June 17, 2020
what we are reading today...
Technology
While email might be one of the most unexciting yet important apps we use, this week the launch of the new email service Hey was accompanied by a bit of drama. Hey is an email app created by the team behind Basecamp, and is a paid service to help screen emails and get users to inbox zero more efficiently. However, when Hey attempted to update its app in the Apple App Store, Apple was having none of it.
Apple’s App Store traditionally takes a 30 percent cut of any in-app purchases. Apple claims this is because developers use its iOS platform in order to reach its global network of consumers. Apple’s scale has attracted app developers, and as a result, over 2M apps are available on the App Store. On the flip side, Apple has monopolistic control over its platform, and in order to reach smartphone users, Apple effectively extorts 30 percent from developers.
Some apps have been able to sidestep this payment, by moving in-app purchases outside of the App Store and onto their own websites. For instance, Netflix and Spotify subscriptions or Kindle purchases take place outside of the iPhone app. Hey’s email app, however, didn’t pass Apple’s sniff test, and the scuttle over fees vs updates began.
This fight seemed to have curious timing. Although Hey launched this week, Apple’s annual developer conference, WWDC, is set to stream next week, and the European Union has just launched several antitrust probes into Apple’s monopolistic habits. Tim Cook is also expected to testify in the US House in its investigations surrounding antitrust in Big Tech.
Go Deeper:
NY Times on Hey Email App
The Verge on Hey and Apple’s Fight
Business
Wondering why the stock market seems to have completely decoupled from reality? One of the reasons is that the Federal Reserve has continued to use any means necessary to help companies survive this recent downturn.
On Tuesday, the Fed started buying corporate bonds as part of a $250B program under the CARES Act. The Fed is effectively lending long-term money to investment grade companies. By buying these bonds, the Fed is also removing the stigma from a company looking for funding (the Fed is stepping up and providing it rather than the company having to ask).
With this act, the Fed is again supporting large companies, leaving small businesses to fend for themselves or with the other programs under the CARES Act, like the PPP (Paycheck Protection Program). One more reason why the stock market seems to be running on its own narrative.
Go Deeper:
Business Insider on the Fed's Purchases
Marketplace on the Fed's Program
Politics
Remember the Paycheck Protection Program? aka the $500B that the American taxpayer gave to small businesses in order to help them survive the shutdown of the US economy? The US Treasury Secretary is now claiming that those loans are confidential, and that his office will not disclose users of the program.
While the PPP itself was launched with a multitude of problems and biases, the Small Business Administration (SBA) oversees the program, and SBA’s loans are traditionally within the public record.
Some companies were “outed” as abusing the PPP, and returned loans publicly such as the LA Lakers, Ruth’s Hospitality Group and Shake Shack (to name a few). Some wealthy customers were able to take advantage of the relationship with their banks in order to get to the front of the line for PPP, and as a result, we may see abuse in who received the funds.
Expect to see members of Congress and other wealthy clientele on the list, if it ever becomes public. One more reason Congress needs to enforce its oversight and work for the American people.
Go Deeper:
CNN on Small Business Program Transparency
Mother Jones on Relief Funds
Culture
2020 has definitely been full of twists and turns — most of us have at one point thought that the writers of this movie we are living through have just gone too far. Even the Onion, a farcical take on the news, seems to be unable to outdo reality.
This week, however, the Onion seems to have predicted the future. On Friday, the Onion ran a story entitled “Quaker Oats Replaces Historically Racist Aunt Jemima Mascot With Black Female Lawyer Who Enjoys Pancakes Sometimes.”
On Wednesday, Quaker Oats announced it will be changing the logo of Aunt Jemima in order to phase out racial stereotypes, which forced Uncle Ben’s to reconsider its logo as well.
While Land O’Lakes retired its Native American logo in April, we have yet to hear from the Washington Redskins.
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