Weekend Papers Summary
FINANCIAL TIMES
-EU regulators are set to charge Apple for allegedly stifling competition on its mobile app store, marking the first time they have used new digital rules to target a Big Tech group. The European Commission has determined that Apple is not complying with obligations to allow app developers to "steer" users to offers outside its App Store without imposing fees. The charges would be the first brought against a tech company under the Digital Markets Act, which forces powerful online gatekeepers to open up their businesses to competition in the EU. An announcement over the charges against Apple is expected in the coming weeks. The EU could also announce charges against other tech groups, such as Google parent Alphabet and Facebook owner Meta's use of personal data for advertising.
-Voters in France are considering whether to allow the nationalist, populist RN to enter the heart of government. The snap poll on June 30 and the second round on July 7 will depend on whether voters see the RN of today, which Marine Le Pen has spent over a decade crafting into a smoother, more professional force, is up to the task. Voting patterns in the Berry region of central France show the RN making inroads in new areas and voter segments, conquering a swath of France known as "the diagonal of emptiness" due to depopulation, lack of high-speed train links, and weak economy.
-Russia's Vladimir Putin has proposed a ceasefire and negotiations to end the war in Ukraine in exchange for control of four frontline Ukrainian regions. The conditions include areas Moscow never occupied during its two-year invasion, a pledge not to join NATO, and lifting western sanctions imposed in 2022. Ukraine rejected this proposal, claiming it amounted to capitulation and would leave the country vulnerable to future attacks. Under Putin's conditions, Russia would gain full control of Donetsk, Kherson, Luhansk, and Zaporizhzhia.
-Boeing and Airbus have admitted to using titanium parts in their jets with counterfeit certification documentation. The parts were purchased from Spirit AeroSystems, a Kansas supplier struggling with quality issues. The metal, which originated in China, was falsified before being used in parts installed in jets. The transaction may have occurred as early as 2019. The metal is used to make critical components for aircraft, including landing gears and fasteners for engine-to-wing pylons. The companies have been scrutinized by regulators following a door panel blowout in January. An audit of the two companies found examples of them failing to meet manufacturing and quality control requirements.
-Tesla CEO Elon Musk has won a significant victory in shareholder votes on his $56B pay package and a proposal to relocate the company's domicile from Delaware to Texas. The largest stock options package in US history was reapproved by 77% of votes cast at Tesla's annual meeting in Austin. The plan to reincorporate in Texas won the backing of 84% of votes, representing 63% of shares. The results are a significant boost for Musk as he seeks to reassert control over Tesla. The reaffirmation of his pay will also strengthen Tesla's position in overturning a Delaware court decision to void the 2018 stock options package.
-Luxury clothing sales platform Yoox Net-a-Porter is closing its China operations, citing a weaker economic backdrop in the vast ecommerce market. The decision was made in line with a global Yoox Net-a-Porter plan to focus investments and resources on its core and more profitable geographies. The company operated in China under a joint venture with Chinese ecommerce group Alibaba, which will be liquidated. Profitability in China's luxury market has been a focus this year due to a prolonged property slowdown and lagging consumer demand. French luxury group Kering has also faced worsening performance in the first quarter due to slow market conditions.
-The Labour Party is planning the largest Whitehall shake-up in decades, aiming to break down departmental silos and pursue its government missions. Sir Keir Starmer is reviewing proposals for five new "mission boards" to aid cross-department work, headed by Starmer himself. These entities will draw on private sector expertise and may be granted powers to help deliver policy. The Labour leader's aim is to "break down silos" and reduce delays caused by measures passing between rival departments and being split between different budgets. The Treasury will focus more on attracting investment and driving growth, as part of his pledge to end "sticking-plaster politics" and usher in a "decade of renewal" for the country.
-Carlyle is considering a sale of Cogentrix Energy, one of the largest US power plant owners, as a wave of deals for utilities accelerates due to soaring energy demands from digital networks. The private capital group has hired advisers to explore a sale that could value Cogentrix at $3B-$4B, generating a large windfall for Carlyle's infrastructure arm. Investment bank Lazard and law firm Latham & Watkins have been hired to advise on the sale. Cogentrix owns stakes in 13 natural gas power plants across the US. The wave of deal-making has been partly spurred by speculation that data centers and digital infrastructure used to power artificial intelligence will spark an unprecedented demand for power, straining the energy supply.
-South Africa's ruling African National Congress (ANC) has signed a power-sharing deal with the Democratic Alliance, allowing a new government to be formed under ANC leader Cyril Ramaphosa. This deal was crucial for the ANC to maintain power, which lost its majority for the first time since the end of white minority rule 30 years ago. Ramaphosa is expected to be reappointed president later. The deal is seen as a "historical" moment for South Africa, allowing his party to co-govern. The agreement aims to create a stable democracy and an inclusive economy.
-Miami's Waldorf Astoria Residences, the tallest building in the Americas south of New York City, has secured a $668M residential construction loan, the largest in Florida's history. The $668M loan, secured from Bank OZK and Related Fund Management, breaks the previous record for a residential construction loan in Florida, a $600M loan for the Cipriani Residences earlier this year. Miami is the most attractive market for condo construction lenders due to the demand and lack of supply. The city experienced a population influx during the pandemic, with high earners flocking to the area for better weather, friendly taxes, and looser Covid restrictions. The buyer pool is deeper than ever, with people with high-paying jobs able to afford the construction of luxury properties.
THE NEW YORK TIMES
- The G7 summit in Italy has sparked a tense debate over abortion rights, primarily between the United States and Italy. The summit's final statement, which includes the words "abortion" and "reproductive rights," has sparked a diplomatic tug of war between the two countries. The debate primarily revolves around the inclusion of the words "abortion" and "reproductive rights" in the statement, which has been a contentious issue. The Italian government has denied any intention to backtrack on its commitment to protecting access to safe abortions. The G7 leaders had a variety of topics to discuss and disagree on, including the ongoing wars in Gaza and Ukraine, a loan for Ukraine, and the issue of abortion rights.
-President Biden was at the G7 with Ukraine's President, Volodymyr Zelensky, where he was expecting to discuss a security pact he had signed to support Ukraine in its battle with Russia. However, he seemed flustered when asked about the Gaza cease-fire plan. Biden asked for an update on the fate of the cease-fire deal, which he announced last month but has yet to be publicly accepted by Israel or Hamas. He reiterated the U.S. stance that the proposal had been endorsed by the Israeli government, the United Nations Security Council, and the G7, and that the hold-up was with Hamas. Biden seemed flustered at confronting questions about his cease-fire plan for Gaza.
-Former President Donald Trump is celebrating his 78th birthday, which he is not happy about. Trump, who is trying to become the oldest person to be elected president of the United States, expressed his dislike for birthdays, particularly this one. He was upset earlier this week when his supporters sang an early "Happy Birthday" to him at a rally in Las Vegas. Trump is now 78 and trying to convince the country to give him another four years in office, at the end of which he would be the oldest president in American history. The current, 81-year-old occupant of the Oval Office holds the mantle.
-A Houston bankruptcy judge has ordered the sale of Alex Jones's personal assets, allowing the conspiracy theorist to continue broadcasting on Infowars while the Sandy Hook families continue to pursue payment of $1.4B in defamation damages. The proceeds will be distributed among the Sandy Hook families, but Jones will not have to shutter his Infowars business empire. The outcome divided the Sandy Hook families, with those who sued Jones in Texas favoring the decision, which will keep Jones on the air but allow them to potentially receive more in damages from the Infowars income. Those who sued Jones in Connecticut favored settling for less money and shutting down Jones, although they acknowledged he would not be silenced entirely.
-The Supreme Court has rejected a ban on gun bump stocks, which allow semiautomatic rifles to fire at speeds rivaling those of machine guns. The ban was imposed after one of the deadliest mass shootings in modern US history, at a Las Vegas concert in 2017. The decision, by a vote of 6 to 3, split along ideological lines. Justice Clarence Thomas, writing for the majority, argued that the Bureau of Alcohol, Tobacco, Firearms and Explosives had exceeded its power when it prohibited the device by issuing a rule that classified bump stocks as machine guns. The court held that a semiautomatic rifle equipped with a bump stock is not a 'machine gun' because it cannot fire more than one shot by a single function of the trigger.
-Israel's defense chief rejected a diplomatic effort by France to end the tit-for-tat missile strikes over Israel's border with Lebanon. The United States, France, and other mediators have been seeking an agreement to stop the tit-for-tat strikes between Israel and Hezbollah, a powerful militia and political faction backed by Iran. The United States, France, and other mediators have sought for months to find a way to stop the tit-for-tat strikes. More than 150,000 people on both sides of the border have been displaced by the fighting, and Israel has warned that it is prepared to take stronger action to dislodge Hezbollah militants from southern Lebanon. The ongoing cross-border hostilities between Hezbollah and Israeli forces have raised fears of a full-blown war.
-China and the World Anti-Doping Agency (WADA) have been accused of doping in the Olympic Games, following the revelation that 23 elite Chinese swimmers had tested positive for a banned substance months before the last Summer Olympic Games. China and the WADA defended their decision to allow the swimmers to compete in the Games in 2021, claiming they had not been doping. However, a secret report reviewed by The New York Times revealed that China and the WADA were aware that three of the 23 swimmers had tested positive for a different performance-enhancing drug several years earlier and had escaped public identification and suspension in that case as well. China claimed that the swimmers had unwittingly ingested the banned substances, an explanation viewed with considerable skepticism by some anti-doping experts. The two incidents add to longstanding suspicions among rival athletes about what they see as a pattern of Chinese doping and the unwillingness or inability of the WADA to deal with it.
THE NEW YORK POST
-Tupperware Brands is set to close its South Carolina factory and lay off over 100 workers, marking the company's last remaining US plant. The iconic plastic food container company will shift all manufacturing operations to Mexico, where many of its products are already made. The closure of the facility in Hemingway, Florida, will result in the layoffs of 148 employees. The layoffs are set to begin in September and conclude on January 14, 2025. Tupperware aims to appreciate each of its valued team members and their many years of service to the company. The Hemingway plant, which was sold in 2023, was the company's sole manufacturing site in the US. Eligible employees will be offered severance packages and early retirement, and the company will also help connect them with other companies for employment. Tupperware was founded in 1946 by Massachusetts chemist Earl Tupper.
-Tesla CEO Elon Musk confirmed that he and former President Trump have had conversations during a shareholder meeting. Musk said that Trump calls him out of the blue for no reason and is "very nice when he calls." He recalled telling Trump that EVs are "pretty good for the future" and that America is the leader in electric cars. Musk also mentioned that many Trump's friends now own Teslas and love them. The Wall Street Journal reported last month on the pair's "growing alliance." Musk did not address this claim. Tesla shareholders voted to reinstate Musk's $56B pay package that had been voided by a Delaware judge and change the company's state of incorporation from Delaware to Texas.