Hi this is ZipLaw! This is our Roundup Newsletter where we run through all the top news stories of this past week and explain how they impact law firms.
Here’s what we’re serving today:
- 📄 Regulation: Amazon-Roomba gets blocked
- 💸Corporate: Why is Blackrock investing in Infrastructure?
- 🤖 Technology: The Big Semiconductor Shakeup
- 🚢 Shipping: The Red Sea Food supply crisis
- 📈 Economy: Davos 2024 key takeaways
- 🇨🇳 China's Economy: China outdid itself last year, growing its economy by 5.2%, just nudging past the government's 5% goal. This was a nice jump from the pandemic-plagued 3% growth in 2022. But investors weren't throwing parties – the Chinese stock market kept dipping in 2024.
- 🇬🇧 UK's Inflation Surprise: The UK's inflation took an unexpected hop, jumping to 4% in December. This uptick mirrors what's happening in the US and Eurozone, causing investors to pump the brakes on expecting interest rate cuts.
- 💸 A Mixed Bag for US Banks: Goldman Sachs reported a $2 billion Q4 net profit but saw its lowest annual profit in four years at $8.5 billion. Morgan Stanley's profits dipped to a 2019 low. JPMorgan Chase achieved a record $49.6 billion net profit, benefiting from high interest rates. Citigroup plans to cut 20,000 jobs following a challenging Q4 influenced by its Russian transactions.
- 🍎 Apple's Smartphone Crown: Apple clinched the title of top global smartphone seller, outpacing Samsung. They shipped 235 million gadgets in 2023, up by 4% despite a shaky market. But in the corporate popularity contest, Microsoft edged out Apple for the most valuable company spot.
- 🤖 AI's Impact on Jobs: A PwC survey threw light on a growing trend: 25% of global CEOs are planning to trim their workforce by at least 5% this year, blaming generative AI for the cuts. Google and Amazon are already ahead of the game, scaling back in their advertising and streaming sectors, respectively, under AI's influence.
In Short: The EU is expected to block Amazon's $1.4 billion bid for Roomba maker iRobot, potentially reshaping the smart-home industry landscape.
What’s going on?
Amazon's shopping cart just hit a roadblock. The EU's antitrust regulator is likely to veto Amazon's hefty $1.4 billion deal to acquire iRobot, the brains behind the Roomba vacuum. Amazon wanted to sweep up iRobot to bolster its smart-home repertoire. But EU officials are waving the red flag, fearing this move could sideline other robot vacuum makers. Not just a bump in the carpet, shares of iRobot took a tumble, dropping a whopping 31%.
The plot thickens across the pond, too. The US Federal Trade Commission is reportedly drafting its own legal challenge against the merger. Amazon's response? They're gearing up for a legal showdown with the EU, refusing to back down or offer concessions.
Why does it matter?
This isn't just about vacuum cleaners. It's about control in the booming smart-home market. The EU is worried that Amazon might play favourites, pushing Roomba while shoving other brands under the rug on its massive online platform.
Plus Amazon isn't just selling stuff; they're creating a whole smart-home universe with gadgets like Alexa. And the FTC is concerned that the deal would give Amazon too much control over the smart-home device market and potentially violate users’ privacy by giving the company access to data on their homes.