Sony asks UK regulator to block Microsoft deal
© Jae C. Hong
GAMING
Sony asks UK regulator to block Microsoft deal
Sony urged the UK’s antitrust watchdog to block Microsoft’s $69 billion Activision Blizzard deal or force it to sell the blockbuster Call of Duty, as no other solution exists that’ll prevent harm to consumers in the cloud gaming and console markets. The UK’s Competition and Market’s Authority said in provisional findings last month that the deal could result in a substantial lessening in competition for UK gamers. It suggested a number of remedies, including the sale of the best-selling Call of Duty game or blocking the deal altogether. The agency did say it would consider other remedies that would safeguard rivals’ access to the blockbuster shooter game. Microsoft has since said that the deal cannot be be completed without Call of Duty. It has struck long-term licensing deals with Nintendo and Nvidia Corp. in an effort to appease global regulators. — BLOOMBERG NEWS
AIRLINES
Southwest to use Amazon Web Services after holiday chaos
Southwest Airlines will use Amazon servers to help process fare searches, crew scheduling, and other software tasks, a modernization of its technology that comes months after a meltdown stranded thousands of the airline’s passengers. Amazon Web Services will become Southwest’s “preferred cloud provider,” the e-commerce giant said on Wednesday, calling the move a “large-scale migration” of the airline’s digital infrastructure to the cloud. Southwest will use AWS to power elements of its website and mobile app, store data, and run internal analytics. Southwest already runs some software on AWS, including gate management and departure control programs, said Lauren Woods, the low-cost airline’s chief information officer. — BLOOMBERG NEWS
ATHLETIC SHOES
Adidas’s break with Ye hits the bottom line hard
Adidas’s breakup with the rapper formerly known as Kanye West and the inability to sell his popular Yeezy line of shoes helped batter earnings at the end of last year, leading to a net loss of 513 million euros ($540 million). The fourth-quarter loss, also attributed to higher supply costs and slumping revenue in China, contrasts with a profit of 213 million euros in the same period a year ago, the German shoe and sportswear maker said Wednesday. More losses could be ahead as the company forecast a 500 million-euro hit to earnings this year if it decides not to repurpose the remaining Yeezy products it has in stock. The company is predicting a 2023 operating loss of 700 million euros. Adidas split with Ye in October following the rapper’s antisemitic remarks on social media and in interviews, facing pressure along with other brands to end ties. The company is now grappling to find ways to replace its banner Yeezy line, which analysts have said amounted to as much as 15 percent of its net income. — ASSOCIATED PRESS
AVIATION
Airlines to cancel flights at CDG as union protests continue
France’s civil aviation authority has asked airlines to cancel 20 percent of flights at Paris-Charles de Gaulle airport on Thursday and Friday. Airlines are expected to further reduce flights this week as unions continue to protest against government pension reforms. Up to 30 percent of flights at France’s smaller airports, including Paris-Orly and those in Lyon and Toulouse, may be cut as well, according to a statement. Turnout to Tuesday’s protests, the sixth this year, surged to 1.28 million, the highest yet, according to government figures. — BLOOMBERG NEWS
INTERNATIONAL
Moody’s downgrades Israel’s credit rating due to threat to judiciary
Moody’s Investors Service became the last of the largest three credit assessors to warn of risks to Israel’s debt rating and economic prospects from Prime Minister Benjamin Netanyahu’s planned changes to the country’s legal system. The rating company said the revamp, if implemented, “could materially weaken the strength of the judiciary and as such be credit negative.” Israel has an A1 rating from Moody’s, its fifth-highest grade, with a positive outlook. Credit companies are taking an increasingly dim view of the legislative push by Israel’s far-right cabinet that took office late last year. Fitch Ratings this month issued a warning similar to Moody’s, and S&P Global Ratings has said the direction the new government appears to be taking “raises concerns.” — BLOOMBERG NEWS
EQUITY
Women who didn’t marry earn less than men who didn’t
Never-married women are the fastest growing cohort in the labor market. Yet, as their ranks have swelled their wage gap has, too. The group’s median weekly earnings are 92.1 percent of what men who have never married make, a new report from Wells Fargo released Wednesday found. That gap has increased from a decade ago, when they brought in 95.8 percent of what men did. Overall, women make around 83 percent of what men do in the United States, according to the Census Bureau. But given that the motherhood penalty accounts for such a large part of the pay gap, Wells Fargo economist Sarah House was surprised by the growing wage gap among single women. — BLOOMBERG NEWS
AUDITING
PwC hit with fine by UK watchdog
PricewaterhouseCoopers was hit with a £5.6 million ($6.6 million) fine by the UK’s audit watchdog over serious failures for its work on Babcock International Group’s books in 2017 and 2018. “The quality of these audits fell far short of the standards expected of statutory auditors. Of particular concern is the lack of skepticism applied and the failures to follow some basic audit requirements,” Claudia Mortimore, the Financial Reporting Council’s deputy executive counsel, said. The world’s biggest auditors have come under intense scrutiny from regulators over some of the most high profile finance scandals in recent years from Greensill to Carillion. PwC was fined £1.75 million last year over its 2017 audit of BT Group. — BLOOMBERG NEWS
BOOKSTORES
Barnes & Noble fights back in suit by former CEO
Barnes & Noble ratcheted up its battle with a former chief executive by detailing in a court filing the reasons for his dismissal, including reports of sexual harassment and an allegation that he sabotaged an acquisition of the company. The book store, which ousted Demos Parneros in July, initially declined to say why he’d been terminated without severance. But after Parneros sued the chain in August, alleging that Barnes & Noble founder Len Riggio made up reasons to dismiss him after a deal to sell the chain to another book retailer fell through, Barnes & Noble elaborated that his exit was related to sexual harassment and violating other company policies. According to the filing, Parneros derailed an acquisition of the company that was in the final stages. At a June meeting, he portrayed the company as having “no realistic prospects for success” and as an “ugly mess,” the book store alleges. The company says a female subordinate reported two incidents in which she was subject to unwanted touching and comments. Parneros denied the allegations in an e-mailed statement. He said he did not undermine the acquisition, and was “fully supportive of the sale process from the start.” He also said the accusation of sexual harassment was unfounded. — BLOOMBERG NEWS
