🗞️ Manchin’s Ready to Build Back Better, Spirit Selects Suitor, & Big Tech Faces A Big Threat
This Week: Biden's climate change bill has risen from the grave, the skies just got a bit smaller, and Silicon Valley's biggest threat is not who you'd expect. Plus, Uber wins a ruling, Meta's VR strategy is threatened, and the most lucrative investment you've never heard of.
President Biden's massive Build Back Better bill has been resurrected from the dead — though slightly smaller, and with some creative rebranding. Now called the Inflation Reduction Act, the bill seems to have far-reaching implications on the US's attempt at combating climate change, mostly by pumping billions into renewable energy production methods and electric vehicle tax incentives. And rather than punish corporations for carbon emissions, it extends tax credits on green energy production and invests in carbon capture technologies.
Should the bill pass, it would reduce US emissions 40% by 2030, which is close to the 50% target the US announced in the Paris Agreement back in 2015.
Senator Joe Manchin held the bill up for months, with some believing it was dead. However, Manchin had an about-face on the bill in recent weeks.
“I think it is absolutely a transformative bill,” Leah Stokes, a professor at the University of California, Santa Barbara, told The New York Times. “It will put us on track for meeting President Biden’s goals. It will reduce every American’s energy bills.”
Fossil Fuel Leases
While many people see the bill as a major effort to counter the effects of climate change, some see the expansion of fossil fuel leases to federal lands and waters as a defeat. “Permitting new fossil fuel projects will further entrench us in a fossil fuel economy for decades to come — and constitutes a violent betrayal of your pledge to combat environmental racism and destruction,” a letter from the Center for Biological Diversity to the President and Congress said. “New fossil fuel projects will also lock workers into a dying industry and delay the growth in sectors that will support jobs of the future.”
To open the news is to read of multiple climate catastrophes playing out simultaneously across the country (and the globe), so this bill cannot come fast enough. Yet it’s clear the expansion of fossil fuel leases is leaving some underwhelmed.
🎧 What We’re Listening To
This week, we’re sharing another podcast we think you should listen to – bias intended 😆. Check out a conversation our own Lauren O’Neill had with legal pros Karla Pinckes and Maureen Frangopoulos about equal pay and how to get it, as well as tips for leaders who want to promote a fairer work environment.
. . .
Challenging the Gender Pay Gap in Legal, Not Billable
If you’d like to catch the full replay, check that out here.
After weeks of uncertainty and competition between JetBlue and Frontier Airlines over which company would purchase Spirit Airlines, shareholders have decided on JetBlue. The proposed merger — a cash buyout of Spirit at $33.50 per share, and a valuation of $3.8 billion — would create the nation's fifth-largest carrier behind United, American, Delta, and Southwest. According to The New York Times, should the deal be approved, JetBlue will have a 10% market share of the domestic airline industry.
JetBlue hopes the deal closes by the first half of '24, and that single-carrier operations will begin by '25.
Not everyone sees this merger as a good thing. Bill Baer, President Obama's antitrust head at the Justice Department, told The New York Times, “The airline industry is ridiculously concentrated, and has been and legitimately continues to be an area of focus for the Justice Department.”
He added that the details of the proposed merger suggest that JetBlue expects an uphill battle, including a premium on Spirit's share price to keep investors onboard.
A Bailout Debrief
During the depths of the pandemic, the US government bailed out the airline industry to the tune of $50 billion. JetBlue received just shy of $1 billion of taxpayer money, about a quarter of the price it's paying to buy Spirit. Yet, as of April, they were struggling to hire enough staff. According to John Samuelsen, president of the Transport Workers Union, the airline was losing 20 flight attendants a week as a result of “mental fatigue, physical exhaustion and stress,” notes WGBH.
JetBlue will of course be making the case for the foreseeable future that consolidation helps customers, but will the DOJ buy that claim? And will Spirit's shareholders stick around long enough to see that through?
🤓 Step Into Our Office
In case you haven’t heard, we’re bringing Office Hours back for our Lawtraders. Join our talent team – Josh Saneda, and Candace Cooper – this afternoon at 3 pm ET for a breakout session where they’ll share their best practices for getting hired, so you can position yourself as a key candidate to land that next role.
As antitrust and regulatory scrutiny heats up for Meta, Alphabet, and other social media giants in Silicon Valley, some are beginning to wonder if the tide is ebbing on their reign. Whether it's Instagram's push towards reels and more video content to copy TikTok or the fact that Google is losing search among Gen Z to TikTok, it's clear that the Beijing-based firm has come to dominate the minds of everyone in Silicon Valley. “It’s obvious that, if they don’t make moves to arrest the flow of users from their platforms to TikTok, their investors will revolt and valuations will continue to fall,” writes the New Yorker.
But TikTok is not without its own regulatory scrutiny. As we told you in June, nine Republican Senators sent a letter to the company's head raising concerns about data privacy.
The CEO responded that the social media platform is working to transfer its US data onto Oracle's cloud servers, reports NBC News — which would separate American data and put it onto Silicon Valley-owned servers.
The Kardashians v. Instagram
As Meta has tried to turn Instagram into a TikTok clone in order to stem the outflow of users, the social media platform's diehards have balked at the shift. Late last month, sisters Kim Kardashian and Kylie Jenner (who have over 700 million followers combined) posted to the feed “Make Instagram Instagram Again.” The post continued “stop trying to be tiktok I just want to see cute photos of my friends.” It seemed to work, as Instagram head Adam Mosseri said, “we definitely need to take a big step back and regroup,” reports Platformer.
Big Tech has a lot on its plate right now: between ad revenues taking a hit over the last few months, regulatory scrutiny heating up, and TikTok's ascension to the top, the Valley is facing its biggest existential crisis in years.
📤 What Else We're Forwarding
Uber Ruling: A federal judge has ruled that Uber does not need to provide wheelchair-accessible service in every market, The Verge says. The ruling found that the cost of running such a specialized service would make it unreasonable.
Immersive Monopoly: The FTC is challenging Meta's purchase of VR firm Within Unlimited saying it would create a monopoly in the VR space, notes Bloomberg Law. This challenge goes right to the heart of Silicon Valley's long-running playbook of buying up the competition.
Mouthwash Riches: Turns out one of the most stable and sought-out investments among the monied elite is … Listerine. According to The Hustle, shares of the Listerine Royalty Trust are bought and sold at private auctions among the wealthy, and a .5% share of the trust pays out about $120K in income a year.
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See ya next week!