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🎧 Amazon strikes again

Good afternoon and welcome to our first issue of the year. We have some pretty big plans for 2021 and
Legit.
Good afternoon and welcome to our first issue of the year. We have some pretty big plans for 2021 and we’re grateful you’re joining us for the ride.
In today’s issue:
  • Amazon keeps on disrupting.
  • A 12-year-old sues TikTok.
  • The Vatican’s embarrassing embezzlement scandal.
  • NYSE bids adieu to three Chinese telcos.

M&A
PodSpeed
Amazon is acquiring podcast startup Wondery to beef up its content on Amazon Music, it announced on Wednesday.
Rookie. Amazon Music started hosting podcasts in September, but it’s a newbie compared to Wondery.
The startup, founded in 2016 by a former Fox exec, is packing all-star stats. It’s the fourth largest podcast publisher in the world, has 20 million monthly listeners, and is the name behind major podcasts like “Dirty John” and “Dr. Death.”
But the deal is a little weird…
First, Wondery’s podcasts will continue to exist on other platforms, meaning Amazon is feeding quality content to its rivals. Seems counterintuitive, but Bezos is a guru at long-term strategy. Amazon can use its marketing expertise to boost Wondery’s stats and earnings across all platforms, helping Amazon’s bottom line.
Secondly, Amazon owns Audible, which hosts audiobooks and podcasts. It’s interesting that Amazon is ignoring the synergies with Audible and is instead pairing Wondery with Amazon Music.
THE TAKEAWAY
Pod-domination. Amazon’s waltzing into the pod biz later than everyone else. But taking Wondery under its wing puts the tech giant in a good position: it’s now in the running to jostle with Spotify (the current podcast king) for a sizable market share and has skipped over having to set up its own podcast infrastructure.
Zoom out. Audio is hot right now:
  • The deal caps off 2 years of frenetic podcast M&A, with startups like Gumlet, Stitcher, Parcast and Megaphone being snatched up for millions.
  • Clubhouse, the invite-only app you probably don’t have access to, is pioneering a new audio-centric social media experience.
TECH
TikTok Goes Viral
… for being sued by a 12-year-old.
Huh? The 12-year-old is taking TikTok to court in London over allegations it violated data protection laws. The lawsuit, which is being supported by the children’s commissioner, Anne Longfield, takes aim at TikTok’s secret sauce: its algorithm.
Longfield believes the app illegally collects and exploits children’s data to power its algorithm and generate revenue. Lawyers told the court TikTok “is targeted specifically at children” and, although TikTok requires users to be 13 to join, “a large number of users are under that age.”
TL;DR: the 12-year-old – who has been granted anonymity - is hoping TikTok will delete her data and set a precedent for other renegade-hating tweens.
THE TAKEAWAY
Kids are smart. Over a third of TikTok’s users in the US are under 14. For under-13s - who probably have FOMO they could be making millions or landing a D'Amelio-style Hulu deal - the only safeguard against TikTok is a loose age-gate they can easily duck.
This is less of a TikTok problem and more of an every-social-media-platform-ever problem. I know I wasn’t the only kid who told Zuck I was 40 when I signed up to Facebook.
But… TikTok has been under fire for this a lot:
  • Last year the FTC fined TikTok $5.7m for illegally collecting the data of kids under 13.
  • In July, South Korea issued a similar fine.
  • In Aug., French officials announced an investigation into TikTok’s measures for younger users.
My take: if this lawsuit gains traction, we might be on the cusp of regulation that insists age is verifiable online.
CORRUPTION
Pope Francis to Corruption
Image: Giphy
Image: Giphy
Pope Francis passed a new law on Monday stripping the Vatican’s most powerful office of its financial assets and real estate.
Why? The secretariat of state – the diplomatic and administrative arm of the Holy See – has been at the centre of an embarrassing criminal investigation spanning years of alleged mismanagement of investments and donations.
E.g. The secretariat of state bought a luxury residential building (60 Sloane Avenue) in London’s Chelsea neighbourhood using donations.
Prosecutors – who last year raided the Vatican’s banking regulator as part of the investigation – have accused officials in the department of abusing their authority and haemorrhaging church money whilst enriching middlemen, who fleeced the Vatican of tens of millions of euros in fees.
Now, the pope is spearheading a Vatican shake-up to root out corruption.
THE TAKEAWAY
Embezzling money from the pope gives confidence a whole new meaning. But the secretariat of state’s Icarus syndrome came back to bite it in the butt; the pope’s new law has demoted what was once the Holy See’s most powerful office to an ordinary department.
Though the corruption scandal sped up Pope Francis’ decision, reforming the Vatican’s administration has been a centrepiece of his papacy. He’s hoping dressing down the secretariat will mean “greater control and better visibility.”
Zoom out. The Holy See is facing a major cash crunch right now. Its main source of revenue, ticket sales from the Vatican Museums, has evaporated due to coronavirus closures.
STOCKS
Heartbreak Hotel
While the rest of the world was ringing in the new year, the New York Stock Exchange announced plans to delist three Chinese companies.
Why? The NYSE said the companies “were no longer suitable for listing” and cited an executive order signed by Trump in November that barred Americans from investing in companies with ties to the Chinese military.
The companies – China Mobile Ltd., China Telcom Corp Ltd., China Unicom Hong Kong Ltd. – have a combined market capitalization of $157bn and will be suspended from trading between Jan. 7 and Jan. 11.
No biggie. Although it’s promised to take “necessary” countermeasures, being kicked off the NYSE isn’t going to hurt China’s military or security ambitions. It’s not going to hurt the companies themselves either, who can still raise money from international investors by selling shares in Hong Kong.
THE TAKEAWAY
“He’s for China, I’m for the U.S. But other than that, we love each other.” – Trump speaking about China’s President Xi Jinping in Jan 2020.
Since then, DonXi have lost a whole lotta love. Tensions between the US and China have rapidly escalated this past year over economics, geopolitics, the pandemic, human rights.
Bidding adieu to China’s telecom giants shows this estrangement has now morphed into curbing Chinese access to Wall Street money. Bloomberg has already predicted China’s oil giants might be delisted next.
Bottom line. The “ignoble departure” of these three companies is a sign the deglobalization of capital markets “has truly begun,” says Axios. Already loving 2021, guys.
LEGIT ONE LINERS
  • Pending: a British judge will decide today if Julian Assange should be extradited to the U.S.
  • Facial recognition tech is under fire after law enforcement makes three false arrests.
  • Russia passes laws to restrict U.S. social media influence.
  • Ticketmaster will pay $10mn for hacking a rival ticket seller.
  • Google hates America’s new drone laws.
  • Illinois expunges 500,000 criminal cannabis cases after legalization.
  • Argentina legalizes abortion.
  • Ghislaine Maxwell is denied bail for the second time.
  • An interesting take on whether lawyers should be criticized for who they represent.
LEGAL TECH SPOTLIGHT
Business Insider asked eight experts what legal tech trends would frame 2021. Increased consolidation amongst startups, Big Law ramping up investments and increased access to justice were amongst the top predictions.
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