much more interesting than the kind of pop packages, Disney stuff. [Laughs.]
Is it a coincidence you mentioned all women?
I think it is. But maybe in my subconscious I choose women. Maybe because I’ve been in the studio with two women not too long ago.
Benny and I have written some new songs, and there will be some new music from Abba released this autumn. But I’m forbidden to say anything more about it. I’m sorry. I would have told you everything, but I can’t. All I can say is that it was fantastic in the studio because it was like yesterday. It was so strange coming into that studio and the four of us looking at each other and thinking, “What is this?” It all came rushing back.
Corporate America takes on anti-Asian discrimination
Top business leaders and corporate giants are pledging $250 million to a new initiative and an ambitious plan to stem a surge in anti-Asian violence and take on challenges that are often ignored by policymakers, Andrew and Ed Lee report in The Times.
Donors are a who’s who of business leaders. Individuals who are collectively contributing $125 million to the newly created Asian American Foundation include Joe Bae of KKR, Sheila Lirio Marcelo of Care.com, Joe Tsai of Alibaba and Jerry Yang of Yahoo. Organizations adding another $125 million to the group include Walmart, Bank of America, the Ford Foundation and the N.B.A. The initiative has echoes of the recent effort by Black executives to round up corporate support to push back against bills that would restrict voting.
Anti-Asian hate crimes jumped 169 percent over the past year; in New York City alone, they have risen 223 percent. And Asian-Americans face the challenge of the “model minority” myth, in which they’re often held up as success stories. This shows “a lack of understanding of the disparities that exist,” said Sonal Shah, the president of the newly formed foundation. For example, Asian-Americans comprise 12 percent of the U.S. work force, but just 1.5 percent of Fortune 500 corporate officers.
The group’s mission is broad. It is aiming to reshape the American public’s understanding of the Asian-American experience by developing new school curriculums and collecting data to help influence public policy. But its political lobbying efforts may be challenged by the enormous political diversity among Asian-Americans, Andrew and Ed note.
nearly 402,000 cases on Saturday, a global record, and another 392,000 on Sunday. A business trade group is calling for a new national lockdown, despite the economic cost of such a move. The C.E.O. of India’s biggest vaccine manufacturer warned that the country’s shortage of doses would last until at least July.
Credit Suisse didn’t earn much for its Archegos troubles. The Swiss bank collected just $17.5 million in fees last year from the investment fund, despite losing $5.4 billion from the firm’s meltdown in March, according to The Financial Times.
Verizon sold AOL and Yahoo. The telecom giant divested its internet media business to Apollo Global Management for $5 billion, and will retain a 10 percent stake. It’s a sign that Verizon is giving up on its digital advertising ambitions and focusing on its mobile business.
A third of Basecamp employees quit after a ban on talking politics. At least 20 resigned after the software maker’s C.E.O., Jason Fried, announced a new policy preventing political discussions in the workplace. The company isn’t budging: “We’ve committed to a deeply controversial stance,” said David Hansson, Basecamp’s chief technology officer.
stormed the field yesterday, forcing the postponement of its highly anticipated match against Liverpool. They called for the ouster of the Glazer family, United’s American owners, over their support for the new competition meant mostly for European soccer’s richest teams.
Succession hints and other highlights from Berkshire’s meeting
At the annual meeting of Berkshire Hathaway on Saturday, Warren Bufett and Charlie Munger spoke out on a typically broad range of topics, from investing regrets to politics to crypto. (They also picked fights with Robinhood and E.S.G. proponents, for good measure.) Buffett watchers also got their clearest hint yet as to who will succeed the Oracle of Omaha as Berkshire’s C.E.O. when the 90-year-old billionaire finally steps down.
It’s Greg Abel. CNBC confirmed with Buffett that Abel, the 59-year-old who oversees Berkshire’s non-investing operations, would take over as C.E.O. “If something were to happen to me tonight it would be Greg who’d take over tomorrow morning,” Buffett said. Charlie Munger, Buffett’s top lieutenant, dropped a hint on Saturday, saying, “Greg will keep the culture.”
Buffett took on Robinhood. The Berkshire chief said the trading app conditioned retail investors to treat stock trading like gambling. “There’s nothing illegal about it, there’s nothing immoral, but I don’t think you’d build a society around people doing it,” Buffett said.
Robinhood pushed back. “There is an old guard that doesn’t want average Americans to have a seat at the Wall Street table so they will resort to insults,” tweeted Jacqueline Ortiz Ramsay, the company’s head of public policy communications.
And Buffett got blowback on E.S.G. Berkshire shareholders followed his lead and rejected two shareholder proposals that would have forced the company to disclose more about climate change and work force diversity. But each proposal got support from a quarter of Berkshire shareholders, a relatively high percentage. And big investors spoke publicly about their backing for the initiatives: BlackRock, which owns a 5 percent stake in Berkshire, said the company hadn’t done enough on either front.
Other highlights from the Berkshire meeting:
Munger let loose on crypto. “Of course I hate the Bitcoin success and I don’t welcome a currency that’s so useful to kidnappers and extortionists,” he said. “I think the whole damn development is disgusting and contrary to the interests of civilization.”
Ajit Jain, who oversees Berkshire’s insurance operations, and Buffett traded quips about whether the company would insure Elon Musk’s trip to Mars. “This is an easy one: No, thank you, I’ll pass,” Jain said. Buffett said it would depend on the premium and added, “I would probably have a somewhat different rate if Elon was on board or not on board.”
“We will not be anywhere near as focused on buybacks going forward as we have in the past.”
— Intel C.E.O. Pat Gelsinger told CBS’s “60 Minutes” that in the future the semiconductor giant would focus less on buying its own shares and more on expanding production capacity to alleviate severe chip shortages.
an op-ed in The Wall Street Journal to tell executives about it. The Republican senator from Texas criticized company chiefs for what he said were ill-informed criticisms of Georgia’s new voting laws. “For too long, woke C.E.O.s have been fair-weather friends to the Republican Party: They like us until the left’s digital pitchforks come out,” Cruz wrote. These companies “need to be called out, singled out and cut off,” he added.
Cruz’s rejection may not make a big difference. After the Capitol riot on Jan. 6, many corporations pledged to withhold donations from lawmakers who voted against certifying the election results, at least for a period of time. Cruz, who is viewed as a key player in the efforts to reverse the vote, could be shut out for longer than others. But he’s not strapped for cash: He brought in more than $3 million in campaign funds in the three months after the riot, largely from individual donors.
It highlights a new schism between Republicans and corporate America. Those ties were already fraying under President Trump’s unpredictable administration. President Biden’s proposed tax hikes and regulatory push would have typically driven companies into the arms of Republican allies, but Cruz, for his part, said he’s no longer interested in what the corporate donors and lobbyists have to say. “This time,” he wrote, “we won’t look the other way on Coca-Cola’s $12 billion in back taxes owed. This time, when Major League Baseball lobbies to preserve its multibillion-dollar antitrust exception, we’ll say no thank you. This time, when Boeing asks for billions in corporate welfare, we’ll simply let the Export-Import Bank expire.”
meet in court for a trial that could have implications for the future of the App Store and the antitrust fight against Big Tech. DealBook spoke with Jack Nicas, a technology reporter for The Times, about what’s at stake.
Why is Epic suing Apple?
Many companies, including Spotify and Match Group, have complained loudly and publicly about the control that Apple has over the App Store, and the 30 percent commission it charges. Epic basically set some bait for Apple: It began using its own payment system in Fortnite, a very popular game, which meant Apple couldn’t collect its commission. It knew how Apple would react: Apple kicked Fortnite out of the App Store. Then Epic immediately sued Apple in federal court, and simultaneously launched a sophisticated PR campaign to paint Apple in a bad light. [Epic is suing Google for the same reason.]
Read the full report about the case from Jack and Erin Griffith.
THE SPEED READ
Legendary Studios, the producer of movies like “Godzilla vs. Kong,” has reportedly held talks to either merge with a SPAC or buy another studio. (Bloomberg)
Politics and policy
Why investors have largely shrugged off President Biden’s proposal to raise capital gains taxes. (NYT)
As the head of the nonprofit Venture for America, Andrew Yang pledged to create 100,000 jobs nationwide. The group created about 150. (NYT)
An internal Amazon report warned management that its sales team had gained unauthorized access to third-party seller data, which may have been used to help its own products. (Politico)
Tesla is reportedly stepping up its engagement with Beijing officials as it faces greater pressure from the Chinese government. (Reuters)
Tomorrow is Berkshire Hathaway’s annual shareholder meeting, the gathering known as “Woodstock for capitalists.” Like last year, the company is bowing to the times by holding the meeting virtually. But another aspect of the discussion may show that Warren Buffett is increasingly out of step with the times, DealBook’s Michael de la Merced reports.
Investors are pressing Berkshire to disclose more about climate change and work-force diversity. Shareholders, including the Calpers public pension fund, argue that Buffett’s conglomerate isn’t doing enough to disclose its portfolio companies’ progress in addressing those issues. Buffett opposed these initiatives ahead of the meeting, arguing that they cut against Berkshire’s philosophy of letting its subsidiaries operate largely independently. “I don’t believe in imposing my political opinions on the activities of our businesses,” he said at Berkshire’s 2018 annual meeting.
Buffett is expected to get his way, for now. He controls over a third of Berkshire’s voting power and holds sway over faithful retail investors, virtually guaranteeing that the proposals will fail to pass.
Simiso Nzima, the head of corporate governance at Calpers, points out that the S.E.C. appears inclined to force more disclosure on climate change risks anyway.
The big question is whether this will tarnish Berkshire’s golden reputation. Corporate America is increasingly heeding investor demands — including from BlackRock, a major Berkshire shareholder — to do more to fight climate change and racial inequity. Berkshire does not dispute the importance of climate change and diversity, but Buffett’s pushback here risks denting his standing as perhaps the world’s most admired investor. “I don’t think at the moment there’s been a slip in the gold standard,” said Lawrence Cunningham, a professor at George Washington University and a Berkshire shareholder, “but if it’s not tended to, there might be.”
HERE’S WHAT’S HAPPENING
Big Tech finishes earnings season on a strong note. Amazon’s first-quarter earnings more than tripled — yes, tripled — to $8 billion, surpassing expectations. As our colleague Shira Ovide writes, the quarter showed that tech giants are “unquestioned winners of the pandemic economy.”
announced today that an E.U. investigation found that the iPhone maker abused its control over its App Store to charge its music-streaming rival more in fees.
A big day in New York City: July 1. Mayor Bill de Blasio said the city would fully reopen by that day. But officials concede that tourism won’t fully return to prepandemic levels for years, and employers have been largely targeting the fall for bringing workers back to offices.
The head of the Credit Suisse board’s risk committee steps down. Andreas Gottschling won’t stand for re-election. He is the latest official at the Swiss bank to exit following scandals at Greensill and Archegos.
Good and bad news for AstraZeneca. The drug maker beat expectations for earnings and sales growth, but it is struggling to compile the data requested by U.S. officials to have its Covid-19 vaccine approved by the F.D.A., The Wall Street Journal reported.
given the Tesla chief’s history with the S.E.C.
Today in Business
“The days of the bullpen, the trading floors — that’s over.”
— Whitley Collins of CBRE on how the pandemic has upended the commercial real estate market, reversing the trend of “more and more dense” office spaces.
A warning on gig workers
Marty Walsh, the labor secretary, said yesterday that “in a lot of cases” gig workers in the U.S. should be classified as employees, not independent contractors. “In some cases they are treated respectfully and in some cases they are not, and I think it has to be consistent across the board,” he told Reuters. Shares of Uber, Lyft, Fiverr and DoorDash fell on the news.
But how much control does Walsh have over how companies classify their employees?
There’s no single law that makes workers employees or contractors. The Labor Department can enforce the Fair Labor Standards Act, which establishes the federal minimum wage and overtime pay. This only applies to employees, and who should fall into that category has been the subject of a long-running debate.
New guidance wouldn’t change the law. But it could change how the Labor Department decides whether to bring lawsuits against gig economy companies. “It’s implicitly a sign to employers that you should comply with this interpretation or there’s a risk of enforcement,” Brian Chen, a staff attorney at the National Employment Law Project, told DealBook. The guidance is nonbinding, but Benjamin Sachs, a professor at Harvard Law School, said courts “tend to give it deference” when making decisions. “I wouldn’t be surprised if we saw specific action coming from the department sometime this year,” said William Gould, a Stanford law professor and the former chairman of the National Labor Relations Board.
In Her Words newsletter, explains why promising G.D.P. numbers aren’t the end of the story.
“A boom-like year” is how one economist described what the U.S. economy might look like in 2021. The latest data, published yesterday, showed that G.D.P. grew at a robust 6.4 percent annualized rate in the first quarter.
While the headline numbers may at first glance suggest that America’s economic health is on track for a full recovery, a closer look reveals an economy that is “profoundly unequal across sectors, unbalanced in ways that have enormous long-term implications,” as The Times’s Neil Irwin put it.
Growth has been fueled by consumer spending on goods, while the services sector has yet to recover. Services account for more than 95 percent of the jobs held by women, according to Michael Madowitz, an economist at the Center for American Progress.
“I’m a little worried we’re too confident the service job losses are just going to spring back to life,” Madowitz said. “If nobody closed a business that might be fine, but that seems unlikely.”
Roughly two million women have left the work force since last February. G.D.P. does not account for their lost productivity and earnings, nor for the hours of work at home that women shouldered in the past year, uncompensated.
from a sinking ship to a success proves that putting purpose first is good for profits. Joly spoke to DealBook about “The Heart of Business,” which is out next week.
Why did you write a book?
So much of what I learned in business school is either wrong, dated or incomplete. We urgently need a new philosophy of business and capitalism, a refoundation around purpose and humanity. There’s no going back after the pandemic. We’ve seen each others’ homes and vulnerability. We need to make a declaration of interdependence.
Isn’t pursuing profits the point?
Milton Friedman is on my “most wanted” list. People who oppose stakeholder capitalism are mistaken. We can create better economic outcomes by connecting with employees, customers, communities and the planet. People should refuse zero-sum games. The book is a practical guide for leaders who are eager to abandon the old way.
And it’s also spiritual?
Yes. Because work is fundamental. We should ask ourselves why we work, what drives us. At Best Buy, before the holiday season, we’d gather — even though it’s a very busy time — to talk about what gives people energy, what matters. Magic happens when work is connected to meaning and individual genius, to the thing that’s good or beautiful in each of us.
How does this “magic” manifest itself?
Two Best Buy employees performed pretend “surgery” on a broken dinosaur toy behind the counter and gave a boy back a new item, saying his baby dino recovered. That had to come from the heart. They could have just sent his mother to the shelf. Leaders need to use their heads and hearts and see and hear employees and give people the freedom to make work meaningful.
Shares in Darktrace, the British cybersecurity company, climbed after its I.P.O. was priced at a valuation of 1.7 billion pounds ($2.4 billion), below the reported target of $4 billion. (Reuters)
Politics and policy
The Senate approved a $35 billion bill to clean up the nation’s water systems, but further compromise on infrastructure spending looks unlikely. (NYT)
Apple and Samsung were the latest companies to report problems making products because of a shortage of computer chips. (WaPo)
How Google plans to revamp its offices for the postpandemic era: Goodbye, sit-down cafeterias; hello, outdoor meeting spaces. (NYT)
Best of the rest
The fight over control of Apollo Global Management has reportedly sidelined another co-founder, Josh Harris. (Bloomberg)
Vaccination passports could help countries reopen their borders more quickly — if they can agree on a common standard. (FT)
She rose to fame through the “Disaster Girl” meme. Then she made $500,000 by turning it into an NFT. (NYT)
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“They want all the benefits of the App Store but don’t think they should have to pay anything for that,” Apple said in a statement. “The commission’s argument on Spotify’s behalf is the opposite of fair competition.”
Today in Business
Criticism of the App Store is part of a broader debate over tech industry power, where a small number of companies like Apple, Facebook, Google and Amazon have government-like authority to set policies over major parts of the digital economy. It determines how people find information and entertainment, communicate and shop.
This week, Apple flexed its power by introducing a software update that gave customers more power to block data tracking by apps, a change that has sparked a rivalry with Facebook, which has criticized the move as anticompetitive because it will harm the ability to sell online advertising.
Companies are increasingly pushing regulators and courts to intervene. At a congressional hearing in Washington last week, companies including Spotify, Tile and Match Group told senators how policies by Apple and Google, whose Play Store is another pinch point for app developers, hurt competition and resulted in higher app prices for customers. And next week, a trial is scheduled to begin in California between Apple and Epic Games, the maker of Fortnite that has filed an antitrust lawsuit against Apple over its fees.
Britain is conducting another antitrust investigation of Apple over the App Store after receiving complaints from developers.
The case announced on Friday is part of a broader effort by the European Union to clamp down on so-called gatekeeper companies like Apple, Amazon, Facebook and Google. Policymakers are drafting laws that would prevent the tech giants from abusing their market power to harm smaller companies, including how they manage app stores.
Efforts to force changes to the App Store pose a threat to a fast-growing piece of Apple’s business. As sales of iPhones, iPads and other hardware devices mature, the company is counting on digital services as a fresh source of growth. Optimism among investors about that business has helped send Apple’s stock soaring, giving it a market value of more than $2.2 trillion, the largest in the world.
If we had a choice, would any of us want to be tracked online for the sake of seeing more relevant digital ads?
We are about to find out.
On Monday, Apple plans to release iOS 14.5, one of its most anticipated software updates for iPhones and iPads in years. It includes a new privacy tool, called App Tracking Transparency, which could give us more control over how our data is shared.
Here’s how it works: When an app wants to follow our activities to share information with third parties such as advertisers, a window will show up on our Apple device to ask for our permission to do so. If we say no, the app must stop monitoring and sharing our data.
harmful to small businesses.
fingerprinting. This involves looking at seemingly innocuous characteristics of your device — like the screen resolution, operating system version and model — and combining them to determine your identity and track you across different apps.
studied user experience design and data privacy. In the past, iPhone owners could restrict advertisers from tracking them, but the tools to do so were buried in settings where most people wouldn’t look.
“The option was available before, but really, was it?” Ms. Nguyen said. “That’s a big shift — making it visible.”
As of this week, all apps with tracking behavior must include the App Tracking Transparency pop-up in their next software updates. That means we initially will probably see a small number of apps requesting permission to track us, with the number growing over time as more apps get updated.
Apple’s new software also includes two other interesting new features: the ability to use Siri to play audio with a third-party app like Spotify and the option to quickly unlock an iPhone while wearing a mask.
favoring its own apps.
To make Siri work with other audio services, you won’t have to change any settings. If you normally listen to music with a third-party app, such as Spotify, Siri will simply learn over time that you prefer that app and react accordingly. (Audio app developers need to program their apps to support Siri, so if they haven’t done so yet, this won’t work.) That means if you always use Spotify to play music, you will be able to say “Hey Siri, play The Beatles” to start playing a Beatles playlist on Spotify.
The other new feature helps solve a pandemic issue. For more than a year, wearing a mask has been extra annoying for owners of newer iPhones that have face scanners to unlock the device. That’s because the iPhone camera has not been able to recognize our covered mugs. Apple’s iOS 14.5 finally delivers a mechanism to unlock the phone while masked, though it requires wearing an Apple Watch.
Here’s how that works: When you scan your face and the phone determines it can’t recognize you because your mouth and nose are obstructed, it will check to see if your Apple Watch is unlocked and nearby. The Apple Watch, in effect, acts as proof to verify that you are the one trying to unlock your phone.
To make this work, update the software on your iPhone and Apple Watch, then open the Settings app on your iPhone. Scroll down to “Face ID & Passcode.” In this menu, go to “Unlock with Apple Watch” and toggle on the option to use your Apple Watch to unlock when the image scanner detects your face with a mask.
Next time you are at the grocery store and look at your phone, your watch will vibrate once and unlock your phone. Sweet relief.
Just about every day now in D.C., lawmakers seem eager to show their might against Big Tech. Yesterday gave them the opportunity to flex their muscles in two high-profile events at the Senate: the confirmation hearing for Lina Khan, a “progressive trustbuster” who was nominated for a seat at the F.T.C., and a judiciary committee hearing about Apple and Google’s control over their app stores. For good measure, a group of seven House Republicans yesterday announced a pledge to no longer take donations from major tech companies.
Here’s what you may have missed on a busy, and bruising, day for Big Tech — and what it means.
Lina Khan said she’d bring her tough-on-tech stance to the F.T.C. Ms. Khan referenced a “whole range of potential risks” she sees in the tech giants, including how they could parlay their dominance in one market into adjacent spaces. She said that when it comes to online advertising, which is fueled by consumer data, “companies may think it’s worth the cost of doing business to risk violating privacy laws.” The Democratic nominee received little pushback on her views during questioning.
At the other hearing, companies complained about Apple and Google. Spotify, which is suing Apple in Europe, said the company blocked it from telling customers that they could find cheaper subscription prices outside its iPhone app. Match Group testified that it now paid nearly $500 million a year to Apple and Google in app store fees, its single largest expense. Tile said Apple boxed out its products and then copied them, referencing the AirTag product Apple unveiled Tuesday.
Google made a questionable call. Match Group’s chief legal officer, Jared Sine, said Google had called the company the night before, after its planned testimony became public, wondering why the comments appeared to be tougher than what Match had said on a recent earnings call. “It looks like a threat, it talks like a threat, it’s a threat,” Senator Richard Blumenthal said. Wilson White, a government affairs official at Google, told senators that Match was an important partner and that Google would never aim to intimidate the company.
sweeping antitrust bill, but a more targeted piece of legislation focusing on app store conduct could go through more easily.
In a trial next month, Apple is set to face off against Epic Games, which is suing Apple over the payment terms for its iPhone app, potentially providing more fodder for the critics of Big Tech who are looking to rein it in.
HERE’S WHAT’S HAPPENING
The E.U. plans to clamp down on A.I. Draft rules would set tight limits on the use of the technology, including in self-driving cars, hiring decisions, bank lending, school enrollment and more. It’s one of the most ambitious efforts to regulate A.I. before it becomes mainstream.
India suffers a surge in Covid-19 cases. The country recorded 312,731 new infections in a 24-hour period, the highest one-day level since the onset of the pandemic, raising concerns about its ability to control the coronavirus. Separately, Pfizer said it had identified counterfeit versions of its vaccine in Mexico and Poland.
Credit Suisse is raising nearly $2 billion after two trading scandals. The Swiss bank has been forced to rebuild its balance sheet following the collapse of Greensill Capital and the meltdown of Archegos. Meanwhile, it faces a new inquiry by Switzerland’s financial regulator over potential risk-management faults in its handling of Archegos.
Janet Yellen calls on corporate America to help the U.S. reach its climate goals. The Treasury secretary said the private sector would bear much of the burden of greening the American economy, and said the Biden administration was devising a financial reporting framework to make it easier to invest in assets like green bonds.
barred from the OTCQB over-the-counter market for failing to comply with listing rules. The investor David Einhorn had flagged the penny stock’s puzzling market cap as a sign of a “fractured” market.
Is the SPAC boom over?
Around 100 blank-check funds went public each month in the first quarter of the year. So far in April, you could count the number of those I.P.O.s on two hands. The sudden drop in debuts of special purpose acquisition companies, or SPACs, has market watchers asking whether this is a pause for breath — or a more permanent plunge in popularity.
a statement at the end of last month highlighting “the key considerations related to the unique risks and challenges of a private company entering the public markets through a merger with a SPAC.” Not long after, another note offered “guidance” on some of the trickier accounting issues related to blank-check funds. Neither statement suggested any rule changes, but with Gary Gensler, the S.E.C.’s new enforcement-minded chairman, taking over this week, SPAC sponsors have slowed their roll.
Today in Business
SPACs’ recent performance has also been lousy. Analysts at Goldman Sachs note that a stock price index of 200 SPACs (pre- and post-merger) has badly underperformed the market this year, down 17 percent versus a 10 percent gain in the S&P 500. SPACs have also lagged an index of unprofitable tech stocks, suggesting that investors have particular concerns about SPACs, since plenty of them have acquired other unprofitable tech companies.
But we haven’t heard the last of SPACs. The amount of money these shell companies have raised to date could drive $900 billion in M.&A. activity over the next two years, according to the Goldman analysts. And more than 25 SPACs filed I.P.O. registration documents this month, per SPAC Research, adding to a pipeline of more than 200 others that have disclosed plans to go public but haven’t yet sealed the deal, for whatever reason.
reassessing his approach to life and work has been shared more than 200,000 times.
players, coaches, fans and politicians — as an effort to import American-style competition and economics. Frank McCourt, the American owner of the storied French soccer team Olympique de Marseille, told DealBook that the league — which he publicly denounced — never made sense.
The Super League would have created a closed competition with guaranteed places for 15 clubs, and would have introduced revenue sharing and spending caps. That more closely resembles U.S. leagues like the N.F.L. than the more freewheeling system of European soccer.
“It felt like imposing an American flavor on a different culture,” said Mr. McCourt, who previously owned the L.A. Dodgers before buying control of Marseille (l’OM to its fans) in 2016. JPMorgan Chase’s role in financing the Super League bolstered this notion, though its architect was Florentino Pérez, the Spanish president of Real Madrid.
to drop out. “There is no football without fans,” Mr. McCourt said. “What is their perspective?” (Fan demands are something that he knows well: He met with several earlier this year after supporters stormed Marseille’s training grounds to protest the club’s performance.)
Mr. McCourt said he favors plans by UEFA, the European soccer overseer, to expand its Champions League tournament, a much-debated move that gained new urgency as the Super League became a threat. “There’s a process that UEFA is going through with all of the stakeholders,” he said, contrasting the approach with the more limited decision-making behind the Super League.
As Rory Smith of The Times put it: “It was all, in some way, unserious: There was a cobbled-together website, an uninspiring logo and an American banker, but no broadcaster, no suite of sponsors and, in the end, no commitment to see any of it through.”
THE SPEED READ
U.S. start-ups raised $69 billion in the first quarter, 40 percent more than the previous quarterly record; and private equity firms are more willing to fund mega-leveraged buyouts. (WSJ)
Shares in UiPath rose 23 percent in their trading debut, in one of the biggest public offerings by a software company on record. (Bloomberg)
Maybe the day traders were right: Hertz unveiled a bankruptcy reorganization plan that provides some value to pre-Chapter-11 stockholders. (MarketWatch)
Politics and policy
The White House is weighing options for overhauling opportunity zones, a Trump-era tax break meant to drive investment in poorer areas — but largely used for development in wealthier ones. (NYT)
The S.E.C. is reportedly weighing stricter disclosure rules for investment firms, which may require more frequent reports on a wider variety of holdings. (Bloomberg)
A jury ruled that Intel did not infringe patents held by an affiliate of the investment firm Fortress; at stake was $3 billion in requested damages. (Reuters)
The electric vehicle maker Arrival says it can replace huge assembly lines with much smaller factories. (NYT)
Apple reportedly plans to expand its ad business — just as it rolls out privacy rules for its devices that would hurt rivals like Facebook. (FT)
Best of the rest
Nike’s contract with the estate of Kobe Bryant has ended. What happens next is complicated. (NYT)
“Welcome to the YOLO Economy” (NYT)
The hottest investment in commercial real estate right now: the humble car wash. (Commercial Observer)
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The latest update on the labor market is scheduled to arrive Thursday morning when the government releases its weekly report on jobless claims.
The unexpectedly sharp drop announced last Thursday took Wall Street by surprise and fueled hopes that the economic recovery was gaining momentum. About 613,000, it was the lowest weekly total of initial claims for state unemployment benefits since the pandemic began, though still high by historical standards.
This time, analysts surveyed by Bloomberg expect the figure to climb. Even so, most forecasters maintain that the labor market is improving.
“We know from experience that weekly claims bounce around from one week to the next,” said Gregory Daco, chief U.S. economist at Oxford Economics, and reports from states like California tended to spike and drop. What matters is the longer-term trend, he said, and since January, there has been consistent progress.
Warmer weather, more extensive coronavirus vaccination efforts and a stream of government assistance that has enabled consumer spending have all contributed to recent gains.
Still, the labor market remains encumbered by anxiety about coronavirus infections and the demands of child care when regular school schedules have been disrupted.
According to the Census Bureau’s weekly Household Pulse Survey, more than four million people who were unemployed in March said they were not working because they were afraid of catching Covid-19.
“It’s important to keep in mind that the trend is going in the right direction,” said Heidi Shierholz, director of policy at the left-leaning Economic Policy Institute, “but we’re still at crisis levels of unemployment claims.”
Credit Suisse said on Thursday that it suffered a loss in the first quarter stemming from loans it made to the collapsed investment fund Archegos Capital Management, a debacle that has prompted Switzerland’s financial regulator to investigate whether the bank was doing a poor job monitoring the riskiness of its investments.
The loss of 252 million Swiss francs, about $275 million, from January through March, came after a loss of 4.4 billion francs from Archegos wiped out a big increase in revenue and forced the departure of some top executives. Credit Suisse also said on Thursday that it had sold bonds to investors to shore up its capital.
The bank, based in Zurich, has suffered a series of calamities this year that have severely damaged its reputation and finances. Swiss regulators are also investigating a spying scandal and Credit Suisse’s sale of $10 billion in funds packaged by Greensill Capital. The funds were based on financing provided to companies, many of which had low credit ratings or were not rated at all. Greensill collapsed in March, and its ties to former Prime Minister David Cameron of Britain have caused a political scandal.
The Swiss regulator, known as Finma, said it would “investigate in particular possible shortcomings in risk management” at Credit Suisse. Finma also said that it would “continue to exchange information with the competent authorities in the U.K. and the U.S.A.”
If not for the Archegos loss, Credit Suisse would have made a pretax profit of 3.6 billion francs, the bank said. Revenue for the quarter rose 30 percent to 7.6 billion francs as Credit Suisse raked in fees from lively trading on stock and bond markets.
The quarterly loss, described as “unacceptable” in a statement by the bank’s chief executive, Thomas Gottstein, compared to a profit of 1.3 billion francs in the first quarter of 2020.
Tile said Apple boxed out its products and then copied them. Spotify said Apple blocked it from telling customers that they could find cheaper prices outside its iPhone app. And Match Group testified that it now paid nearly $500 million a year to Apple and Google in app store fees, the dating company’s single largest expense.
That testimony came Wednesday at a Senate hearing on Apple’s and Google’s control over their app stores, held by the Judiciary subcommittee on antitrust. The hearing was the latest example of the growing scrutiny of Big Tech and the increasing agreement among Democrats, Republicans and smaller companies that the world’s biggest tech companies have become too powerful.
At the hearing, representatives from Apple and Google defended their companies’ practices, saying that they don’t copy competitors, that few apps pay their commissions and that they charge the commissions to fund the security of their app stores.
Both Democratic and Republican senators were skeptical of those explanations. “Google and Apple are here to defend the patently indefensible,” said Senator Richard Blumenthal, a Democrat from Connecticut. “If you presented this fact pattern in a law school antitrust exam, the students would laugh the professor out of the classroom, because it is such an obvious violation of our antitrust laws.”
Apple and Google have long had a stranglehold on the business of mobile apps. But that position, which has earned them hundreds of billions of dollars, has increasingly led to regulatory, legal and public-relations headaches.
Federal and state lawmakers are holding hearings and considering legislation to weaken the companies’ app-store controls. The Justice Department is investigating the issue. And in a trial next month, Apple is set to face off against Epic Games, the Fortnite maker, which is suing Apple for forcing it to use Apple’s payment system in its iPhone app.
Jared Sine, the chief legal officer at Match Group, said on Wednesday that Google had called his company the previous night when his planned testimony became public. He said Google wondered why his testimony appeared to be tougher than what Match had said on a recent earnings call.
Mr. Blumenthal called that intimidation, and Senator Amy Klobuchar, the Minnesota Democrat who is the subcommittee’s chairwoman, suggested that the senators would investigate.
Wilson White, a government affairs official at Google, said that Match was an important partner and that Google would never aim to intimidate the company.
“There are many, many ways they could hurt our business,” Mr. Sine said. “We’re all afraid, is the reality, Senator. We’re fortunate you’re listening to us today.”
“Well,” Ms. Klobuchar replied, “I hope the Justice Department is, too.”
“We think it is entirely appropriate for Congress to take a closer look at Apple’s business practices,” Mr. Prober said.
Apple has faced scrutiny in recent years for its strict control over its App Store, including Apple’s practice of forcing apps to use its payment system, which allows it to collect a commission of up to 30 percent on many app sales.
That policy has fueled a multibillion-dollar business, but also brought Apple regulatory headaches, including Wednesday’s hearing and legislative fights in several states. Next month, Apple is set to face off in a trial against Epic Games, the maker of Fortnite, which is suing Apple over its App Store policies.
As part of its announcements on Tuesday, Apple said it was redesigning its podcast app, which now offers millions of shows, up from 3,000 when Apple introduced the service 16 years ago. Starting next month, creators can sell subscriptions to their podcasts, Apple said. It was unclear if Apple would take a cut of those sales, but that has been its approach when pushing into new industries, including in apps, music and news.
The subscription service will put Apple in even more direct competition with Spotify, which has been working on its own podcast subscriptions. Spotify has been a leading critic of Apple in recent years. The music service’s business depends up reaching listeners through iPhones, putting the company at Apple’s whim. Spotify has filed antitrust complaints against Apple in Europe and has complained about the company to American regulators.
Apple also showed off a series of slimmer, faster and more colorful iMacs. The desktop computers, which have 24-inch screens, range in price from $1,300 to $1,700. Apple also unveiled its new iPad Pro, its top-of-the-line tablet, with a sharper screen, faster speeds and the ability to connect to 5G wireless networks. The iPad will cost between $800 and $1,100.
Apple’s other announcements on Tuesday included an update to its branded credit card that would allow spouses to build credit together, and improvements to its Apple TV devices, such as a new remote and faster processor that will make video play more smoothly.
Apple unveiled a series of new products on Tuesday that showed how it continues to center its marketing pitch around consumer privacy, at the potential expense of other companies, while muscling into new markets pioneered by much smaller competitors.
Apple showed off a new high-end iPad and iMac desktop computer based on new computer processors Apple now makes itself. Apple said it was redesigning its podcast app to enable podcast creators to charge for their shows. And it released a new device called AirTags, a $29 disc that attaches to a key ring or wallet to help find them.
Apple also made some other news on Tuesday that was not mentioned in its glitzy, hourlong infomercial. The company said in a subsequent news release that it planned to release its highly anticipated iPhone software next week that will come with a privacy feature that has many digital-advertising companies worried, most notably Facebook.
The feature will require apps to get explicit permission from users before tracking them across other apps. As a result, when opening many apps next week, owners of iPhones will be greeted with pop-up windows that ask them whether to allow the app to track them. Companies are expected to gather less data about users as people decline that tracking.
locked in a war of words over the change, with Facebook arguing that it would hurt the digital-advertising industry that helps fund free internet services. Apple has said it is merely giving consumers the right to choose whether to be tracked.
Separately on Tuesday, Apple’s AirTags immediately drew criticism from Tile, a company that for years has made similar devices for finding lost items. “We welcome competition, as long as it is fair competition. Unfortunately, given Apple’s well-documented history of using its platform advantage to unfairly limit competition for its products, we’re skeptical,” said CJ Prober, Tile’s chief executive.
Tile’s general counsel, along with executives from Apple, Google, Spotify and Match Group, are set to testify to Congress on Wednesday at a hearing on Apple and Google’s market power and control over mobile apps. “We think it is entirely appropriate for Congress to take a closer look at Apple’s business practices,” Mr. Prober said.