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Amazon Drops Planned 2 Percent Merchant Fee as FTC Lawsuit Looms: Details

Amazon.com is scrapping a plan to charge merchants who do not use its shipping services an additional fee, a company spokesperson said on Wednesday, signaling that the e-commerce giant was taking a cautious approach to operations amid mounting antitrust scrutiny.

Effective October 1, Amazon was planning to impose a new 2 percent fee on every sale by third-party sellers that ship their products themselves, according to media reports in August. The company said the fee was intended to shield itself from higher costs.

“After careful consideration, we’ve made the decision not to implement this program fee to ensure seller sentiment related to the fee does not impact program participation,” an Amazon spokesperson told Reuters.

The reversal in Amazon’s plans comes when the company is facing a potential lawsuit from the US Federal Trade Commission. Bloomberg first reported the news on Wednesday.

The fee would have applied to thousands of merchants who ship orders through Seller Fulfilled Prime – Amazon’s program that guarantees swift product delivery, even though the company does not handle the shipping itself, according to the report.

The FTC is expected to file a lawsuit against Amazon later this month after the company did not offer concessions to settle antitrust claims, the Wall Street Journal reported.

The FTC began probing the company during the Trump administration when it also launched investigations into other tech majors. Amazon has been criticized for allegedly favoring its own products over those from outside sellers on its platform.

© Thomson Reuters 2023

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Activision Blizzard, Microsoft Extend $69 Billion Deal Deadline to October 18

Activision Blizzard said on Wednesday it has extended the deadline for the close of its $69 billion (roughly Rs. 5,66,200 crore) takeover by Microsoft to October 18 as the companies work to secure approval from the United Kingdom’s antitrust authority.

The “Call of Duty” publisher said the companies also agreed to increase the deal termination fee to $3.5 billion (roughly Rs. 28,700 crore) from $3 billion (roughly Rs. 24,600 crore) if it does not close by August 29. The fee will further rise to $4.5 billion (roughly Rs. 36,900 crore) after September 15.

The two U.S. companies originally agreed to close the deal by July 18, but U.S. regulatory efforts to block the takeover and Britain’s push to restructure it have delayed the close.

The U.S. Federal Trade Commission’s (FTC) bid to temporarily stop the deal was denied twice, first by a federal judge and then by an appeals court.

Britain’s Competition and Markets Authority (CMA) had earlier decided to block the deal, but reversed course last week and extended its deadline for a final ruling to August 29 after the U.S. court ruling left Britain alone in opposition.

Regulators in both countries have varying concerns over the deal.

The FTC said the deal could let Microsoft degrade Activision’s game quality or player experience on rival consoles like Nintendo and Sony Group’s PlayStation, as well as manipulate pricing or change terms or timing of access to Activision content.

The CMA questioned whether the deal could hinder competition in the cloud gaming industry, where users can play on any device using subscriptions such as the Xbox Game Pass that offer a wide selection of games.

Microsoft responded to these concerns by offering 10-year licensing deals to rivals after the deal closes. The latest was an agreement with Sony Group to keep “Call of Duty” on PlayStation, the biggest competitor to Microsoft’s Xbox.

© Thomson Reuters 2023

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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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Microsoft Asks London Court for Two-Month Pause of Appeal Over Activision Deal

Microsoft on Monday asked a London tribunal to pause its appeal against Britain’s block on its $69 billion (nearly Rs. 5,66,100 crore) takeover of Activision Blizzard to give the parties more time to resolve the dispute.

Britain’s competition regulator, the Competition and Markets Authority (CMA), in April became the first major regulator to block the acquisition of the Call of Duty maker, citing concerns about the impact on competition in cloud gaming.

The US Federal Trade Commission (FTC) has also opposed the tie-up, but suffered a major defeat last week when a federal court rejected the FTC’s application to temporarily halt the deal.

In Britain, the CMA’s final report is usually the last word. Companies cannot offer remedies after its publication and their only recourse is to the Competition Appeal Tribunal (CAT).

But last week, less than an hour after a US federal court ruled the deal could go ahead, the CMA said it could look again at a modified proposal. It later said a restructured deal could satisfy its concerns subject to a new investigation.

All sides applied for a two-month pause of the case at the CAT, which the CMA’s lawyers said in court filings will “allow the CMA and the parties to engage swiftly and constructively in relation to Microsoft’s proposals”.

Microsoft’s lawyers said in court filings that the CMA is “the critical impediment” to closing the deal and pausing the case would allow all sides to try and find a solution.

However, Judge Marcus Smith said he wanted to hear the lawyers on whether there was a “proper legal foundation” for the CMA to consider a modified deal.

The judge also asked whether the FTC’s initial defeat in the US had been taken into consideration by the CMA.

© Thomson Reuters 2023

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US Court Refuses Appeal to Revive Antitrust Lawsuit Against Meta’s Facebook

A US appeals court on Thursday refused to revive a lawsuit filed by states against Meta’s Facebook that alleged the company had broken antitrust law.

Dozens of states led by New York asked the US Court of Appeals for the District of Columbia last year to reinstate the lawsuit, which US District Judge James Boasberg of the District of Columbia rejected, saying they had waited too long to file.

Both the Federal Trade Commission and the states had asked the court in 2020 to order Facebook to sell Instagram, which it bought for $1 billion (nearly Rs. 8,120 crore) in 2012, and WhatsApp, which it bought for $19 billion (nearly Rs. 1,55,330 crore) in 2014. The FTC case is going forward.

The three-judge unanimous appeals court panel said it agreed that “the states unduly delayed in bringing suit.”

“The States were on notice of Facebook’s two major acquisitions. Both were publicized,” Circuit Judge A. Raymond Randolph wrote, noting that the FTC had investigated both transactions.

Neither the New York attorney general’s office nor Facebook immediately responded to a request for comment.

In February this year, Meta registered another win as a judge released a ruling denying the Federal Trade Commission’s request to stop Meta Platforms from buying virtual reality content maker Within Unlimited, rejecting the regulator’s concerns the deal would reduce competition in a new market.

A December trial to decide if Meta could go forward with the relatively small deal was seen as a test of the FTC’s bid to head off what it sees as a repeat of the company acquiring small upcoming would-be rivals to dominate a market, this time in the nascent virtual and augmented reality markets.

Judge Edward Davila of the US District Court for the Northern District of California said the FTC had failed to show that Meta would have entered the market to make dedicated fitness content if it was unable to buy Within.

© Thomson Reuters 2023

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Amazon Said to Be Facing FTC Complaint for Illegally Collected Kids’ Data

Federal regulators are expected to sue Amazon over allegations that the e-commerce giant illegally collected data on children, according to two people familiar with the case.

The Federal Trade Commission recommended filing a complaint that Amazon’s Alexa-powered speakers are collecting information about children under the age of 13 without parental consent in violation of the Children’s Online Privacy Protection Act, or COPPA, said the people, who requested anonymity to discuss a pending case. The Justice Department could file on the FTC’s behalf as soon as next month.

A group of children’s advocacy organizations in 2019 asked the FTC to investigate whether Amazon’s smart speakers violated children’s privacy rights. The Campaign for a Commercial-Free Childhood – now called Fairplay – and the Center for Digital Democracy, among other groups, alleged the company retained voice recordings indefinitely and, in some cases, held onto personal data even after users tried to delete it.

Amazon didn’t adequately verify that it had parental consent to collect data, and most of the applications on the Alexa voice assistant tailored to kids didn’t include a privacy policy at all, the complaint said.

Amazon sells a kids-focused edition of its Echo smart speaker and offers a subscription service that opens up a curated selection of apps, books and other content.

When the complaint was filed, the company said its Echo Dot Kids Edition and FreeTime, since rebranded Kids+, complied with COPPA.

Amazon and the FTC declined to comment.

The federal government can seek more than $50,000 (roughly Rs. 41,09,000) per alleged violation of the kid’s privacy law, which has led to significant fines in previous cases.

The FTC, which enforces both antitrust and consumer protection laws, has dinged Alphabet’s YouTube and Musical.ly, the precursor company to ByteDance’s TikTok, for children’s privacy violations. In December, the agency required closely held Epic Games, the maker of the popular Fortnite title, to pay a $275 million (roughly Rs. 2,300 crore) fine – the largest levy to date under the kids’ privacy law.

Speaking at a conference in Washington Friday, FTC Chair Lina Khan said the law “prohibits firms from conditioning access to certain services on endless collection of data.”

The law has “substantive limitations on when firms can be collecting data,” she said.

Politico earlier reported the FTC’s intent to pursue the case against Amazon.

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Twitter Asked for Details on Elon Musk’s Internal Communications, Business Decisions in US FTC Probe

The US Federal Trade Commission asked Twitter to turn over some internal communications related to owner Elon Musk and other detailed information about business decisions as part of an investigation into the social media company, according to a report put out by two House of Representatives committees.

The FTC has sent more than a dozen letters to Twitter and its lawyers since Musk’s takeover in October. Among the requests were the company “identify all journalists” who were granted access to company records and to provide information about the launch of the revamped Twitter Blue subscription service, the report said.

The FTC also wants Musk to testify in connection with the probe, the Wall Street Journal reported.

Musk, in a tweet, said it was “a shameful case of weaponisation of a government agency for political purposes and suppression of the truth!”

Twitter did not immediately respond to Reuters’ requests for comment.

The FTC said “it should come as no surprise that career staff at the commission are conducting a rigorous investigation into Twitter’s compliance with a consent order that came into effect long before Mr. Musk purchased the company.”

The staff report by the House Judiciary Committee and Select Subcommittee on the Weaponisation of the Federal Government said while some of what the FTC had asked for was relevant to its probe regarding Twitter, other elements went too far.

“There is no logical reason why the FTC, on the basis of user privacy, needs to analyse all of Twitter’s personnel decisions. And there is no logical reason why the FTC needs every single internal Twitter communication about Elon Musk,” the report said.

The agency has been asking Twitter if it has the required resources to comply with the privacy consent decree, a person familiar with the matter told Reuters last year.

One of the FTC’s concerns was whether Twitter had the staffing needed to abide by a May 2022 settlement with the US regulator in which it agreed to improve its privacy practices and place responsibility on people who held certain positions. The concerns had been prompted by mass layoffs at the firm.

Twitter in May agreed to pay a fine of $150 million (roughly Rs. 1,230 crore) to settle allegations that it misused private information, and also improve its compliance practices.

© Thomson Reuters 2023

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Microsoft’s Licensing Offer Said to Likely Satisfy EU on Activision Deal

Microsoft’s offer of licensing deals to rivals is likely to address EU antitrust concerns over its $69 billion (nearly Rs. 5,68,000 crore) acquisition of Activision, three people familiar with the matter said, helping it to clear a major hurdle.

Microsoft announced the Activision bid in January last year, its biggest ever, to take on leaders Tencent and Sony, in the booming videogaming market and to venture in the metaverse which is virtual online worlds where people can work, play and socialise.

The European Commission, which is scheduled to decide on the deal by April 25, is not expected to demand that Microsoft sell assets to win its approval, the people said.

Activision shares spiked up 1.8 percent in pre-market trading after the Reuters’ story was published.

Microsoft President Brad Smith last month said the US software group was ready to offer rivals licensing deals to address antitrust concerns but it would not sell Activision’s lucrative Call of Duty franchise.

Smith said it was not feasible or realistic to think that one game or one slice of Activision can be carved out and separated from the rest.

The EU competition enforcer declined to comment.

Microsoft said it was “committed to offering effective  and  easily  enforceable solutions  that address the European Commission’s concerns.”

“Our commitment to grant long term 100 percent equal access to  Call of Duty to Sony, Steam,  NVIDIA and others  preserves the deal’s benefits to gamers and developers and increases competition in the market,” a Microsoft spokesperson said.

Last month, Microsoft said it had signed 10-year licensing deals with Nintendo and Nvidia that will bring Call of Duty to their gaming platforms, with the agreements conditional on a green light for the Activision deal.

The deal faces regulatory headwinds in Britain, where the UK competition agency has suggested that Microsoft divests Call of Duty to address its concerns while the US Federal Trade Commission (FTC) has asked a judge to block the deal.

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Activision Blizzard Agrees to Pay $35 Million to Settle Workforce Allegations

Activision Blizzard has agreed to pay $35 million (nearly Rs. 290 crore) to settle allegations over the video game maker’s handling of workplace complaints and violations of whistleblower protection rules, US financial regulators said on Friday.

The Securities and Exchange Commission said the company knew employee retention issues were “a particularly important risk in its business” but did not have adequate measures in place to manage workplace misconduct complaints between 2018 and 2021.

The company, which makes the popular Call of Duty game, also required employees between 2016 and 2021 to tell the company if the SEC contacted them for information — a violation of whistleblower protection rules, the agency said in a statement.

“Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors,” said Jason Burt, who heads the SEC’s Denver office, said in a statement.

Representatives for the Santa Monica, California-based video game developer and publishing company, in a statement, said they were “pleased to have amicably resolved this matter” and had “enhanced” their workplace reporting and contract language.

Microsoft, which makes Xbox, had made a $69 billion (nearly Rs. 5,66,500 crore) bid to acquire Activision Blizzard, but the Federal Trade Commission asked a judge in December to block the transaction. EU authorities as also examining the deal. The FTC, which enforces antitrust law, argued that the deal would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023.

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PlayStation CEO Jim Ryan Met EU’s Antitrust Chief to Discuss Microsoft’s Activision Deal

Sony’s gaming chief Jim Ryan met EU antitrust chief Margrethe Vestager on Wednesday to discuss Microsoft’s $69 billion (about Rs. 5,62,647 crore) bid for Call of Duty maker Activision Blizzard, a person familiar with the matter said on Thursday.

The meeting came as the EU competition watchdog prepares to warn Microsoft this week about the potential anti-competitive effects of the US software giant and Xbox maker’s acquisition in the biggest gaming industry deal in history.

Microsoft is looking to Activision to help it compete better with leaders Tencent and Sony. The latter has criticised the deal and even called for a regulatory veto.

The person declined to provide details of the discussion between Ryan and Vestager. The European Commission, which is scheduled to rule on the deal by April 11, did not immediately respond to a request for comment.

The US Federal Trade Commission has sued to block the deal while UK regulators have also expressed concerns, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

An earlier report suggested that Microsoft argued that the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023.

The deal currently faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

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Microsoft Activision Takeover: No ‘Substantive’ Settlement Talks With US FTC, Lawyer Says

There are no “substantive” settlement discussions under way between US President Joe Biden’s administration and Microsoft to resolve a legal dispute over the Xbox maker’s $69 billion (roughly Rs. 5,71,900 crore) bid for games maker Activision Blizzard, a Federal Trade Commission attorney said on Tuesday.

The FTC, which enforces antitrust law, asked a judge to block the transaction in early December, arguing it would give Microsoft’s Xbox exclusive access to Activision games, leaving Nintendo consoles and Sony’s PlayStation out in the cold.

FTC attorney James Weingarten, speaking in a brief telephonic pretrial hearing, said there were no “substantive” settlement discussions between the two sides under way.

Microsoft argues that the deal would benefit gamers and gaming companies alike, offering to sign a legally binding consent decree with the FTC to provide Call of Duty games to rivals including Sony for a decade.

The case reflects the muscular approach to antitrust enforcement being taken by the administration of US President Joe Biden. But antitrust experts say the FTC faces an uphill battle to convince a judge to block the deal, because of the voluntary concessions offered by Microsoft to allay fears it could dominate the gaming market.

Michael Chappell, the FTC administrative law judge, will rule on the deal after hearings set for August 2023. Either side can then appeal to the same FTC commissioners who voted to bring the challenge, and then to a U.S. appeals court.

The deal faces scrutiny in the European Union which is to decide by March 23 whether to clear or block the deal.

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