fortune--2020-06-17--‘That ’70s Show’ actor Danny Masterson charged in three rape cases

Lyft says all rides will be in electric cars by the end of 2030

“That ’70s Show” actor Danny Masterson has been charged with the rapes of three women in the early 2000s, Los Angeles prosecutors said Wednesday.
The three counts of rape by force or fear come after a three-year investigation of the 44-year-old Masterson. The charges were filed and an arrest warrant issued Tuesday. Masterson was taken into custody late Wednesday morning, jail records showed. He was being held on $3.3 million bail and is scheduled to be arraigned on Sept. 18.
Masterson’s attorney Tom Mesereau said his client is innocent, and “we’re confident that he will be exonerated when all the evidence finally comes to light and witnesses have the opportunity to testify.”
Prosecutors allege that Masterson raped a 23-year-old woman sometime in 2001, a 28-year-old woman in April of 2003, and a 23-year-old woman he had invited to his Hollywood Hills home between October and December of 2003.
If convicted, he could face up to 45 years in prison.
Prosecutors declined to file charges in two other Masterson cases that police had investigated, one because of insufficient evidence and the other because the statute of limitations had expired.
Masterson has been married to actor and model Bijou Phillips since 2011.
“Obviously, Mr. Masterson and his wife are in complete shock considering that these nearly 20-year old allegations are suddenly resulting in charges being filed, but they and their family are comforted knowing that ultimately the truth will come out,” said Mesereau, who has previously represented Michael Jackson and Bill Cosby in their trials for sexual crimes.
“The people who know Mr. Masterson know his character and know the allegations to be false.”
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AP Television Writer Lynn Elber contributed to this report.


fortune--2020-06-17--Fortune survey: 62% of CEOs plan policy changes in response to current calls for racial justice

1. A majority of companies aren’t hiring right now.
Around 4 in 10 CEOs say their companies have furloughed or laid off workers or cut their pay. That’s helped pushed the total number of unemployed Americans to 21 million as of May.
And it’s looking like many of those out-of-work Americans might struggle to find new jobs: Around 6 in 10 CEOs say their company has implemented a hiring freeze or deferred new hiring. A small minority of firms are still growing, with 19% of CEOs saying they’ve expanded hiring since the start of the crisis.
In an attempt to cut costs, CEOs have also turned to decreasing executive pay (35%), reducing employee benefits (15%), and offering voluntary retirement or exit packages (11%).


fortune--2020-06-17--Hertz suspends $500M stock offering amid SEC investigation

Bankrupt car rental firm Hertz has shelved plans to issue up to $500 million in new stock, after the Securities and Exchange Commission raised concerns and launched a review into the deal.
In a regulatory filing Wednesday, Hertz disclosed that it is suspending the stock offering after the SEC informed the company that it would be investigating the deal. Despite filing for Chapter 11 bankruptcy in May, a judge in Delaware last week approved Hertz’s plan to raise fresh liquidity by issuing new shares.
Hertz’ stock performance has been one of the most fascinating stories on Wall Street this year. Even after filing for bankruptcy protection and seeing its most famous shareholder, Carl Icahn, throw in the towel on the company, Hertz’s shares spiked to as high as $5.53 each this month.
The rebound has been widely attributed to an influx of interest in the company from retail investors—many of whom have turned to the stock market during the coronavirus pandemic, hoping to ride the market’s impressive rally since March. The fact that stockholders are among the last in line to get paid when a company files for bankruptcy—behind bondholders and other creditors—has not discouraged investors from trading the stock at market-high volumes in recent weeks.
Hertz acknowledged the risk that equity investors would be taking, warning them in offering documents that the stock could potentially be “worthless” given the company’s financial position. But the company appeared intent on pushing ahead with the issuance, presumably to capitalize on the interest its existing shares have garnered on the market.
The news that Hertz is suspending the issuance amid the SEC’s review saw trading of the company’s stock temporarily halted on the New York Stock Exchange on Wednesday afternoon. Hertz’s shares closed the day’s trading at $2 per share, up 2.6% on the day.


fortune--2020-06-17--Why making Juneteenth a company holiday is a powerful statement

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Giving employees a day off may not seem like the top way for multibillion-dollar companies to fight systemic racism. But a new trend in corporate America—the declaration of June 19, or Juneteenth, as a company holiday—makes a powerful statement, according to historians.
Juneteenth celebrates the date in 1865, more than two years after the Emancipation Proclamation, when enslaved people in Galveston, Texas, learned that they had been freed through Maj. Gen. Gordon Granger’s “General Orders, Number 3.” The day is the oldest commemoration of the end of slavery in the United States, but it hasn’t been honored as a holiday or taught in history classes throughout much of the country.
Last week, Twitter and Square became the first major companies to announce they would make the day a paid holiday for their workforces. The duo were quickly followed by Fortune 500 companies like Mastercard and Target; media companies like the New York Times and Vox; and fellow Silicon Valley and tech firms like TikTok and Lyft. Some companies committed to an annual holiday, while others made the change for this year only. About 200 total companies have now pledged to honor the date with a paid holiday.
The gesture has resonance beyond its show of solidarity. The original Juneteenth proclamation was, at its core, about labor, says Tamika Nunley, an assistant professor of American history at Oberlin College who studies slavery, gender, and the Civil War. The first, most often quoted sentence of the message informs “the people of Texas” that “in accordance with a proclamation from the Executive of the United States, all slaves are free.” But the rest continues, “The connection heretofore existing between [former masters and slaves] becomes that between employer and hired labor. The freedmen are advised to remain quietly at their present homes and work for wages.” The message is meant to inform formerly enslaved people about the “new labor relationship,” Nunley says.
“There’s no other place that’s more fitting to acknowledge [Juneteenth],” says Nunley of modern-day employers.
The Juneteenth document also warns formerly enslaved people “that they will not be supported in idleness,” a message “controlling how they respond to Juneteenth,” Nunley adds. Companies, then, sending a clear signal that the day is one for celebration and not for work adds another dimension to the decision. “The order was designed to silence them—telling them to be quiet, not to be idle,” she says. “It makes the celebratory component of Juneteenth that much more important.”
Juneteenth’s closest equivalent among the holidays traditionally acknowledged by corporate America may be Labor Day, Nunley adds. The labor movement fought for the date honoring workers, which became a federal holiday in 1894. No other holiday on the American calendar specifically honors the end of slavery.
Of course, giving employees a day off for Juneteenth is only as meaningful as a company makes it through a broader commitment to racial justice. “Is it just a holiday, or is it a signifier in recognizing how systemic racism and inequity has constrained employees’ lives on all fronts?” Nunley asks.
The movement in corporate America to honor Juneteenth may contribute to more widespread recognition, including the longtime goal of a federal holiday. Almost all 50 states recognize Juneteenth as a holiday, but that doesn’t mean they provide a day off for state employees, as for other holidays. Some, including New York, have moved over the past several days to further honor the date as a paid holiday for state employees. Campaigns including HellaJuneteenth and the National Juneteenth Observance Foundation have long pushed for an acknowledgment from the federal government; their efforts have gained new momentum over the past few weeks.
The movement among corporate leaders to acknowledge the day’s significance to their workforces has been unprecedented. Says Nunley: “This is something entirely new for corporate America.”


fortune--2020-06-17--Google says it will hire more black workers at senior levels

Alphabet’s Google says it will try to improve the number of Black workers in senior roles and set a goal of filling at least 30% of leadership positions with employees from underrepresented groups by 2025.
The search giant also said it would hire more people in Atlanta, Washington, Chicago and London, add more support for its Black workers and establish internal anti-racism programs for all employees, according to a Wednesday blog post.
Black workers and other people of color have long pointed out the lack of diversity in Silicon Valley companies like Google, Facebook Inc. and Apple Inc. Those calls have been amplified by the protests against systemic racism and police violence sweeping the nation in the aftermath of the death last month of George Floyd at the hands of police in Minneapolis. Google executives have said diversity in the workforce is a priority, but gains haven’t been fast enough for many activists and employees. The percentage of Black employees at Google grew to just 3.7% in 2020 from 2.4% in 2014, according to the company’s annual diversity report.
In addition to the internal changes, Google announced a $175 million “economic opportunity package” that will be spent on investments in Black-led venture capital firms and startups, training for Black job seekers and grants for small businesses.
The new workforce diversity commitments come at the same time as Google has said it will slow overall hiring in most parts of its business as it deals with the economic impact of the Covid-19 pandemic.


fortune--2020-06-17--Fed chair Powell says government should extend $600 supplemental unemployment benefits beyond July

Add Federal Reserve chairman Jerome Powell to the ranks who believe the government should extend its historically generous unemployment benefits.
Speaking to the House Financial Services Committee during a virtual hearing Wednesday, Powell voiced his opinion that the federal government would be ill-advised to let expanded, coronavirus-related unemployment benefits expire this summer.
Such benefits were enacted through the $2.2 trillion coronavirus aid package known as the CARES Act, which extended unemployment insurance to groups of workers historically ineligible for them, such as part-time employees, independent contractors, and the self-employed. The CARES Act also bolstered state unemployment benefits with an additional $600 weekly payment provided by the federal government.
But with the $600 weekly payment provision due to expire at the end of July and no clear sign of an extension in the works, there are concerns that economic conditions could deteriorate for many Americans without the added support—a view which Powell said he agrees with.
“I would say it probably is going to be important that [the $600 weekly benefit] be continued in some form,” Powell told the committee. “I wouldn’t say what form, but you wouldn’t want to go all the way to zero on that.”
Powell was responding to a question from Rep. Jennifer Wexton (D-Va.), who noted that in her home state, the maximum weekly unemployment benefit is $370. “The extra money has been a huge relief to the over 822,000 Virginians who have filed for unemployment benefits since March 15,” Wexton noted.
While he agreed with Wexton’s assertion, Powell added that the U.S. economy “should see strong job creation between now and the end of July,” which would lead to lower unemployment and fewer Amercians being dependent on government benefits to make ends meet.
At the same time, the Fed chair acknowledged indications that many workers “are reluctant to go back [to work] quickly”—particularly those in lower-paying service jobs that require close contact with customers.
“It may partly be that the $600 is generous compared to what they make; we know that many of them weren’t making that much when combined with the other unemployment insurance,” Powell said. “But also, if it’s a service economy job and you’re very close to someone—it’s a barber shop, it’s a beauty parlor, it’s a nail salon—there’s also still reluctance on the part of workers to go back to work at all.”


fortune--2020-06-17--Can President Trump block the publication of John Bolton’s book? History is not on his side, say exp

Can President Trump block the publication of John Bolton’s book? History is not on his side, say experts

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Is John Bolton attempting to undermine national security to sell books, or is President Donald Trump abusing his power to stop unflattering tell-alls from being released?
That’s the question at hand as the Justice Department has sued Bolton, Trump’s former national security adviser, in order to block the release of his tell-all, The Room Where It Happened. The memoir, the Justice Department claims, contains classified information that could compromise the country’s national security. Bolton’s publishing house, Simon & Schuster, says that this is just another case in a growing series of attempts by the President to block the publication of books about himself.
Bolton’s memoir, meanwhile, has sprung to the No. 1 spot on Amazon’s bestseller list amid all the controversy.
While the details of the lawsuit are complicated, the Justice Department claims that Bolton did not finish a prepublication screening for classified information and that the book violates a nondisclosure agreement he signed.
Bolton’s lawyer, however, says that the book’s release was pushed back twice already to undergo a “prepublication review” by the National Security Council (NSC) and that the claim that the book contains classified information is a “transparent attempt to use national security as a pretext to censor Mr. Bolton, in violation of his constitutional right to speak on matters of the utmost public import.”
When asked directly about classified information in the book this week, President Donald Trump made the false claim that all conversations he participates in are considered classified and threatened Bolton with criminal charges if the book is published.
“I will consider every conversation with me, as President, highly classified,” the President said. “So that would mean that if he wrote a book and if the book gets out, he’s broken the law. And I would think that he would have criminal problems. I hope so.”
While the President may ultimately decide what information is classified and what isn’t, a 2009 executive order outlines that certain materials shall not be classified if they “(1) conceal violations of law, inefficiency, or administrative error; (2) prevent embarrassment to a person, organization, or agency; (3) restrain competition; or (4) prevent or delay the release of information that does not require protection in the interest of the national security.”
“Yes, hypothetically he could exercise his classification authority retroactively in an expansive way beyond what current standards permit,” said Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists, to CNN. “But doing so, especially in an arbitrary and self-serving manner, would make it easier for a court to overturn his action on First Amendment grounds.”
Book publisher Simon & Schuster released a statement saying that the lawsuit “is nothing more than the latest in a long-running series of efforts by the administration to quash publication of a book it deems unflattering to the President.”
The lawsuit, notably, does not make mention of the publishing house (which has already distributed copies of the book for review) and instead focuses on Bolton himself and the profits he will receive. It also asks him to persuade Simon & Schuster to pull the book back.
“Ambassador Bolton has worked in full cooperation with the [National Security Council] in its prepublication review to address its concerns, and Simon & Schuster fully supports his First Amendment right to tell the story of his time in the White House to the American public,” Simon & Schuster continued in its statement.
The lawsuit, filed by Assistant Attorney General Joseph Hunt, says that “at no time has Defendant received ‘written authorization’ as required by the NDAs that disclosure of the book ‘is permitted.’ The opposite is true. Defendant was repeatedly advised in writing that the prepublication review process was ongoing.” The suit, however, also mentioned that the book was reviewed by Ellen Knight, senior director for records, access, and information security management at the NSC, who “was of the judgment that the manuscript draft did not contain classified information.” Even so, the clearance process, she told Bolton’s team, “remained ongoing.”
This is not the first time the Trump administration has attempted to use the courts to stop the release of unflattering books about the President. In January 2018 Trump’s attorney, Charles Harder, attempted to stop the publication of Michael Wolff’s Fire and Fury by claiming the book contained libel and “actual malice.” The attempt was unsuccessful, and Wolff issued a statement thanking the President for helping propel his book to the top of the charts.
In 2018, his team also made legal threats against Omarosa Manigault Newman’s White House memoir, Unhinged. The President said he would sue Newman for confidentiality breaches. Simon & Schuster brushed off the threat as “hollow.”
In 2019, the President’s team attempted unsuccessfully to block the publication of the anonymous tell-all A Warning. The Justice Department said the author also violated nondisclosure agreements. Literary agency Javelin defended its author, and the book was published. “Our author knows that the President is determined to unmask whistleblowers who may be in his midst. That’s one of the reasons A Warning was written,” Javelin noted in a statement.
While the President’s attempts to stop unflattering books from being published have been largely unsuccessful, they are still unprecedented and worrisome, say experts.
Ben Wizner, director of the ACLU’s Speech, Privacy, and Technology Project, released a statement this week comparing the President to Richard Nixon. “Any attempt by the Trump administration to block the publication of John Bolton’s memoir is doomed to fail,” he said. “A half-century ago the Supreme Court rejected a similar attempt by the Nixon administration to block the publication of the Pentagon Papers, and since then it has been firmly established that prior restraints on publication are unconstitutional and un-American. As usual, the government’s threats have nothing to do with safeguarding national security, and everything to do with avoiding scandal and embarrassment.”
In 2018, in defense of Michael Wolff, the Authors Guild, a legal advocacy group, suggested that the President’s actions were uniquely dangerous to the First Amendment. “To the Guild’s knowledge, no prior President has sued a writer for libel, and for good reason,” they wrote. “The ability to criticize the government and its leaders lies at the essence of the First Amendment’s protection of free speech; and threats of libel lawsuits are one of the de facto primary means of curtailing free speech in this country today.”


fortune--2020-06-17--How The Engine’s Katie Rae is addressing racism in VC

Venture capitalist Katie Rae spends her days dealing with what she calls “tough tech,” investing in hard-science startups whose products require years of research and development to create technology breakthroughs. But the sweeping anti-racist protests of the past several weeks have amplified an even more difficult, and long-entrenched, problem in tech and VC.
“Racism is everywhere, right? We know this. And so is sexism. It’s internal to us, and it’s internal to the culture,” says Rae, the CEO and managing partner of The Engine, a venture capital firm spun out of MIT.
Only 1% of venture capital dollars go to black founders; only 2.7% goes to women founders, with black women founders getting a fraction of a percentage point. These numbers have stayed basically flat for years, despite mounting criticism, in part because the venture capitalists making the funding decisions are overwhelmingly male and white.
“It is embarrassing to the venture capital community that the percentage of venture capitalists who are black or Latinx is almost not countable,” Rae told me, during an interview at the CB Insights Tech Conference on Wednesday. “You literally think to yourself, ‘Are we serious here? It’s 2020.’”
In recent weeks, major VC firms and their partners have taken various steps to condemn racism, although it remains to be seen how much money they will commit, over the long term, to back up their rhetoric.
“Without confronting it continuously, you’re not going to get results,” Rae says. “I am super proud of what we have done and accomplished at The Engine, in terms of who we’ve invested into and how we’ve grown our team. But we need to do better.”
Her firm, founded four years ago, raised $205 million in its first fund and has invested in 25 startups in sectors including engineering, manufacturing, biotech, and artificial intelligence. A full 80% of those companies have a founder who is female and/or nonwhite, according to data The Engine provided Fortune.
She added that The Engine is “rewriting some of our policies to be more proactive, to hold ourselves to account there” and holding open forums with her community of founders.
“I don’t want to say safe space, because…we don’t know if that’s safe for people,” says Rae. “But I think holding those forums is really important, both for our own team and in our larger community of founders, and step into those uncomfortable moments.”


fortune--2020-06-17--Facebook and Instagram to let users switch off political ads

Facebook is giving users the ability to turn off political ads in their feeds, following backlash over its policy of letting candidates and political groups lie in them.
Facebook and Instagram users will be able to switch off the ads by clicking on the ads’ settings or by going through their user settings. The ability to block political ads will start rolling out in the U.S. today and reach all users within a few weeks.
In the fall, Facebook plans to expand the capability globally.
“Facebook is supporting and strengthening our democracy in 2020 and beyond,” Zuckerberg said in a USA Today op-ed on Tuesday that announced the change. “And for those of you who’ve already made up your minds and just want the election to be over, we hear you.”
In January, Facebook revealed its plans to give people more control over seeing political ads. The change follows Facebook’s controversial decision to let politicians and political groups buy ads without their being policed for accuracy. It also comes as the company faces criticism for letting President Trump post inflammatory comments about protests for racial justice, which upset Facebook employees, and statements about mail-in ballots.
Facebook has defended its political-ads policy by saying that the company favors freedom of speech and that people should be able to see what political leaders say, so they can make up their own minds about their comments. It also said that banning political ads would favor incumbents, who often have more money to spend on traditional advertisements.
Twitter CEO Jack Dorsey, in contrast, banned political ads, saying that any traction political messages get on social media should be “earned” not “bought.”
During a press call on Wednesday, Facebook also addressed a recent executive order by President Trump that aims to weaken or revoke legal protections that keep social media companies from being held liable for what their users post. Trump signed the order after Twitter added a misinformation warning on one of his tweets about mail-in ballots.
Nick Clegg, Facebook’s vice president of global affairs and communications, complained that removing the legal protection, called Section 230, would lead to less free speech, not more. He also pointed out that the two political parties seek opposite goals: Republicans want Facebook to do less fact-checking, but Democrats want more.
“Policymakers are just going to have to decide what rules they want for campaigns,” he said.


fortune--2020-06-17--Zoom to offer all users full encryption, bending to pressure

Zoom Video Communications will offer full end-to-end encryption to all users, free and paid, succumbing to pressure from members of Congress and the public who pushed the video-conferencing company to bolster privacy.
Those using the service at no charge will have to verify their phone numbers to get access to the strongest level of security, Zoom CEO Eric Yuan said Wednesday in a blog post. End-to-end encryption makes it impossible for third parties to decipher communications, but will mean that participants cannot call into a Zoom meeting on a telephone line.
“We are also pleased to share that we have identified a path forward that balances the legitimate right of all users to privacy and the safety of users on our platform,” Yuan wrote. Verifying the identities of free participants will help the company combat abuse taking place on its platform, he added.
The San Jose, Calif.-based company said it plans to begin testing the stronger encryption in July. Zoom said previously it would reserve this feature for large corporate clients who paid for the service. About 70,000 internet users signed two petitions this week urging Zoom to give full encryption to everyone in the interest of cybersafety for those who can’t afford a subscription. U.S. Senators Sherrod Brown, an Ohio Democrat, and Richard Blumenthal, a Democrat from Connecticut, have blasted the software maker for not offering end-to-end encryption, though the company earlier had claimed it did.
While its stock has more than tripled this year, Zoom has suffered a series of controversies related to privacy and security. During the coronavirus pandemic, when hundreds of millions of people started using the video-conferencing app to keep in touch with colleagues, loved ones and communities, trolls began invading calls with profane, pornographic and racist content, in a phenomenon known as Zoombombing. After researchers discovered instances when Zoom meetings and their related encryption keys were routed through servers in China, even though no one on the call was based there, the company pledged to offer full encryption to allay concerns that Zoom wasn’t secure.
Yuan said on an earnings call this month that he wouldn’t offer free users full encryption so Zoom could work with the Federal Bureau of Investigation and local law enforcement to identify people who were committing crimes during video-conference meetings. The company later clarified those remarks after a user uproar about the ties to law enforcement.


fortune--2020-06-17--How the first-ever digital ADHD treatment—a video game—got the FDA’s blessing

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Depending on whose numbers you use, somewhere between 5% and 11% of American children have ADHD (attention deficit hyperactivity disorder). That has created a massive market for attention deficit disorder drugs such as Adderall, Ritalin, Vyvanse, and others.
But those treatments are all traditional therapeutics, imbibed via pills. Now, a digital competitor is heading into the space—a prescription video game that’s meant to help children with ADHD focus.
The product is Boston-based digital health firm Akili’s EndeavorRx, and it’s the first of its kind to gain Food and Drug Administration (FDA) clearance. Akili has been around since 2010 but walked a very specific path to get to this milestone.
“Everything is about data,” Akili CEO Eddie Martucci tells Fortune. “Getting the clinical evidence, so people can trust it. And by that I mean the patients, their doctors, everyone.”
The focus on evidence and data is built into Martucci’s academic pedigree. He has a Ph.D. in biochemistry and biophysics from Yale and then headed into the world of health entrepreneurship. “I’ve always been interested in letting the science be done by the researchers and then bring it to patients,” he says.
And therein lies the secret sauce to Akili’s success with the FDA. The digital health realm is littered with bold proclamations which often don’t pan out. Martucci’s philosophy is that the tech and the hype must always be supplemented by evidence in the real world via the means of randomized trials.
“We’ve worked with investors in both the technology field and the health care field. Our board is a hybrid of those two [forms of] expertise,” he says. “We partner with top-tier universities, such as UC–San Francisco, Duke University, and countless others to run rigorous clinical trials.” The company also has strategic partnerships with companies such as Japanese drug giant Shionogi to market its product.
Akili has conducted five clinical studies involving more than 600 children with ADHD. These included randomized controlled trials—considered the gold standard in the clinical study world—which place different study participants into various groups to see whether or not one therapeutic approach is as effective as another.
Martucci emphasizes that the video game approach isn’t meant to supplant traditional drugs. He considers it a targeted digital treatment to increase focus and says the company’s studies have shown the product is just as good on that front for patients who take ADHD medications as well as for those who don’t.
“We’re not focused on just shoving this into some existing pharmaceutical model,” he says. “We want this to be what the model for digital therapeutics actually should be.”


fortune--2020-06-17--New York City is ready to enter its outdoor dining phase of reopening on Monday

New York City is on track to enter the second phase of reopening on Monday, a step that includes outdoor dining, Governor Andrew Cuomo said.
Statewide, less than 1% of New Yorkers tested positive for the coronavirus on June 16, the lowest percentage since the start of the pandemic, Governor Andrew Cuomo said. There were 17 deaths on June 16, also a low.
The Westchester, Rockland, and Hudson Valley regions are on track to enter phase three on Tuesday, and Long Island is on track for Wednesday, he said.


fortune--2020-06-17--The Coronavirus Economy: The show must go on—even for Playbill

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Even with Broadway going dark and all in-person performances shuttered for the foreseeable future, Playbill—the iconic publication for theatergoers—is pushing ahead with a busy summer schedule.
Fortune spoke with Playbill’s chief digital officer Alex Birsh for a new series, The Coronavirus Economy, about how the outbreak has affected the stage-production-adjacent business and what we can expect for live shows in our socially distant future.
Playbill’s chief digital officer Alex Birsh. Marc J. Franklin
The following interview has been lightly edited and condensed for clarity.
Fortune: When did you realize the outbreak of COVID-19 was going to affect your work at Playbill?
I had an inkling in mid-February that the spring was not going to be normal, but envisioning how was the hard part, since anyone alive now has never experienced such a pandemic. Once the Jazz vs. Thunder game was canceled due to a player testing positive for the virus, I knew we were in truly uncharted territory. You just don’t see referees run onto a court, call a game off, and tell everyone to go home. It was staggering; it was like something out of a movie.
So I immediately started thinking that Broadway, very soon, is about to be affected in a huge way. I don’t think anyone could have envisioned for how long, though. The NBA season was immediately suspended, and then Broadway was suspended soon after.
All shows, plays, and musicals on Broadway—and virtually everywhere else—are canceled for the foreseeable future. Without live shows, how is Playbill keeping the business running? How is it engaging with the audience, and has it been doing anything in particular to support the casts and crews of shuttered productions?
Ever since my father started Playbill On-Line, its old title, in the mid-1990s, Playbill has been the most extensive and consistently updated online theater resource. We write about theater and theater-adjacent news; we have the Playbill Vault—a digital library of all the information you could ever need about Broadway’s productions of the past and present; we have a Jobs section on our site to help people get their start in the industry; and we have a separate make-your-own-Playbill site called PLAYBILLder. We also have an incredibly passionate following on social media, with more than 1.5 million total followers across the major platforms.
“Ever since my father started Playbill On-Line, its old title, in the mid-1990s, Playbill has been the most extensive and consistently updated online theater resource,” says Birsh. Courtesy of Playbill
When anyone asks me what the fastest-growing part of our business is, my answer is always the same: our Instagram profile. We have ventured into the content creation space, either streaming live or recorded musicals and plays, such as Pride Plays, our Playbill Pride Spectacular concert, and the just-announced Playbill Virtual Theatre Festival, or holding interviews through interview series like Stream Stealers and The Broadway Q&A. Through all this, we keep engaged with new and old online audiences who are theater-obsessed, along with the army of new and exciting creative forces in the industry.
June is Pride Month, and the first of the Pride Plays just aired via live stream. Could you explain a bit more about this initiative, what inspired it, and what else fans can expect from the Pride Plays 2020 Festival?
Pride Plays is produced and directed by the great trio of Michael Urie, Doug Nevin, and Nick Mayo, in association with Rattlestick Playwrights Theater. The festival was obviously supposed to be an in-person experience, just as it was wonderfully done last year, but we wanted to be part of the reason these plays were able to reach the digital public, and we are thrilled to partner with Pride Plays and host them digitally on our site. The Plays help raise funding and awareness for Broadway Cares/Equity Fights AIDS through honoring impactful LGBTQIA+ plays through history, an organization that is near and dear to my heart.
On Friday, we just held our first play, Donja R. Love’s One in Two, which was just outstanding, and up next we have the Five Lesbian Brothers reuniting for a one-night-only live reading of their 1992 play Brave Smiles…Another Lesbian Tragedy at 7 p.m. ET on June 22; Mart Crowley’s The Men From the Boys, directed by Zachary Quinto at 7 p.m. ET June 26; and Masculinity Max by MJ Kaufman at 7 p.m. ET June 27. And to top it off, we have our Playbill Pride Spectacular concert on June 28.
Among the most depressing forecasts as the pandemic continues is that live shows and performances will not be able to resume for the rest of 2020, at least. But as the old saying goes, “The show must go on,” so how does Playbill plan to adapt to whatever the social distancing, self-isolating future holds?
We will continue to create content fitting for our site to keep our audiences engaged, and when theater returns, we will return to the theaters to serve our beloved readers and collectors. Playbill is one of the rare theatrical institutions that has been around longer than many theaters themselves—we were established in 1884—so we have seen our fair share of history surround and impact us. We, like the theater itself, will rebound well and be smart and responsible in helping bring people the joy of theater in the safest ways possible.


fortune--2020-06-17--Are contact-tracing apps a scourge or savior?

Will contact-tracing apps help contain the pandemic, or will they flop while normalizing mass surveillance?
That’s the substance of a major debate now raging among privacy and public health advocates. As countries rush to roll out contact-tracing tech, which seeks to notify people who may have come into contact with COVID-19, some are encountering complications.
Early problems may hurt hopes. Amnesty International, the civil-rights group, warns that apps distributed by the governments of Bahrain, Kuwait, and Norway are some of the world’s most privacy-invasive. The three apps actively track and upload people’s GPS coordinates to centralized servers, a potential security and privacy nightmare. These systems “go far beyond what is justified,” Claudio Guarnieri, head of Amnesty International’s security lab, said in a statement.
Norway took the hint. Heeding a warning from its own data-protection authority on Friday, the country reluctantly pulled its contact-tracing app this week. Camilla Stoltenberg, director of the Norwegian Institute of Public Health, said her team disagreed with the data-protection authority’s determination, but would “delete all data and pause work” regardless. Defiantly, Stoltenberg added that without the app, Norway “will be less equipped to prevent new outbreaks that may occur locally or nationally.”
The problems don’t end there. A vulnerability in a Qatari contact-tracing app potentially exposed a million people’s personal details in May. Meanwhile, countries such as the UK, France, Iceland, and United Arab Emirates are pursuing a centralized model like Norway’s, which is less ideal for security and privacy. The worst offenders risk turning public opinion against all contact-tracing app efforts.
The apps won’t work if people fail to use them. Researchers estimate that 60% of a country’s population must adopt the technology for it to stop a second wave of pandemic infections. On Tuesday, Germany released its version of a contact-tracing app, but a June 10 survey indicated that only 41% of Germans would be willing to download it. (If the majority of the population adhered to social distancing, hygiene, and mask-wearing guidelines, the apps might be effective with as little as 20% adoption.)
There is hope for privacy preservation. Germany, Austria, Ireland, Italy, and Switzerland are some of the countries that have opted for a decentralized approach to data collection, meaning people’s data will be stored on their own phones rather than on government servers. And a system in development by MIT scientists, called “private automatic contact tracing,” sounds promising too.
If a contact-tracing app were to become available in the United States, would you download it? Please send me a note sharing your point of view; we’ll consider featuring it in an upcoming newsletter.
Robert Hackett
Twitter: @rhhackett
Email: robert.hackett@fortune.com
THREATS
Bend the knee. The CEOs of Facebook, Google, and Amazon have signaled that they're open to testifying before the House Judiciary Committee for a hearing related to antitrust concerns. Apple, which is facing two EU antitrust probes related to Apple Pay and its App Store, has not yet agreed. Meanwhile, the Justice Department is considering rolling back legal protections for online publishers, the Wall Street Journal reports.
Who left the door open? An internal report by a CIA task force determined that the theft of top-secret hacking tools from the agency in 2016 might never have been discovered if WikiLeaks, the secret-leaking website, had not published a trove of stolen documents related to the incident in 2017. The report, prepared for then-head of the CIA Mike Pompeo and since obtained by the Washington Post, said the CIA team's security practices were "woefully lax."
A tale of two earnings. Chinese giant ByteDance, owner of the viral video app TikTok, reported $5.6 billion in revenue for the first quarter of the year. The sum is more than double—a 130% increase over—the same period a year prior, Reuters reports. Meanwhile, Oracle shares fell 5% on Tuesday after the company reported that it missed analysts' expectations. Revenue fell 6% to $10.44 billion from a year ago as the pandemic took a toll on the company's cloud-computing business, CEO Safra Catz said.
All the fake news that's fit to print. Russian fake-news peddlers are maintaining a lower profile by amplifying American-made disinformation rather than original content. One such incident involved Russian trolls and bots promoting a conspiracy theory about a faulty Iowa Caucus app, the New York Times reports. Meanwhile, a group of researchers outed another Russian influence campaign that operated in the dark for six years and shared thousands of pieces of false information on social media, including fake tweets from politicians.
Getting the Face-boot. Facebook recently removed nearly 900 accounts associated with far-right groups, like those of the Proud Boys and American Guard. The groups were promoting hate and violence amid ongoing protests over racial inequality and police brutality in the U.S. Also, in a semi-reversal of its earlier commitment to keep selling and displaying political advertising, Facebook will allow users to "turn off" these ads for the 2020 election.
Who's a good boy?
ACCESS GRANTED
While we're on the subject of contact-tracing apps, the Wall Street Journal has an eye-opening dive into the economy of location-tracking apps. Are they a privacy-breaching scourge, a key source of data for public-health authorities tasked with fighting the coronavirus pandemic, or both?
While an undergraduate at the University of Virginia, Joshua Anton created an app to prevent users from drunk dialing, which he called Drunk Mode. He later began harvesting huge amounts of user data from smartphones to resell to advertisers. Now Mr. Anton’s company, called X-Mode Social Inc., is one of a number of little-known location-tracking companies that are being deployed in the effort to reopen the country. State and local authorities wielding the power to decide when and how to reopen are leaning on these vendors for the data to underpin those critical judgment calls.
FORTUNE RECON
A collection of 23 years of Jeff Bezos’s writing to be published in November by Alan Murray
How Juneteenth became a corporate movement by Aric Jenkins
Square’s head of lending thinks the PPP still needs more changes to help the smallest businesses by Anne Sraders
North Korea blows up liaison office with South Korea in most serious provocation in years by Kanga Kong and Jeong-Ho Lee
U.S. retail sales surge in May but remain well below normal levels by Phil Wahba
NYPD must release body-cam footage within 30 days of a use-of-force incident by Henry Goldman
Privacy-preserving A.I. is the future of A.I. by Jeremy Kahn
ONE MORE THING
Chinese scientists have successfully transmitted a special cryptographic key, used to encode and decode messages, between a satellite and two ground stations that were 700 miles apart. The system used quantum entanglement, a property of particle-scale physics, to create a communications system whose ciphers are resistant to interception and tampering. The work of the 24-person team, published in the scientific journal Nature on Monday, could one day form the basis of a super-secure global communications network beamed from space.


fortune--2020-06-17--How to keep theater alive when there’s no live theater

It was devastating to see how quickly the American theater collapsed in the midst of the COVID-19 quarantine—and I say this as someone who lost both my jobs by March 24—but from a certain perspective it wasn’t exactly surprising.
Until this spring, our entire industry was built on an economy of scarcity. My fellow theater artists and I knew that movies and TV had a certain cultural advantage because they were available everywhere and to everyone, but we argued the essence of our work was in its fundamental ephemerality. Our performances happened only a certain number of times for the select number of people who could both get a ticket and travel to the lone venue where that particular cast was appearing on that particular day. We enacted rules that made it difficult or even impossible for our work to be recorded. We spent a lot of time affirming that productions gained an almost sacred worth because the intimate magic they created was unavailable to most people.
We weren’t entirely wrong. The unrepeatable “liveness” of the theater can indeed be exhilarating, and speaking for myself, it has often created an almost religious awe. But on some level my colleagues and I knew that we could use that ephemerality as an excuse to make our work as selectively accessible as a luxury good.
We didn’t feel great about that. We had many, many conferences about it, and every now and then we’d shake things up a little so that our limited tickets were less expensive or our limited runs were indeed able to appear on TV. But mostly we were just tweaking a system that relied on the elusive opportunity for people to share rooms with us.
And that system could not withstand quarantine. By banking on the limitless potential of scarcity, we allowed ourselves to ignore the potential for catastrophe, and now we find ourselves asking an existential question: How can we still be theater artists, since being theater artists means being live in a room with just a few other people?
But what if that question is flawed? What if our relationship to our audience—not to mention the expression of our craft—can still be inherently theatrical, even if we’re not on a traditional stage? What if we’re still theater people, even without the theater?
That’s not to say that a live performance with a live audience isn’t the bedrock of our art form. Of course it is. It always will be, since being in the room with the art creates such a potent form of communion. But even if we agree that we will always put the stage in the center, theater professionals can still allow ourselves to offer a continuum of access points.
The last three months have forced us to do that, and the range of projects we’ve created is astonishing. Live-streamed plays are being written and performed; older productions are being released online; virtual marketplaces are being created to support artists; and theater award shows are gamely moving to screens. Sometimes people pay for this content, and sometimes they don’t. Sometimes it’s great, and sometimes it’s…on its way to greatness. But no matter what, it doesn’t feel like TV or movies. It feels like theater, learning to make sense of itself on another platform.
Just look at the recent live stream of Michael Urie performing the play Buyer & Cellar, or the Public Theater’s online production of the play What Do We Need to Talk About?, which Richard Nelson explicitly wrote to be performed on Zoom. These pieces had “liveness.” They had spontaneity. And while they lacked certain things we can rightfully love about sharing space with performers, they still felt “theatrical.”
What else can we experiment with? Not just online, but in a variety of ways, how can we assert ourselves as theater artists outside the theater? How can we reach audiences who might never make it into our limited-run show in a 99-seat venue, and how can we then link that encounter with what we do onstage? How can we use the temporary absence of theaters as an opportunity to build bridges back to them?
I’ve been awakened to the possibilities by the pieces I’ve edited for The Flashpaper: Theatre’s Thoughts on Right Now. That’s the print-only journal I founded, which launches this week as a way to let theater artists respond to urgent current events, using any genre they choose. The Flashpaper also provides these artists a passive income stream that isn’t tied to having a show in production or even having access to a theater. They are all equally compensated for every issue sold, no matter when or where it is purchased.
Thanks to the contributors, the first issue of The Flashpaper is also a forum on how the industry can dismantle the worst parts of the old system and reinvigorate the best. With everything from original plays to manifestos to hand-drawn comics, they remind us that we have always had the capacity to reach people in multiple ways, through multiple channels, and with multiple points of view.
We can’t allow ourselves to forget that. We can’t allow ourselves to go back to the way it was before, because no industry that imploded as quickly as ours did was ever that stable to begin with. We don’t need to despair about that, or at least not only despair. We have the opportunity to reevaluate what theater is, what it means to be theater artists, and who it is that theater can reach. We have a chance to replace our sanctified scarcity with a sustainable and welcoming abundance.
Mark Blankenship is a theater journalist, editor, and podcaster. He is the founder and editor of The Flashpaper: Theatre’s Thoughts on Right Now, available at TheFlashpaper.com.


fortune--2020-06-17--A revolution in the ‘family planning’ aisle: pregnancy tests with baby-free branding

Women’s health startup Modern Fertility is launching a pair of tests—one for detecting pregnancy and the other for ovulation—that will immediately stand out from the competition. Not for any extra bells and whistles, but for what they lack: Not a single cute baby adorns their packaging.
It’s a very intentional choice by the three-year-old startup. The San Francisco–based company’s first product was an at-home hormone fertility test—one that historically would only be given at a fertility clinic to women struggling to conceive.
And yet when Modern Fertility surveyed its users, nearly 75% of them said they were not currently trying to get pregnant. Instead, they reported using the hormone test to better understand their reproductive health.
“It reflects a broader industry and societal trend,” says Modern Fertility cofounder and CEO Afton Vechery. “It validates that the whole fertility category needs to be broader.”
She noted that with half the pregnancies in the U.S. unplanned and one in six couples struggling to conceive, some of the baby-centric products currently on the market “can be triggering to a lot of women. When you go to buy these products,” she says, “they imply that you’re trying for one thing—that you’re thinking about babies right now.”
The launch today of Modern Fertility’s new products and an upcoming app, which helps read and track test results, is part of a broader push by the company to shift the fertility category into what Vechery calls “mainstream wellness.”
“If you think about the founding principles and goals for the company,” says Kirsten Green, founding partner of venture capital firm Forerunner Ventures, which led Modern Fertility’s Series A round of funding, “it’s really about broadening the conversation around fertility—even the definition of it.” While much of the research and funding in the space has been invested in infertility, or couples struggling to conceive, Vechery says her goal is “building a fertility company for women who don’t have fertility issues” so they can be more proactive about their reproductive health.
Modern Fertility decided to launch its new products after hearing from some of its users that the ovulation tests—which measure a woman’s peak fertile window—currently on the market weren’t working for them. The simple yes/no tests that tell women whether they are ovulating are ineffective for women whose hormones don’t align with the tests’ standard threshold. Modern Fertility’s product, with the help of its app, gives a specific value of the luteinizing hormone that leads to ovulation and tracks its level over time, instead of giving just a simple positive or negative.
In a survey of 400 women, the company found that the most popular reason women wanted to track their ovulation was not necessarily because they were trying to get pregnant but because they wanted to learn more about their bodies. “These traditional products were designed for this one specific person”—a woman trying to conceive—“but women were using them in new ways,” Vechery says. “We wanted to create the product experience for this new landscape.”
Modern Fertility’s pregnancy tests are admittedly pretty standard, but the company will sell them on its website for $14 for a four-count; top pregnancy tests can cost up to double that amount.
For Green, Modern Fertility fits squarely into her firm’s thesis—one that she says has only been accelerated by COVID-19. “The last decade was a lot about satisfying wants and desires,” she says, “and this next decade will be much more focused on need and things that are vital to us living our best lives.” She adds, “It’s about people and human empowerment and how we can build better businesses around that.”


fortune--2020-06-17--J.C. Penney is starting liquidation sales at 136 stores in new source of pain for Macy’s

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J.C. Penney has begun clearance sales at 136 of the stores it is planning to close permanently as part of its bankruptcy protection process, liquidations that promise to add to the pain chains that Macy’s, Kohl’s, and Gap are already feeling.
A month ago, Penney filed its business plan to emerge from Chapter 11 protection as a leaner, better-run company, saying it would close 242 of its 840-store fleet by 2021, including 192 this year. Those stores, disproportionately in smaller markets, generated 18% of Penney’s pre-bankruptcy revenue. The list of the stores closing first is here.
Deals at the already discount-heavy department store chain will include storewide discounts of up to 40% off original prices, with things like jewelry and window treatments getting even bigger price cuts, according to a press release from the four companies overseeing the liquidations: Gordon Brothers, Hilco Merchant Resources, Great American Group, and Tiger Group.
Those deals could be painful for rival department stores like Kohl’s and Macy’s as they look to unload much of their own merchandise left unsold during the pandemic that lowered their sales by about half in the first quarter. On the home-goods front, another rival, Pier 1 Imports, is liquidating altogether, meaning even more discounting for the survivors to compete with.
Penney, which is heavily focused on apparel, could also squeeze indirect rivals and mall neighbors like Gap, Aéropostale, and American Eagle Outfitters at a time when they too are grappling with hundreds of millions of dollars worth of unsold clothing.
In theory, these Penney store closings could present an opportunity for rivals to win market share in the areas of the closing stores. But Macy’s, Gap, and Kohl’s are already losing market share to the likes of T.J. Maxx, Target, and Amazon, which are more likely to be the benefactors of Penney closings.
Just like Sears’ hundreds of store closings in the past decade didn’t help Penney or Macy’s much, the Penney shutterings won’t necessarily mean a boon for the stores they will leave behind in the mall. In fact, those malls losing their Penney stores, typically lower-quality malls, will likely see a drop in shopper visits.
And even if the Penney closings do mean market share gains for rivals further down the road, it will pinch margins in the short term. Barneys New York’s liquidation during the holiday season hurt sales at Nordstrom, Saks Fifth Avenue, and Neiman Marcus. A few years ago, the Sports Authority’s demise slammed Dick’s Sporting Goods briefly.
Penney suggested additional closing stores will be identified soon. “A handful of previously announced store closing locations remain on hold pending further review,” the company said in a blog post on Wednesday.


fortune--2020-06-17--Aunt Jemima brand looks to shed its racist roots with vow to change name and logo

Quaker Oats, a subsidiary of PepsiCo, announced this morning that it will rename and remove the logo from its more than 130-year-old Aunt Jemima breakfast brand. The decision comes amid a social media backlash that called out Aunt Jemima’s branding, which has overt ties to American slavery, as racist.
The company said that the image of Aunt Jemima will be removed in the fourth quarter and that the name change will follow; Quaker Oats has not yet announced any details of the new branding.
“We recognize Aunt Jemima’s origins are based on a racial stereotype,” said Kristin Kroepfl, vice president and chief marketing officer of Quaker Foods North America, in a statement. “While work has been done over the years to update the brand in a manner intended to be appropriate and respectful, we realize those changes are not enough.” In 1989, for example, the brand removed the kerchief from the Aunt Jemima figure.
“We acknowledge the brand has not progressed enough to appropriately reflect the confidence, warmth, and dignity that we would like it to stand for today,” added Kroepfl in the statement. “We are starting by removing the image and changing the name. We will continue the conversation by gathering diverse perspectives from both our organization and the Black community to further evolve the brand and make it one everyone can be proud to have in their pantry.”
Yesterday singer Kirby posted a TikTok video captioned “How To Make A Non Racist Breakfast,” which criticized the brand’s links to the plantation South and minstrel shows. The video, which has been viewed more than a half-million times, ends with Kirby dumping Aunt Jemima pancake mix out into her sink and saying, “Black lives matter, people. Even over breakfast.”
A PepsiCo spokesperson said that the announcement had been planned for today in order to follow yesterday’s corporate announcement from CEO Ramon Laguarta that the company will invest $400 million over five years in black communities and in increasing black representation at PepsiCo. Laguarta’s letter to employees, which was also published as an op-ed in Fortune, made no mention of the Aunt Jemima changes. The spokesperson said the timing of the rebrand was unrelated to yesterday’s social media outcry.
In addition to the name change, the company said the Aunt Jemima brand will donate at least $5 million over the next five years “to create meaningful, ongoing support and engagement in the Black community.”
This is not the first time the company has been called on to change the Aunt Jemima brand. A 2015 New York Times op-ed titled can “Can We Please, Finally, Get Rid of ‘Aunt Jemima’?” described the logo as an “outgrowth of Old South plantation nostalgia and romance grounded in an idea about the ‘mammy,’ a devoted and submissive servant.” In 2017, a Change.org petition was launched by the husband of restaurateur B. Smith to change the Aunt Jemima branding to that of the lifestyle icon.


fortune--2020-06-17--The U.K. is complicit in antiblack racism—and has a responsibility to fight it

The killing of George Floyd left the world shocked and led to a global surge of awareness about the experience of the global black community. The world has awoken to the need to tackle racial injustice. And there has never been a moment in my lifetime when the need to create long-lasting change has felt more urgent than it does now.
The challenges that the black community faces are real. From the frustration of overt and subtle racist acts to wider systemic racism and the lack of economic advancement that follows, we need to tackle the individual and systemic prejudices that exist both within the workplace and wider society. But now there is hope that for once, people will no longer be afraid to speak out in support of the black community.
During this period, I have been overwhelmed with messages from people both expressing how they feel and suggesting what needs to be done to create positive change in the U.K. Some people have messaged me to say that racism in the U.K. isn’t that bad. Others have told me that they don’t feel comfortable speaking out about their experiences for fear of losing their jobs. If, at this time, some black people in the U.K. still feel too afraid to speak out, then I don’t know when they will be able to.
I find myself in a strange space. On one hand, this feels like a watershed moment. But unless the black community in the U.K. seizes this moment, it will pass by and be forgotten. In the U.K. and across the world, we must not let ourselves forget this moment—but instead channel our passion and awareness into real change. That is what inspired 56 Black Men’s recent Let’s Not Forget campaign.
Unless we are direct and honest, unless we come together with a common progressive goal, unless we are laser focused on creating change, history has shown us that it will most likely repeat itself.
The U.K. needs to take ownership of its past. That includes the slave trade, imperialism, and colonialism. Instead of brushing it under the carpet, we must confront it head-on. Today, views of racial superiority have solidified into the workplace and wider society. It is no secret that most boardrooms in the U.K. are disproportionately white. For example, there is only one black CEO in the FTSE 100, an index of the top 100 British public companies by market capitalization. This drives home how lacking black representation is in U.K. decision-making positions.
From speaking with many U.K. corporations, I have found that too often, corporate interest in diversity is no more than lip service. Too often businesses silence the black community by emphasizing more general terms such as “BAME” (black, Asian, and minority ethnic) or “disadvantaged communities.” While these companies’ intentions may not be bad, many black people I have spoken to still do not feel they have an authentic voice when businesses emphasize terms that do not refer specifically to the black experience.
I am calling for a shift in mindset among business and government leaders. I am calling out the white-centric education system in the U.K., and I suggest incorporating the country’s true past of oppression into school curricula. This way, we avoid oversight of the systemic racism that exists in the U.K. and open up the conversation for history to stop repeating itself. The real history of Africa should be taught with the same emphasis as the histories of other societies; the black historic narrative did not start with chains.
Many black people are simply looking for equality at all levels. We should not still need to be marching for equality in 2020.
Real change often starts with those in decision-making roles. Until they make racial injustice a priority, we will continue to speak up until we see change in the U.K.
The comfort zone is a nice place, but nothing ever grows there.
Cephas Williams is founder of 56 Black Men.


fortune--2020-06-17--For one MLB team, playing at an empty ballpark could increase profits

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The Miami Marlins’s average game attendance last year was 10,016, by far the lowest in Major League Baseball. Zero fans in the ballpark might work out better for them.
The team may have lost money last year due to the costs of running $515 million Marlins Park, and if the ballclub were to play 2020 without fans in the stands, the Marlins could actually eke out a profit, according to back-of-the-envelope calculations from public records and guidance from a former MLB team official who requested anonymity.
The 30 team owners and the Major League Baseball Players Association are locked in a struggle that will determine the length of the 2020 season, or whether it begins at all. Negotiations center on the finances of playing games in empty stadiums. Owners have said the fans’ absence will cut into proceeds by an average of $640,000 per game, but they’ve refused to release information to support that figure.
The Marlins, among the worst-performing teams, brought in about $500,000 per game in 2019, according to rough computations—and that was with tickets available for all 36,742 seats in their home stadium. With the cost of operating a ballpark estimated at about $300,000 per game, it’s possible that the Marlins could come out ahead without fans streaming through the turnstiles.
The mystery around the numbers goes a long way to explaining why the baseball season is still uncertain even as the National Basketball Association and National Hockey League have cemented plans to start playing again. And though it’s not based on ironclad numbers specific to the Marlins, it’s probably the best calculation possible in the fog of mistrust and secrecy that’s a defining hallmark of Major League Baseball.
Representatives of team owners and the players’ union both declined to comment. So did the Marlins.
Here’s what’s publicly known. The Atlanta Braves, which won the same division last year in which the Marlins finished last, are part of billionaire John Malone’s Liberty Media empire. As such, information can be gleaned from Liberty Media’s annual report that’s not available for the other 29 MLB teams.
The Braves made $5.4 million per home game last year, an amount that includes ballpark operations—ticket revenue, refreshment and merchandise sales and money generated from the postseason. There were also local and national broadcast fees, licensing and other “shared MLB revenue streams,” which would still be flowing even in a season with empty ballparks.
Ticket sales and other game-day proceeds account for 39% of team revenue, according to a confidential Major League Baseball report titled “Economics of Playing Without Fans in Attendance” that was shared with the players’ union and obtained by the Associated Press.
Tell us when and where!! https://t.co/zPMbehld1n — Mike Trout (@MikeTrout) June 16, 2020
Taking that figure at face value, ballpark attendance would make up about $2.1 million of the Braves’s $5.4 million per-home-game revenue.
The average cost of running a ballpark per game is around $300,000, according to the former team official. Not all of that money would be saved in an empty stadium because it includes energy costs, but a substantial amount is to pay for game-day staff that wouldn’t need to be present without a crowd.
The math gets murky in the secrecy surrounding other franchises, including Derek Jeter’s Miami Marlins. The New York Yankees Hall of Famer is the chief executive officer and a 4% owner of the Marlins.
Using the Braves as a reference point and figuring in publicly available data on attendance and the average cost of a ticket, the Marlins seemed to earn a profit with fans in their ballpark.
There are plenty of caveats. For instance, the franchise reaps the benefits of shared revenue whether or not anyone shows up to Marlins games, so they get a cut of the gate when, say, the Braves sell out.
The Marlins’s average attendance per game last year was 31% of the 32,776 customers the Braves drew. Apply that to the Braves’s $2.1 million per-home-game revenue from fans and that’s just $644,000 in ballpark sales for the Marlins.
The next step is adjusting for the difference in ticket prices. The Marlins’s average, which doesn’t include premium seating and luxury suites, was $22.55, according to data compiled by Statista. The Braves’s average ticket cost was $29.44, yielding a discount of about 25%. Apply that to the adjusted revenue figure and that leaves about $500,000 per game of ballpark sales for the Marlins last year.
Compare that with the average cost of running a ballpark, and you’re left with $200,000 per game.
It’s a ballpark figure, and there’s plenty to dispute, but this is one reason why negotiations over the 2020 baseball season drag on.


fortune--2020-06-17--Digital healthcare is all the rage in COVID-19 times. But not everyone is invited to the party

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Venture capital has overflowed with interest in digital health since the pandemic forced patient care into the realm of the bits and the bytes.
But not all startups are getting the same treatment.
Proteus Digital Health, once valued as much as $1.5 billion, has been building a digestible sensor that tracks whether patients have taken their medications. Over the course of nearly two decades, it has raised more than $420 million from investors including The Carlyle Group, Kaiser Permanente Ventures, Medtronic, OrbiMed, and Novartis on that pitch (per data from Pitchbook).
Earlier this week, the company filed for Chapter 11 bankruptcy protection.
Even prior to the onset of the pandemic, the pre-revenue health tech company struggled to raise additional funding and furloughed the majority of its employees for two weeks in November, per CNBC—highlighting the issue of integrating digital therapies within the existing hierarchy (think pharmaceutical companies, regulators, and insurers). An important licensing agreement with Otsuka Pharmaceuticals meanwhile fell apart earlier this year. The coronavirus, the company says, only made matters worse.
“The onset of the COVID-19 pandemic created significant uncertainty in the capital markets and frustrated [Proteus’] efforts,” the filing read, adding that Proteus has held “fruitful discussions” with Otsuka and other parties regarding a potential sale.
Blued: Despite skepticism regarding the IPO of Chinese companies and the grey area LGBTQ rights hold in the middle kingdom, Blued, China’s biggest gay dating app, has filed for an initial public offering in the U.S.—amid Pride month no less. The company posted $107.2 million in revenue for 2019 and losses of $96.6 million. Shunwei Capital (12.3% pre-offering) backs the firm. It plans to list on the Nasdaq as “BLCT.”
China, where Blued’s main business resides, has recently indicated that it may reconsider its stance same-sex marriage, which is currently illegal in the country. Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- GreenLight Biosciences, a Boston-based company using RNA products for agricultural and life sciences applications, raised $102 million in Series D funding. Morningside Ventures led the round and was joined by investors including S2G Ventures, Cormorant Asset Management, Continental Grain Company, Fall Line Capital, Tao Capital Partners, Baird Capital, MLS Capital Fund II, Lewis and Clark AgriFood and Lupa Systems. Read more.
- Pagaya, a New York and Tel Aviv-based fintech using AI in institutional investment, raised $102 million in Series D funding. Aflac Global Ventures, Poalim Capital Markets, Viola, Oak HC/FT, Clal Insurance, GF Investments, and Siam Commercial Bank participated.
- Credo, a San Jose, Calif.-based semiconductor maker, raised $100 million in Series D funding. Funds and accounts managed by BlackRock led the round.
- Outreach, a Seattle-based sales engagement platform, raised $50 million in funding. Sands Capital led the round and was joined by investors including Salesforce Ventures and Operator Collective.
- Uptycs, a Waltham, Mass.-based security analytics company, raised $30 million in Series B funding. Sapphire Ventures led the round, and was joined by investors including Comcast Ventures and ForgePoint Capital.
- Hydrow, a maker of an at-home rower, raised $25 million in Series A-2 financing led by L Catterton.
- Starburst, a Boston-based analytics company, raised $42 million in Series B funding. Coatue led the round and was joined by investors including Index Ventures.
- Onna, a New York and Barcelona-based platform for integrating workplace apps, raised $27 million in Series B funding. Atomico led the round and was joined by investors including Glynn Capital, Dawn Capital, Nauta Capital and Slack Fund.
- Drishti Technologies, a Mountain View, Calif.-based AI-powered video analytics company for factory floors, raised $25 million in Series B funding. Sozo Ventures led the round.
- Proprio, a Seattle-based surgical navigation company, raised $23 million in Series A funding. DCVC led the round, and was joined by investors including Cota Capital. BOLD Capital Partners and Alan Frazier.
- Open Raven, a Los Angeles-based data security platform, raised $15 million in Series A funding. Kleiner Perkins led the round and was joined by investors including Upfront Ventures.
- DroneBase, a German-based aerial data analytics company, raised $7.5 million in Series C funding. Valor Equity Partners and Razi Ventures invested, joining existing investors Union Square Ventures, Upfront Ventures, Hearst Ventures, Pritzker Group Venture Capital, and DJI.
- Dumpling, a Seattle-based platform for businesses to set up grocery shopping and delivery, raised $6.5 million in Series A funding. Forerunner Ventures led the round and was joined by investors including Floodgate and FUEL Capital.
- MyTutor, a U.K.-based platform secondary school tutoring, raised £4 million ($5 million) in investment, led by existing investor Mobeus Equity Partners. This brings MyTutor’s total funding to-date to £14 million.
- careMESH, a Reston, Va.-based patient notification platform, raised $5 million in seed funding. Assurance Capital and Pavey Family Investments led the round.
- CognitOps, an Austin-based warehouse automation startup, raised a $3 million in seed funding. Chicago Ventures led the round and was joined by investors including Schematic Ventures, CEAS Investments, and Churton Ventures.
PRIVATE EQUITY
- Digital.ai, backed by TPG, acquired Numerify, an AI analytics solutions firm, and Experitest, an app testing platform. Financial terms weren't disclosed.
- A consortium of investors led by KKR acquired Vinhomes, a Vietnamese real estate developer. Financial terms weren't disclosed.
- Authentic Brands, Simon Property Group, and Brookfield Property Partners are in talks to buy bankrupt retailer J.C. Penney, per Bloomberg. Read more.
- Accel-KKR invested in PINC, a Union City, Calif.-based provider of supply chain management software. Financial terms weren't disclosed.
OTHERS
- Greensill, acquired Omni, a Latin America-based SME lender. Greensill is backed by SoftBank.
EXITS
- Square acquired Verse, a Spanish peer-to-peer payment app. Verse had raised from investors including Spark Capital, eVentures, and Greycroft Partners.
- Permira completed its acquisition of Carlyle’s majority stake in Golden Goose, a Venice, Italy-based luxury fashion brand. Carlyle retains a minority stake in the business. Financial terms weren't disclosed.
- Accelya, backed by Vista Equity Partners, agreed to acquire Farelogix, a Miami-based provider of SaaS solutions for airline retailing. Sandler Capital Management is the seller. Financial terms weren't disclosed.
F+FS
- Osceola Capital, a lower middle-market private equity firm, raised $125 million for its first fund.
- Rockpoint Group raised $5.8 billion across two funds.
- Corten Capital, an European investment firm founded by two former Warburg Pincus dealmakers, raised 392 million euros ($441 million) for its first technology fund.
- FirstMark Capital, an early stage venture capital firm, raised $650 million across FirstMark V and FirstMark Opportunity Fund III.
- Louis Dreyfus, an agricultural commodities giant, launched a corporate venture capital program. Read more.


fortune--2020-06-17--Target’s $15 minimum wage is now permanent

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Target announced today it will raise its internal minimum wage for hourly workers to $15 an hour in early July, making permanent what had been a temporary raise to compensate workers during the coronavirus pandemic and reaching the wage goal it had set years ago a few months ahead of schedule.
In 2017, Target, which had been looking to improve customer service and hold on to good workers in a tight labor market, said it would boost its minimum wage to $15 by the end of 2020. Amazon hit that level in late 2018, while Walmart’s is currently $11, excluding temporary incentives.
But with a surge in business as shoppers have stocked up on essentials since March when the pandemic hit the U.S. in earnest, Target, like other retailers, boosted its starting pay temporarily from $13 an hour to $15. Improved benefits and pay were designed to entice workers in what have often been difficult and even dangerous conditions in stores and warehouses.
Walmart—which has ramped up staffing by hundreds of thousands of people, many on temporary assignment, to cope with the surge in business—spent $675 million in the first quarter alone on things like bonuses and extra benefits. Some 270,000 of its 1.5 million U.S. employees have taken coronavirus-related leave in recent months. Other retailers, notably Kroger, have ended their so-called hero pay, a $2 an hour raise, as shopping patterns have begun to return to normal. Target, which reported stellar first-quarter sales results, is spending $1 billion more this year on things like wages, paid sick leave, and safety equipment (such as masks) than it did last fiscal year. While the fact that 20.9 million Americans are currently receiving unemployment benefits could suggest retail talent is plentiful, chains like Target rely on motivated employees doing work in stores that is more complex than that of even just a few years ago in part because of the integration of e-commerce. Prior to the pandemic, Walmart and Target had been gradually improving compensation for hourly workers to lift motivation and the quality of customer service. Both chains have been among retail’s best performers in recent years.


fortune--2020-06-17--Netflix CEO and his wife give $120 million to HBCUs

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Netflix CEO Reed Hastings and his wife, philanthropist Patty Quillin, announced today that they have made a personal donation of $120 million to fund scholarships at historically black colleges and universities, known as HBCUs.
“Both of us had the privilege of a great education, and we want to help more students—in particular students of color—get the same start in life,” they said in a statement.
It’s also a call to action: “Generally, white capital flows to predominantly white institutions, perpetuating capital isolation. We hope this additional $120 million donation will help more black students follow their dreams and also encourage more people to support these institutions—helping to reverse generations of inequity in our country.”
The donation will be distributed three ways, with $40 million each given to the UNCF (United Negro College Fund), Spelman College, and Morehouse College, institutions they’ve supported in the past. Hastings and Quillin have also previously visited the Morehouse and Spelman campuses.
The high-profile donation comes at a time when major employers are grappling with a national reckoning on systemic racism and a widespread failure to diversify their workforces. Advocates hope the donation will prove a much-needed boost at a critical time.
“HBCUs produce an unmatched level of black talent—some 40% of all [black] engineers and 80% of all [black] doctors and dentists come from these schools,” says Jonathan Speed, a Bay Area–based adviser and higher-education policy expert, who has been surveying, advising, and mentoring HBCU students and tech entrepreneurs for more than a decade.
The $120 million gift is unprecedented, but Speed believes the attention around the donation may be just as valuable. “Tech companies pay lip service to the idea of recruiting from these schools but haven’t followed through,” he says. “Reed’s donation not only fuels the necessary and critical mission of HBCUs, but draws attention to the fact that tens of thousands of dynamic, innovative, and intelligent college graduates are ready and able to join the workforce.”
HBCUs lag in overall financial support, which the pair hope to reverse. The median endowment across all of the country’s HBCUs is $15.7 million compared with $36.8 million for predominantly white institutions (PWIs). No HBCU endowment ranks in the top 100.
“This gift from Patty and Reed comes from two people who care deeply about education, equity, and the future of our country,” Spelman College president Mary Schmidt Campbell said in a statement. Among other distinctions, Spelman produces more black female Ph.D.s in STEM fields than any other school in the country. “We are enormously grateful for their affirmation of the work of Spelman College.”


fortune--2020-06-17--Eiffel Tower to reopen after longest closure since WWII

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Workers are preparing the Eiffel Tower for reopening next week, after the coronavirus pandemic led to the iconic Paris landmark’s longest closure since World War II.
France’s tourism industry is opening back up, but the 324-meter (1,063-feet) tall wrought-iron tower won’t immediately welcome visitors the way it did before the country went into lockdown in March.
Only limited numbers of people will be allowed in when the Eiffel Tower opens again on June 25. Elevators to the top will be out of service, at least at first, and only the first and second floors will be accessible to the public.
“At first, only visits by the stairs will be available,” Victoria Klahr, the spokeswoman for the tower’s management, said Tuesday.
Everyone over 11 years old will be required to wear face masks, and crowd control measures will be in place.
“We are optimistic that visitor numbers will pick up, even if it will likely be local tourists who visit the monument in the first weeks,” Klahr said.
The tower’s director told The Associated Press on Tuesday that he hopes access will be back to normal by August.
A stringent cleaning operation is in place and will continue daily from next week.
“There is a new protocol,” said Eiffel Tower hygiene consultant Alain Miralles. “The day cleaning teams will be able to clean all the points of contact every two hours, from the opening of the site to its closing,”
Tourists planning trips to the City of Light are advised to book tickets to visit the Eiffel Tower online once the ticket office reopens Thursday.
Paris tourism officials have expressed muted optimism about the city’s reemergence as a travel destination. Since confinement measures were imposed in March, tourism levels have dropped by around 80% compared to the same month in previous years, they say.
“To visit Paris now is quite exceptional, as we of course don’t have many visitors and we don’t expect this summer to be at the same level as previous ones,” Corinne Menegaux, the director of Paris’s businesses and tourism office, told The AP.
Hotel owners are also keen to welcome visitors again, if realistic about the challenges ahead – and the competition among European countries to draw tourists back in the coronavirus era.
“Everyone is Europe is looking to draw the European clientele. The Italians want to bring in the French, the Germans want to attract the Danes,” said Serge Cachan, president of France’s Astotel Group. He pointed out the plexiglass protections in the reception area of one of his hotels and arrows to ensure social distancing.
He welcomed the French president’s decision Sunday to let Paris restaurants reopen earlier than planned. “Without restaurants, there is no conviviality, there is no tourism, there are no clients in hotels,” he said in an interview.
“The message I would like to on-pass to the city of Paris is: Hurry and open up all of the tourist attractions and activities.”


fortune--2020-06-17--‘Bitcoin for Boomers’ startup River Financial raises $5.7M

There are plenty of places to buy Bitcoin, so it’s not obvious why the world needs another one. But a startup called River Financial sees a niche: a Bitcoin service that operates like a conventional bank and caters to those over 55.
Launched last fall, River is the brainchild of Alex Leishman, a former aerospace engineer who became intrigued with Bitcoin in 2013, and was a teaching assistant for Stanford University’s first cryptocurrency class.
According to Leishman, well-known Bitcoin sellers like Coinbase and Grayscale cater to those with a trading mentality, and don’t provide the sort of customer service that investors—particularly older and wealthy ones—expect.
At River, he says, those looking to buy Bitcoin enjoy the sort of service they would get at a bank, including staff who return their phone calls. Leishman adds that River eschews exotic cryptocurrencies and trading options to focus instead on traditional banking products: joint accounts for married couples, IRAs, tax-advantaged accounts and so on.
River’s niche, which Leishman refers to tongue-in-cheek as “Bitcoin for Boomers,” appears to be gaining some traction. The startup has several thousand customers, many of them high-net-worth individuals, and claims it has been growing 80% every month since January—with 77% of that growth coming from those 55 or older. Leishman says many of these individuals want to acquire Bitcoin as a way to diversity from stocks and bonds, and because its supply is limited.
On Wednesday, River announced it had raised a $5.7 million seed funding round from crypto investment firms, including Polychain Capital, Slow Ventures, and Castle Island Ventures. The startup also announced the launch of its Private Client offering, which is tailored to family offices and high-net-worth individuals and enables clients to place Bitcoin orders of up to $250 million.
Leishman says River, which now has licenses to operate in 19 states, obtains its Bitcoin from a variety of sources and stores clients’ funds offline in a “2,000-pound military vault.” In the coming year, he says, River plans to offers standard checking and savings accounts in partnership with a chartered bank.
River’s advisers include two prominent individuals in the Bitcoin world, Elizabeth Stark of Lightning Labs and Steve Lee of Square Crypto.
Order fees top out at 1.5%, and the company doesn’t charge a fee to store customers’ Bitcoin. So far, says Leishman, his customers have been treating the service like a savings bank with deposits—in the form of Bitcoin purchases—accounting for 97% of transactions.
An earlier version of this story incorrectly described River Financial’s $5.7 million funding round as a Series A, not a seed round.
More must-read finance coverage from Fortune:


fortune--2020-06-17--What an old GM dress code says about Mary Barra’s leadership style

Good morning, Broadsheet readers! Morgan Stanley’s former global head of diversity is suing the bank, almost of half of black women in the U.S. say work is where they’re most likely to face racism, and we get a closer look at Mary Barra’s leadership style. Have a productive Wednesday.
– The mind of Mary Barra. If you’re looking for some insight into what makes GM CEO Mary Barra tick, I’d recommend a nugget tucked halfway into Fortune‘s latest Leadership Next podcast.
It comes up in a conversation between our colleagues Ellen McGirt and Geoff Colvin. Geoff, who’s covered Barra and GM for years, tells Ellen about an incident early in Barra’s career, when she was tasked with leading the auto giant’s human resources. When she stepped into the role, she discovered that GM had a 10-page dress code. Well, Barra knew that was “ridiculous,” says Geoff. “She quickly replaced it with a two-word dress code, ‘dress appropriately.'”
That straightforward, no-nonsense approach to leading the company through problems big and small has come to characterize Barra’s run as CEO. And it’s on display in her response to the killing of George Floyd, which Ellen asks her about on the podcast.
Barra talks about the letter she wrote to her company, in which she says she is “both impatient and disgusted by the fact that as a nation, we seem to be placated by the passive discussion of ‘why’… Let’s stop asking ‘why’ and start asking ‘what.’ What are we going to do?”
One of the first steps in answering that question: The company has created an “inclusion advisory board” to guide its actions, with the aim of making GM “the most inclusive company in the world.”
An aim and a board are not an answer—but they are a starting point. To hear more about Barra’s plans, listen to the full podcast here.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
ALSO IN THE HEADLINES
-She's suing. Marilyn Booker spent 26 years at Morgan Stanley, first as global head of diversity and later in wealth management, before being fired in December. She is now suing the bank for racial discrimination and retaliation; according the NYT, "she believes she was fired because she pushed too hard to get senior executives in that division to embrace her plan to restructure a program for training black financial advisers." She tells the Times: “My story is the same story as those of many black people on Wall Street. Our fate has been tied to the goodness of whatever white person is in charge.” (A spokesman for the bank says it rejects Booker's allegations.) New York Times
-A safe pick? President Trump has nominated Nancy Beck to lead the Consumer Product Safety Commission, which is responsible for reviewing safety information and collecting injury reports for a massive range of consumer products. But NPR reports that some scientists and public health experts are pushing back, saying that Beck, who currently leads chemical and pesticide regulation at the EPA, "has not adequately protected the public from toxic chemicals and pollution over the course of her career." NPR
- Step in the right direction. In the wake of the police killing of Rayshard Brooks, Atlanta Mayor Keisha Lance Bottoms has announced new rules for officers' use of force. Among the reforms: Deescalation techniques will be required before the use of deadly force, and officers will be “duty bound to intercede” when they see other officers employing excessive applications of force. (One might wonder why such rules weren't already in place.) New York Times
- Racism at work. A new Essence poll of black women in America finds that nearly half of respondents report that the workplace is where they most frequently experience racism. Forty-five percent of black women said they have faced racism while applying to a job and 44% while being considered for a promotion or for equal pay. Essence
MOVERS AND SHAKERS: Apple diversity chief Christie Smith is leaving the company. Her exit comes as tech firms reckon with racism, though Apple says her departure was planned months ago. Laura Chambers, formerly of Airbnb, has been named CEO of breast pump maker Willow.
IN CASE YOU MISSED IT
- RIP, Nur Omar Mohamed. Rep. Ilhan Omar's father has died due to complications from the coronavirus. Omar was raised by her father and grandfather after her mother died when she was an infant; she and her dad came to the U.S. as refugees from Somalia's civil war in 1995. Politico
- Simone Biles, plaintiff. Simone Biles, the U.S.'s most decorated gymnast, identified herself on Monday as a plaintiff in an ongoing civil case involving USA Gymnastics and the United States Olympic and Paralympic Committee. In signing onto the case, Biles joins 140 other victims of former team doctor Larry Nassar, including Aly Raisman, McKayla Maroney, Kyla Ross, Jordyn Wieber and Jamie Dantzscher. Still actively competing and training for the 2021 Tokyo Games, Biles is in the unique position of suing the same bodies that sanction her sport. ESPN
- Know her name. Sarah Hegazi, who is a lesbian, was one of dozens of Egyptians arrested for waving rainbow flags at a Cairo music festival in 2017. (Homosexuality is not technically illegal in Egypt, but police often use the country's anti-"debauchery" laws to prosecute gay people.) The arrest set off a downward spiral in Hegazi's life, ultimately leading to her suicide last week. New York Times
ON MY RADAR
The subtle significance of Nadiya’s Time to Eat The Ringer
Melinda Gates and MacKenzie Bezos unveil $30M gender equality initiative Geek Wire
7 months pregnant and furloughed The Cut
PARTING WORDS
"This has to be more than about just wearing a T-shirt. It’s about, how can we create real change this time, real change that actually sticks."
-WNBA MVP Breanna Stewart, on going beyond posturing to change systematic racism


fortune--2020-06-17--As Chinese state-backed firms eye overseas acquisitions, Europe considers new ways to block them

The European Union may develop a new tool to stop companies—particularly those backed by foreign countries—swooping in to scoop up European firms.
Foreign investment rules are currently being tightened in the U.S. In the EU, countries such as France, Spain, and Italy are contemplating doing the same to protect their strategic assets in an ever-expanding field of sectors, these days including health care.
The defensive actions come as Chinese corporations—many of which enjoy state backing—are reported to be eyeing bargains in Europe.
On Wednesday, the European Commission floated giving itself the power to review large acquisitions of EU companies, in cases where the prospective buyer gets financial support from a foreign government. If it turns out that a deal is likely to distort the EU’s single market, the commission would be able to force concessions or even, as a last resort, block the deal entirely.
The proposal is one option laid out in a new white paper about the distortive effects of foreign subsidies in the EU’s internal market. The EU has strict laws to stop its member states distorting the market through state subsidies, but it doesn’t currently have legislation that addresses the problem when outside countries are doing the same.
“We need the right tools to ensure that foreign subsidies do not distort our market, just as we do with national subsidies,” said Margrethe Vestager, the bloc’s competition commissioner. “Today’s white paper launches an important discussion on how to address effects caused by foreign subsidies. The [EU] single market is key to Europe’s prosperity, and it only works well if there is a level playing field.”
Wednesday’s discussion document sets out three options, which are not necessarily mutually exclusive. Apart from the option that would more strictly police the outside acquisition of EU companies, the other two address state-subsidized foreign companies that operate in the EU (which might have to change their behavior if they are distorting the EU single market) and the issue of foreign subsidies allowing companies to undercut their European rivals in public procurement.
“The definition of financial contribution is broad, and may cover loans, guarantees, capital injections, preferential tax treatment, tax credits, grants and debt forgiveness, amongst others. The contribution need not directly relate to the acquisition either,” said Neil Cuninghame, a competition lawyer at Ashurst, in an emailed statement. “Given that the similar process of establishing whether state aid has been provided by EU member states is often not straightforward, establishing whether distorting contributions have been given by foreign governments can be expected to be even more fraught.”
The proposals come just a couple of days after the EU took the unprecedented step of ruling that two Egyptian exporters had illegally used subsidies from the Chinese government to undercut European glass-fiber fabrics producers.
The commission signaled its desire to rein in state-subsidized foreign companies back in March, when it announced its new industrial strategy. At the time, it said the white paper would be followed up by a formal proposal for new legislation next year. The ideas published Wednesday are open for public consultation until Sept. 23.
At the same time, the EU is trying to get the World Trade Organization (WTO) to expand its list of prohibited industrial subsidies.
Chinese investment in the EU has been falling in the past few years, as it has elsewhere. Analysts say this is partly thanks to Beijing increasingly pushing back against the practice, and partly because of the increased scrutiny deals have been receiving.
However, the coronavirus pandemic has hit share prices around the world, making for some bargains—particularly in the tech sector. The development prompted EU antitrust chief Vestager (who is also in charge of digital policy) to suggest in April that EU countries take stakes in their top companies to prevent Chinese takeovers.
Vestager’s boss, European Commission President Ursula von der Leyen, has, since taking office last year, placed a lot of emphasis on Europe’s “strategic autonomy,” which many interpret as code for protectionism.
Repeatedly asked about China at a press conference on Wednesday, Vestager said there is “no specific country” that the commission is thinking of, as it proposes its new rules. Internal Market Commissioner Thierry Breton noted that there are also concerns with the subsidies given to some Middle Eastern companies.
“We’re also sending a clear message to the rest of the world: ‘You are welcome, but these are our rules,’” Breton said.
This article was updated to include the Cuninghame quote.