The Washington Post - USA (2022-06-09)

THURSDAY, JUNE 9 , 2022. THE WASHINGTON POST EZ SU A

Economy & Business

WALL STREET

SEC proposal would

overhaul market rules

Wall Street’s top regulator has
previewed a set of sweeping
overhauls to the rules
underpinning the U.S. stock
market, setting up a major clash
with some of the biggest names
in equity trading.
Securities and Exchange
Commission Chair Gary Gensler
said he has asked the agency’s
staff to weigh changes with the
aim of making the equities
market more transparent and
fair for retail investors. His
plans could directly affect how
brokerages including Citadel
Securities, Virtu Financial and
Robinhood Markets process
many retail trade orders.
The possible changes outlined
by Gensler would require two
votes by the agency’s
commissioners to take effect. If
enacted, the plans could mark
the biggest overhaul for the U.S.
stock market in more than 15
years and the agency’s most
direct response yet to last year’s
wild trading in GameStop and
other meme stocks.
“Right now, there isn’t a level

playing field among different

parts of the market: wholesalers,

dark pools and lit exchanges,”

Gensler said in remarks

prepared for an event hosted by

Piper Sandler. “It’s not clear ...

that our current national

market system is as fair and

competitive as possible for

investors.”

In what would be one of the

most significant changes,

Gensler asked staff to consider

creating an order-by-order

auction mechanism intended to

help retail traders obtain the

best pricing for their orders. The

structure would draw on

practices now in place in the

options market.

Other key changes Gensler

said he has asked staff to

consider include having the SEC

define directly what it means for

a broker to give its clients “best

execution” to satisfy agency

requirements.

— Bloomberg News

RETAIL

As packages shrink,

prices stay the same

Manufacturers are quietly

shrinking package sizes without

lowering prices. It’s dubbed

“shrinkflation,” and it’s

accelerating worldwide.

In the United States, a small

box of Kleenex now has 60

tissues; a few months ago, it had

65. Chobani Flips yogurts have
    shrunk from 5.3 ounces to 4.
    ounces.
    Shrinkflation isn’t new,
    experts say. But it proliferates in
    times of high inflation as
    companies grapple with rising
    costs for ingredients, packaging,
    labor and transportation. Global
    consumer price inflation was up
    an estimated 7 percent in May, a
    pace likely to continue through
    September, according to S&P
    Global.
    Edgar Dworsky, a consumer
    advocate and former
    Massachusetts assistant
    attorney general who has
    documented shrinkflation for
    decades, began noticing smaller
    boxes in the cereal aisle last fall.
    He can cite dozens of examples,
    from Cottonelle Ultra CleanCare
    toilet paper, which has shrunk
    from 340 sheets per roll to 312,
    to Folgers coffee, which
    downsized its 51-ounce
    container to 43.5 ounces but still
    says it will make up to 400 cups.
    — Associated Press

ALSO IN BUSINESS

Ikea is known for the

distinctive names of its home

products. The retailer’s Norway

branch now wants to help

parents browsing the baby-

naming department. Ikea

Norway has built “a name bank”

with more than 800 listings

available on its website. The

names are drawn from ones Ikea

has given to its furniture instead

of product numbers since 1948.

Ikea names its products after

Swedish towns, lakes and other

geographical features, but also

uses names that have

traditionally gone to people. The

branch noted that while

retailers saw “both a shortage of

raw materials and challenges

with delivery times” during the

coronavirus pandemic, “there is

at least no shortage of children”

in Norway.

An Amazon executive who

recently announced his surprise

resignation from the e-

commerce giant is joining

logistics start-up Flexport as its

chief executive. Dave Clark will

begin his role at the San

Francisco-based company Sept.

1, two months after he steps

down from his current role as

CEO of Amazon’s worldwide

consumer business, Flexport

announced Wednesday. Clark

and Flexport’s current CEO,

Ryan Petersen, will serve as co-

CEOs for the first six months,

after which Petersen will

transition to serve as executive

chairman of the company. On

Friday, Clark announced his

departure from Amazon, where

he has worked for 23 years.

(Amazon founder Jeff Bezos

owns The Washington Post.)

— From news reports

DIGEST

PUNIT PARANJPE/AGENCE FRANCE-PRESSE/GETTY IMAGES

Laborers work at a construction site in Mumbai on Wednesday.

India is dealing with price spikes, and on Wednesday its c entral bank

raised its key interest rate in a bid to tame inflation. The central bank

also raised its 2022-2023 inflation projection to 6.7 percent.

BY ELIZABETH DWOSKIN

After a weeks-long impasse,
Twitter’s board plans to comply
with Elon Musk’s demands for
internal data by offering access
to its full “firehose,” the massive
stream of data comprising more
than 500 million tweets posted
each day, according to a person
familiar with the company’s
thinking, who spoke on the con-
dition of anonymity to describe
the state of negotiations.
The move aims to end a stand-
off with the billionaire, who has
threatened to pull out of his
$44 billion deal to buy Twitter
unless the company provides
access to data he says is neces-
sary to evaluate the number of
fake users on the platform.
The information could be pro-
vided as soon as this week, the
person said. Currently some two
dozen companies pay for access
to the trove, which comprises not
only a real-time record of tweets
but the devices they tweet from,
as well as information about the
accounts that tweet.
Musk’s legal team contends
the data stream is essential for
understanding the amount of
spam and bot activity on its
platform, a figure that could
influence the company’s ad rev-
enue, according to a letter sent to
Twitter on Monday.
Musk has said the deal is on
hold until he secures the infor-
mation, adding to speculation
he’s trying to pull out or renegoti-
ate his purchase for a lower
price. When he signed his initial
deal to buy the company in April,

he waived a right to look deeply

at Twitter’s finances and internal

workings. The purchase agree-

ment requires that Musk go

through with the deal unless he

can show the company misled

him or a major event has

changed its value.

Twitter’s leaders are skeptical

of Musk’s ability to use the fire

hose to find previously undetect-

ed information: The data stream

has been available for years to

the companies that pay Twitter

for the ability to analyze it to find

patterns and insights in the daily

conversation. They, along with

some analysts and Silicon Valley

insiders, say that Musk is using

the data requests as a pretext to

wiggle out of the deal or to

negotiate a lower price.

The spam activity is important

to his team because if Twitter is

underestimating such presence

on its service, the company’s

estimates for how many users

could be shown ads would be

smaller, affecting revenue.

In the Monday letter ad-

dressed to Twitter’s general

counsel, Vijaya Gadde, Musk’s

lawyers accused Twitter of refus-

ing to provide information about

spam and fake accounts that the

billionaire, who is the world’s

richest man, has been requesting

since May 9.

Musk “must have a complete

and accurate understanding of

the very core of Twitter’s busi-

ness model — its active user

base,” stated the lawyers from

the firm Skadden Arps, Slate,

Meagher and Flom. “Twitter’s

latest offer to simply provide

Twitter to comply

with Elon Musk’s

demands for data

additional details regarding the

company’s own testing method-

ologies, whether through written

materials or verbal explanations,

is tantamount to refusing Mr.

Musk’s data requests.”

Musk did not immediately re-

spond to a request for comment.

Twitter spokesman Scott

Bisang referred The Washington

Post to the company’s Monday

statement. “Twitter has and will

continue to cooperatively share

information with Mr. Musk to

consummate the transaction in

accordance with the terms of the

merger agreement,” the state-

ment said. “We believe this

agreement is in the best interest

of all shareholders. We intend to

close the transaction and enforce

the merger agreement at the

agreed price and terms.”

Twitter’s challenges with bots

and fake accounts have been

around almost as long as the

16-year-old platform. For years,

the company has reported that

bots and spam accounts repre-

sent less than 5 percent of users

on the service, a number the

company has derived from ex-

tensive audits. (This figure does

not include automated accounts

permitted by the service.)

But some outside researchers,

based on their studies, suggest

that percentage is actually much

higher — perhaps double or

triple the 5 percent figure.

Musk began complaining

about the bot issue soon after he

agreed to acquire and take the

company private for $44 billion

in April. He has used his own

massive Twitter megaphone to

threaten to put the deal “on hold”

and insisting the deal could not

“move forward” until Twitter

provided further proof of its

methods for detecting spam.

Musk has committed more

than $33 billion of his own

wealth, which largely comes

from his ownership of Tesla, to

complete the deal. But as the

stock market has been roiled by a

global downturn, Tesla share val-

ues have plummeted, and some

analysts have speculated that

Musk has buyer’s remorse.

Faiz Siddiqui contributed to this

report.

JONATHAN NEWTON/THE WASHINGTON POST

Elon Musk will gain access to Twitter’s massive stream of data comprising more than 500 million tweets posted each day, according to a

person familiar with the company’s thinking. Musk has d emanded information on spam and fake accounts amid an attempt to buy Twitter.

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BY BRYAN PIETSCH

The European Union will re-
quire all new smartphones and
tablets sold within its borders to
have a common charging port by
the fall of 2024 — and laptops by
2026 — under a new provisional
agreement, pushing technology
companies such as Apple to fall in
line with other smartphone mak-
ers that have widely adopted a
universal port in recent years.
European Parliament and
Council negotiators agreed on
the law Tuesday, saying in a
statement that the move is in-
tended to “make products in the
EU more sustainable, to reduce
electronic waste, and make con-
sumers’ lives easier.”
The law, which still needs to be

formally approved, requires all

new smartphones, tablets, e-

readers and portable speakers —

among a long list of other small

electronic devices — sold in the

E.U. to use the USB-C type charg-

ing port. The requirement for

laptops will take effect in early

2026.

The small, pill-shaped port is

already used in many smart-

phones and laptops, as well as

Apple’s latest iPads and some of

its previous-generation MacBook

laptops.

But the mandate puts Apple in

a difficult position, as it has clung

to its proprietary “Lightning”

port on its iPhones and the charg-

ing cases for its AirPods in-ear

headphones. The Verge, a tech-

nology news site, called the Euro-

pean law “a major blow to Apple’s

Lightning port.”

Much like how California’s en-

vironmental and safety stan-

dards often lead to changes

across the United States because

of the logistical difficulty and

financial impracticality of creat-

ing different products for differ-

ent states, the European charg-

ing-port law could have a wide-

spread impact for handheld con-

sumer electronics across the

world.

In Germany, the European

Union’s largest economy, the top

three most-popular smartphones

are all iPhones, according to con-

sumer research site Counter-

point, with the fourth and fifth

being Samsung Galaxy phones

that use USB-C ports. In France,

the bloc’s second-largest econo-

my, iPhones hold the top four

spots in the smartphone market,

Counterpoint calculates.

Apple also recently brought

back its proprietary “MagSafe”

magnetic charger to its MacBook

Pro, and announced Monday it

would do the same with its thin-

ner MacBook Air laptops.

Apple has apparently been pre-

paring for the crackdown, howev-

er: Bloomberg News reported last

month that amid the looming

possibility of the European law,

the company has tested iPhone

models that use USB-C instead of

its proprietary port.

Technology critics have for

years bemoaned Apple’s persis-

tence in maintaining its proprie-

tary ports, noting that while

many device-makers have con-

formed to the USB-C port, Apple’s

unique charging medium leaves

consumers stuck with a tangle of

various cables.

But the E.U.’s move could stifle

efforts to innovate toward the

abolishment of charging ports

altogether, such as the use of

magnetic-contact chargers in-

stead of ports to allow for ex-

tremely thin devices, said Ben-

edict Evans, an industry analyst.

He wrote on Twitter that it was

“hard to see any meaningful con-

sumer benefit” from the law,

which he said outlawed “some

ideas” such as the sole use of

magnetic chargers.

Apple did not respond to a

request for comment Tuesday

evening. When the European law

was proposed in September, the

company said in a statement:

“We remain concerned that strict

regulation mandating just one

type of connector stifles innova-

tion rather than encouraging it,

which in turn will harm consum-

ers in Europe and around the

world.”

When Apple stopped provid-

ing wired headphones and wall

plugs with its iPhones in 2020, it

said the cutback was for environ-

mental reasons, although some

pointed out it was better for the

company’s bottom line.

Under new E.U. law, common charging port to be required for smartphones

If approved, devices must

comply by 2024; laptops

would shift 2 years later

ISTOCK

The law requires a long list of small electronic devices, including

tablets, sold in the E.U. to use the USB-C type charging port.