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- 🙇 Meta bowed to Biden's pressure
🙇 Meta bowed to Biden's pressure
PLUS: Kroger-Albertsons merger goes to trial; Canada shuts the door on China
Jacob Goldschein & Steven Van
August 28, 2024 • Estimated Reading Time: 10 minutes
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S&P 500: -0.60% 📉
Nasdaq 100: -1.18% 📉
Dow 30: -0.39% 📉
Russell 2000: -0.65% 📉
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TOP STORY
🙇 Meta bowed to Biden's pressure
📸 Getty Images
Earlier this week, Mark Zuckerberg dropped a bigger bombshell than last week's episode of Love Island.
On Monday, Meta’s top man confirmed that the Biden administration pressured the company to censor certain inaccurate content during the COVID-19 pandemic.
BOOM!
💬 In August 2021, Meta said it had removed more than 20 million pieces of content from Facebook and Instagram for violating the company's COVID misinformation policies.
📸 Bloomberg
In 2021, senior administration officials "repeatedly pressured our teams for months to censor certain COVID-19 content," Zuckerberg wrote in a letter to the House Judiciary Committee.
This involved censoring "humor and satire," with officials expressing considerable frustration when we (Meta) didn't comply.
"I believe the government pressure was wrong, and I regret that we were not more outspoken about it," Zuckerberg wrote.
He added that Meta wouldn't make the same decision today and would "push back" against such pressure in the future.
If it were to happen again…
With the "benefit of hindsight and new information," there were decisions made in 2021 that wouldn’t be made today.
💬 "Like I said to our teams at the time, I feel strongly that we should not compromise our content standards due to pressure from any administration in either direction—and we’re ready to push back if something like this happens again.”
I'm sure Zuck's a good guy, and this may not have been entirely his fault.
However, by allowing the government to influence its decisions, Meta prioritized compliance with government demands over its content guidelines.
Maybe Meta is more concerned about pleasing "the authority" than upholding free speech.
Fool me once, shame on me; fool me twice, well, you know the rest.
📈 Meta ($META) stock is up 49.23% this year.
RETAIL
🛒 Kroger-Albertsons merger goes to trial
📸 Ethan Miller/Getty Images
Over the past couple of years, Kroger has been vying to acquire Albertsons to hopefully form the ultimate grocery superpower.
It began in October 2022, when Kroger offered a historic $24.6 billion to buy Albertsons outright in what would’ve been the “largest supermarket merger in U.S. history.”
That sounds like a great deal, especially considering Albertson’s current market cap is around 12 billion; talk about paying a premium.
👀 Kroger ($KR) stock is up 15.11% this year while Albertsons Companies ($ACI) stock is down -11.34%.
However, when the second-largest U.S. grocery company (Kroger) and the fourth-largest grocer in the country (Albertsons) try to merge, it’s bound to attract regulatory attention.
Hence, the FTC sued to prevent the merger from going forward, which is why the deal has been at a standstill…
Until earlier this week, when the antitrust trial began in Oregon federal court.
That’s a hell of a lot of stores and power.
📈 Kroger operates over 2,700 stores across 35 states.
Albertsons owns 24 brands and operates around 2,200 locations in 34 states.
Combined, these stores would represent about 13% of the U.S. grocery market, with Walmart leading at approximately 22%.
💬 In the three-week hearing that opened Monday, the FTC is seeking a preliminary injunction that would block the merger while its complaint goes before an in-house administrative law judge.
💬 An injunction is a court order to stop or start an action, like a legal command that can prevent harmful actions or require specific actions.
📸 Supermarket News
Unfortunately for the grocers, though, the FTC is seeking an injunction, which usually causes most companies to abandon their merger plans.
However, Kroger will not be deterred because it genuinely believes it is helping customers.
CEO Rodney McMullen said the merger is 'squarely focused on ensuring we bring customers lower prices starting day one.'
The customers themselves may not be so convinced, though.
To sum it up:
The FTC argues that combining Kroger and Albertsons will lead to 'fewer choices for customers and more power for the merging firm.'
Kroger and Albertsons argue that they need to combine to compete against bigger rivals like Amazon.com Inc., Costco Wholesale Corp., and Walmart Inc.
Experts believe the trial will play out over three weeks, so we'll see you again in September!
💬 “Customers also are wary of the merger. In Santa Fe, New Mexico, for example, 278 shoppers wrote to the FTC to express their concerns about a combined Kroger and Albertsons, which would own five of the city’s eight supermarkets.”
💬 Over 100,000 Americans wrote to the Antitrust and Consumer Protection Agency to express concerns about the proposed takeover.
💬 “The risk is more deals, more concentration and potentially higher prices and less consumer choice.”
POLITICS
🛑 Canada shuts the door on China
📸 CTV News
Earlier this week, the Canadian government announced it would impose a 100% tariff on imports of Chinese-made electric vehicles. Damn, talk about a squeeze.
Where’d they get that number from?
Unsurprisingly, the Canadian tariff will match that of the U.S., which President Biden announced in May.
The U.S. has been putting tariffs on the Chinese for decades because they have a ton of beef with China.
💬 In addition to EVs, Canada also announced a 25% tariff on imported steel and aluminum from China.
💬 The European Union imposed tariffs of up to 37.6% on imports of EVs last month.
💬 The Candian tariffs will be imposed starting Oct. 1 this year.
📸 Kelly Clark/The Canadian Press via AP
Why’s Canada doing it, though?
Well, the same reason as America, to even the playing field.
Unlike these Western countries, China's government support lets Chinese companies sell EVs and other products at very low prices, even if they don't make a profit, which gives them an unfair advantage in global trade.
Chinese companies can sell EVs for as little as $12,000; last time I checked, a Tesla costs much more.
But even if this will make things 'more fair' for companies, it will hurt Canada, maybe even more than China.
💬 "I think we all know that China is not playing by the same rules.”
China is currently Canada's second-largest trading partner, behind the U.S., and automobiles were a big moneymaker for the Maple Country this year.
Instead, Canada has made billion-dollar deals with top European automakers to strengthen its EV supply chain and will likely rely even more on the U.S.
Some more trade numbers between the two countries (via the University of Alberta):
2023 Exports to China: $30.5 billion, a 6.17% increase year-over-year (YoY).
2023 Imports from China: $89.21 billion, a 10.98% decrease YoY.
The top Canadian export to China is Canola, valued at $3.84 billion, which has grown 75.21% yearly.
💬 Automobile imports from China through Canada’s largest port, Vancouver, surged 460% in 2023 after Tesla began shipping Shanghai-made EVs to Canada.
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