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Legit.
Good Monday morning. Some good news: last week, Legit passed the 1k subscriber mark.
In today’s issue:
  • Slack’s office romance.
  • France’s troubling security bill.
  • Google spies on workers.
  • An unpopular take on Arcadia’s collapse.

M&A
Pickin’ Up the Slack
Salesforce is buying workplace messaging service Slack for $28 billion, it announced on Tuesday.
The backstory. Slack started off as a whimsical gaming company that - in the spirit of Ross Geller - pivoted to revolutionizing workplace communication. By swapping emails out for instant messaging, Slack went from zero to a $23 billion valuation at its IPO last year.
For Salesforce, it was love at first sight. The software company has been trying to launch its own messaging service to complete its software suite for years. Proposing to Slack, a startup backed by hype and a loyal user base, was like finding the perfect glass slipper.
But… Salesforce investors are feeling pretty meh about the marriage. Slack hasn’t cashed out from the pandemic the way everyone expected it to:
  • It hasn’t made a profit since it went public.
  • Its growth has been smothered its arch nemesis, Microsoft Teams, whose 75m daily users dwarfs Slack’s 12m.
Splurging on a startup plagued by intense competition? Odd. One Citi analyst was pretty blunt in his opinion: “we don’t think Salesforce needed to buy this.” 
THE TAKEAWAY
A match made in heaven… for Slack. It gets access to Salesforce’s huge customer base and a chance at taking down the Death Star that is Microsoft.
  • Not so great for Salesforce, who’s stock has fallen 15% since Tuesday.
Regardless, it’s a bittersweet end to Slack’s rep as the underdog giving Big Tech a run for its money. The reality - that startups have to merge to compete with the likes of Microsoft – begs the question: does competition work in Silicon Valley? 
Zoom out. Slack + Salesforce = a sign WFH is a permanent shift, not a temporary blip.
HUMAN RIGHTS
Experts Slam French Security Bill
UN experts have urged France to redraft its new security bill, calling it “incompatible” with human rights and international law.
Why? The brunt of the criticism is directed at two parts of the bill.
Article 22: gives police the right to deploy drones with facial recognition tech.
  • Experts says this cuts into the right to privacy.
Article 24: makes it an offense to distribute videos or pictures of the police with the intention of causing harm. This:
  • Makes accountability for police abuses and excessive force less likely.
  • Curtails the ability of journalists to cover police action.
So much surveillance. Macron’s security plans have sparked weeks of violent unrest in Paris, with anger fanned further by the recent police beating of a Black music producer.
THE TAKEAWAY
Liberté? Macron thought the law would win him brownie points as a tough defender of law and order before the 2022 election. Now, after global criticism, the government has promised to rewrite Article 24.
But… no one’s patting Macron on the back for his U-turn.
  • Tinkering with Article 24 doesn’t fix the issues with Article 22.
  • UN experts have asked Macron to re-evaluate the purpose of the entire bill.
TECH
Speaking of Surveillance…
Google illegally spied on and fired workers for organizing employee protests, the National Labor Relations Board alleged on Wednesday.
The backstory. This time last year, in a mask-free universe, Google fired two employees – Laurence Berland and Kathryn Spiers.
  • Berland was in the midst of protesting Google’s decision to work with a famous union-buster firm when he was fired for looking at co-workers’ calendars.
  • Days later, Spiers was fired for creating a pop-up notification reminding Google employees of their right to organize. Google said Spiers was fired for abusing access to internal tools.
Now, the NLRB has called the firings illegal. In a complaint filed on Wednesday, the NLRB also accused the tech giant of interrogating and discouraging workers from engaging in employee activism. 
The flip side. Google, who has until Dec 16 to settle, says it’s confident in its legal position.  
THE TAKEAWAY
Oh, the irony. Google’s slogan was literally “don’t be evil” all the way up until 2018, when it was quietly dropped from marketing materials.
While the NLRB’s complaint has dragged Google’s many, many controversies (re: sexual harassment, treatment of contract employees, contracts with federal border protection agencies and the Chinese government) back into the spotlight - it’s also a warning to other tech companies trying to squash employee activism.
P.S… Google’s PR team suuucks. The day they were accused of illegally spying on activists – that is the day they chose to fire their top AI ethics expert.
Also in trouble: Facebook could face an antitrust suit from 30 states this week.
RETAIL
Another One Bites the Dust
Image: Giphy
Image: Giphy
Arcadia Group, the British retail empire owned by Philip Green, went into administration last week.
Because of the pandemic? Kinda. Arcadia blames its demise on the era of social distancing. But the retail industry has been crumbling under the pressure of digital disruption for ages.
It’s been over 25 years since Amazon strutted onto the scene with plucky plans to digitize shopping. Since then, retailers have ignored the way e-commerce has remolded the industry. Brick and mortar stores, they thought, would never go out of fashion.
Then, they did. The thinning herd goes beyond Arcadia: Brooks Brothers, Victoria Secret and Macy’s have all taken a hit this year. And speedy new online retailers, like Misguided and Boohoo, are reaping the benefits.
Blame it on Phillip… is the approach most outlets are taking. He’s an easy target. MP’s hate him. He famously sold a homeware chain for £1 (it collapsed immediately). He took £1bn out of Arcadia in dividends. He lives on a massive yacht in the tax-haven of Monaco.
But, Phil’s approach to retail is pretty commonplace. Example: Debenhams was famously controlled by a string of private equity firms in the 2000s who took similar amounts out of the business in dividends.
THE TAKEAWAY
A Darwinian shakeup. Tempting as it is to blame Phillip Green for all the world’s evils (so, so tempting), pinning Arcadia’s downfall solely on him, or the pandemic, is short-sighted.
Retail is a different beast to the one it was a decade ago, and old-timers left it too long to re-evaluate their approach to an increasingly digitized sector. Instead, they chose to chase a quick buck.
LEGIT ONE LINERS
  • Brexit: the clock is running on UK/EU talks.
  • Netflix is being sued for poaching company executives.
  • Ernst & Young is getting probed (again) by German prosecutors over the collapse of Wirecard.
  • Jared Kushner’s lawyer is being investigated in a bribe-for-pardon scheme.
  • Cheesecake Factory settles charges it misled investors on the impact of COVID.
  • Ex-Tesla employee is paying $400k to settle his feud with Elon Musk.
  • Farmers in India are protesting contentious farm reforms.
  • US House passes a landmark bill decriminalizing marijuana at a federal level.
  • Chinese companies might get kicked off American exchanges if US regulators can’t review their audits.
LEGAL TECH SPOTLIGHT
Legal tech firm Exterro is acquiring digital forensics firm AccessData to speed up how long it takes lawyers to decide to act on a case.
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