DealBook Briefing: Media Mergers Coming in 3, 2, 1 …


Andrew says the verdict is likely to rattle President Trump, a vocal opponent of the Time Warner deal. “Mr. Trump doesn’t like to lose, and that could make his administration more reluctant to police future deals that actually deserve to be blocked,” he writes in his latest column.

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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.

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Elon Musk

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Shannon Stapleton/Reuters

Tesla is cutting staff in a bid for profitability

In a sign of financial sense, the carmaker announced that it would lay off 9 percent of its staff of 37,500. The cuts will mainly hit salaried employees and won’t affect production workers at its plant in Fremont, Calif. (That’s important, given its struggle to build enough Model 3 sedans.)

The aim is to slow Tesla’s cash burn: It lost $785 million in the first quarter, despite generating $3.4 billion in revenue. In an email to the staff, Elon Musk said that his company’s vision — to “accelerate the world’s transition to sustainable, clean energy” — would not happen “unless we eventually demonstrate that we can be sustainably profitable.”

DealBook’s take: Streamlining — and presumably reducing how rapidly it needs to raise money — sounds sensible for Tesla. But exciting new projects like an electric truck could now become harder to finance. There’s also a risk to that highflying stock: If Tesla behaves like a normal company, investors may start to value it as one.

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Kim Il-sung Square in Pyongyang, North Korea.

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Ed Jones/Agence France-Presse — Getty Images

Who wants to do business with North Korea?

When President Trump met Kim Jong-un in Singapore this week, one of his pitches to the dictator was the prospect of Western investment in North Korea. Businesses aren’t exactly lining up to build factories in Pyongyang — at least, not yet. But could that change? Alex Stevenson of the NYT assesses the chances:

Some in the business world find the idea intriguing. The North has a relatively young population and an underground entrepreneurial bent. It has a large amount of resources like rare earths and iron ore. And South Korea has offered the North a modernization plan that includes building railways and power plants.

Crossed wires? North Korean state media said Mr. Trump offered to lift sanctions on Pyongyang. That wasn’t the White House line.

The political flyaround

• President Trump is expected to impose tariffs on Chinese goods as soon as Friday. (Politico)

• Take a close look at Tom Barrack, a billionaire ally of Mr. Trump who has strong ties to the Middle East — and introduced him to Paul Manafort. (NYT)

• Mick Mulvaney’s time atop the Consumer Financial Protection Bureau — sorry, the “B.C.F.P.” — is near an end. His potential replacement: Representative Darrell Issa, a California Republican who isn’t running for re-election.

• A New York state court has curtailed the reach of the Martin Act, which has been used to bring fraud charges against Wall Street. (NYT)

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Protesters at a Seattle city council meeting in May.

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Elaine Thompson/Associated Press

Seattle fought Big Tech. Big Tech won.

Last month, city officials unveiled a business tax meant to help pay for homeless programs and affordable housing. It would have fallen in large part on Amazon. But the e-commerce behemoth lobbied hard against the tax — and now it’s dead.

The lesson for mayors and city governments elsewhere? Taking on tech titans is risky, especially if they employ lots of people in your district. More from David Streitfeld and Claire Ballentine of the NYT:

The politicians had no stomach for a protracted battle over jobs, even at a moment when the area’s unemployment rate is only 3.1 percent. “It is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis,” they said.

The deals flyaround

• Toyota plans to invest $1 billion in Grab of Singapore, the biggest investment yet by a carmaker in the ride-hailing industry. That may not be unalloyed good news for Grab.

• Bird, a big player in electric scooter sharing, is said to be raising $300 million — equivalent to its total valuation three months ago — at a valuation of $2 billion. (NYT)

• Adyen, a European payments processor used by Uber, priced its I.P.O. at the top of the expected price range, valuing itself at $8.3 billion. (WSJ)

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Wang Zhao/Agence France-Presse — Getty Images

ZTE could be in trouble again

Republican senators are betting that President Trump won’t block their effort to restore penalties against the Chinese telecom company that the White House struck a deal to save.

What Senator Bob Corker, Republican of Tennessee, told the WSJ:

“I don’t think the president cares about ZTE. Someone told me that he gave [GOP lawmakers] a wink and a nod and told them he didn’t care. I don’t know if that’s true or not, but I think he did what he did for the Chinese leader but he doesn’t really care what Congress does.”

Elsewhere in ZTE news: The company’s stock resumed trading in Hong Kong overnight after a two-month hiatus, and its market valuation is down by $3 billion.

The tech flyaround

• Malware mined nearly 5 percent of all the Monero cryptocurrency in circulation. (Palo Alto Networks)

• A blockchain experiment in Britain could remove red tape at customs borders. (FT)

• IBM thinks it can make A.I. 100 times more energy-efficient. (MIT Technology Review)

• Bill Gates’s new energy fund has made its first investments, in grid storage. (Quartz)

• Facebook has opened a design lab to improve privacy. (Bloomberg)

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James Hill for The New York Times

Big banks predict who’ll win the World Cup

Ahead of the first game tomorrow, strategists and analysts have put their quantitative skills to use to predict the overall winner of the tournament. Their approaches — including A.I., statistical modeling, and economic analysis — show that picking a winner is just as divisive among the world’s largest banks as it is in sports bars from Moscow to Manchester.

UBS backs Germany, Goldman Brazil, and ING Spain. Here’s how they got to their results.

In other World Cup news: FIFA expects to make $6.1 billion from this year’s tournament. Some games will cause stock market weirdness. And people watching the tournament in Russia may have their devices hacked.

Revolving door

• Guess Inc.’s co-founder, Paul Marciano, has resigned from the clothing company after an investigation into allegations that he sexually harassed and assaulted women. (NYT)

• Cambridge Analytica’s former chief data officer, Alexander Tayler, is trying to reinvent himself as a consultant on data analytics — and compliance. (FT)

The speed read

• If robots come for our jobs, what should the government do? (NYT)

• America’s investment banks have been eating the lunch of European counterparts for years. That might be about to change. (FT)

• Why do economists rarely talk about inequality? Perhaps because they’re afraid of politics. (Bloomberg)

• Beijing says it will let foreign banks run securities businesses in China — so long as they have at least $15 billion in net assets. (WSJ)

• How long do we have to wait before productivity rises? (FT)

You can find live updates throughout the day at nytimes.com/dealbook.

We’d love your feedback. Please email thoughts and suggestions to bizday@nytimes.com.

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Big Day for AT&T, Time Warner and U.S. as Court Rules in Antitrust Case


What are the possible outcomes?

Judge Leon could block the deal.

Doing so might encourage the Justice Department to act more aggressively when it looks at deals in the future, and might prompt a rethink by companies with similar deals in the works.

A key argument against the government’s case is that the deal is a so-called vertical merger, which means that the two companies do not produce competing products: One makes media content, and the other distributes it. Some big takeovers lately have had similar profiles — the purchase of the insurer Aetna by the drugstore chain CVS, and Amazon’s purchase of Whole Foods — and they typically make it past regulators.

So a win for the government could really shake up some businesses’ plans and open the door for a new definition of antitrust regulation.

He could let it proceed without attaching any conditions.

That would, of course, have the opposite effect. It could be the green light for more vertical takeovers, and would be seen as a setback for the Trump administration.

If the deal is allowed to proceed, Comcast is expected to make a bid for most of 21st Century Fox’s television assets — setting up a bidding war against the Walt Disney Company, which has already struck a deal to buy those holdings.

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The Dallas headquarter of AT&T, whose proposed merger with Time Warner was challenged in court by the Trump administration. A ruling is expected Tuesday.

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Dylan Hollingsworth for The New York Times

It’s possible that the Justice Department will appeal a ruling that goes against it, though, so things may not end there.

He could approve it but attach conditions.

The aim of the conditions would broadly be to keep AT&T from using its control of content like HBO or CNN as a weapon to increase costs for its rivals. The fear is that AT&T could charge rivals a high price for, say, HBO to make AT&T’s own product more competitive.

One way to address this would be to appoint a third party to oversee disagreements between AT&T and the cable companies that want to license Time Warner content. The government doesn’t like that approach.

Another option is to demand that AT&T and Time Warner sell off some plum assets. AT&T and Time Warner don’t like this approach, so would be expected to appeal any such decision.

Doesn’t the government challenge deals all the time?

It’s true that deals get challenged all the time, but the government’s focus in the past has typically been on protecting consumers by keeping one company, or a small group of companies, from owning too much of any one specific industry. It comes up when companies buy their competitors — what’s known as horizontal integration.

For example, in 2016, a federal judge blocked the merger of Staples and Office Depot after the Federal Trade Commission argued that the combination would leave Americans with only one dominant retailer focused on pens, paper clips and Post-it notes.

What makes the AT&T decision noteworthy is that the deal is being challenged even though it doesn’t share all the characteristics of horizontal integration.

“Vertical mergers do not fit the traditional horizontal-merger analytical framework used by the U.S. regulatory authorities,” R. Mark McCareins, a professor at the Kellogg School of Management at Northwestern University, wrote in an online discussion about vertical mergers. It means the trade commission and the Department of Justice “are faced with pounding a square peg into a round hole.”

[Read more: The Time Warner case is not AT&T’s first tangle with U.S. antitrust law.]

Didn’t this get political at one point?

Yup. Time Warner owns CNN, which President Trump has publicly and repeatedly attacked as fake news.

“AT&T is buying Time Warner, and thus CNN,” he said at a campaign rally when the deal was announced. He said it was “a deal we will not approve in my administration.”

The government had said that Mr. Trump did not communicate with antitrust officials on the deal and that their decision to oppose the merger had not been ordered by the White House. During the trial, Judge Leon rejected many of AT&T’s efforts to introduce evidence about political interference into the case.

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AT&T’s Many Run-Ins With the Government


The ruling expected Tuesday in the AT&T-Time Warner case is just the latest chapter in AT&T’s tangles with United States antitrust law over the years.

AT&T, one of the world’s largest telecommunications companies, figures prominently in the annals of antitrust law.

Since the late 19th century, under various names and configurations, the entity once known as Ma Bell has often been targeted by regulators trying to rein in its size and keep it from amassing monopoly power.

On Tuesday afternoon, a federal judge is expected to issue a ruling in AT&T’s latest battle with the Justice Department, which is attempting to block the company’s $85.4 billion takeover of Time Warner. The current courtroom battle is a reminder of the complicated balancing act the government must strike in regulating ever-changing companies.

“AT&T has been a dominant company from the very beginning and has sought to maintain its dominance through varying government interactions,” said Gerald Brock, a former Federal Communications Commission staff member who is a professor of public policy at George Washington University. “That’s been the sense of AT&T through the ages — that they seem to have a lot of power, but people also want to be able to communicate in a way that AT&T allows them to do.”

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An 1880 engraving of New York’s central telephone exchange office.CreditCulver

1876

With Bell’s Invention, a Company Is Born

Alexander Graham Bell receives two patents for his telephone. A year later, the Bell Telephone Company, the precursor to AT&T, issues stock to seven shareholders. In 1881, the company acquires Western Electric Company, a supplier of telephone equipment.

CreditThe New York Times

The result: The telegraph business was already giving way to telephones, so the sale of the Western Union stake was not a big loss. Opening up AT&T’s long-distance lines to independent telephone companies satisfied regulators who were seeking greater efficiencies, but it also made the companies more dependent on the Bell System service.

1956

Concessions in an Antitrust Case

AT&T settles an antitrust lawsuit by agreeing to stay out of the burgeoning computer industry. It also agrees to generally license its patents — opening the door for transistors, invented by Bell Labs in 1947, to spread far and wide.

The context: The lawsuit, filed in 1949 by the administration of President Harry S. Truman, sought to break apart Western Electric, the Bell System’s manufacturing arm, from the parent company. Western Electric was overcharging AT&T, the government argued, and so was forcing telephone customers to pay higher rates. It also charged that technological innovations developed within the Bell Labs monopoly were being kept under wraps.

The result: The Bell System was still a powerful monopoly, virtually the lone source for telephone service in the United States, but it would be denied the chance to develop the next big shift in telecommunications: computers.

CreditThe New York Times

1982

The Demise of ‘Ma Bell’

AT&T ends a seven-year-old antitrust case by agreeing to disassemble itself into several independent pieces, essentially breaking apart the monopoly it had enjoyed since early in the century.

The context: Technology developed outside the Bell System had been gnawing at AT&T’s monopoly for years. Microwave towers, for example, could transmit signals, circumventing the Bell System wires. A 1968 regulatory decision allowed independent companies to connect to AT&T’s network. AT&T, meanwhile, was eager to shed the prohibition on computer work it agreed to in the 1956 antitrust settlement.

The result: Some pieces of the Bell System would be swallowed by other corporate entities, while others, such as Verizon, would be huge successes in the new landscape. AT&T, a shadow of its former self, was eventually acquired by a former “Baby Bell,” SBC Communications (formerly Southwestern Bell). The new combination become AT&T Inc.

Randall Stephenson, left, AT&T’s chief executive, at a hearing before Congress in 2011 over AT&T’s bid for T-Mobile.CreditAlex Wong/Getty Images

2011

Expansion Plans Rebuffed

AT&T, facing strong opposition from federal regulators, abandons its plan to acquire the mobile phone service T-Mobile USA for $39 billion.

The context: AT&T was hungry for more radio spectrum, which carries wireless calls and data, as smartphones became must-have devices. Adding T-Mobile would have helped solve that problem, and would have made AT&T the nation’s largest cellphone service provider. Spearheading the merger: Randall L. Stephenson, in his first big strategic step since becoming AT&T’s chairman and chief executive in 2007.

But the Obama administration said antitrust oversight had gotten weaker in recent years and strongly objected to the deal, saying it would result in higher prices and less innovation. The Justice Department was joined in opposing the merger by several state attorneys general and the Federal Communications Commission, which published a lengthy report laying out its concerns.

The result: The failure of the deal was a major setback for AT&T’s growth plans and left the company scrambling for a new solution to its network constraints.

Time Warner offices in New York City. Today’s Time Warner is the byproduct of many rounds of spinoffs and acquisitions.CreditSam Hodgson for The New York Times

Who Strikes Fear Into Silicon Valley? Margrethe Vestager, Europe’s Antitrust Enforcer


“Europe is acting to enforce antitrust laws where the U.S. is not,” said Jeremy Stoppelman, the chief executive of Yelp, who feels that American regulators dropped the ball when they decided not to pursue a case against Google in 2013 (Yelp is a longtime Google antagonist). “Ironically, many of the complainants in the E.U. antitrust case against Google are U.S. companies, pursuing justice in Europe precisely because the U.S., has not acted,” he said in an email.

While Ms. Vestager’s global influence is ascendant, her political fate is murky. She has made it clear that she would like a second term as competition commissioner, but there is no guarantee that the Danish government will reappoint her to the commission next year. In fact, the new prime minister, who comes from a rival party, has said he will not do so.

Though a long shot, Ms. Vestager is among the potential contenders for president of the European Commission, the executive arm of the European Union. It is the most powerful job in the bloc — one never held by a woman, or by someone with her public profile.

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Facebook’s C.E.O., Mark Zuckerberg, spent two days being interrogated by lawmakers in Washington in April.

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Tom Brenner/The New York Times

Her appeal partly speaks to a populist impulse from the political left, a David-versus-Goliath belief that it is high time someone stood up to giant corporations, particularly those that exert so much power. But not everyone views her as a heroic regulatory warrior.

Critics of Ms. Vestager include leaders of American tech companies who have crossed her and who take issue with both her approach and her facts; Republicans in Congress; some members of the Trump administration; the Wall Street Journal editorial board; and groups like the Business Roundtable, a conservative-leaning, pro-business collection of American chief executives.

Apple is especially aggrieved. In 2016, Ms. Vestager ordered Ireland to reclaim 13 billion euros in back taxes, or about $15.5 billion, saying that the company had illegally received a tax break that was not available to others. Apple has begun paying the money into an escrow account, but both the company and Ireland have appealed the decision. They say it ignores how much tax Apple has already paid to Ireland, misrepresents the tax rate the company is subject to there, and reflects either a willful misreading or an ignorance of tax law.

Critics also accuse her of grandstanding, and of displaying bias against American companies.

“I think she has this vision of what the law should be, and it seems to me that when this radically affects major companies that are headquartered in the U.S., you might want to have more of a dialogue with the U.S. regulators and the U.S. government about it,” said Joe Kennedy, a senior fellow at the Information Technology and Innovation Foundation, a nonprofit think tank based in Washington.

Both Timothy D. Cook, Apple’s chief executive, and Sundar Pichai, Google’s chief, have traveled to Brussels to argue their cases in person, apparently in vain. Last June, Ms. Vestager fined Google €2.4 billion, or about $2.8 billion, after concluding that it had unfairly used its search engine to favor its services over those of its rivals. It was the largest such penalty in the European Commission’s history, and more than double similar fines levied by the United States.

Last May, she fined Facebook €110 million, or about $131 million, after concluding that it had misled the European authorities about its acquisition of the messaging service WhatsApp. And in January, she fined the American chip maker Qualcomm €997 million, or about $1.2 billion, saying it had abused its market dominance to shut out competitors.

For the moment, the attention is on data privacy, and whether it is possible to regulate how technology companies share and profit from users’ personal information.

As the top European official enforcing competition laws, Ms. Vestager has primarily concentrated on how a range of companies use, or abuse, their market dominance. But she has also emerged as a major voice of warning about the effect of tech firms on our habits, our privacy, our ability to make human connections and even democracy itself. (Europe has a new data privacy law that is to take effect May 25.)

“What’s fascinating about her role is that in her mind, the new antitrust is about data, not about market power,” said Randy Komisar, a veteran Silicon Valley executive and now a general partner at the venture capital firm Kleiner Perkins Caufield & Byers.

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Apple’s headquarters in Cork, Ireland. In 2016, Ms. Vestager ordered Ireland to reclaim 13 billion euros in back taxes from the company.

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Andrew Testa for The New York Times

He added: “I believe the European approach is more appropriate than the U.S. laissez-faire approach. The U.S. economy sort of lives or dies by the notion of free markets, and I think what we’re seeing is a perversion of free market economics that is very difficult to counter without regulation.”

Appearing last November at a tech summit meeting in Lisbon, Ms. Vestager was interviewed onstage by Kara Swisher, host of the Recode Decode podcast, as about 15,000 people looked on. Many in the audience were young techies who greeted the commissioner with something like euphoria, particularly when she declared that “we need to take our democracy back” from social media.

“She’s what my generation looks for in a politician,” said Corina Stoenescu, a Harvard Business School student who helped organize a conference in March where Ms. Vestager was the keynote speaker. She added: “The moment tech giants come into question, then Vestager comes into question. She’s the only person on the planet who has a voice about it.”

Other jurisdictions are following Europe’s regulatory lead. Brazil, among other countries, has begun an antitrust case against Google, and one of the search giant’s Brazilian competitors said last summer that it would use the European arguments in its own lawsuit. And in November, the state of Missouri opened an investigation into whether Google violated the state’s antitrust and consumer protection laws.

“It’s good if we can inspire each other globally,” Ms. Vestager said in a recent interview in Copenhagen.

She was juggling interviews and preparing for a speech, as a bag of knitting rested nearby. She likes to knit in meetings, and has recently been making elephants, after moving on from socks. (She also sometimes sews her own clothes.)

Trained as an economist, she grew up in Glostrup, a suburb of Copenhagen, the daughter of two Lutheran ministers. (She’s not a fan of organized religion, she said, and follows a “Believe in God, fear the church” philosophy.)

She entered politics at 21, joining the tiny centrist Danish Social Liberal Party, which was founded by her great-grandfather. Elected to Parliament in 2001, she rose to become the party’s parliamentary leader six years later — she was already national chairwoman — and was blamed as being too young, too boring and female when the Social Liberals lost half their seats in the subsequent election.

“She was very, very young, but if she had been a man, people would not have complained in the same way,” said her biographer, Elisabet Svane.

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Ms. Vestager in Copenhagen during a European Union Economic and Financial Affairs Council meeting in 2012. As Danish economics and interior minister, Ms. Vestager pushed through deeply unpopular cuts in retirement and unemployment benefits.

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Keld Navntoft/Scanpix, via Getty Images

As for the boring part: “She has a lot of humor, but she is a little boring sometimes,” Ms. Svane said in an interview. “The party is boring. They are technocrats and teachers, and they always know what is best for society.”

Ms. Vestager brought in a media consultant, Henrik Kjerrumgaard, who advised her to drop the dull platitudes, simplify her message and stick to her beliefs — even if they made her unpopular. She rethought how to present herself.

“All of us have multiple selves,” she said. “Being a public figure is not about changing yourself, but maybe bringing out some other side of yourself.” She learned to smile more, she said, “to be more direct, less detailed, not like an economist lecturing.”

Her party rebounded in the 2011 elections and joined a three-party governing coalition led by the Social Democrats under Helle Thorning-Schmidt. Appointed to the new post of economics and interior minister, Ms. Vestager pushed through deeply unpopular cuts in retirement and unemployment benefits — forcing Ms. Thorning-Schmidt to renege on her own campaign promises — while helping enact more liberal immigration policies.

She made a fair share of enemies, among them a group of long-term unemployed workers angry about reductions in their benefits. She still keeps the sculpture they gave her, of a middle-finger-brandishing hand, in her office in Brussels, saying it was “a reminder that you will make mistakes, and people will have a different point of view, and that should be part of your understanding of yourself.”

In 2014, Denmark made her the country’s appointee to the European Commission, and she took charge of the competition portfolio.

Ms. Vestager appears to have found that rare thing, a decent work-life balance. (By comparison, the fictional character she and Ms. Thorning-Schmidt are collectively said to have inspired, Birgitte Nyborg, the central figure of the Danish political drama “Borgen,” struggles unsuccessfully to hang onto her marriage.) Ms. Vestager’s husband, Thomas Jensen, a math and philosophy teacher, lives in Copenhagen with their youngest daughter, 15. Their two older daughters are in college.

“Here, it’s more the rule than the exception to be a working mother,” she said. “I have sometimes been asked if I’m a bad mother to my daughters, and I say, ‘They don’t know any different — this is the mother they’ve got.’”

Lately she has been thinking about power — what it is, who has it, how it is used — after reading the historian Mary Beard’s latest book, “Women and Power.” “The #MeToo movement can be maybe the most important catalyst for decades in doing that,” Ms. Vestager said. “It tears down our understanding of power.

“Power is not something you own,” she continued. “It’s only something you’re borrowing.”

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Sprint and T-Mobile C.E.O.s Are in Washington to Sell Their Merger. Here’s What They’ll Confront.


The reason for two American carriers to need approval? T-Mobile, which is acquiring Sprint, is controlled by Deutsche Telekom of Germany. Sprint is mostly owned by SoftBank of Japan.

Deutsche Telekom and SoftBank had to undergo reviews by Cfius when they bought control of their respective American wireless providers years ago, which suggests that any transfer of assets between the two now would pass muster.

But the Trump administration has recently taken a harder stance on foreign-owned acquisitions. It pre-emptively blocked Broadcom’s hostile bid for the chip maker Qualcomm. While Broadcom is based in Singapore, and had announced that it would relocate to the United States, the logic was that any change at Qualcomm could hamper its ability to help build out the next-generation wireless network, known as 5G, in the United States. The administration has also said it might consider nationalizing the 5G network, underscoring the sensitivity of the technology that underlies a merger between Sprint and T-Mobile.

Complicating matters are the business dealings of Sprint’s owner, SoftBank. It has ties to Huawei and ZTE, two Chinese tech companies whose connections to Beijing have been a matter of controversy.

But Sprint and T-Mobile are likely to point out that each has already passed a Cfius review in the past, and are willing to make concessions to win over the panel now.

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The business dealings of Sprint’s owner, SoftBank, might complicate the merger. SoftBank has ties to Huawei and ZTE, two Chinese tech companies whose connections to Beijing have been a matter of controversy.

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Jeenah Moon for The New York Times

F.C.C.: What’s in the public interest?

The Federal Communications Commission has scrutinized a possible T-Mobile-Sprint merger before.

In 2014, SoftBank’s founder, Masayoshi Son, met with the chairman of the F.C.C. at the time, Tom Wheeler, and the Justice Department’s antitrust chief at the time, Bill Baer. Mr. Son’s goal: to convince the regulators that AT&T and Verizon were an oligopoly that had a stranglehold on the United States wireless market. The best way to combat that, Mr. Son argued, was by letting Sprint combine with T-Mobile.

Mr. Wheeler and Mr. Baer rejected the argument, concluding that effectively reducing the wireless market to three major carriers from four would not be good for consumers. “The merger made no sense before, and it makes no sense today,” the two wrote in an op-ed on CNBC.com last year, as T-Mobile and Sprint resumed merger talks.

Sprint and T-Mobile are now betting that the new F.C.C. chairman, Ajit Pai, feels differently.

A Trump appointee, Mr. Pai has said that he would employ “humility” in determining which mergers should be allowed to go through. Last year, he pushed the F.C.C. to relax rules limiting how many television stations a broadcaster could own. Weeks later, the Sinclair Broadcast Group unveiled a deal to buy Tribune, a transaction that, if completed, would make the company the most powerful television station owner in the country. (The F.C.C.’s internal watchdog has begun an inquiry into that deregulatory push and whether it had been timed to help Sinclair.)

One question is how the F.C.C. will regard Sprint and T-Mobile’s argument that they need to fend off new players in the market. The carriers have pointed out that Comcast has begun bundling wireless service with cable television offerings, essentially by reselling access to Verizon’s network. Charter Communications is expected to unveil a similar service as well.

Craig Moffett, an analyst at the research firm MoffettNathanson, said that the commission has not traditionally considered offerings from cable companies when it comes to analyzing concentration in the wireless market. Whether it will now is unclear.

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Makan Delrahim, the Justice Department’s antitrust chief, sued to block AT&T’s $85.4 billion takeover of Time Warner, arguing that the combination would bring higher prices for consumers.

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Stephen Voss for The New York Times

Justice Department: Will people pay higher prices?

The biggest regulatory wild cards may be the Justice Department and its current antitrust chief, Makan Delrahim. Late last year, the Trump appointee sued to block AT&T’s $85.4 billion takeover of Time Warner, arguing that the combination would lead to higher prices for content from HBO and Turner Broadcasting channels.

The move was notable because AT&T’s deal involved buying a content company, not another telecommunications rival.

T-Mobile and Sprint’s deal would unite two direct competitors, a type of deal that regulators have traditionally been harder on.

Mr. Delrahim has also opened an investigation into whether AT&T, Verizon and potentially other carriers have colluded to hamstring an effort to help consumers switch wireless service providers more easily.

And it was the Justice Department that first moved to block AT&T’s 2011 bid for T-Mobile. In its lawsuit, the department argued that shrinking from four carriers to three “would remove a significant competitive force from the market.” That attitude prevailed again in 2014 when Mr. Baer pushed back against a union of T-Mobile and Sprint.

Many of the department’s antitrust staff members today are holdovers from 2014, suggesting they may take similar stances now as they did then.

Though corporate America assumed that a Trump presidency would be more lenient toward deal-making, it has maintained an aggressiveness in regulating mergers, according to Norman Armstrong Jr., the co-head of the antitrust practice at the law firm King & Spalding.

“Overall I haven’t seen much change from the last administration to this one,” he said.

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Common Sense: Amazon, the Elephant in the Antitrust Room


But Amazon is already vertically integrated — it creates content and distributes it over the internet. So are Netflix, Google (with YouTube) and Facebook (with its Watch feature and other offerings).

Which is why the so-called FANG companies (Facebook, Apple, Amazon, Netflix and Google) loomed large at the just-completed AT&T-Time Warner trial and may well figure in a Sprint-T-Mobile decision, even though none of the technology giants is directly involved or is a party to the litigation.

AT&T’s chief executive, Randall Stephenson, repeatedly referred to the technology giants during the trial, and made clear that they are what drove the merger. “The media and entertainment industry is going through some rather significant disruption,” he testified. “It’s coming from predominately folks in the tech sector.”

The Time Warner chief executive, Jeff Bewkes, made the same argument. “They have the content, the programming, and they have the technological capability of delivering it straight to you,” he said, adding that by “they” he meant the FANGs. “And they can communicate with you about that relationship and what to watch and how to value the program.”

In closing arguments this week, AT&T and Time Warner’s lead trial lawyer, Daniel Petrocelli, argued that a combined company could use the kind of data about its users that is routinely collected by the tech companies to enhance its programming and offer more targeted advertising. It could use the resulting higher revenues to reduce consumer prices by what he estimated to be $500 million per year.

The government’s lead lawyer, Craig Conrath, provided a counterargument: “The fact that AT&T may want to compete in some other market, that doesn’t give them a free pass to reduce competition in the pay-TV market,” he said. (The pay-TV market has traditionally included subscription TV providers, including cable and satellite, but not over-the-internet providers like Amazon and Netflix.)

AT&T sees Netflix, YouTube and Amazon as “the wolves at the door,” said Scott Hemphill, an antitrust expert at the New York University School of Law. “That’s the center of their theory.”

Time Warner’s content companies, like HBO, CNN and the Turner channels, “are just islands of content unmoored from the consumer,” he said.

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Although they aren’t parties to the government’s lawsuit, the biggest tech players, Facebook, Apple, Amazon, Netflix and Google, have cast a shadow at the AT&T-Time Warner trial.

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Jason Henry for The New York Times

Of course, the argument can be made that AT&T doesn’t need to buy a company like Time Warner — it could create a media content company of its own. That’s what Amazon and Netflix did, and both companies now outspend Time Warner on original programming.

But from a consumer standpoint, it doesn’t really matter. “The major tech platforms are becoming vertically integrated as they create their own content to push out over their distribution platforms,” Rich Greenfield of the investment firm BTIG wrote in a recent research note. “In turn, is it O.K. to be vertically integrated if you build your way in, but not to buy your way into it? What if instead of an acquisition of Time Warner, AT&T just spent $8 billion a year on content creation, the way Netflix is — would that be legal, but buying Time Warner is not?”

Whether the FANG companies compete in the same markets with AT&T and Time Warner is of more than academic interest — it could well influence Judge Richard Leon’s decision, which he said he would deliver no later than June 12.

If Judge Leon does take such an expanded view of the market, AT&T and Time Warner would most likely prevail. Even if he does find some violations, he could impose conditions on the merger rather than block it entirely, much as Comcast had to accept conditions on its purchase of NBC Universal.

Making a case that the proposed Sprint-T-Mobile merger would benefit consumers is far more difficult. The deal has drawn near-unanimous opposition from antitrust experts.

The Sprint-T-Mobile tie-up, in contrast to AT&T-Time Warner, would be a horizontal merger — a combination of direct competitors, that way reducing the number of players operating in the market. Those kinds of deals have traditionally received more antitrust scrutiny.

The government rejected the same merger less than four years ago, and the result was robust competition and lower prices for wireless services — exactly what antitrust regulators fervently hope for. Before that, in 2011, the government blocked a proposed merger of AT&T and T-Mobile.

So the question is whether the markets in which they compete have so changed since then that a merger now wouldn’t harm consumers.

The two companies will need to argue that the market is no longer just the four wireless providers, but now includes the technology giants and broadband and cable companies like Comcast. A merged Sprint and T-Mobile would command only a small share of such a vastly expanded market, and wouldn’t have the power to raise prices.

That may arguably be the case for video, which can now be streamed over wireless handsets, but not for voice calls and texting, at least not yet. Sprint and T-Mobile are talking up the potential for 5G technology to further blur the lines between traditional markets, but widespread use of 5G is still years in the future.

Courts and antitrust regulators “don’t usually consider merger defenses that depend on the existence of undeployed technology,” said Herbert Hovenkamp, an antitrust professor at the University of Pennsylvania Law School and the Wharton School. “Our crystal balls aren’t that good. We don’t have the power to gaze five years down the road, especially when it comes to fast-changing technology.”

While Professor Hovenkamp said he understood the argument AT&T and Time Warner were making about Amazon, “this whole generic idea that companies need to merge to go up against Amazon may play to a general audience, but if you take it to its logical conclusion, it could be used to validate nearly every merger.”

Perhaps T-Mobile and Sprint could hold off a few years, and return with evidence that they’re actually competing with the big tech companies rather than merely anticipating that competition.

Then again, given the vagaries of the Trump administration’s antitrust policies, “they may feel there’s no reason not to roll the dice now,” Mr. Hovenkamp said.

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Future of AT&T-Time Warner Deal Is in Judge’s Hands


The six-week courtroom battle, featuring top executives and glimpses of trade secrets, has been one of the most closely watched antitrust cases in years. It has the potential to reshape the fast-changing telecom and entertainment landscape, which is facing new competition from tech companies.

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“The only lessening of competition that would occur is if this merger is blocked,” the lead lawyer for AT&T and Time Warner said. The Justice Department’s lead lawyer said, “There are hundreds of millions of dollars in harms to consumers.”

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Christian Hansen for The New York Times

The judge’s opinion could also help set the course for antitrust regulation in the years ahead. A victory for the companies could embolden executives to pursue new deals. A government win could slow future deal-making. On Sunday, T-Mobile and Sprint announced a merger to better compete against AT&T, in a deal that is also expected to face close antitrust scrutiny.

The case has centered on the question of harm to consumers and whether the merger would lead to price increases. The Justice Department presented several theories for why prices could go up hundreds of millions of dollars a year over all for cable subscribers. The core idea is that AT&T could threaten to withhold Time Warner content, like N.B.A. games and CNN, to extract more money from rival cable and satellite operators that wanted to run that “must-have” programming.

The call for selling off business lines showed how little the two sides have changed their strategy throughout the trial. The Justice Department, which had made the same demand before it sued in November, says only the divestitures would solve antitrust concerns because restrictions on business practices are rarely well enforced.

The government called witnesses from Dish’s Sling TV and from Cox, Charter and RCN, which provide cable and broadband service, to discuss their fears that AT&T, one of the nation’s largest satellite television providers, would use Time Warner’s programming as its weapon to hurt them. The Justice Department also relied heavily on an economic analysis by Carl Shapiro, a professor at the University of California, Berkeley, that estimated monthly cable bills could go up at least 27 cents.

“These witnesses came across the country to share their concerns,” said Craig Conrath, the Justice Department’s lead lawyer. He said the potential antitrust violations from the deal were not “theoretical.”

“There are hundreds of millions of dollars in harms to consumers,” Mr. Conrath said.

AT&T and Time Warner fiercely attacked those economic arguments during the trial and in the closing argument on Monday. Rivals are always motivated to argue against the activities of competitors, Mr. Petrocelli said.

The companies assailed the economic analysis of Mr. Shapiro, saying the data sets used were not complete and cherry-picked points.

“It is the centerpiece of this case,” Mr. Petrocelli said. But he said Mr. Shapiro’s arguments were “a complete failure of proof.”

The companies’ ability to raise doubts about the Justice Department’s case put the government in a challenging position, analysts said.

“The burden of proof is on the government, and the consensus view is that it would be an uphill battle for the government,” said Paul Glenchur, a senior telecommunications and cable analyst for Hedgeye Potomac Research.

For a merger focused on the future of technology, the trial felt stuck in time. A clock on the wall was frozen at 5:05. Cellphones and other device were forced off. Lawyers relied on boxes of files and binders wheeled in on library carts. Judge Leon, with bow ties and cuff links, was a stickler for order and schedules. He took careful notes by pencil.

Political questions have hovered over the trial, but have not been allowed in the courtroom. President Trump, a vocal critic of Time Warner’s CNN, said during the election campaign that the merger should be blocked. Makan Delrahim, the Justice Department’s head of antitrust, told the court in filings that the White House had not influenced his decision. Judge Leon, however, said he wanted to keep the trial focused on the merits of the deal.

The outcome of the trial may not be a simple yes or no on the merger. Judge Leon may push the parties to work out a settlement that would let the merger proceed with the promise of assigning a third-party arbitrator to resolve business disputes over Time Warner content. He could also, as the government suggested, demand that some parts of the merged company be sold before the deal is approved.

Whichever side loses is expected to appeal.

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European Regulators Ask if Facebook Is Taking Too Much Data


Until recently, few consumers stopped to consider the value of their personal information or how much of it they were forking over in exchange for free online services.

But the recent revelations that the voter-profiling firm Cambridge Analytica obtained the personal information of up to 87 million Facebook users have prompted more questions about the data the social media giant is collecting.

“If something is being sold at a certain price, you can make an informed decision on whether you’re willing to pay,” said Anisha Sekar, a 27-year-old product manager at RaiseMe, a start-up in San Francisco that helps students earn college scholarships. “With Facebook, it’s difficult to know what you’re giving up, and you can’t really make a fully informed choice.”

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“If something is being sold at a certain price, you can make an informed decision on whether you’re willing to pay,” said Anisha Sekar, a product manager at RaiseMe, a start-up in San Francisco.

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Christie Hemm Klok for The New York Times

Although Twitter, Google Analytics and many other services also track consumers’ online activities for advertising or website measurement purposes, German regulators singled out Facebook’s terms and conditions as inappropriate.

They say consumers in Germany have little choice of social networks, forcing users to consent to Facebook’s collection of their web-browsing data if they want Facebook accounts. According to the regulators’ analysis, Facebook has a 95 percent market share of social networking in Germany.

“Since we believe Facebook is dominant, the user’s agreement to these terms and conditions is not voluntary,” Andreas Mundt, the president of Germany’s Federal Cartel Office, said in a recent phone interview.

Because users in Germany lack a real choice, he added, Facebook in effect is able to extract whatever data it wants from them. “The Facebook case is really about excessive pricing vis-à-vis the consumer,” Mr. Mundt said.

He compared the current Facebook proceeding to a 2013 case in which his agency charged Amazon with unfairly prohibiting sellers, as a condition of selling their products on the site, from offering lower prices elsewhere. Amazon ultimately agreed to abandon its pricing practice.

The regulators are not trying to quantify the specific monetary value of data. German, Italian and Belgian regulators are arguing in different ways that certain Facebook data practices are unfair or misleading, not directly causing financial harm to consumers.

Facebook has appealed the judge’s ruling in Belgium. The company also disagrees with the German regulators’ finding of dominance. Matt Steinfeld, a Facebook spokesman, said that just half of internet users in Germany used Facebook while the rest used other services.

“Like Facebook, many of those services are supported by ads and offer tools to other apps and websites, then use information they collect to improve people’s experience,” Mr. Steinfeld said in a statement. “This is not the picture of an internet dominated by a single renegade company.”

He said the company looked forward to answering questions from regulators in Italy.

The United States, where 68 percent of adults say they use Facebook, according to the Pew Research Center, looks at competition differently. Experts said federal regulators would be unlikely to consider Facebook the dominant player, given that many consumers in the United States also use Twitter, Snapchat and other services.

Marketers have long contended that consumers willingly trade their data for more customized ads and personalized services.

“To some degree, we would say most consumers want relevance and aren’t too concerned about privacy,” Bryan Kennedy, the chief executive of Epsilon, a data broker and analytics provider, said at a recent ad industry conference.

While consumers may like discounts and relevance, many are uncomfortable with the data-mining that goes into those benefits. According to a study by researchers at the University of Pennsylvania, many consumers think the trade-off is unfair and, in fact, are simply “resigned” to being data-mined. The recent news that Cambridge Analytica siphoned off the data of Facebook users and their friends has made the trade-off only look like a rawer deal.

Ms. Sekar, the start-up employee, said she had long accepted that using Facebook and Facebook-owned services like Instagram meant that the company would collect information about her for ads.

But that exchange has become more complicated, she said, as new questions emerge about how consumers’ data could be mined to profile and potentially manipulate them. While she is still using Facebook and Instagram and has a “decent sense” of what the company collects, she added, “it’s probably worse than I know.”

“It really frustrates me that all of this is done under the guise of: ‘Well, you made this choice. Nobody is making you sign up for Facebook,’” Ms. Sekar said.

Some industry experts, however, said it was illogical to suggest that Facebook was overcharging in data — because consumer data does not have a face value like a dollar bill. It’s a commodity with a fluctuating value, they said, depending on what it is used for.

“Mass quantities of data by itself doesn’t confer any kind of competition advantage or intrinsic value,” said Ryan Hagemann, the director of technology policy at the Niskanen Center, a libertarian think tank in Washington that has received funding from Facebook. “It’s about how the data is used.”

Facebook made about $84 on average per user in the United States and Canada last year and about $20 on average from users globally, up from $13.50 and $5 in 2012, the year it went public. Targeting ads to its 2.2 billion users helped Facebook generate revenue of $40.6 billion in 2017.

The consumer-tracking techniques underpinning that revenue are not unique to Facebook. But the Cambridge Analytica revelations and Facebook’s gargantuan online reach have put the social network in the hot seat. The company has compounded its problems by being unclear about its practices.

In two days of questioning during congressional hearings this month, Mark Zuckerberg, Facebook’s chief executive, told legislators that he did not know how many data points Facebook collected about individual users or how many non-Facebook sites the company tracked users on, and he offered incomplete answers about how the tracking worked.

Although Facebook allows users to opt out of seeing ads based on their use of other sites and apps, they cannot opt out of the company’s collecting details about their activities on those services.

After the congressional hearings, Facebook posted a blog item generally laying out how it receives data on users’ activities from non-Facebook sites.

“We can and will do more to help people understand how Facebook works and the choices they have,” Mr. Steinfeld, the Facebook spokesman, said.

Ms. Sekar’s ambivalence lines up with a sense of resignation that researchers at the University of Pennsylvania’s Annenberg School for Communication found when they asked Americans about their feelings on sharing unknown quantities of their data with companies.

While much of the ad industry views the consumers from whom it extracts information as willing and informed participants, the Penn researchers say users are in the dark about what they’re giving up.

“The whole idea is unethical if people don’t understand it,” said Joseph Turow, a professor at the Annenberg School and the lead author of the study.

This year, 63 percent of consumers who responded to the researchers’ questions said they wanted to have control over what companies can learn about them online, but have come to accept they have little control over that. That’s up from 58 percent in 2015.

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U.S. Said to Investigate AT&T and Verizon Over Wireless Collusion Claim


The investigation highlights a push by the Justice Department’s antitrust chief, Makan Delrahim, to crack down on the opaque world of intellectual property, or I.P., standards. He has said the Justice Department will scrutinize potential coordination in standards-setting organizations that can hurt competition.

“In the context of antitrust and I.P., we will be inclined to investigate and enforce when we see evidence of collusive conduct undertaken for the purpose of fixing prices, or excluding particular competitors or products,” Mr. Delrahim said in a speech this month at a conference in Washington. He previously warned of the potential for “cartel-like behavior” by competitors that got together with standards-setting organizations.

At the same time, the Justice Department is suing AT&T to block its $85.4 billion merger with Time Warner. Mr. Delrahim has said the deal will hurt competition and lead to higher prices for cable customers. AT&T and Time Warner have strongly disputed the claims in a federal trial that is expected to end this month.

Currently, most mobile phones use SIM cards, which contain unique identifying information about a user and are inserted into the devices so the phones can function. People typically have to buy a new SIM card when changing carriers.

The eSIM technology, which was introduced in early 2016, is embedded in mobile phones and other devices so that people do not need SIM cards anymore.

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The investigation may also include major American carriers other than AT&T and Verizon, a person with knowledge of the inquiry said.

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Brandon Thibodeaux for The New York Times

The eSIM technology is supported by gadget makers including Apple, Google and Microsoft, as well as several wireless carriers globally and in the United States. The Apple Watch 3, Google Pixel 2 smartphone and Microsoft Surface all have eSIM abilities, for example. The technology would make it easier for people to use local carriers when traveling internationally and would free up storage space in devices to use for other technologies like bigger processors and batteries.

The push by the major carriers to restrict the flexibility of eSIM runs counter to a movement in which consumers were gaining more flexibility to move from carrier to carrier. In late 2013, under pressure by the Federal Communications Commission, the wireless industry agreed to let people take devices off any particular network without penalty once the devices were fully paid for.

After the formal complaints against AT&T and Verizon were filed, several device makers and other wireless companies voiced similar concerns to the agency about the carriers’ actions around eSIM, four people familiar with the investigation said. The investigation may also include other major American carriers, another person said.

“The actions would limit choice for consumers and harm competition,” said Ferras Vinh, a policy expert at the Center for Democracy and Technology.

In a private meeting of a task force called G.S.M.A. North America this year, AT&T and Verizon pushed for the ability to lock phones to their networks, bypassing the purpose of eSIM technology, said Harold Feld, a senior vice president of Public Knowledge, a nonprofit consumer group, who was briefed on the meeting. Verizon has said it needed to be able to lock down phones to prevent theft and fraud.

“There is a constant problem with industry standards-setting organizations that on the one hand allow the industry to come together for the purpose of efficiency but can be very anticompetitive and operate in secrecy,” Mr. Feld said.

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DealBook Briefing: Did Jeff Bewkes Help Time Warner’s Cause in Court?


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William Hejl, a farmer worried by the threat of Chinese tariffs.

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Dan Koeck for The New York Times

The timeline for a potential U.S.-China trade war

As the U.S. and China continue to posture over trade — alarming U.S. farmers, many of whom are in key electoral districts in the Midwest — it’s worth noting three upcoming dates, Peter Eavis writes.

On May 1, exemptions to the tariffs on imported steel and aluminum expire.

On May 22, the public comment period ends for another $50 billion worth of tariffs, and the Trump administration can announce a final list of targets.

And Aug. 18 is potentially the deadline for the administration to act on an investigation into Chinese trade practices. But there’s a provision for a 180-day delay after that.

Key caveats: President Trump has the power to pursue trade policy almost at whim. And a W.T.O. proceeding against China could take years.

Elsewhere in trade: How Qualcomm became collateral damage in the fight (China says its takeover of NXP Semiconductors has “hard to resolve” issues), while Washington continues to fret about Chinese tech. Rusal is betting on China for relief from U.S. sanctions. What worries the Fed about trade. And why Wall Street and trading allies increasingly ignore presidential statements.

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Assembling a rifle at the Sturm, Ruger & Co. factory.

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Eric Thayer/Reuters

Breaking: Amalgamated presses Sturm, Ruger on gun limits

The politically minded bank already adopted principles for limiting firearm sales laid out by the advocacy group Everytown for Gun Safety. Now it’s using its position as a (small) shareholder in Sturm, Ruger to urge the gun maker to adopt six Everytown principles.

Among them: Supporting mandatory background checks for all sales; binding sellers to a code of conduct; and adopting smart-gun tech. If Ruger doesn’t support those principles, Amalgamated would withhold votes for Sandra Froman, a Ruger director who’s also on the N.R.A.’s board.

Elsewhere in gun sales: Dicks’s Sporting Goods plans to destroy its stock of assault-style rifles.

The political flyaround

• Attorney General Eric Schneiderman of New York wants to change state law to allow repeat criminal charges against offenders granted a presidential pardon. An adviser to President Trump warned that Michael Cohen could flip. And meet the judge in his case, Kimba Wood.

• Karen McDougal and the publisher of the National Enquirer have settled. She can now publicly discuss her claim to have had an affair with Mr. Trump, who is spared the risk of legal proceedings. (NYT)

• A resolution demanding that Scott Pruitt quit the E.P.A. attracted signatures from 170 Democratic lawmakers. (The Hill)

• Ted Cruz’s Democratic challenger, Beto O’Rourke, is within 3 points in the latest Quinnipiac poll. (Axios)

• The Senate voted to overturn an Obama-era rule restricting car lenders from discriminating against minorities. (NYT)

• The S.E.C. voted to move ahead with public consultations on a rule requiring brokers to put clients’ “best interest” first. (Bloomberg)

• The rise and fall of the lobbyist Tony Podesta. (WSJ)

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Jason Redmond/Agence France-Presse — Getty Images

The most important part of Jeff Bezos’s annual letter

It’s the disclosure that Prime now has over 100 million members. These are Amazon’s stickiest and most valuable customers, who order often and can access its streaming service. The company had $9.72 billion in revenue from subscription services, including Prime fees.

Mr. Bezos also talks about the importance of “high standards” for his digital behemoth. (And about yoga handstands.)

Elsewhere in Amazon: The company is moving its entertainment division to the Culver Studios, where “Raging Bull” and “E.T.” were made.

The tech flyaround

• Facebook is reportedly designing chips, and working to move 1.5 billion users worldwide beyond the reach of European data privacy rules. An Irish watchdog still has qualms about its facial recognition. And ad agencies are seeking substitutes for its hoard of personal data.

• Uber is reportedly in talks to hire VMware’s Zane Rowe as C.F.O., to help prepare an I.P.O. next year. The last of Otto’s founders, Don Burnette, has left Uber.

• Qualcomm has begun cutting about 1,500 jobs. (Bloomberg)

• Intel is closing its wearable tech group. (CNBC)

• Tencent, JD.com and others will put $437 million into a unit of the embattled tech conglomerate LeEco. (FT)

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Lucas Jackson/Reuters

Goldman’s big task: looking less like the Goldman of old

As the firm moves more into consumer businesses — pushing its Marcus online lending platform, buying Adam Dell’s budget-planning app — it is looking less like a traditional investment bank and trading house and more like a one-stop shop. Like the universal banks JPMorgan Chase, Bank of America and Citigroup.

But the shift carries plenty of risk. “It goes against their history as a firm; they’ve no track record of expanding consumer, commercial or corporate banking,” the analyst Brian Kleinhanzl of KBW told the FT.

Elsewhere in banking: Credit Suisse and UBS are reportedly in talks to combine some of their back-office operations. The activist investor Edward Bramson has built a 5 percent stake in Barclays and wants to wind down its trading division, unnamed sources told the London Evening Standard.

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William P. O’Donnell/The New York Times

The deals flyaround

• Bankers for Meredith have reportedly ruled out the National Enquirer owner A.M.I. as a bidder for Time, Fortune, Inc. and Sports Illustrated, rejecting a $300 million offer. (Vanity Fair)

• P.&G. agreed to buy Merck of Germany’s consumer health business for $4.2 billion. (WSJ)

• Total of France agreed to buy Direct Energie, a utility focused on clean energy, for $1.7 billion. (NYT)

• Lloyd Blankfein of Goldman Sachs and Jon Gray of Blackstone butted heads over a potential debt deal at a recent lunch. (Bloomberg)

• The U.K. will reportedly approve Melrose Industries’ bid for GKN. (FT)

• Avenue Capital is reportedly planning a social-impact debt fund. (Reuters)

• Bon-Ton Stores is going out of business. (WSJ)

• Grail, a cancer-detection start-up backed by Jeff Bezos and Bill Gates, is reportedly working to raise $1 billion. RealSelf, an online hub for cosmetic surgery information, has raised $40 million. And Green Bits, which makes software to help cannabis dispensaries stay legal, has raised $17 million from Tiger Global Management and others.

Revolving door

• Cerberus Capital Management has hired the former JPMorgan Chase C.O.O. Matt Zames as president. Frank Bruno, a Cerberus veteran, will become co-C.E.O. alongside Stephen Feinberg. (WSJ)

• Wynn Resorts has added three women to its board: Dee Dee Myers, who was a White House spokeswoman in the Clinton administration; Betsy Atkins, an advocate of stronger corporate governance; and Wendy Webb, a former investor-relations chief for Disney. (Bloomberg)

• Deutsche Bank’s C.O.O., Kim Hammonds, and investor-relations chief, John Andrews, are leaving. (WSJ)

• GlaxoSmithKline has hired Kevin Sin from Genentech as a top internal deal maker. (Reuters)

• Jana Partners has hired Dan Hanson, once of BlackRock, and Pulkit Agarwal, formerly of the International Finance Corporation, to work on its social impact investing fund. (Reuters)

The speed read

• The highest-ranking civil servant in Japan’s Finance Ministry resigned after accusations that he had sexually harassed female journalists. (NYT)

• Starbucks will become a test case for training to combat unconscious bias; its effectiveness is still a matter for debate. (NYT)

• Coastal communities are no longer the only ones suing fossil-fuel companies over the costs of climate change. (NYT)

• Porsche’s headquarters in Germany were raided by the police yesterday as part of an investigation into emissions cheating. (NYT)

• The departing editor of Harper’s Magazine, James Marcus, said he had been fired for opposing the publication of a contrarian essay on #MeToo. The magazine disputes that. (NYT)

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