Bitcoin plummets as economists, regulators express skepticism of cryptocurrency boom

Bitcoin’s value, which nearly quintupled from the first of the year through the first of September, peaking at $4,950.72 per coin on the latter date, has fallen more than 20 percent this month and over 15 percent in the past seven days, as of 4:15 p.m. EST Wednesday.

The decline comes as a number of regulatory agencies and economic experts around the globe express skepticism regarding Bitcoin and other cryptocurrencies.

China banned Initial Coin Offerings (ICOs)—the means by which creators introduce and raise capital for new cryptocurrency projects—earlier this month, and Chinese news outlet Caixin reported Friday that the country might prohibit cryptocurrency exchanges entirely in the near future, Business Insider notes. 

But, Bloomberg’s Lulu Yilun Chen tweeted Friday that the Chinese government had yet to mandate the shutdown of Okcoin and Huobi PRs, two of the country’s most prominent cryptocurrency exchange platforms.

Some say China will relax the pressure it has placed on the cryptocurrency market once the government has found a viable means of regulating that market.

“China [is] saying, ok, we need to push back on these for now until we figure out how to deal with them,” said Zennon Kapron, director of the Shanghai-based financial technology consultancy Kapronasia, per Reuters, in reference to the country’s ICO ban. Kapron added that he expects the country’s government to eventually ease the ban.

Previous Chinese regulations against cryptocurrencies have proved temporary. The country prohibited the withdrawal of Bitcoin investments in February, but allowed withdrawals to resume in June, Business Insider points out.

Chinese regulators are not the only ones wary of the cryptocurrency boom.

Tuesday, the U.K.’s Financial Conduct Authority released a statement cautioning investors about the risks of ICO investors, Business Insider reports. These risks, according to the FCA, include the lack of regulation governing the cryptocurrency market, the volatility of cryptocurrencies, the potential for fraudulent ICOs, and the experimental nature of cryptocurrency projects.

“ICOs are very high-risk, speculative investments,” the FCA’s warning reads. “You should be conscious of the risks involved … and fully research the specific project if you are thinking about buying digital tokens. You should only invest in an ICO project if you are an experienced investor, confident in the quality of the ICO project itself (e.g., business plan, technology, people involved) and prepared to lose your entire stake.”

Also on Tuesday, Business Insider says, JP Morgan CEO Jamie Dimon predicted an imminent crash of what he sees as the Bitcoin bubble. His prediction, so far, has been self-fulfilling. Dimon said he “would fire any trader that transacted Bitcoin for being stupid” (Business Insider’s paraphrasing).

As of 5:15 p.m. EST, Bitcoin’s value has fallen six percent on Tuesday’s news.

Business Insider notes that early this month, in an interview with Quartz, Yale economics professor and Nobel Prize winning author Robert Shiller, who predicted the crash of the housing and technology markets in his 2000 book “Irrational Exuberance,” called Bitcoin the best example in today’s market of a speculative bubble.

A “speculative bubble” occurs when unrealistic expectations amongst investors of an asset’s future performance drive the market value of that asset beyond any real gains it is capable of accruing.

In the aforementioned book, Shiller argues that the tech bubble formed because “a fundamental deep angst of our digitization and computers” compelled investors to seek a false sense of understanding and comfort by gobbling up tech stocks.

“Somehow Bitcoin…gives a [similar] sense of empowerment: I understand what’s happening! I can speculate and I can be rich from understanding this! That kind of is a solution to the fundamental angst,” Shiller told Quartz.

There is no question that investors have been exuberant about cryptocurrencies this year. ICOs have raised over $2 billion in 2017. The question is whether the exuberance is irrational. As a number of financial experts answer that question in the affirmative, once-exuberant cryptocurrency backers are growing skittish.

Featured image via Wikimedia Commons

Consumers accuse Best Buy, other Texas retailers of price-gouging in Harvey’s wake

A photo taken at a Best Buy in Houston after Hurricane Harvey shows 12-packs of Smart Water listed for $29.98 and 24-packs of Dasani water advertised at $42.96. The photo went viral on social media, causing many to accuse the company of price-gouging in the wake of the storm.

A Best Buy spokeswoman told CNBC the exorbitant pricing resulted from a “big mistake” made by a few employees at one store.

The company issued a statement Wednesday explaining that because it does not sell water by the case, its computer systems contain no pricing information for cases of water. When employees at the store in question failed to find prices for cases, they multiplied the price of individual bottles by the number of bottles in a case and arrived at the numbers listed above.

The statement says the explanation is not an excuse and expresses remorse for the occurrence.

“We feel terrible about this because, as a company we are focused on helping, not hurting people affected by this terrible event,” the statement says. “We are all deeply sorry that we gave anyone even the momentary impression that we were trying to take advantage of the situation.”

Best Buy is just one of a number of Houston-area retailers consumers have accused of using the storm to pad the bottom line, The Washington Post reports. The state attorney general’s office has received 684 complaints from consumers, most of which allege price-gouging.

“Anytime catastrophic storms hit Texas, we witness the courage of our first responders and the generosity of neighbors coming together to help their fellow Texas,” Attorney General Ken Paxton said in a statement, per the Post. “Unfortunately, in the wake of the damage from storms and flooding, we also see bad actors taking advantage of victims and their circumstances.”

Some businesses have charged as much as $8.50 for a single bottle of water, and up to $99 for a case, the Post says.

An investigation by KXAN, an NBC affiliate based in Austin, revealed that a Best Western hotel in Robstown was charging almost triple its ordinary nightly rate. A crew working undercover for the station paid $289.99 ($321.89 with tax) for a room that typically costs $119 per night.

Best Western spokeswoman Kelly Dalton said in a statement that the nationwide hotel chain had reimbursed the overcharged customers and intends to cut ties with the Robstown location.

One woman says she paid more than $60 for two cases of beer at a RaceWay gas station in Corpus Christi. RaceWay says the overcharge resulted from a clerical error, and that the owner, who is an “independent Raceway contract operator,” according to a statement by RaceWay, gave the customer a full refund when the mistake came to light.

Still, the company says: “We take these allegations seriously and are investigating them with the operator.”

Texas law enforcement takes price-gouging seriously as well. The offense carries a fine of $20,000 per incident. If victims are over the age of 65, the penalty is $250,000 per incident.

Price-gouging, Paxton says, is something “you can’t do in Texas.”

A few gas stations have reportedly been charging upwards of $3.50 per gallon for gas, Kayleigh Lovvorn, a spokeswoman for the attorney general’s office, told the Post. One store, she said, charged $20/gallon. The average gas price in Houston is $2.21, according to gaspricewatch.com.

Sunday, the Post reported that Harvey had forced the shutdown of a quarter of the oil and gas production in the Gulf of Mexico, and disabled ten percent (two million barrels per day worth) of the country’s refining capacity. The shutdowns will drive up the gas prices in and around Houston.

Paxton’s office is investigating whether the $20/gallon price was an act of price-gouging or a necessary response to the refinery shutdowns.

Featured Image via Flickr/brownpau

BitCoin’s value surges despite looming scalability challenges

As of 2:18 Eastern Monday, a single bitcoin is worth $4,282—an all time high for the cryptocurrency, invented in 2008. The bitcoin-USD exchange has soared more than 200% this year, as investors in Korea and Japan increasingly seek to buy the cryptocurrency—some such investors are willing to pay premiums of up to 30%—and May’s New York Agreement helps it to accommodate expansion.

A wide array of investors have jumped on the bandwagon, some more enthusiastically than others. “Whether or not you believe in the merit of investing in cryptocurrencies…real dollars are at work here and warrant watching,” Goldman Sachs analysts wrote in a note to clients, per Bloomberg.

Joshua M. Brown, a financial advisor at Ritholtz Wealth Management, is among those who, despite their skepticism, cannot resist BitCoin’s upside. When the cryptocurrency first became part of investors’ vernacular seven years ago, Brown observed in a blog post in mid-July describing his first-ever BitCoin purchase, it was subject to all the volatility that accompanies a “new and unproven” investment opportunity.

Now, though, the cryptocurrency has been hanging around in the public eye for quite a while, and recent developments such as the New York Agreement may lead to stabilization.

As a limited resource as well as a medium of exchange, Bitcoin has properties of a commodity as well as a currency, Goldman Sachs’ note to clients points out. The United States IRS does not recognize Bitcoin as legal tender but, rather, treats it as property for tax purposes.

BitCoin’s value is not supported by some inherently valuable asset like gold or silver, but the lack of such a standard is par for today’s currencies, according to Tim Courtney, CIO at Exencial Wealth Advisors.

“The first thing to understand is that, just like every other currency, there is no asset backing digital and cryptocurrencies,” Courtney told TheStreet. “In the past, some currencies were backed by gold or silver, but that’s no longer the case.”

Without any sort of backing, Bitcoin derives all of its value from supply and demand. BitCoins, in other words, are only worth what someone is willing to pay for them.

“When you see returns on digital currencies moving up, that means demand for them has outnumbered the sellers out there,” Courtney explained to TheStreet.

BitCoin will face a minefield of obstacles as it scales up to satisfy increasing demand. One such challenge could be unprecedented volatility. In late June, Ethereum, a cryptocurrency similar to Bitcoin, dropped from $300 dollars to $0.10 on a single, multi-million-dollar exchange, CNBC reports.

Courtney observes, per TheStreet, that there was no way to reverse the trades, as there would have been had the crash involved “established assets.”

“…there is no security to your [cryptocurrency] trades if something unexpected happens,” Courtney told TheStreet.

‘”What we’ve been doing in the stock market to prevent flash crashes, they’re nowhere near that in the cryptocurrency market,” adds Joe Saluzzi, co-founder of Themis Trading, per CNBC.

Bitcoin also runs the risk of devaluing itself as it expands, Courtney says. He cites the “constrained supply” of Bitcoin as an integral part of its value—basic microeconomics principles hold that if a commodity is in high demand but short supply, its price will rise.

Yet, as Bitcoin expands to serve increasing demand, it will become less and less scarce, and may, therefore, lose much of its value. In other words, like any other currency that loses its scarcity, Bitcoin will be subject to inflation.

BitCoin has long been vulnerable to cyberattacks. As its popularity grows, it will increasingly become a target for hackers. Exchange services BTC-e and Bitfinex both reported being hacked last week, according to CNBC.

The security and anonymity of BitCoin make it a suitable platform through which to launder money, demand ransoms, and carry out other nefarious transactions. All transactions carried out on contraband distribution websites like the AlphaBay and Hamsa, both of which authorities shut down in July, are conducted via BitCoin. Late last month, alleged BTC-e operator Alex Vinnik was arrested on suspicion of having laundered more than $4 billion his clients generated through a variety of criminal enterprises.

“It’s hard to imagine the IRS, Treasury etc allowing anonymous transactions without any reporting becoming a global standard for US persons,” Brown wrote in his blog post.

Still, Brown says, he is not willing to miss out on the potential upside of an investment in BitCoin. “I’m old enough to realize that just because I don’t see a use for something, that doesn’t mean I won’t be proven wrong by others who do,” he writes.

Judging by the spikes in the cryptocurrency’s value—it seems to hit a new high every day, of late—plenty of other investors are indeed anxious to prove Brown wrong.

Featured Image via Flickr/Zach Copley

Delta Releases Quarter Two Earnings Reports: Profit Down Despite Unit Revenue Increase

Delta Airlines, Inc. published its earnings report for the second quarter of 2017 on Thursday, according to Reuters’ Alana Wise and Arunima Banerjee. For investors, the report was a mixed bag. Profit fell 21% as compared to quarter 2 of 2016: net income dropped to $1.22 billion from 1.55 billion a year ago. However, passenger unit revenue (PUR), which Reuters says “measures sales according to flight capacity,” rose 2.5%.

Stocks across the industry, which had been trending upward recently as a result of sector-wide increases in PUR, dipped following Delta’s report. Delta’s own shares fell 2% Thursday, closing at $54.35.

Operating costs are soaring as fuel prices rise and “renegotiated contracts with…pilots, flight attendants, and mechanics unions” demand higher payouts from airlines. Delta reports that its salary costs are up 9% as compared to last year, and that fuel costs have risen 18%. Employees also received an additional $338 million in profit shares.

However, there are plenty of reasons to be hopeful about the future of Delta, and of the airline industry as a whole. Delta Chief Financial Officer Paul Jacobson says “the June quarter represented the peak for non-fuel cost pressures this year,” and expects costs to moderate in quarter three.

Moreover, passenger unit revenue is expected to continue to rise; Delta projects that the figure will grow between 2.5% and 4.5% in quarter three. An 18-20% increase in operating revenue is anticipated as PUR continues to climb. In quarter two, operating margin rose by one percent. Total operating revenue was up 3.3% to 10.79 billion.

Matthew Heller of CFO.com quotes Delta President Glen Hauenstein as saying the quarter two increase in PUR “marked Delta’s return to unit revenue growth after two and a half years.” Delta expected a 2% increase in PUR in the first quarter of the year, but reported a 0.5% decrease instead.

Unit revenue has declined throughout the sector over the past few years, partly because consumers are pressuring airlines to lower fares.  Passenger Revenue per Available Seat Mile (PRSM), a key indicator of unit revenue, fell over 7% across the industry from 2013 to 2016, according to MIT’s Airline Data Project.

Recently, though, unit revenue has been on the upswing. Hauenstein attributes the rise in Delta’s unit revenue numbers to “a strengthening demand environment and our commercial initiatives to provide customers more choice, an innovative experience, and a broader global network.”

The air travel industry is a key element of the United States’ economy, accounting for 7.3% of the country’s jobs and 5.1% of its GDP (data collected by Airlines for America). The success of airlines can boost the overall health of the economy considerably, and when airlines struggle, the economy is liable to dip.

The inverse is also true: when the economy struggles, consumers opt for more affordable modes of travel, and the airline industry suffers. But, as Hauenstein says,  the increase in Delta’s unit revenue suggests that demand is strong. An efficient business should be able to turn a greater profit when a greater demand exists.

Still, given Delta’s earnings reports over the last year or so, and considering Jacobson’s assertion that quarter two marked the apex of Delta’s yearly costs, it seems the June quarter was an aberration. With unit revenue increasing for the first time in years, Delta looks poised to close 2017 well.

As of 2:48 Eastern Time on Friday, Delta stock had risen 1.32% since the market closed Thursday. Since April 17, the stock is up nearly 25%, as investors respond to increases in unit revenue throughout the airline industry. Yes, a 21% decrease in profit is alarming at first blush, but Delta should be fine in the long run.

Seattle City Council Passes Measure to Tax the Wealthy

By a 9-0 vote this week, Seattle’s city council passed a measure that would require residents to pay a 2.5% tax on income over $250,000. Couples who file jointly would be taxed on household income over $500,000, Rick Anderson of the LA Times reports. Though conservative activists have already taken legal action against the tax, it is scheduled to be implemented in 2019.

As the Trump administration reduces federal funding to cities, Seattle’s local government is seeking alternative revenue sources, so as to continue its climate change, affordable housing, transit, and education programs.

Mayor Ed Murray wants to “ensure Seattle stands up to President Trump’s austere budget,” he said. The Mayor has called the new tax a “formula for fairness.”

Proponents of the new tax say it will combat gentrification—housing prices and rents are “soaring” in Seattle, according to Mr. Anderson—and counter the strain the current tax system places on those with low-income.

“We have an increasing affordability gap between the have and have-nots. The middle class is being squeezed as well,” said city councilwoman Lisa Herbold, who co-sponsored the new tax. “And one of the reasons is our outdated, regressive and unfair tax structure.”

According to John Burbank of the pro-tax Economic Opportunity Institute, “households with incomes below $21,000 are paying, on average, 16.8% of their income in state and local taxes, while those with incomes above $500,000 pay just 2.4%.”

Moreover, Burbank says the new tax will have little effect on most high-income taxpayers. It only taxes income above $250,000. So, those who make, say, $275,000, will pay the 2.5% tax on just $25,000; that’s $625 annually.

Many of Seattle’s mega-rich, including Jeff Bezos, CEO of Seattle-based Amazon; Bill Gates, founder of Microsoft; Steve Ballmer, owner of the LA Clippers and former Microsoft CEO, do not live within city limits, and so would not be subject to the tax.

Opponents of the tax initiative, such as the aforementioned Mr. Ballmer, say it “drive up wages” will incentivize local businesses to move out of Seattle. Moreover, a local income tax in the largest city in a state with no income tax is a tough pill for many to swallow.

“We’re known across the world as a place that doesn’t have an income tax,” says Paul Guppy of the Washington Policy Center think tank in Seattle. “[But an income tax in Seattle would send] a certain signal to people planning to make a life here.”

Of course, the implication is that said “signal” would prompt potential Seattle denizens to move elsewhere.

Expected legal pushback against the measure began just hours after it was passed when a lawsuit was filed by the Freedom Foundation, a conservative activist group, on the grounds that the tax would “violate state law.” According to the LA Times’ Anderson, “[Washington] state law… bars cities from taxing net income and requires state approval for enactment of any new municipal taxes.”

The foundation’s CEO, Tom McCabe, worries the tax will eventually extend beyond the $250,000+ income bracket, and perhaps be applied across the whole state of Washington.

“No matter who starts out paying it, everyone will eventually suffer,” he said in a statement.

Other cities are considering taxing the wealthy to compensate for the decrease in federal funding. San Francisco, for instance, is considering raising the income tax rate by 0.5% for residents who make over $1 million.

Polls provide varying indications of Seattle residents’ attitudes toward the new tax. 62% of 700 voters polled recently by King-5 TV disapproved of the measure, but other studies have shown widespread support for the tax.

Automakers’ Shares Rise Despite Decline in Sales

US automakers reported a decline in new vehicle sales for the fourth straight month on Monday.

Experts anticipated the dip, which comes on the heels of a record-setting 2016 in which 17.55 million new vehicles were sold. Retail sales numbers, which account for the sale of used cars, remain stable, and industry stocks are rising despite the underwhelming reports.

GM’s shares increased by 1.8% Monday, despite a 5% drop in sales as compared to last June. Ford’s shares jumped 3.3%.

GM’s chief economist, Mustafa Mohatarem, notes that “key U.S. economic fundamentals clearly remain positive,” and expects “U.S. retail vehicle sales [to] remain strong for the foreseeable future.”

Notice that Mohatarem mentions retail vehicle sales, not sales of new vehicles.

A preponderance of like-new used automobiles has flooded the market, and likely will not go away anytime soon.

An increasing number of consumers prefer to lease cars rather than buying them. When the leasing term expires, many leased cars wind up back on the lot, to be sold as used vehicles. Therefore, a trend toward leasing vehicles is often accompanied by an increase in used car sales and a proportionate decrease in new car sales.

When sales of new cars drop, companies are prompted to offer attractive leasing agreements and to lease cars they would otherwise sell new. As a result, more cars are leased and more cars are sold used.

It is a self-perpetuating cycle. But with the length of the average car loan standing at a record high of 69.3 months according to edmunds.com, economists wonder how sustainable it is for the consumer.

“[Such a long lease] is financially risky,” says Jessica Caldwell, executive director of industry analysis at Edmunds, “[and leaves] borrowers exposed to being upside down on their vehicles for a large chunk of their loans.”

Another reason for the drop in new car sales is companies’ increasing reluctance to sell cars to rental agencies. Such sales yield relatively small profit, and Mohatarem says the “pullback in daily rental sales” is “industry-wide.”

Ford’s sales to rental agencies fell 13.9 percent in June, but there was no change in the company’s sales to consumers.

Another trend found in the data is consumers’ preference for large vehicles—SUVs, trucks, and crossovers—as opposed to small, passenger vehicles.

Nissan and Toyota were among the few companies whose sales increased in June 2017 exceeded their sales in June 2016. Both companies reported increases of approximately 2%. In both cases, the increases come due to huge jumps in SUV sales.

Sales of Toyota’s 4Runner, an SUV rose 16.6 percent, and sales of its more affordable SUV option, the RAV4, saw a 24.7 percent spike. Nissan sold 19.5 percent more trucks, SUVs, and crossover vehicles than it did last June, but 12.1% fewer sedans.

At the beginning of the decade, when the price of gas in the US began to climb above $3.00 a gallon, consumers were eager to ditch their gas guzzlers in favor of small, fuel-efficient alternatives. Now, with the average gas price hovering just above $2.00, Americans seem to opt for space rather than fuel economy or eco-friendliness.

Whether consumers in the US are buying SUVs or Priuses, they certainly aren’t buying new ones. Still, the health of the automotive industry does not seem to be in jeopardy. The avenues by which companies generate revenue are changing as consumers choose used cars and leases over brand new vehicles.

Moreover, it is only natural for a downturn like a 4-consecutive-month sales decreases to follow a record-setting boom. It is worth bearing in mind that all reported decreases are relative to June of last year when the industry was in the midst of a huge upswing.

Unless the entire interstate system breaks down or a personal hovercraft is invented, American consumers and automotive companies will maintain a fruitful and happy business relationship for years to come.

Madoff’s Sons’ Estates Pay $18 Million to Victims of Ponzi Scheme in Legal Settlement

The estates of Michael and Andrew Madoff, heirs to the fortune of their father Bernie, will keep just under $4 million dollars after approximately $18 million is seized to pay a legal settlement with Irving Picard, the court-appointed trustee tasked with collecting the money lost by Madoff’s investors. Half of the money awarded in the settlement will go to the Madoff Victim Fund, which has paid out $9 billion to those Madoff cheated since it was created by the Department of Justice after Madoff’s conviction.

The estate of the senior Madoff’s younger son, Andrew, will retain about $2 million; that of Andrew’s older brother, Mark, will keep $1.75 million.

The two brothers managed business and regulation at Bernie Madoff’s private investment securities business. In 2008, they exposed their father’s scheme, after the senior Madoff confessed privately that his investment management enterprise was a classic Ponzi scheme.

Madoff reported false returns over multiple decades, using the money entrusted to him by new clients to pay the dividends he had promised to older ones. Like any Ponzi scheme, Madoff’s operation required a majority of participants to remain indefinitely committed to the scheme, because with no actual profit being made, Madoff was unable to consistently pay out the gains he had reported.

When the bottom dropped out of the economy in 2008, Madoff’s clients asked for $7 billion worth of dividends. Madoff only had a few hundred million dollars with which to pay them. With his scheme on the verge of collapse, Madoff presumably made the aforementioned confession to his sons, who in turn alerted federal authorities.

Several other Ponzi schemes have been enacted throughout history. Allen Stanford used such a scheme to steal $8 billion from his clients; Tom Petters’ swindled investors out of $3.7 billion. Still, no other Ponzi scheme has netted its proprietor a sum even close to that poached by Madoff.

Madoff, 79, is serving a 150-year prison sentence after pleading guilty in 2009 to 11 counts of various varieties of fraud, perjury, money laundering, and theft in connection with the scandal, which allegedly cost thousands of investors a collective $20 billion dollars they had entrusted to Madoff.

Neither of Madoff’s sons will see a dime of their inheritance. Mark Madoff hanged himself with a dog leash in his SoHo condo in December 2010. He allegedly wrote his wife the Madoff family “would be better off without ‘this’ hanging over them all, forever.” Presumably, Mark was referring to his father’s scandal.

Andrew Madoff died in September 2014 of mantle cell lymphoma, with which he was originally diagnosed in 2003. The cancer had been in remission for years before it resurfaced aggressively just prior to the youngest Madoff’s death. Mark Madoff once called his father’s scheme a “father-son betrayal of biblical proportions.”

Though the senior Madoff’s sons were instrumental in bringing his corruption to light, suspicion hounded them in the aftermath of their father’s conviction. Both Madoff brothers held top executive positions at Bernard L. Madoff Investment Securities, but claim to have been uninvolved in the scheme.   Five of Madoff’s employees were convicted of aiding Madoff’s corruption, but neither of the mastermind’s sons was among them.

The ripple effect of a scheme like Madoff’s is incalculable. Of course, thousands upon thousands of investors lost fortunes. Their families lost inheritances; some, presumably, were reduced to poverty. Madoff’s sons spent their lives under the weight of others’ suspicion and their own shame. Andrew Madoff publicly repudiated his father; Mark Madoff ended his own life.

The $4 million dollars the Madoff estates will retain and the $9 billion dollars the Department of Justice has repaid to Bernie Madoff’s victims seem strange and insignificant consolation.

EU Watchdogs Declare Google a Monopoly

When a company’s name becomes a verb in the dictionary, there may be evidence of a monopoly.

Perhaps it is no surprise, then, that EU antitrust regulators have declared Google a monopoly and accused the tech behemoth of “anti-competitive practices.” The EU’s ruling was accompanied by a $2.7 billion fine and is expected to be followed by further regulation as the EU continues an aggressive investigation of the mobile phone and online advertising arms of Google’s business.

Google’s new monopoly status makes it easier for competitors to bring civil suits against the company. “We can expect to see a series of damages claims brought by the rivals that were excluded from the market by Google’s conduct,” said Peter Wills, co-head of competition law for Bird & Bird in London.

Google has historically remained more or less impervious to the regulatory efforts of watchdogs like the EU, as well as to general trends in the technology market. Share prices in Google’s holding company, Alphabet, have fallen just 1.8 percent, despite a prolonged selloff of technology stocks. Since the EU began investigations of Google in 2015, the company’s stocks have doubled. Today, Google boasts a $666 billion market capitalization, making it the second most valuable stock in the world, behind Apple.

However, the EU’s similar declaration against Microsoft in 2004 checked the Microsoft’s expansion into then-budding markets like internet advertising, thereby opening the door for Google’s rise. The recent ruling against Google may well facilitate the growth of some hitherto unknown corporate entity.

Typically, when the EU administers a regulatory punishment like the one it has levied against Google, it also mandates a specific course of action by which the company can repair the problem. The union’s decision not to provide such a mandate to Google, evidence of the EU’s ambivalence about how to handle the business implications of modern technology such as algorithms, means Google will have to devise its own strategies to reduce its “anti-competitive practices.” Ultimately, Google must prove that other companies pose significant competition to its business.

The classification of Google as a monopoly “will provide a cornerstone for assessment of other ongoing cases, especially regarding Android and Adsense,” says Jonas Koponen, competition chief at Linklaters law firm in Brussels. The EU’s review of these cases may lead to repercussions far more damaging to Google.

As it stands, websites that pay for the use of AdSense are prohibited from running ads that promote Google’s advertising competitors. If the EU forces Google to allow AdSense customers to run its competitors’ ads, Google would likely have to radically change is business models, or risk losing a considerable portion of its advertising revenue, which accounted for 85% of Alphabet’s total revenue last year.

The Android investigation could carry its own far-reaching implications. Currently, Google preinstalls its Google Play app store on all devices running the Android OS. If new regulations allow phone manufacturers such as Samsung to feature their own app stores on the phones they build, Google’s dominance could be further stunted. Moreover, Samsung, other phone manufacturers, and the host of other companies Google has bullied out of various markets could bring civil suits against Google.

The EU has been consistently tough on the giants of the technology industry. In 2016, it demanded 13 billion euros’ worth of unpaid taxes from Apple. In 2004, the regulatory pressure it imposed on Microsoft allowed Google to emerge amongst the world’s leading technology companies. Now, the EU is putting similar pressure on Google itself. Technology is rapidly changing the ways companies operate and forcing us to reevaluate business ethics.

Featured Image via Wikipedia

Woman Wins a $43 Million Jackpot, but Instead gets a Steak Dinner?

How often have you found yourself spending all your money in a casino? You think you will have better luck next time, so you go back to try again. You sit down to play a slot and BAM you hit the jackpot you win big, $43 million dollars the screen says. Well, this happened to a woman named Katrina, and began taking pictures doing the happy winning dance, she just hit an enormous winning and she could not be more excited. Oh, but wait, she goes to get her winnings and the casino workers tell her no, you actually have not won that money, but we can offer you a complimentary steak dinner and $2.25 because that is what the winning should have been for that specific slot. Now you’re confused, angry and upset, how can a slot machine just lied to you about that much money for a winning.

The casino staff told Katrina that there was a malfunction in this specific slot machine and that is the reasoning to why she will not be winning the $43 million, as she had previously thought. The correct amount that should have been shown on the screen was $2.25 so is that is what they offered her plus the steak dinner, but Katrina turned that down. According to her lawyer now she will be filing a lawsuit against the casino, located off of Rockaway Boulevard, and will be pursuing $43 million in damages. But she is not only going after the casino for the confusion in her winnings but the casino’s parent company and the manufacturer of the slot machine. Katrina’s lawyer has a 17-page complaint about her experience at the casino and some of the issues in it include alleged common-law negligence, breach of contract and negligent representation.

As a casino you cannot just say a machine is broken because you think it is when it is to your benefit, there has to be reasoning and specific reasoning and proof at that. People come to a casino to gamble and are expecting to win the money in which slot machines announce, and when a case like this happens it sends a message that anyone who has ever played this slot has never truly had a chance to really win. Does this casino not check their machines for glitches, and do maintenance work on them to make sure they run properly? People come to casinos to win big and win money not to be in a position of zero chance to really win and out of the money they deserve.

Katrina feels like she was not treated fairly. The casino should have recorded a check on all slot machines to make sure they are up to par for those people coming to play, so an occurrence like this does not happen. It has caused psychological agony for Katrina and put her in a situation where she did not even have a chance or opportunity to truly win because she dedicated her time to this machine because she thought she could win big. No one wants to go to a casino and get played, they are there to win big and win what they deserve because that is what the machine says. Maintenance checks and truthfulness in casinos needs to be up to standard and for the greater of the people because they are there to try to win.

Uber Announces a Loss of $2.8 Billion for 2016

Uber announced a gross of $20 billion for the year of 2016, which is double what the company made just the year before. After its drivers took their share, the company’s net revenue was an estimated $6.5 billion for the entire year. However, that rapid growth did not come without a price.

In fact, the company says that in the year of 2016 it lost over $2.8 billion. That money does not include its business in China that it sold in the middle of the year. Before Uber sold its China business to Didi Chuxing in the summer, it has already stated that it was losing over a billion in China.

While this loss is big by any company’s standards, Uber still managed to grow its sales in the second half of the year. It did this all while keeping is losses constant.

Uber is a privately-owned company and therefore it does not have to publicly report its finances. This moment of financial disclosure could be the company’s attempt to boost morale for the employees as well as those who have invested in the company. It would also help boost consumer’s confidence in Uber.

It was just recently that the company faced a lawsuit from Alphabet Waymo who insists that Uber’s self-driving technology was pilfered by a few Google employees. Just over a week ago, Uber finally released a statement against Waymo’s accusations. Basically, Uber says that Waymo is wrong.

Uber claims that all the self-driving technology it uses has been acquired legally through other sources. However, Waymo has taken its case to judge saying that Uber’s current executive stole over 14,000 documents before leaving Google to join Uber. Uber continues to investigate the matter by searching computers and other devices of its employees.

This announcement of the company’s high numbers could also be a great way to assure consumers that Uber is doing well despite the minor hiccups the company has had in the courtroom and on the road. Not long ago, an Uber autonomous vehicle was in an accident with another car.

The accident, though proved not to be the self-driving vehicles fault but that of the driver that failed to yield to the Uber vehicle, caused Uber to halt all its testing. The company stopped the test of its self-driving vehicles while the accident was further investigated. Once it was proved to have been the other driver’s error, Uber was quick to start their engines once more.

There is also a further investigation in response to an Uber employee who claims that when they worked for the company they experienced not only harassment but sexism. Yet despite all the negative things that have been happening for the company, it’s still pushing through and is continuing its race towards a fully autonomous vehicle.

A spokesperson for Uber, Rachel Holt who is also the regional manager for U.S. and Canada, said, “We’re fortunate to have a healthy and growing business, giving us the room to make the changes we know are needed on management and accountability, our culture and organization, and our relationship with drivers.”

Trump Might Surpass Obama’s 8 Years of Travel in Just one Year

Some believe that Donald Trump is well on his way to surpassing former President Barack Obama’s eight-year travel spending amount. It’s only been 80 days since Trump took office and his trip to his private club in Florida cost an estimated $20 million.

So why are so many slightly raising their eyebrows at this lucrative spending? Well if you recall, back during the Obama presidency, Trump openly criticized President Obama for the money he cost American taxpayers for every trip he took.

Yet when a president decides to go on a trip, he can’t just book a flight and be on his way. There’s the cost of secret service and other security measures that, in their entirety, can’t be completely estimated. A 2016 Government Accountability Office report on a four-day Florida trip President Obama took back in 2013 estimated that the cost of security was about $3.6 million.

It would seem that President Trump has spent a total of 21 days, including six weekends, at his private Palm Beach club, Mar-A-Lago. It’s been estimated that the total amount for all these trips rounds off to about $21.6 million.

However, when it comes to presidential trips, President Obama spent slightly under $97 million throughout his 8 years in the White House. His trips included personal vacations to Aspen for skiing and the Obama family vacation to Martha’s Vineyard. But there were also work trips like when he visited the Everglades National Park for Earth Day.

Before taking office, Trump was quite the critic of President Obama’s vacations. He often took to Twitter to express his disapproval for the vacation trips Obama took to his home state Hawaii.

One of his Tweets featured an inaccurate unemployment figure when Trump said, “The habitual vacationer, @BarackObama, is now in Hawaii. This vacation is costing taxpayers $4 million +++ while there is 20% unemployment.”

He also later Tweeted, “President @BarackObama’s vacation is costing taxpayers millions of dollars—Unbelievable!”

It’s believed that if Trump’s spending habits continue on their current pace, the new president will surpass President Obama’s within the next few months. Which is in question since Trump has recently said that the federal government should cut down their own spending by $54 billion. This cut deals out low blows to the State Department, the Department of Housing and Urban Development, Environmental Protection as well as lot of other departments that will receive big cuts.

However, as the weather in that region begins to escalate in the upcoming month, it’s expected that President Trump will stop his Palm Beach vacations. Although it will be too hot to vacation in Florida, many others think that the president’s next move will be to Trump Tower in New York City. In his penthouse apartment there his wife and first lady Melania Trump has been residing since the beginning of 2017 with their son. The other vacation destination that is suspected for the president is Bedminster Township, New Jersey where his private Trump National Golf Club is.

Yet despite his criticism of President Obama’s vacations, the Trump family is proving to be a bit costly when it comes to security protection. Not only does he frequent travels rack up cash but it costs an estimated $127,000 to $146,000 per day to protect the first lady as she resides in New York without the president.

The secret service is in a bit of a strain as well when it comes to extending their protection to the first family. Many have been pulled from their investigations across the country in order to put on two-week rotations to protect Trump and the entire first family.

John Kelly who is the Homeland Security Secretary says that Homeland Security plans to ask Trump for more funding for his protection. Kelly said, “We need a larger Secret Service because we need to get some of these people a little bit of time at home with their families.”

Pink Diamond Breaks Record With $71.2 Million Sale at Auction

The record price for any diamond or jewelry piece to be sold at auction was set recently when a pink diamond known as the “Pink Star” went for $71.2 million at Sotheby’s auction. The Pink Star is stunning coming in at 59.6 carats.

The Pink Star came from the mines of Africa in 1999 by De Beers. The raw uncut gem was 132.5 carats. It took over two years to cut the diamond down.

Its recent sale price crushed the $60 million pre-sale price it was estimated at, set by Sotheby’s before it went on the block for auction. It was just three years ago that the diamond was bought for an even higher price at a different Sotheby’s auction. Not too long after, however, the deal for the Pink Star fell through after the buyer defaulted.

Back in fall of 2013, it was won at auction by a New York diamond cutter named Isaac Wolf for $83 million. Wolf failed to pay for the diamond, however, hence the default. This caused a slight problem for Sotheby’s. They, in turn, had to buy the diamond because it was guaranteed a $60 million sale.

Aside from its record-breaking sale price, the Pink Star has earned itself the reputation of being the most flawless and largest pink diamond to ever be graded by Gemological Institute of America.

Three bidders competed for the pink prize over telephone. The entire thing took only five minutes as a crowd of onlookers watched in anticipation. The whole room erupted in applause when the hammer went down on the final bid of $63 million, which doesn’t include the buyer premium.

The new owner is Hong Kong jeweler Chow Tai Fook. Sotheby’s Asia Chairwoman Patti Wong commented to the source on the excitement of the bid. Wong said, “I know there was a lot of talk about the economy in China not being as positive as it was a few years ago,” yet it would seem that these auction results were quite unexpected.

So how do they know this sale will go through and no default like the previous one did? Ms. Wong says that she isn’t worried about that happening at all. The bidders in this auction have a long-term relationship with Sotheby’s. She told CNBC that the company is “very confident that all three bidders had the financial capability, and of course the buyer definitely had the financial capability.”

The Pink Star joins the ranks of record breaking diamonds to sell for big prices at auctions. One of them was the “Oppenheimer Blue” which went for 56.8 million Swiss francs ($57.6 million) at auction only last summer. The Pink Star crushes the record for another pink diamond, “Graff Pink”, which was a 24.78 carat diamond that went for $46.2 million.

David Bennett, who is chairman of auction houses jewelry division said, “The Asian element in the jewelry market is extremely important and from what I’ve been hearing from members of the trade I’ve been talking to, in the last six months they have become more and more important.”

Dow-DuPont Merger Delayed Due to FMC Deal

Dow Chemical and DuPont have delayed their merger. The cause would be due to the fact that both are making at attempt at an asset swap, totaling $1.6 billion, with FMC Corp. a known pesticide maker.

The merger between Dow Chemical and DuPont runs at an estimated $78.7 billion and is expected to be finalized sometime in August. Yet it would seem that FMC grew the most in the eight years that it came to the agreement to purchase DuPont’s crop-protection assets. The European Union wanted those assets to be sold off before things are finalized with Dow Chemical.

DuPont has plans to gain FMC’s health and nutrition business. This deal with FMC, according to DuPont Chief Executive Ed Breen, will gratify “the bulk” of what’s needed for the company to gain the permission of governments around the globe. The largest speed bump in the two companies’ merger is that the European Commission, as well as their global counterparts, are to review all the implications of any antitrust issues that go along with the FMC transactions.

It’s stated that the closing extension is the most recent for the agreement that was drafted back in 2015 and only closed just last year. Both companies gained the approval of the European Commission for their merger back in March. The way they did this was agreeing to sell all pesticide and polymer assets. Yet while this brought them a bit further, they still need antitrust clearance from China, Brazil, and the United States.

Breen believes that the requirements are just “little things” that each country needs in order to finalize the regulatory approvals.

Besides research and development programs, DuPont plans to sell herbicide and insecticide to FMC. Among the assets that the company is selling to FMC is Rynaxypyr, which has earned itself the reputation of being a top seller for DuPont. Just last year Rynaxypyr earned the company an estimated $450 million. That’s just before interest, taxes, depreciation and amortization was added on. Afterward the total climbed to around $1.4 billion.

A company based in Delaware, called Wilmington, has plans to acquire FMC food businesses as well as ingredients used in pharmaceuticals that usually generate around $228 million in earnings.

It was also stated to a source that FMC has plans to pay DuPont over $1.2 billion as well as give DuPont $425 million in working capital. That money is supposed to reflect the difference in asset values.

Even after all the payments, FMC stills poses to be a good deal for DuPont. After its dealing with DuPont, FMC will hold over 90 percent of pesticide sales. That will make the Philadelphia company the fifth largest producer of crop protection chemicals.

Aside from everything else, Dow and DuPont say they still have plans to combine forces. Once this is done, however, the two say the will then proceed to divide the finally merged company into three. This will take place just over 18 months of closing the deal. The first spinoff company to emerge from this will be a plastics company that will carry on the name, Dow.

The other two companies coming out of the merger will be agriculture and specialty companies. All three will retain the BBB rating by Standard & Poor’s, which is the current rating that Dow now holds.

Although FMC is still thought of as a good deal by some analysts, it is expected to reduce the cost savings that will be anticipated by the merger of DuPont and Dow. Yet once the deal is closed and the two companies have merged, it’s predicted that their combination will bring a targeted $3 billion of synergies.

China Brings In Record Breaking Lobster Imports From the U.S.

Lobster imports from the United States has become increasingly popular in China. So much so, that it’s setting a new record for the country as China begins to further its expansion of its lobster market.

Until 2010, American lobster wasn’t something you would find in China. Around that time, however, the value for the delectable crustacean jumped by 250 percent to $7.4 million. That number only continued to grow which is proved by last year’s high number $108 million in lobsters from the United States. That number is up from the $90.2 million China imports saw back in 2014.

Just last year alone China brought in over 14 million pounds of U.S. lobster which is another record set compared to the previous year 13.1 million pounds the year before.

But it’s not just China who has developed a craving for American lobster. Other Asian countries are partaking, including South Korea. South Korea pulled in $28 million in imports last year which was a significant rise from the $5 million it brought in back in 2010. Vietnam also saw a rise in its imports with its small number of 142,940 to $31 million.

Some believe that the sudden rise in the number of lobster imports could be due to the fact that China has seen a great surge in its middle class. The American lobster is far cheaper than other seafood like the spiny lobster and geoduck clams. Stephanie Nadeau, who owns The Lobster Company in Arundel, Maine, commented that many customers appreciate the fact that American lobster is “kind of an affordable luxury.”

Last year was also a record catching year for fishermen in Maine who brought more than 130 million pounds of Lobster. That number is far more than double that of 2007. Those numbers don’t seem to be coming to halt anytime soon this year either. It’s recorded that lobster sales to China were at $14 million during the first few months of the new year. It’s also said that nearly 1.7 million pounds of lobster was exported as well.

Lack of Oxford Comma Costs Oakhurst Dairy Company $10 Million

It’s a topic that is probably far more taboo than politics and religion. It has caused debates among even the sharpest of minds and now is possibly the cause of a class-action lawsuit about overtime pay for truck drivers. You guessed right. It’s the Oxford comma.

It would seem that one little punctuation mark could cause a dairy company in Portland, Maine, over $10 million dollars.

It started back in 2014 when three of the company’s truck drivers decided to sue Oakhurst Dairy for nearly four years’ worth of overtime pay that they felt had been denied them during their employment with the company. It’s a law in Maine that workers be given 1.5 times their normal wage rate for every hour they work after 40 hours. However, that also comes with a few exemptions and stipulations.

So in order to understand why the three truckers felt slighted in their overtime pay, we first have to review what we all know about the Oxford or, as some call it, serial comma. When you have a list of items in a sentence—like “coats, hats, and shoes”—some would say that a comma should go after hats in the sentence. Other grammarians feel, rather strongly I might add, that there shouldn’t be.

One might say that to argue over punctuation is rather absurd, but for the truck drivers who sought compensation that was not the case at all. The law in question, as stated below, lacks the Oxford comma.

It says that overtime does not apply to: The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of:

  1. Agricultural produce;
  2. Meat and fish product; and
  3. Perishable foods.

So the real question is what is exempt from the law? Is it the distribution of the three items that follow, or could it be the packing for the shipment of the distribution for those three? The drivers dispersed the perishable foods but didn’t partake in the packaging of the boxes. If the truck drivers got the money in overtime that they were fighting for completely depends on how the court would read the law above.

Had there been a comma placed after “shipment” the law might have read that there is an exemption for the distributions of perishable foods. Yet when the issue came to court at the beginning of the week, the appeals court chose to side with the drivers. The court believed that a lack of a comma added too much uncertainty and the suit came out in the truck drivers’ favor.

Although just three drivers filed the suit against the dairy company, more than 75 of them will split the money. It’s reported that the drivers make an estimated 46,800 and 52,000 per year without overtime added. Yet they worked an extra 12 hours of overtime per week.

Many companies and laws do not add the Oxford comma to their writing. The same goes for the guidelines of the Maine Legislation Drafting Manual. Lawmakers were not supposed to use the Oxford comma during the writing of the law. So technically the law was written correctly according to its language standards.

Most news organizations in America will leave the Oxford comma out unless there are situations that would be unclear without it. The Associated Press, which is basically the authority for nearly all American news, isn’t in favor the comma’s usage either.

It’s usually used in academic and book publishing. The Chicago Manual of Style is an avid user of the comma as well as the Oxford University Press style who says that the comma “can serve to resolve ambiguity.”

Back in 2014, FiveThirtyEight and SurveMonkey Audience surveyed 1.129 Americans and came to the conclusion that nearly 57 percent of them prefer the use of the Oxford comma while 43 percent weren’t too in favor of the punctuation mark.

However, the Maine Legislation Drafting Manual does add that in the circumstances of the series being modified caution should be taken by readers. It states that “Commas are the most misused and misunderstood punctuation marks in legal drafting and perhaps the English language.”

 

Obamas Get $65 Million Book Deal

Former President Barack Obama and first lady Michelle Obama received bids for a book deal that has jumped to the price of $60 million. Penguin Random House was first in line with HarperCollins, Simon & Schuster, and Macmillan trailing not too far behind in the bid.

Yet on Tuesday Penguin Random House won the bid with a $65 million deal for the rights to two books written by the former President and his first lady. According to the Financial times, both the books will be written separately by the couple but the rights to both books will be sold jointly.

This is the largest book deal that has even been paid to a former president for his memoir. Knopf which is part of Penguin Random House only paid $15 million for Bill Clinton’s memoir “My Life” back in 2004. In 2010, Crown published former President George W. Bush’s book “Decision Points” for around $10 million.

Penguin Random House has already published prints of books by the Obamas. CEO Markus Dohle made a statement about their enthusiasm to work with them once again. He also made a statement saying:

“With their words and their leadership, they changed the world, and every day with the books we publish at Penguin Random House, we strive to do the same. Now, we are very much looking forward to working together with President and Mrs. Obama to make each of their books global publishing events of unprecedented scope and significance.”

It’s estimated that the dual book deal is the most anticipated of any former president and first lady. Former President Barack Obama has been credited as having a unique prose style when compared to recent presidents. Both is books “Dreams from My Father” and “The Audacity of Hope” have sold millions of copies.

It’s predicted that Michelle Obama will delve further into her time as first lady. The only book she has published, “American Grown” back in 2012 was about gardening.

Wells Fargo Fires Managers in Connection with Scandal

Last fall, Wells Fargo was fined $185 million after regulators found the bank guilty of opening as many as 2 million retail bank accounts without customers’ approval. Over 5,000 employees tied to the scandal were fired. In a recent addition to this total, the head of the bank’s consumer credit-card business and three other senior managers were also fired.

The bank announced in a statement on Tuesday that it was firing: Shelley Freeman, former Los Angeles regional president; Pam Conboy, Arizona lead regional president; Claudia Russ Anderson, former community bank risk chief and; Matthew Raphaelson, community bank strategy and initiative leader. The four employees will not receive bonuses for 2016 and will forfeit unvested equity awards and outstanding options, according to Wells Fargo.

The board and management are both reviewing the proliferation of the practice, promising to hold managers accountable for the fraudulent activity.

Of the four managers fired, Freeman and Conboy were profiled by Bloomberg in a November story on banking supervisors. The profile described how these supervisors earned promotions through cross-selling, a practice in which one persuades an individual customer to sign up for more Wells Fargo products.

The board unanimously voted to fire the managers and expects to finish its review and investigation before the annual shareholder meeting in April. The panel is deciding which materials will be made available to the public after the review is complete. The panel may still release information on discoveries uncovered on the four managers, according to an anonymous source.

The board will most likely withhold the 2016 bonuses of some top executives, including CEO Tim Sloan and CFO John Shrewsberry, as a way of holding managers accountable for the bank’s performance, according to another source.

Soda Tax Brings In More Than Expected

The sweetened beverage tax received this year for the city of Philadelphia was up to $5.7 million for just the first month. That’s more than double what the Revenue Department estimated but less than the amount needed. Earlier in the year the Revenue Department project the amount of tax to be $2.3 million in January.

This number was to accommodate the expectation that businesses would lag long enough for the new tax to register. There was also the expectation that more than a few retailers would load up on pre-tax products.

The main goal for the year is $91 million. In order for this goal to be met, tax intake will need to increase by $7.7 million by April. This is certain to assure such a large number and maintain that number as well as bring in another $7 million in unpaid taxes for the remainder of the year.

These numbers were released after a campaign “Ax the Bev Tax” expressed the complaints of sellers who reported at least a 30 to 50 percent loss in sales. the owner of ShopRite stores in the city says that since that in the next upcoming week he might get rid of at least 300 jobs because of dropping sales. He commented saying, “There’s no way of knowing the layoff number, but 280, 300 jobs will be gone one way or the other. If a person quits or goes on unemployment, or I lay them off, the jobs will be gone.”

Even those opponents of the soda tax say that the estimated number given by the administration is a bit too low. They also believe that at the rate of collection the number won’t be achieved.

Yet while many stores are worrying about how the tax might influence sales and jobs, restaurants say that the tax has had little effect on them. The vice president of government affairs for Pennsylvania Restaurant and Lodging Association, Melissa Bova said, “When people go out, they’re going to get the soda no matter what — the problem is the cost of buying the product has gone up, so they’re trying to find a way to not pass on the entire cost to the customer.”

However, the largest problem most restaurants and even fast food chains seem to be suffering with is increasing their prices in order to make up the free refills that are offered. It’s $60 with a $57 tax for just one five-gallon bag of syrup that is used in many soda fountains.

After Renegotiation, Verizon Pays $350 Million Less for Yahoo

Yahoo says it is will to cut back $350 million of the price that Verizon will be to obtain the internet business. This decision seems to be following the unknown costs caused by the hack that Yahoo suffered some time ago.

Both Verizon and Yahoo have agreed to share the liabilities that come with the hacks. The hacks occurred sometime during 2013 and 2014. During this time, over 1 billion of Yahoo’s users were exposed to hacker who gained the email, names, birthdays, and security questions of over 1 billion of the internet company’s users. It was the largest security breach that any company has ever experienced. That hack was soon followed by the breach of nearly 500 Yahoo users’ accounts. As Yahoo wraps up its investigation of the incidents, it says it plans on releasing more information.

It was this major breach of Yahoo security that put the deal to sell its internet business to Verizon. The deal, which was made last summer, is now at an estimated value of $4.48 billion. It would seem that where shareholders were once hesitant, they are now ready to vote on the deal as soon as April.

Despite the breach of its security, Yahoo stressed that these hacks have very little effect on how its services are run. Yet when the numbers are run, it’s shown that there has not only been a drop in emails sent but a decrease in page views altogether.

Verizon had also obtained AOL back in 2015 for $4.4 billion. Verizon had initially said that it would combine Yahoo with its AOL internet business, however it would seem that is no longer the case. Now, Verizon will keep the two companies separate from each other. Even though Verizon plans to keep the brands separate, it will use the combined sales and digital advertising from both to bring in the audience of almost one billion internet users.

Yet Yahoo and AOL are not as large as internet giants like Facebook and Google. While Yahoo is still known to drag in an abundant audience, investors hold Google and Facebook as alternatives since either currently rule the digital advertising world.

When it comes to term of selling its internet business to Verizon, there is no clear answer as to whether Marissa Mayer, the former Google executive who became Yahoo chief back in 2012, will stay on with the company once things are settled with Verizon. Mayer didn’t do so well when it came to turning around Yahoo’s internet business which seemed to struggle for quite some time. That led to her having to write off a majority of the value that came with her acquisition of Tumblr.

Verizon’s executive vice president, Marni Walden, commented on the company’s acquisition of Yahoo saying, “We have always believed this acquisition makes strategic sense.” Walden also went on to say that Verizon is enthusiastic about the deals completion, and that Verizon can’t wait to “welcome Yahoo’s tremendous talent and assets into our expanding portfolio.”

Transit Riders Disagree with Governor Over Budget

Public-transportation advocates say that they need more money than what was proposed by Gov. Andrew Cuomo for the New York City transit system.

Advocates came together with state lawmakers on Monday. The concern was that there was a provision in the $152.3 billion state budget proposal by Gov. Andrew Cuomo. The provision has the potential to limit the amount of state money that would be sent to the Metropolitan Transportation Authority (MTA). It would also 2011 payroll tax that aids in the funding of the system.

Cuomo’s proposal would send $244 million for payroll tax revenue losses. That number is down from $309 million. Yet even though the advocates calls are being heard by Cuomo, Cuomo’s office disagrees with their proposition of cutting costs. Their argument is that the budget proposal will give more than $4.5 billion toward the total state funding which will go toward the MTA operating expenses. The MTA operates the subway, bus, and light rail systems in New York City. That amount has risen from the $30 million that was given the previous year.

The increase in funds is a result of the state’s anticipation of more revenue coming from payroll tax. That revenue will mainly rely on mid and large employers throughout New York City, Hudson Valley, and even Long Island.

A spokesman for Cuomo, Morris Peters, called the motion to increase the cut ridiculous. He also commented that, “This is on top of the $8.3 billion secured for the MTA capital plan.”

However, legally the state is required to give the payroll tax to the MTA. Yet even though that is true, Cuomo and lawmakers are the deciding factor when it comes to how much the MTA will get.

The payroll tax was first established following the 2009 recession and initially applied to all employers in the MTA which spans out to 11 country regions.

It is estimated by many that a decrease in the funds would lead to weakening of the mass transit system, more than there already is.

Executive director of the Riders Alliance, John Raskin, said in a comment, “For the first time, Gov. Cuomo is threatening in his executive budget proposal only $244 million, leaving a $65 million gap that can recur year after year after year. This has a direct impact in the lives of public transit riders.”