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📮 Zuck's (smoking gun) emails

Good Monday morning. Another week, another round of tech lawsuits.
In today’s issue:
  • Facebook’s in trouble for the thousandth time this year.
  • India’s farm protests.
  • Mastercard owes you £300.
  • Brexit talks explained.

Zucks to Be Facebook
The Federal Trade Commission and 48 states slapped Facebook with parallel antitrust lawsuits on Wednesday.
The slap is more closed fist than open palm. Both lawsuits claim Facebook ate up its competition by buying rivals – Instagram and WhatsApp – to maintain a monopoly in the social networking biz.
But… the key to antitrust cases is consumer harm. The lawsuits tackle a question that’s puzzled regulators since the dawn of tech: how do you prove consumers are being harmed by a free product?
The answer = privacy. Last year, legal scholar Dina Srinivasan in a breakthrough paper argued FB’s monopoly does come with harmful strings attached: it’s forced consumers to accept worse privacy settings.
  • Back in the day, FB took privacy super seriously. It edged Myspace out of the arena by promising to never use tracking cookies or change its terms of service without putting it to a user vote. 
  • But when competition dwindled, FB started rolling back privacy protections.
Proof in the lawsuits. (1) In 2008, Zuck sent an email saying: “it is better to buy compete.” (2) Emails between FB executives suggest user privacy is maintained when there’s competition, and eroded when there’s not, says Wired.
The other side. FB’s asking why the FTC didn’t block the Instagram and WhatsApp acquisitions when they happened.
Far away. The case – which took 18 months to put together – will take years to resolve. But what’s the harm in a little speculation.  
  • FTC wins: Facebook might have to spin Instagram and WhatsApp off into independent companies
  • FTC loses: it’ll have a tough time slaying other Big Tech monsters.
Zoom out. Snapchat & Twitter have major potential to thrive if Faceboook’s family breaks up.
Fightin’ Farm Laws
India’s farmers rejected the government’s proposal to amend three controversial farming laws on Wednesday.
The backstory. Farmers have been demonstrating for weeks over laws enacted in September that loosened rules around the sale, pricing and storage of farm produce.
  •  Old rules: farmers had to sell their goods at an auction at their State’s Agricultural Produce Market Committee. A government-agreed minimum price was set for items.
  • New rules: farmers can sell directly to private businesses, like supermarkets, cutting out the middle-man.
Deadlock. The government thinks liberalization gives farmers more autonomy and removes regulatory barriers. Farmers – who make up over half of India’s workforce – don’t agree. They think the reforms leave them with little bargaining power against corporate retailers who’ll dictate price points.
Theoretically, farmers could sell crops at higher prices in times of demand. But anecdotal evidence shows free-market prices are generally lower than the government-agreed minimum price.
It’s not a rosy picture for farmers, 8 out of 10 of whom are currently in debt.
India’s Thatcher moment? Economists broadly agree India’s agricultural sector needs modernization - but not through abrupt measures that fail to address farmers’ concerns.
  •  “I am ready to stay here for 8 months if I have to,” one farmer told the Washington Post.
This affects your pantry and closet. India is the leading exporter of Basmati rice, milk and cotton to the global market. 
Overshadowed & Overcharged
The U.K. Supreme Court greenlit a £14bn class action suit against Mastercard on Friday.
Move over, Zuck. Facebook’s been hogging the antitrust headlines, but the case against Mastercard is the biggest class-action suit of its kind.
Walter Merricks, the ex-Financial Ombudsman exec behind the suit, claims Mastercard imposed “excessive card transaction charges” on 46 million British consumers between 1992 to 2008.
Historic x2. It’s also the first mass claim to be launched under the Consumer Rights Act 2015, which compensates consumers for unlawful anti-competitive behaviour.
Next steps. After the SC’s judgement, the Competition Appeal Tribunal (who threw the case out in 2017) will reconsider whether to approve Merricks’ lawsuit.
Coming soon to a wallet near you: £300 - the payout every adult in the UK could receive if Merricks wins.
Mastercard’s denying all charges. In perhaps the worse comeback ever, the company, whose shares fell 1.2% in New York, said: “No UK consumers have asked for this.”
Legal commentators are predicting the SC’s judgement will kick open the floodgates for more large-scale litigation against corporations.
1-0. Mastercard and Visa lost a similar legal battle in June over swipe fees.
Hands Up If You Understand Brexit
Image: Giphy
Image: Giphy
The EU and UK have extended Brexit trade talks beyond yesterday’s deadline.
Rewind. The UK left the EU in January, but agreed to keep the same regulations in place until New Year’s Eve 2020 so both sides could draft up new trading arrangements.
Sliiight issue. There are no new trading arrangements and 2020 is almost over. Three issues are holding up the talks:
  • Fishing: the UK doesn’t want EU boats to continue operating in its waters.
  • Level playing field: the EU doesn’t want the UK to roll back standardized rules on things like workers’ rights and environmental regulations.
  • Governance: the two can’t agree on what should happen if one of them breaks the deal in the future i.e. how will it be adjudicated and what penalties can be applied?
So… the duo ditched yesterday’s deadline to go “the extra mile” in working things out. No new deadline has been set.
And if they still can’t agree? There’ll be a no-deal Brexit a.k.a the worst Christmas present ever.
  • The UK and EU would abide by World Trade Organization tariffs – meaning the UK would face huge taxes when selling goods to the EU and vice versa.
  • Trucks would be backed up for miles at the Eurotunnel.
Longest. Divorce. Ever. And with Brexit coming down to the wire, companies don’t how to prepare for a deal they know nothing about.
The new extension also means there’ll be very little time for bodies - like the UK and European Parliament - to scrutinize a Brexit deal. 
… Remember when BoJo said: “There is no plan for no deal because we’re going to get a great deal.” Sweet, youthful innocence. 
  • Stock-timism: Airbnb and DoorDash go public in blockbuster IPOs.
  • Georgia High Court rejects latest Trump election appeal.
  • Twitter acquires screen-sharing social app Squad.
  • Cyber-security firm FireEye is hacked in a state-sponsored attack.
  • ICC abandons inquiry into alleged British war crimes in Iraq.
  • Media mogul Jimmy Lai is charged under China national security law.
  • FKA twigs sues Shia LaBeouf, citing emotional and physical abuse.
  • The 7th Circuit revives claims against Kraft for labelling products as “100% Grated Parmesan Cheese” when they, in fact, contain fillers.
Danish legal tech startup Contractbook closed a $9.4mn Series A investment round led by Bessemer last week. Here’s their pitch deck.
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