⏩ Antitrust goes global
This week: Chinese regulators make a big move for antitrust law and Coinbase’s chief legal officer shares some interesting tips about his company’s direct listing. Plus, Fyre Festival makes a legal settlement.
🇨🇳 China goes after Alibaba on antitrust
Here’s another sign China doesn’t want to fall behind America in anything: The government is going after its own Big Tech companies with antitrust cases.
The latest target is Alibaba: China fined it a record-high $3 billion earlier this month. Alibaba is the Amazon of China and easily one of the country’s most powerful companies.
It was pulling a move similar to Amazon: A Chinese investigation found Alibaba was using exclusionary retail practices. Essentially, Alibaba blocked some merchants from selling anywhere but Alibaba. Amazon has not done this in any official sense, although companies have felt the need to sell on Amazon--on Amazon’s terms--or risk irrelevance.
The fine won’t be as big as the effect
$3 billion is a record for Chinese antitrust, but it is hardly a dent in Alibaba’s massive revenues. It may, however, convince Alibaba to think twice about the way it deals with users, rivals, or the various companies who sell on its platform.
Rival Tencent, which owns WeChat, may be another target for Chinese regulators. But it will be interesting to see how both China and America approach antitrust, as both countries want tech companies strong enough to outdo the other.
🙌 The deets on direct listings, from Coinbase’s chief legal officer
Coinbase went public last week in one of the most hyped stock market debuts in history. Like many new companies, it chose to bypass the traditional IPO route and go public through a direct listing.
In the wake of its debut, Coinbase’s chief legal officer, Paul Grewal, offered a few helpful pointers and clarifications about direct listings on Twitter. We’re summarizing and sharing them here:
No new shares were created for Coinbase: In IPOs, new shares get issued for traders to buy. In direct listings, existing shares get bought and sold.
The biggest sellers for Coinbase were investors and execs: “Without their sales,” Grewal wrote,” (Coinbase) could not have successfully created a supply of shares that could enable new investors to come in, which is basically the point of a (direct listing).”
Plenty of news stories discussed the quantity of shares sold by the execs: CEO Brian Armstrong sold about $292 million worth. Grewal noted that the executive sales were pretty standard for any direct listing.
Coinbase’s stock has so far been fairly volatile since the direct listing, but it still trading well above 300.
🔥 Fyre Festival makes a long-awaited settlement with the attendees it scammed
Remember the spring 2017 story about a tropical festival concert that broke the internet?
Four years later, it’s about to break the organizers’ wallets -- one final time.
Yes, we’re talking about Fyre Festival: Ja Rule, an investor named Billy McFarland, and a bunch of influencers planned and advertised the event, but “planned” is very much a relative term. They promised several big music acts, private cabanas, and gourmet food. Ticket buyers were provided tents and cheese sandwiches. McFarland ended up in jail, while Ja Rule mostly got off scot-free. But what about restitution for all the concertgoers?
A new settlement of a class action suit takes care of them: Fyre Festival will pay $2 million to organizers and 277 ticket holders. The ticket holders get $7,700 apiece.
This wasn’t the only Fyre Festival lawsuit
Billy McFarland, who was sentenced to six years for fraud, had to pay $5 million to two ticket holders who won a ruling against him in 2019.
The lawyer representing ticket holders in the class action suit said, “Billy went to jail, ticket holders can get some money back, and some very entertaining documentaries were made. Now that’s justice.”
A federal judge must still approve the settlement. And that lawyer is right about the entertaining documentaries. Watch them if you haven’t seen them yet.
💌 What else we’re forwarding
Biden and law school debt: This is a good breakdown of how Biden may end up forgiving student loan debt and why it could make a difference if you went to a public law school vs a private law school or did any work in the public sector.
New York passes a law to make the internet more affordable: If your download speed is 200 mbps or lower in New York, you’re now looking at a capped monthly internet price of $20 thanks to a revolutionary new bill.
🎧 Music we’re working to
Today we’re listening to Suzanne Ciani, an American synthesis, and composer. After studying classical music at UC Berkeley, she constructed analog synthesizers in Don Buchla’s workshop. Throughout the '80s and '90s, she recorded new age albums such as the one we are listening to, The Velocity of Love.
The Velocity of Love - Suzanne Ciani (40m, no vocals)
Spotify / Apple Music / YouTube Music / Amazon Music
See ya next week,