fortune--2020-12-21--The U.K. is facing a Christmas food crisis, as France closes border to trucks over mutant COVID-19 s

The U.K. is facing a Christmas food crisis, as France closes border to trucks over mutant COVID-19 strain

The U.K. is facing the threat of critical food shortages, including for fresh fruit and vegetables, just days before Christmas, as European countries impose bans on transit from the country in response to the discovery of a mutant strain of coronavirus in southern England.
The French government imposed a 48-hour ban on both people and trucks coming into the country from the U.K., starting today. The decision is likely to cripple U.K. trade with the rest of Europe, much of which crosses between Calais, in France, and Dover, in England.
The potential food shortages are a grim irony for a country that had been racing to meet a December 31 deadline to secure a trade deal with the European Union that was meant to prevent exactly such a prospect.
The English Channel crossing between Dover and Calais handles up to 10,000 trucks per day, 90% of all truck traffic entering the country. About half of all British imports cross that border. In addition, about 50% of the food Britons consume—and up to 85% of the fresh fruit and vegetables the country eats—come from the EU, much of it shipped by trucks which cross the English Channel on ferries or the Eurotunnel train from France.
While there is no ban on these trucks arriving in Britain, many freight haulers are reluctant to send drivers to the U.K. without the certainty of knowing they will be able to make the return crossing back to mainland Europe.
British Prime Minister Boris Johnson on Monday was planning to hold emergency talks with his government ministers on how to ensure the continued flow of freight into the country. Meanwhile, European Union officials were holding a crisis committee meeting to coordinate response to the new mutant coronavirus variant.
In addition to France, Austria, Belgium, Finland, Germany, Ireland, Italy, and the Netherlands have all blocked U.K. arrivals. Further afield, Israel turned back visitors arriving from the U.K. and Hong Kong banned flights from Britain in response to the new mutant strain.
The new variant of SARS-CoV-2, the virus that causes Covid-19, has emerged in southern England in recent weeks. British government scientists said on Saturday that tests had shown the new strain was 70% more transmissible than the original virus. But they said there was no evidence so far that the new variant was more likely to cause serious illness or that the current crop of Covid-19 vaccines being rolled out across the world would not protect against it.
The imposition of travel bans on British citizens seems to have largely been the result of the Johnson government’s own sudden decision on Saturday to impose stringent restrictions on movement, socializing and business for large parts of southern England, where the new strain is most prevalent. That move was a sharp U-turn for Johnson, who had imposed a national lockdown in November in an effort to stem a huge spike in infections, centered largely in the north of England, and had been planning to relax social distancing measures over the Christmas holidays.
Parts of the U.K. government seem to have been aware of the new strain for some time. British labs first detected in early October in a sample taken from someone in late September. But concern about the mutant strain seems to have been subdued until the U.K. began experiencing a massive second wave of Covid-19 infections in October and November. With new cases totaling more than 25,000 people per day by early December, scientists realized that the new strain was now responsible for a large number of these—accounting for the majority of new cases in London and eastern England and about half of those in southeast England.
Matt Hancock, the U.K. health minister, first mentioned the new strain publicly in a speech to Parliament on December 14. He said at the time that the World Health Organization had been notified about the new variant. But Hancock said that it was not until Friday that he and Johnson and a wider group of ministers were fully briefed on the alarming figures about the increased transmissibility of the new strain by an expert advisory group that works on new and emerging respiratory virus threats.
The new travel bans also comes at a critical moment in negotiations between the U.K. and the EU on an agreement to govern their trading relationship after December 31, when a one-year Brexit transition period expires. Despite years of talks, negotiators have so far failed to reach a deal—and missed another deadline for reaching one on Sunday as disagreements between the two side remained on issues such as fishing rights.
Without a deal in place, the U.K. will likely face chaos along the Dover-Calais trucking route, with new paperwork and customs checks likely leading to miles-long tailbacks on both sides of the English Channel, and warnings these delays could lead to food shortages. As a result, many retailers and grocers have been attempting to stockpile supplies in advance of January 1 and the road approaches to the Channel crossings have already been congested for weeks due to the additional truck traffic.


fortune--2020-12-21--Tesla shares fall 4.5% ahead of first day in the S&P 500

Tesla ’ s addition to the S & P 500 on Monday could be a shock for these big name @

Tesla Inc. shares fell 4.5% in premarket trading on Monday as the electric vehicle maker marks its trading debut on the S&P 500 Index.
Its shares have catapulted 731% this year in anticipation of the historic inclusion, making it the biggest company ever to be added to the benchmark. The EV pioneer will also be joining the S&P 100, replacing oil and gas firm Occidental Petroleum Corp., which fell 7.5% premarket.
“Welcome to the S&P 500 Club,” said Wedbush analyst Daniel Ives in a report. The index addition marks a “defining chapter of success” for the company he said.
Futures contracts on the S&P 500 were trading down 0.5%, following European stocks lower after several major countries moved to suspend travel from the U.K. amid concerns about a new strain of Covid-19.
Traders who spent most of the year pushing up shares of Tesla in anticipation of surging demand from index funds saw its climax Friday, as frantic purchases by passive managers drove the shares up almost 5% as exchanges closed. At the end of the day, Tesla shares closed at an all-time high. More than $150 billion worth of Tesla shares traded on Friday, ahead of the index inclusion.
“There is strong precedence for positive returns for stocks prior to S&P 500 inclusion and post announcement, but very limited precedent for near term out performance post inclusion,” Sanford C. Bernstein analyst Toni Sacconaghi wrote in a note earlier this month.
Market strategists have been divided on how the addition of the famously volatile stock would impact the benchmark gauge. According to Susquehanna quantitative derivative strategist Souhow Yao, the inclusion will have a limited impact on implied volatility, and that if Tesla was added a month ago, volatility for the S&P 500 would have actually decreased.
On the other hand, Interactive Brokers’ Chief Strategist Steve Sosnick said Tesla’s historic volatility suggests daily moves of about 4% up or down, and at its current market value can end up budging the index by about 2 points.
–With assistance from Beth Mellor.


fortune--2020-12-21--Faced with massive suspected Russian cyber-attack on the U.S. government, Trump blames China

President Donald Trump downplayed the severity of a massive cyber-attack on the U.S. government and suggested China may have been responsible — even as other U.S. officials are convinced Russia was the perpetrator.
In doing so Saturday on Twitter, the president contradicted assessments from senior officials within his own administration who’ve blamed Moscow for the intrusion of at least half a dozen federal agencies — including comments Friday night from Secretary of State Michael Pompeo.
Marco Rubio of Florida, acting chairman of the Senate Intelligence Committee, rejected Trump’s conclusion, calling the hack “the gravest cyber intrusion in our history,” and one conducted by “Russian intelligence.”
Trump, though, in his first public comments on the hack initially reported on Dec. 13, said the incident was “far greater in the Fake News Media than in actuality.”
Bloomberg News reported Saturday that at least 200 organizations, including government agencies and companies around the world, have been hacked as part of the suspected Russian cyber-attack.
“I have been fully briefed and everything is well under control. Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of discussing the possibility that it may be China (it may!)”
The Cyber Hack is far greater in the Fake News Media than in actuality. I have been fully briefed and everything is well under control. Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of….— Donald J. Trump (@realDonaldTrump) December 19, 2020
Trump went on to suggest without evidence that there may also have been a “hit” on the nation’s voting machines, in his latest bid to cast doubt on his loss in November’s presidential election.
Representative Adam Schiff, a Democrat and chairman of the House Intelligence Committee, tweeted that Trump’s comment was a “scandalous betrayal of our national security” that “sounds like it could have been written in the Kremlin.”
The Chinese government also rejected the accusation, with a spokesman calling it “not serious and self-contradicting.”
“U.S. allegations against China have always been a farce made out of political motives in order to smear and denigrate China,” Foreign Ministry spokesman Wang Wenbin said Monday in Beijing. “Such behavior and words are totally inconsistent with the U.S. standing as a major country.”
The president tagged Pompeo and Director of National Intelligence John Ratcliffe in his tweet, underscoring his intention to contradict the assessment of administration officials who’ve blamed Russia for the intrusion.
Pompeo on Friday described the hack as “a very significant effort” and said the U.S. could “say pretty clearly that it was the Russians engaged in this activity.”
“There was a significant effort to use a piece of third-party software to essentially embed code inside of U.S. government systems, and it now appears systems of private companies and companies and governments across the world as well,” Pompeo told radio host Mark Levin.
John Ullyot, spokesman for the White House’s National Security Council, said in a statement that the council “is focused on investigating the circumstances surrounding this incident, and working with our interagency partners to mitigate the situation.” He didn’t name the suspected perpetrator.
The Office of the Director of National Intelligence, led by Trump ally Ratcliffe, also issued a statement on Wednesday describing the incident as “significant.”
“This is a developing situation, and while we continue to work to understand the full extent of this campaign, we know this compromise has affected networks within the federal government,” the DNI said in the statement.
A wider range of government agencies and large corporations have been impacted by the hack, which installed what is known as a backdoor in widely used software from Texas-based SolarWinds Corp. that allowed hackers access to computer networks.
U.S. government agencies known to have been targeted included the State, Treasury, Homeland Security, Energy and Commerce departments. Microsoft Corp. said it had identified more than 40 customers targeted by the hackers.
President-elect Joe Biden on Thursday released a statement saying he would not “sit idly by” in response to the attack.
“I want to be clear: My administration will make cybersecurity a top priority at every level of government — and we will make dealing with this breach a top priority from the moment we take office,” Biden said.(Updates with Chinese response from ninth paragraph.)
–With assistance from Colum Murphy.


fortune--2020-12-21--Denmark to exhume bodies of COVID-19 infected mink over contamination risk

Denmark will dig up millions of dead mink after a hasty cull and burial intended to stamp out a coronavirus mutation ended with the rotting carcasses triggering a new contamination risk.
The exhumation of about 4 million mink will take place in May, with a six-month waiting period deemed sufficient to ensure the bodies will be free of the virus and safe to handle. Once dug up, the mink will be incinerated as corporate waste. Health authorities said keeping the animals buried poses “no immediate pollution risk in regards to lakes, streams as well as drinking water.”
The government is trying to bring to a close a chapter that forced a Cabinet minister to resign and ended Denmark’s reputation as a country that had fought off the pandemic more ably than most.
Prime Minister Mette Frederiksen has had to defend her role in the debacle, after it emerged she didn’t initially have the legal mandate to demand a full cull of Denmark’s roughly 15.4 million mink. The rushed and messy process that followed drew harsh criticism from parliament and the country’s mink industry, which just a few months ago had been the world’s largest.
But Frederiksen has repeated her initial warning that her government’s decision to demand that all Danish mink be culled was appropriate. The country’s top epidemiologist warned at the time that the animals were highly efficient at spreading the coronavirus, and Frederiksen said Danish scientists were worried that the mutation found in the country’s mink could derail vaccine efforts.
The Mink Risk
There are a number of other countries that produce mink and that have detected coronavirus strains in the animals, namely Italy, Spain, the Netherlands, Sweden and the U.S. None has so far taken the same drastic steps as Denmark.
In early November, the World Health Organization said the coronavirus mutation found in Denmark “highlights the important role that farmed mink populations can play in the ongoing transmission of SARS-CoV-2 and the critical role of strong surveillance, sampling and sequencing SARS-CoV-2, especially around areas where such animal reservoirs are identified.”
The organization said then it advises “all countries to enhance surveillance for Covid-19 at the animal-human interface where susceptible animal reservoirs are identified, including mink farms.”
In a separate development, Denmark on Monday joined other European countries in imposing a 48-hour ban on arrivals from the U.K., where a rapidly-spreading mutation of the virus has been detected among humans. Danish health authorities say nine cases of Britain’s mutated strain have been recorded in Denmark.


fortune--2020-12-21--14 of the biggest bankruptcies of 2020—and who might be next in 2021

One industry after another saw activity grind to a near halt in March as the pandemic broke out in the United States. Retailers contended with stores closed for weeks and shoppers too shellshocked to spend on anything but essentials; energy companies faced big declines in demand and, by extension, prices; health care companies dealt with the sector’s shift toward addressing COVID and away from more standard care—and the list goes on.
The result has been 610 bankruptcies as of Dec. 13, according to S&P Global Market Intelligence. That statistic is the highest it’s since 2012, according to the ratings agency and compares to 552 bankruptcies over the same period last year. (S&P tracks companies, private or publicly traded, with debt traded on the markets.)
Few sectors were spared by the pandemic-fueled recession, judging by the roster of 2020 bankruptcies. That list includes retailers such as J.C. Penney, Neiman Marcus, and J.Crew, car rental giant Hertz, mall operator CBL & Associates Properties, Internet provider Frontier Communications, oilfield services provider Superior Energy Services, and hospital operator Quorum Health.
The wave of bankruptcies was particularly brutal for department stores, clothing companies, and other retailers selling nonessential goods. Consumers gravitated to big-box stores where they could do all their shopping under one roof, and they focused on things like food and home improvements. About 20% of the bankruptcy filings were by nonessential retailers, according to S&P—far more than any other category.
Even as the rollout of vaccines begins in the United States, giving people a much needed morale boost, 2021 will still be a tough one for U.S. companies overall.
Retail, in particular, is likely in for additional pain. As November’s soft consumer spending numbers show, Americans are quick to hold back in the absence of support for the millions without work, or in the presence of new restrictions. And mass vaccinations, which may alleviate the situation, are still months away.
The ratings agencies are keeping a close eye on companies they consider distressed to see how they fare in 2021. On the retail side, that means businesses such as Jo-Ann Stores, Rite-Aid, Party City, and Belk; in the restaurant sector, they include Potbelly and Noodles & Co.
The agency expects overall profits to be up in 2021 since retailers won’t have to invest as much in things like plexiglass dividers, curbside pickup areas, and other such items. But companies that were struggling before the pandemic, and somehow slogged through 2020, are very far from being out of the woods.
“You’re going to see some weaker players fall off,” Moody’s vice president Mickey Chadha tells Fortune.
Here are some of the most notable 2020 bankruptcy filings across different industries, with size of liabilities at the time of a company’s Chapter 11 petition:


fortune--2020-12-22--Jupiter and Saturn ‘great conjunction’ awes world. Here’s how to see it

Ripple says it will be sued by the SEC , in what the company calls a parting shot at the @ @

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Tonight’s the night: Saturn and Jupiter will appear closer in the night sky than they have in centuries, in an astronomical event called a conjunction.
The gas giants, the solar system’s two largest planets, will appear only 0.1 degree apart overhead on Monday. They’ll move slightly farther from each other during the rest of this week, but remain unusually close.
In the northern hemisphere, the duo can be seen shining brightly in the southwestern sky soon after sunset. In the southern hemisphere, they’ll glow in the western sky.
In reality, the planets are separated by 456 million miles of space. Jupiter, the more massive of the two, is about 550 million miles from Earth, and Saturn is roughly 1 billion miles away.
“Jupiter comes around every 20 years or so and catches up with and passes Saturn. That’s when we have one of these conjunctions,” says Jeffrey Cuzzi, a research scientist at NASA’s Ames Research Center in Mountain View, Calif.
Such conjunctions recur every two decades owing to their orbital periods. Cuzzi says that “even after December 21st, you can watch the planets start to move away, which is kind of fun, because normally you don’t notice the motion of the planets in the sky.”
The Great Conjunction of Jupiter and Saturn.
(with the Galilean Moons of Jupiter)#jupitersaturnconjunction #thegreatconjunction
Shot on Canon Eos 200D at 250mm pic.twitter.com/DAHqlOScSn — Meer Husamuddin (@HusamuddinMeer) December 21, 2020
Here it is! The great conjunction as seen from Charlottesville just as clouds rolled in. Got some sunset light in there too – Pretty awesome event to see. #GreatConjunction pic.twitter.com/dCiCKnjs15 — Peter Forister ❄☃❄ (@forecaster25) December 21, 2020
Planetary wanderlust
The last time Jupiter and Saturn crossed paths this closely was in 1623. The event wasn’t visible because the planetary passing occurred during daylight hours.
The world was quite different at that time. Three years earlier, the Pilgrims had disembarked at Plymouth Rock. Galileo Galilei, the famed Italian astronomer, had discovered Jupiter’s satellites just 13 years earlier.
People can pay homage to Galileo by observing this conjunction with a pair of binoculars, if not a telescope. The optics in a pair of binocs are “probably about as good” as the telescope Galileo used to discover Jupiter’s moons, Cuzzi says.
Before the 1623 conjunction, the next best one—which was viewable, occurring at night—happened in 1226. At that time, the Mongolian conqueror Genghis Khan was leading his army on a warpath across Asia.
Nice night for a planetary conjunction! Here’s my iPhone shot of the #GreatConjunction: bright Jupiter in the middle of the photo and slightly dimmer Saturn just above and to the right of it, almost touching! pic.twitter.com/Wa67PByNWI — Katie Mack (@AstroKatie) December 21, 2020
Planets passing in the night
It’s speculated that an earlier conjunction could have been the historical basis for the “Christmas star,” also known as “the star of Bethlehem,” in Christian mythology. In the New Testament’s Gospel of Matthew, three wise men, or Magi, are guided to the site of the Nativity by the star.
“There was a conjunction in 7 BC, kind of like this one, and there was another one with Jupiter and Venus in 2 or 3 BC,” Cuzzi notes. “These things were happening then, and it’s possible that they could have inspired a lot of these stories.”
People can appreciate conjunctions not just for the historical perspective but the scientific one, too. Planets like Jupiter and Saturn are “good examples of the hundreds and hundreds of planets we are now discovering around other stars in our galaxy,” Cuzzi says, referring to the recent explosion of activity in so-called exoplanet hunting.
“We learn about these planets by studying our own,” Cuzzi says.


fortune--2020-12-22--Ripple says it will be sued by the SEC, in what the company calls a parting shot at the crypto indus

Ripple says it will be sued by the SEC, in what the company calls a parting shot at the crypto industry

Ripple, one of the most important companies in the cryptocurrency industry, said Monday evening that the Securities and Exchange Commission is poised to file a bombshell lawsuit against the company over the alleged sale of unlicensed securities.
The lawsuit also names Ripple CEO Brad Garlinghouse and cofounder Chris Larsen as defendants. On Tuesday afternoon, the SEC filed the suit in question, claiming the company and executives sold $1.3 billion worth of unregistered securities.
The action will follow years of debate between the company and the agency about whether XRP, a digital currency associated with Ripple, is a security, like a share of stock—which must be registered with the agency—or is instead a currency and thus beyond the SEC’s purview. XRP is the third most valuable cryptocurrency, and currently has a market cap of $23 billion.
Ripple’s decision to announce it was about to be sued was an unusual one. Garlinghouse has predicted the incoming Biden administration may be friendlier to the cryptocurrency industry than the Trump administration has been, suggesting that Ripple’s preemptive announcement may have a political component.
Garlinghouse also blasted the SEC’s decision to sue right before the holidays, and said Ripple will fight the case. “It’s not just Grinch-worthy, it’s shocking,” said Garlinghouse. “It’s an attack on the entire crypto industry and American innovation.”
A security, or not?
In recent years, the SEC has ruled that the two most valuable cryptocurrencies—Bitcoin and Ethereum—are not securities, partly on the grounds they are decentralized with no person or company in control of them.
XRP is different from Bitcoin and Ethereum in that the latter two currencies are minted in a gradual, ongoing process called mining. By contrast, Larsen and others created 100 billion units of XRP in one fell swoop in 2012 for a company called Ripple Labs. While Ripple continues to own the lion’s share of XRP, the bulk of its treasury is held in reserve, to be sold in scheduled allotments. Garlinghouse and Larsen also each own a significant amount of XRP. This arrangement has led some observers to view XRP as more akin to a company’s stock than a currency.
Ripple has pushed back aggressively for years on the notion that XRP is a security. The company notes it does not have discretion to tap the reserve funds as it wishes, and that XRP has become increasingly decentralized as banks and other merchants use it as a bridge currency in cross-border transactions. According to Garlinghouse, the SEC regarding XRP as a security controlled by Ripple is akin to viewing oil as a security controlled by Exxon.
Now, the issue could be resolved by a federal judge, in a case that would have implications for the booming cryptocurrency industry. The SEC recently won a case involving the messaging app Kik, which issued cryptocurrency tokens to its customers. A judge in that case declared the tokens in question were unlicensed securities.
The facts of the Kik case, however, are different from those involving Ripple: Kik sold its tokens directly to would-be investors at the height of the crypto bubble of 2017, in seeming defiance of an SEC directive earlier that year. In contrast, Ripple began pursuing business ideas around XRP nearly eight years ago, at a time when the agency had offered no guidance on digital tokens.
The upshot is that the outcome of a theoretical Ripple case is far from certain.
In remarks to Fortune, the Ripple CEO blasted the agency and its chairman, Jay Clayton, for deciding to sue at a time when Clayton and other senior SEC officials are departing as part of the presidential transition. “Clayton did this with one foot out the door. Rather shamefully, he has decided to sue Ripple, and leave the legal work to the next chairman,” Garlinghouse said.
The legal dustup comes months after Larsen and other Ripple executives have suggested the company may relocate its headquarters outside the U.S. in response to what they declare is overbearing behavior by regulators. Garlinghouse said on Monday that it was “confounding” that the SEC would decide to sue even as countries like Singapore, Switzerland, and Japan have declined to treat XRP as a security.
Garlinghouse also struck a nationalist note, noting that the bulk of Bitcoin and Ethereum is created in communist China, while Ripple is an American company.
The SEC is not the only regulator to draw the ire of U.S. cryptocurrency entrepreneurs. Over the past week, the Treasury Department has proposed a rule that would require banks and exchanges like Coinbase to verify the identity of so-called unhosted devices and software wallets that can transact in Bitcoin and other cryptocurrencies. Critics say the move could stifle the emerging industry known as “decentralized finance” and complain that the 15-day comment period for the proposed rule—which will span the holidays—is too short.
Garlinghouse characterized that Treasury decision and the SEC lawsuit as parting shots by Trump administration officials who are implacably hostile to crypto. He predicted that the industry may find more favor with the incoming Biden administration.
In the meantime, he says Ripple is preparing to litigate.
“I think we have to stand up for all of crypto—and not let the SEC bully the entire industry,” said Garlinghouse, adding, “We’re going to be on the right side of history.”
This story was updated on December 21 to reflect the SEC has filed the lawsuit.


fortune--2020-12-21--Apple’s self-driving car is just a few years from reality, report says

Apple plans to build a self-driving car for consumers and is targeting 2024 to produce the vehicle, Reuters reported on Monday.
The company is developing its own battery technology that could reduce the cost of power packs and extend the vehicle’s range, Reuters said, citing unidentified people familiar with the matter. An Apple spokesman declined to comment.
Apple is tapping outside partners for elements of the system, including lidar sensors that provide autonomous cars with a real-time, 3-D view of the world, Reuters added. Apple is also developing its own lidar technology.
There’s still a chance Apple will decide to reduce the scope of its efforts to an autonomous driving system that would be integrated with a car made by a traditional automaker, Reuters reported, noting that it’s unclear which manufacturer would build it for Apple.
Apple has been working on driverless car technology since 2014, but pared back its ambitions from a full-fledged vehicle in 2017, Bloomberg News has reported. Since then, Apple has been working on the underlying autonomous system. The company has been deciding whether to attach this system to its own car, or existing vehicles, or to partner with an established carmaker, Bloomberg News reported earlier this month.


fortune--2020-12-21--Peloton spins up its biggest acquisition ever

Peloton Interactive agreed to buy fitness-equipment company Precor for $420 million to gain U.S. manufacturing capabilities and new expansion opportunities.
The New York-based maker of pricey bikes and treadmills said the deal, its largest to date, is expected to close early next year. Peloton will gain 625,000 square feet of manufacturing capacity in Whitsett, North Carolina and Woodinville, Washington. That should help the company get its products to U.S. consumers faster, starting in late 2021. Peloton shares rose 2% in extended trading following the news.
Peloton sales have soared this year as the pandemic shut gyms and forced people to work out from home. However, the company struggled to keep up with demand. That led to long wait times and frustrated customers. By making fitness equipment closer to U.S. consumers, Peloton will be able to deliver products sooner. Existing manufacturing facilities overseas will continue operating, according to the company.
“We have seen a ton of growth. No one would wish a global pandemic on anybody, but it’s been a tailwind for our business,” Peloton President William Lynch said. “Keeping up with that growth, which has been a moving target, has been a big company priority.”
“As we’ve been investing in scaling our manufacturing, this is an area where Precor is very strong,” he added.
Precor provides commercial-grade stationary bikes, ellipticals, treadmills, climbers and strength-training equipment to gyms, hotels, apartments, college campuses and other corporate locations. Thus far, Peloton’s business has focused on sales to consumers, but the company plans to use Precor’s relationships to expand into the commercial market.
The deal will also bring about 100 Precor research-and-development engineers to Peloton. Precor will operate as a business unit of Peloton and Precor President Rob Barker will become chief executive officer of this division. He will also be general manager of the new Peloton Commercial business, reporting to Lynch, the company said.
The $420 million transaction is a strategic departure for Peloton, which has mostly eschewed acquisitions — though Lynch said the company may pursue more deals. Peloton shares have jumped about 400% this year, valuing the company at $42 billion.
Precor is a division of Finnish sporting goods company Amer Sports, which is owned by a group of investors including ANTA Sports, FountainVest Partners, Anamered Investments and Tencent.


fortune--2020-12-21--The web must change its business model if it wants to become truly global and multilingual

The multilingual web emerged within two years of the birth of the standards in 1994 that created the web as we know it. The motto of the internationalization task force was “Making the World Wide Web world wide!” But despite that early vision and commitment, today English is the dominant language of the Internet. It accounts for about 60% of all web content, and incredibly, this percentage is growing despite the fact that a vast majority of new Internet users are from non–English-speaking countries like India and China. The main reason for this disparity? It’s the skewed nature of the economics of the web.
The wide gap between the number of speakers of a language and the volume of online content (measured by number of web pages) is shocking. To take just two examples from opposite ends of the world: Hindi, spoken by half a billion individuals and among the top five spoken languages in the world, constitutes less than 0.1% of Internet content. And Spanish, which also has about half a billion speakers in real life, accounts for just about 4% of websites.
The lack of non–English-language websites on the open Internet is a strong proxy for an underdeveloped digital economy. The fact that the Chinese online creative economy is thriving, despite severe limits on free expression, is a good reminder of what is possible and a counterfactual to what has happened to other languages. Chinese web pages (about 1.4% of the global total) do not fully measure the true success of the language because of the country’s unique e-commerce–enabled social platforms—especially in messaging (e.g., Weibo) and video-streaming (e.g., Douyin). These “walled gardens” account for a majority of the online activity in China.
In the rest of the world, where the open web does matter, online content simply does not reflect the linguistic diversity of nations and people. The problem is that the web’s economic engine is dominated by English-language companies.
Since the first Internet ad ran in October 1994, advertising revenue has been the dominant source of funding for content online. The share of digital advertising that belongs to the Big Three—Facebook, Google, and Amazon—is now 70% and still growing, according to eMarketer. With what is left over, not even the English-language digital media can thrive. For other languages, the problem seems insurmountable; creators working in these languages face the double whammy of Big Tech and English-language dominance of the ad spending. The numbers are stark: For example, advertising on sites in Indian languages that are spoken by hundreds of millions of people is so small that it does not even register as a category in any analyst reports. This neglect faced by other languages is significant not merely because it reinforces the cultural dominance of English, but also because it represents a consequential hurdle to accessing information and knowledge for hundreds of millions of people.
However, creators working in languages other than English do have reasons to be optimistic. First, over the past few years, millions of creators—individuals and small teams, not just big companies—have built large audiences on social media. On Instagram alone an estimated 200 million have more than 100,000 followers each. Second, social media and messaging are inherently multilingual. We have evidence of this from Facebook, which, because it is free and features user-generated content, is far more global than the open web, generating millions of posts yearly in more than 110 languages. And finally, over the past year, a third piece of the puzzle has fallen into place—the rapid adoption of seamless digital payments. Thanks to smartphones, all one needs is a tap to make payments using Apple or Google, and now even Facebook. In India, the messaging platform WhatsApp, using UPI—a standard for bank-to-bank micropayments—now enables payments as low as 15 cents.
In China, this trifecta of mobile payments, local-language content, and independent creators with huge followerships has created a multibillion-dollar industry. The first wave of success is in the pay-for-knowledge economy, with a diverse set of content and services marketplaces now at the scale of hundreds of millions of users. On the Weibo messaging service, users can pose questions to influencers through their profile pages—and offer cash for answers. There is the specialized platform Zhihu, where users can pay experts a fee to answer their questions, like a paid Quora. There is a boom in audio platforms that host and distribute a broad mix of free and paid programs, including Ximalaya FM, Dedao, and Dragonfly. Self-help often dominates the top-seller lists. Compared with China’s, such “passion economy” platforms are new in the U.S., but they’re expanding quickly as payment friction declines. Services like Patreon, Cameo, Substack, and ScrollStack (my company) are growing fast.
The pandemic and continuing crises in the media business are accelerating the emergence of the new paid web. As it becomes easier for creators to directly charge their fans, the consequences are far-reaching. If they are able to charge a small amount of money to even a fraction of their fans, more creators could earn a living from their creative endeavors.
On the old web, designed to deliver hyper-targeted ads to unimaginably large audiences, creators have been a sideshow. This world was disproportionately worse for those working in non-English languages. As payments evolve to be as common on the Internet as digital ads, they will transform the creative economy. Writers, podcasters, storytellers in audio and video, and artists of all kinds, working in any language, can charge their fans around the world.
The ability to sustain creative work from these micro-size audiences is likely to spark a world of linguistic innovations. For the first time, a Tamil poet will be able to tap her followers worldwide to launch a new collection. And a Spanish podcaster might sustain his efforts from the neighborhood he knows personally. The World Wide Web will then finally be able to realize its original ambition of being a truly global marketplace for ideas.
Samir Patil is the cofounder and CEO of ScrollStack.com, a mobile-first, multilingual platform that enables creators to charge for their works.


fortune--2020-12-21--Google’s Aramco deal risks irking staff over oil, Saudi politics

Google will start selling its cloud-computing services in Saudi Arabia through a deal with oil producer Aramco, a controversial move by the internet giant.
The partnership gives Alphabet’s Google regulatory clearance to set up what it calls a “cloud region” in the Kingdom, the companies said on Monday. Employees at Google have called on the company to abstain from work in the oil and gas industry, citing environmental concerns, and work with authoritarian regimes.
Still, Thomas Kurian, chief executive officer of Google’s cloud unit, has pushed to service the energy industry. It’s one of a handful of fields where Google is trying to chase Microsoft. and Amazon.com Inc. in the cloud-computing market.
“With this agreement, Google Cloud’s innovative technology and solutions will be available to global customers and enterprises in Saudi Arabia to enable them to better serve end consumers,” Kurian said in a statement on Monday. Aramco described the market for cloud services in the country as reaching $30 billion by 2030.
Google is partnering with Saudi Aramco Development Company, a division of the state-run Saudi Arabian Oil. Aramco announced it had signed a preliminary agreement with Google in 2018 prior to a highly-publicized Silicon Valley tour by Prince Mohammed bin Salman. On that trip, the crown prince visited Google and met with its top executives.
Months later, the murder of Jamal Khashoggi, a columnist and prominent Saudi critic, prompted widespread international condemnation. Many businesses pulled out of a Saudi financial conference and some questioned investment in the Kingdom over human rights concerns. The CIA looked into claims that the crown prince ordered the murder, straining relations between Saudi Arabia and the U.S.
Later that year, Google released a set of public principles for its technology and artificial intelligence after staff protests over its work. That included a prohibition on AI systems “whose purpose contravenes widely accepted principles of international law and human rights.” A Google spokeswoman didn’t immediately comment on the new Aramco partnership.
Jack Poulson, a former Google researcher who runs non-profit group Tech Inquiry, said he’s concerned Google cloud services in Saudi Arabia may be used to surveil citizens and dampen freedom of expression. “It’s irresponsible of Google to do this without some clarification of its scope,” he added.


fortune--2020-12-21--Air Force A.I. test raises concerns over killer robots

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A U.S. Air Force experiment has alarmed people concerned that the U.S. and other militaries are moving rapidly toward designing and testing “killer robots.”
In a training on Dec. 14 at Beale Air Force Base, near Marysville, Calif., the Air Force installed A.I. on a U-2 spy plane that could autonomously control the aircraft’s radar and sensors as part of what the military said was “a reconnaissance mission during a simulated missile strike.”
While a human pilot flew the U-2, the A.I., which the Air Force named ARTUMu, had final authority over how to use the radar and other sensors, Will Roper, assistant secretary of the Air Force for acquisition, technology, and logistics, said in an article for Popular Mechanics in which he described the experiment.
“With no pilot override, ARTUMu made final calls on devoting the radar to missile hunting versus self-protection,” Roper wrote. “The fact ARTUMu was in command was less about any particular mission than how completely our military must embrace AI to maintain the battlefield decision advantage.”
But giving an A.I. system the final word is a dangerous and disturbing development, said Noel Sharkey, a professor emeritus of A.I. and robotics at the University of Sheffield, in England, who is also a spokesperson for the group Stop Killer Robots. The organization, made up of computer scientists, arms control experts, and human rights activists, argues that lethal autonomous weapons systems could go awry and kill civilians in addition to making war more likely by reducing the human cost of combat.
The United Nations has held talks aimed at possibly limiting the use of autonomous weapons, but those talks have bogged down, with the U.S., the U.K., China, and Russia all opposed to any ban.
“There are a lot of red flags here,” Sharkey told Fortune about the Air Force test. While the Air Force had tried to couch the recent demonstration as being about reconnaissance, in the training exercise that reconnaissance helped select targets for a missile strike.
It’s only a small step from allowing the software to direct lethal action, said Sharkey.
He also criticized the Air Force for talking about “the need to move at machine speed” on the battlefield. He said “machine speed” renders meaningless any effort to give humans oversight over what the A.I. system is doing.
The A.I. software was deliberately designed without a manual override “to provoke thought and learning in the test environment,” Air Force spokesman Josh Benedetti told the Washington Post. Benedetti seemed to be suggesting that the Air Force wanted to prompt a discussion about what the limits of automation should be.
Sharkey said Benedetti’s comment was disingenuous and an ominous sign that the U.S. military was moving toward a fully autonomous aircraft—like a drone—that would fly, select targets, and fire weapons all on its own. Other branches of the U.S. military are also researching autonomous weapons.
Roper wrote that the Air Force wasn’t yet ready to create fully autonomous aircraft because today’s A.I. systems are too easy for an adversary to trick into making an inaccurate decision. Human pilots, he said, provide an extra level of assurance.
ARTUMu was built using an algorithm called MuZero that was created by DeepMind, the London-based A.I. company that is owned by Google parent Alphabet, and made publicly available last year. MuZero was designed to teach itself how to play two-player or single-player games without knowing the rules in advance. DeepMind showed that MuZero could learn to play chess, Go, the Japanese strategy game Shogi, as well as many different kinds of early Atari computer games, at superhuman levels.
In this case, the Air Force took MuZero and trained it to play a game that involved working the U-2’s radar, with points scored for finding enemy targets and losses deducted if the U-2 itself was shot down in the simulation, Roper wrote.
In the past, DeepMind has said it wouldn’t work on offensive military applications, and a company spokeswoman told Fortune it had no role helping the U.S. Air Force create ARTUMu nor did the company license technology to the Air Force. She said DeepMind was unaware of the Air Force project until reading press accounts about it last week.
DeepMind as a company, and its cofounders as individuals, are among the 247 entities and 3,253 people that have signed a pledge, promoted by the Boston-based Future of Life Institute, against developing lethal autonomous weapons. Demis Hassabis, DeepMind’s cofounder and chief executive, also signed an open letter from A.I. and robotics researchers calling for a UN ban on such weapons.
DeepMind said it had no comment on the Air Force’s A.I. experiment.
Some other A.I. researchers and policy experts who are concerned about A.I.’s risks have previously questioned whether computer scientists should refrain from publishing details about powerful A.I. algorithms that may have military uses or could be misused to spread disinformation.
OpenAI, a San Francisco research company that was founded partly over concerns that DeepMind had been too secretive about some of its A.I. research, has talked about restricting publication of some of its research if it believes it could be misused in dangerous ways. But when it tried to restrict access to a large language model, called GPT-2, in 2018, the company was criticized by other A.I. researchers for being either alarmist or orchestrating a marketing stunt to generate “this A.I. is too dangerous to make public” headlines.
“We seek to be thoughtful and responsible about what we publish and why,” DeepMind said in response to questions from Fortune. It said a team within the company reviewed internal research proposals to “assess potential downstream impacts and collaboratively develop recommendations to maximize the likelihood of positive outcomes while minimizing the potential for harm.”
More must-read tech coverage from Fortune :


fortune--2020-12-21--Congress COVID-19 relief bill includes $15 billion for Broadway, small music venues, movie theaters

After more than nine months of empty stages, live music venues and theaters in the United States—along with independent movie houses—appear to be headed toward much-needed relief to the tune of $15 billion.
That help, dubbed the Save Our Stages Act, is part of Congress’s $900 billion COVID-19 relief package announced Sunday. As of midday Monday, lawmakers were racing to finalize the legislative text to send it to President Trump’s desk before government funding lapses at midnight. The money set aside for the Save Our Stages Act would assist live music and theater venues, independent movie theaters, and other cultural institutions.
“These are people’s jobs and livelihoods, and they need this help now,” Senate Minority Leader Chuck Schumer (D-N.Y.) said on Twitter.
The relief bill, written last summer by Sen. Amy Klobuchar (D-Minn.) and Sen. John Cornyn (R-Texas), earned kudos from a range of sources including the National Independent Venue Association, known as NIVA (which had been pushing for this help for months), and an array of celebrities, such as comedian Jerry Seinfeld.
“Independent venues were some of the first establishments to close down and will likely be some of the last to open,” Klobuchar said. “I refuse to sit by and let the music die, which is why I was proud to introduce the bipartisan Save our Stages Act.”
Even as vaccines to prevent COVID-19 infection begin to make their way to citizens, the performance arts sector faces a protracted slog, with unanswered questions around when live performances can resume, among others. Continued pain almost certainly awaits.
For instance, Broadway theater productions, which in 2019 had a $12.6 billion impact on the economy and supported dozens of thousands of jobs, according to the New York State Labor Department, will be dark until at least late May 2021.
NIVA recently said that 90% of the country’s independent venues could shutter permanently in quick order without federal aid. Billboard published a running list of live music venues that have closed permanently because of their dark stages during the pandemic, including icons such as New York’s Copacabana and the Douglas Corner Cafe in Nashville. And even as some larger movie houses have reopened, they have done so at reduced capacity. So far, box office revenues are down 80% from 2019 levels, according to the Hollywood Reporter.
The broader relief package will give most Americans a $600 stimulus check. The bill also provides $300 weekly enhanced unemployment payments to most jobless Americans. The $900 billion stimulus package is far smaller than the $2.2 trillion CARES Act passed in March.


fortune--2020-12-21--Tesla slides on first day of trading on S&P 500 Index

Tesla was among the biggest drags on the S&P 500 in its first day of trading on the benchmark.
The electric-vehicle maker, which now represents 1.6% of the index and is among its heaviest-weighted stocks, fell as much as 6.3% as it retraced gains from Friday when tens of millions of shares were purchased by index-fund managers. The S&P 500 fell as much as 2% amid fears of a new coronavirus strain in the U.K.
“Hedge funds will treat this as a negative catalyst for Tesla given buying pressure eases off very quickly,” Roth Capital Partners analyst Craig Irwin said in an interview.
Institutional buying of Tesla surged late Friday as index-tracking managers rushed to add the shares to their funds. Almost $60 billion worth of stock changed hands at $695 a share, most of it in one giant trade in the session’s waning seconds. The price was about 5% higher than Tesla’s level just prior to the close. More than $150 billion worth of Tesla shares traded on Friday, ahead of the index inclusion.
Other electric-vehicle companies, whose shares have gained significantly over the past month after Tesla’s S&P 500 inclusion was announced, were also weak on Monday. Some of the biggest declines came from Nikola Corp., Electrameccanica Vehicles Corp. and Workhorse Group Inc.
Tesla soared 731% this year through Friday in anticipation of the historic inclusion, making it the biggest company ever to be added to the benchmark. The EV pioneer also joined the S&P 100, replacing oil and gas firm Occidental Petroleum Corp.
“There is strong precedence for positive returns for stocks prior to S&P 500 inclusion and post announcement, but very limited precedent for near term outperformance post inclusion,” Sanford C. Bernstein analyst Toni Sacconaghi wrote in a note earlier this month.


fortune--2020-12-21--Amazon closes New Jersey warehouse after spike in COVID-19 cases

Amazon has temporarily closed a New Jersey warehouse after a spike there in asymptomatic COVID-19 cases, a rare move that comes as the company gears up for a final push in what’s widely expected to be a record holiday shopping season.
The world’s largest online retailer told employees at the warehouse in Robbinsville Township that the facility will be shuttered until Dec. 26, a spokesperson confirmed.
Amazon has generally opted to keep its warehouses and other facilities running amid outbreaks, betting that more frequent cleanings and social distancing limit the risk of the virus spreading within a given building. A rare exception came early in the pandemic in March, when an apparel returns warehouse was idled by order of Kentucky Governor Andy Beshear after an outbreak there.
The New Jersey facility, PNE5, is a sortation center that takes finished packages from other Amazon warehouses and routes them to individual post offices and other facilities for so-called last mile delivery. The center serves the Philadelphia and Trenton, N.J., areas, according to MWPVL International, a logistics consulting firm that tracks Amazon’s network.
The temporary loss of one such building is unlikely to seriously strain Amazon’s delivery network, which has plenty of built-in redundancy.
The Seattle giant has spent months ramping up a testing program for its hundreds of thousands of warehouse workers, relying both on third-party labs and its own facilities.
“Through our in-house Covid-19 testing program, we detected an increase in the number of asymptomatic positive cases at our PNE5 facility in northern New Jersey and have pro-actively closed the site until December 26th out of an abundance of caution,” Leah Seay, an Amazon spokesperson, said in an email. “This is exactly why we built the program—to identify asymptomatic cases and ensure that we can take swift action to prevent spread.”
Workers at the facility would be paid for scheduled shifts they miss, she said.
The closing was reported Sunday by CNBC.
Amazon said in October that some 20,000 workers had caught COVID-19 during the pandemic’s first six months, a rare disclosure for a large employer. The company asserted that the rate of infection among its employees was lower than prevailing rates among the general population. But some infectious disease experts said the disclosure lacked key data necessary to evaluate that claim.


fortune--2020-12-21--Thoma Bravo buys property management software firm RealPage for $9.6 billion

RealPage Inc.’s shares surged as much as 32% after private equity giant Thoma Bravo agreed to buy out the real estate software maker for $9.6 billion.
Thoma Bravo is offering investors $88.75 in cash for each share of RealPage, the companies said in a statement on Monday. The transaction represents a 31% premium to the company’s closing share price on Dec. 18 and values the company at $10.2 billion including debt.
The software company’s stock rose 30% to $88.50 at 9:52 a.m. in New York after earlier touching $89.20, a record high for the shares.
RealPage, a maker of software for managing rental properties, had risen more than 26% this year through Friday—outpacing a 15% gain in the S&P 500 —after the pandemic spurred the adoption of online and digital services over in-person alternatives. The company in November hiked its earnings per share forecast for the year after reporting quarterly revenue ahead of expectations. It’s now valued at about 35 times estimated earnings, versus 26 for the benchmark index.
RealPage’s executive team in Richardson, Texas, including Chief Executive Officer Steve Winn, are expected to continue leading the company after the deal closes, the companies said in the statement.
The acquisition would be the biggest to date for Thoma Bravo, which manages more than $73 billion. It’s carved out a niche within the buyout industry, focusing on cloud software businesses that draw steady, recurring sales.
The firm typically makes operational tweaks to the companies it acquires, usually keeping management in place and concentrating on growth rather than cost cutting. It’s a model that’s proved remarkably lucrative, particularly during the coronavirus pandemic. It said in October it had raised three funds totaling more than $22.8 billion.


fortune--2020-12-21--Nike stock hits an all-time high as e-commerce powers through the pandemic

Count Nike among the pandemic’s biggest winners.
The athletic-wear brand’s shares hit a new all-time high early Monday in their first trading session since Nike reported another set of stellar quarterly results. Those results, posted after U.S. markets closed on Friday, showed that Nike is navigating the pandemic exceptionally well thanks in large part to its digital prowess.
Nike shares rose as much 7.7% on Monday morning to hit $147.95, giving it a market capitalization of $228 billion. The shares have more than doubled in value since the pandemic was declared in March.
The secret? Nike has used digital firepower, from its e-commerce site to its fitness apps, to keep customers focused on its brand and to leverage the overall shift in spending toward athletic and casual wear during the pandemic. Nike’s already sizable e-commerce business grew more than 80% year over year for the third straight quarter.
Even as stores, of which 90% are currently open again, continued to see fewer shopper visits, e-commerce soared both in the U.S. and overseas. In China, for Singles’ Day, a November event several times larger than Cyber Monday in North America, Nike was the top athletic-wear brand, garnering the most visits in that category on Tmall, a massive online store there. In the U.S., Nike said it saw record online sales on Black Friday.
Nike CEO John Donahoe says the results show the company is taking market share from competitors. “These are times when strong brands get stronger,” Donahoe told analysts on a conference call on Friday afternoon after the results were announced.
Long before the COVID-19 outbreak began last year, Nike had been making large investments in e-commerce: By selling far more of its products to customers directly, the company aimed to offset a recent move to cut its exposure to a number of wholesalers, such as department stores.
But Nike has also spent a lot of time and money on its apps for shopping and offering workouts. In its previous quarter, whose results were reported in September, e-commerce passed the 30% threshold as a percentage of Nike’s sales, a mark it had previously expected to hit only in 2023.
“The consumer shift to digital is permanent, and our digital penetration will only increase in years to come,” Donahoe said on Friday.
The result has been less reliance on physical retail at a time when many shoppers are still avoiding stores. Nike’s overall revenue for the quarter rose 7% year over year on a constant-currency basis, to $11.2 billion. That handily beat Wall Street projections for $10.55 billion. Meanwhile, net income grew 12% to $1.25 billion, reflecting Nike’s deft inventory management, which has reduced the need to sell anything at clearance prices, as well as its cost-cutting.
Wall Street expects Nike to further develop the winning formula of increasingly taking matters into its own hands through direct sales, both with its own stores and its e-commerce. “There are many benefits (financial and otherwise) to selling direct, and the channel mix will likely continue to swing in this direction for many years to come,” Pivotal Research Group wrote in a research note.


fortune--2020-12-21--Elon Musk trolls Bitcoin, causes novelty Dogecoin to soar

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Tesla CEO Elon Musk sent the cryptocurrency world into a tizzy this weekend with a series of tweets about Bitcoin and a lesser-known currency called Dogecoin. His remarks caused the price of the latter, which is based on a meme about Shiba Inu dogs, to soar.
The episode began in the wee hours of Sunday night when Musk replied to a racy tweet showing a woman wearing Tesla-branded shorts—an article of clothing that the company created earlier this year to mock those who had shorted its stock price. In response to the tweet, Musk billionaire replied “Bitcoin is my safe word.”
Soon after, the eccentric and apparently sleepless billionaire tweeted a series of other messages about Bitcoin. This culminated in an exchange with the CEO of a software security called Microstrategy, Michael Saylor, who recently invested $250 million of the company’s treasury in Bitcoin.
The exchange began when Musk tweeted a crude image suggesting he was trying to resist the urge to buy Bitcoin. This led Saylor to urge the Tesla CEO to make a major bet on the cryptocurrency, and Musk to ask him if such big transactions are possible.
Are such large transactions even possible? — Elon Musk (@elonmusk) December 20, 2020
Musk’s question was likely disingenuous as buying large amounts of Bitcoin is relatively easy and someone with even a passing knowledge of cryptocurrency—like Musk—would be aware of this. Meanwhile, in a previous tweet, Musk declared Bitcoin to be “almost as bs as fiat money.”
The Tesla CEO’s Twitter ramblings took another turn when he began to praise Dogecoin. The dog-themed cryptocurrency has been around since 2013 but is essentially worthless beyond its novelty value since, unlike Bitcoin, it is designed to be inflationary—spitting out 10,000 new coins every few minutes. (See this Fortune overview of Dogecoin for the whole strange story)
Despite the inherent silliness of Dogecoin, its price shot up 40% from $0.003 to $0.005 after Musk tweeted the following:
One word: Doge — Elon Musk (@elonmusk) December 20, 2020
To cap off his prank, Musk pinned the message “come for the comments, stay for the memes” to the top of his Twitter feed. He also changed his biography on the site such that his title didn’t reflect his current jobs—CEO of both Tesla and the rocket company SpaceX—but a fictitious former role.
And so concluded a strange episode—or what many might regard as a typical weekend—for both Musk and cryptocurrency.


fortune--2020-12-22--BioNTech CEO says its joint vaccine with Pfizer will likely work on new U.K. virus variant

Pfizer Inc. partner BioNTech SE is pursuing all its options to make more Covid-19 vaccine doses than the 1.3 billion the companies have promised to produce next year, according to the German firm’s chief executive officer.
The companies will probably know by January or February whether and how many additional doses can be produced, Ugur Sahin said late Monday in an interview. “I am confident that we will be able to increase our network capacity, but we don’t have numbers yet.”
Sahin also said the vaccine will probably work against the new SARS-CoV-2 strain that has emerged in the U.K. Lab tests of the vaccine’s performance have already been done against 20 mutant versions; the same tests will now be run against the new U.K. version, and should take about two weeks, he said.
Efficacy results of more than 90% and approvals around the world have set off a race between countries for additional supplies of the precious shots, with the U.S. seeking to exercise an option for a hundred million. Most of the doses anticipated for next year — enough to immunize 650 million people — have already been spoken for.
More than 2 million people in six countries have already gotten their first shot of the standard two-dose regimen, according to data collected by Bloomberg.
BioNTech is seeking more of the raw materials it needs for its mRNA vaccine, more clean rooms and more cooperation partners, Sahin said. The company also needs additional space to formulate the shots, put them into containers and prepare them for shipping, he said. Pfizer is producing vaccine at three sites in the U.S. and one in Europe, while BioNTech has two manufacturing sites in Germany.
The vaccine’s EU approval and an inoculation campaign set to start there on Dec. 27 promise to further draw on stocks. By the end of 2020, BioNTech expects to ship 12.5 million doses to the EU and 20 million to the U.S., the company said in a press conference on Tuesday. The partners have already begun shipping shots to the U.K., where Health Secretary Matt Hancock on Monday tweeted that some 500,000 people had gotten their first dose.
New Strain Tests
If the vaccine turns out to be ineffective against the mutant strain circulating in the U.K., BioNTech could, in theory, produce a new Covid vaccine to fight the variant within six weeks, Sahin said at the Tuesday briefing. How fast the new inoculation could get to patients would depend on the speed of regulatory review.
But so far, Sahin sees no reason to doubt that the existing shot will be effective. Most vaccines target the spike protein, which allows the virus to enter cells.
“This virus has multiple mutations, but as far as we know, 99% of the spike protein is not mutated,” he said late Monday. “Let’s do the experiment and get the result. That’s always the best answer, but I would emphasize just to stay calm.”
–With assistance from Riley Griffin and Iain Rogers.


fortune--2020-12-22--“There’s nothing to worry about”: President-elect Joe Biden receives COVID-19 vaccine

President-elect Joe Biden on Monday received his first dose of the coronavirus vaccine on live television as part of a growing effort to convince the American public the inoculations are safe.
The president-elect took a dose of Pfizer vaccine at a hospital not far from his Delaware home, hours after his wife, Jill Biden, did the same. The injections came the same day that a second vaccine, produced by Moderna, will start arriving in states. It joins Pfizer’s in the nation’s arsenal against the COVID-19 pandemic, which has now killed more than 317,000 people in the United States and upended life around the globe.
“I’m ready,” said Biden, who was administered the dose at a hospital in Newark, Delaware. The president-elect rolled the left sleeve of his turtleneck all the way up to his shoulder, then declined the option to count to three before the needle was inserted into his left arm.
“You just go ahead anytime you’re ready,” he told the nurse practitioner who administered the shot.
Biden emphasized the safety of the vaccine, and said President Donald Trump’s administration “deserves some credit” for getting the vaccine distribution process “off the ground.”
“I’m doing this to demonstrate that people should be prepared when it’s available to take the vaccine,” he added. “There’s nothing to worry about.”
He noted, however, that distributing the vaccine is “going to take time,” and urged Americans to take precautions during the holiday season to avoid the spread of the virus, including wearing masks.
“If you don’t have to travel, don’t travel,” he said. “It’s really important.”
Biden also thanked health care workers, and offered praise and an elbow bump to Tabe Mase, the nurse practitioner who administered his first dose of the vaccine.
Vice President-elect Kamala Harris and her husband are expected to receive their first shots next week.
Other top government officials have been in the first wave of Americans to be inoculated against COVID-19 as part of the largest largest vaccination campaign in the nation’s history.
Vice President Mike Pence, House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Mitch McConnell, R-Ky., and other lawmakers were given doses Friday. They chose to publicize their injections as part of a campaign to convince Americans that the vaccines are safe and effective amid skepticism, especially among Republicans.
President Donald Trump is discussing with his doctors the timing for taking the vaccine, the White House has said. He tweeted earlier this month that he was “not scheduled” to take the vaccine but that he looked “forward to doing so at the appropriate time.”
The White House has offered another reason for waiting, saying Trump was showing support for the most vulnerable to get the vaccine first.
Trump was hospitalized with COVID-19 in October and given an experimental monoclonal antibody treatment that he credited for his swift recovery. A Centers for Disease Control and Prevention advisory board has said people who received that treatment should wait at least 90 days to be vaccinated to avoid any potential interference.
Dr. Anthony Fauci, the nation’s top infectious diseases expert, and other experts have recommended that Trump be vaccinated without delay as a precaution.


fortune--2020-12-22--Intuit’s CEO on the $7.1 billion Credit Karma acquisition, reorienting toward A.I., and reskilling w

Intuit’s CEO on the $7.1 billion Credit Karma acquisition, reorienting toward A.I., and reskilling workers

Sasan Goodarzi didn’t like doing what he did last June, but he felt he had to.
As CEO of Intuit, maker of TurboTax, QuickBooks, and other finance software for consumers and small-business owners, he oversees a longtime stalwart on Fortune’s ranking of America’s 100 Best Companies to Work For, currently No. 11. But in June he laid off 715 employees, an unprecedented event in the company’s 37-year history. “It is with a heavy heart that I communicate these changes,” he told employees in a long blog post. His reasons and what he’s doing now are worth a close look because companies across the economy are facing the same issues that Goodarzi faces and will likely confront some of the same decisions.
Intuit isn’t laying off hundreds because of crushed demand or cost cutting; business is booming, and the stock is hitting all-time highs. The challenge is keeping the company ahead of disruption by disrupting itself. That’s a core competency at Intuit, which has stayed independent by disrupting itself over the decades to meet the advent of the Windows operating system, the Internet, mobile devices, and cloud computing. In recent years the company has created new business models in which it connects its traditional customers with accountants and bookkeepers, with all parties using Intuit software.
Now, in the era of artificial intelligence, it’s time to self-disrupt again. “With customer needs rapidly evolving and competitors aiming to disrupt us, we need to act now and with urgency,” Goodarzi told employees. That meant eliminating jobs that were “not aligned to where we are investing for the future” and hiring over 700 new employees “to build the capabilities needed as we look ahead.”
The broader issue is reskilling, a hot topic for companies in every industry as the pandemic accelerates technology trends. Is training a realistic option, or does today’s urgency require hiring the needed skills? Intuit does both under chief data officer Ashok Srivastava. The company offers employees a rigorous six-month course in A.I. in which students “go through it from the definition of A.I. all the way to algorithms,” he says. A one-day course is available for those who want “a glimpse of A.I.,” and Srivastava teaches a five-part course that he created for product managers, executives, and others who are less tech-focused.
But that isn’t enough, so Srivastava also oversees the hiring of the specialized software engineers Intuit needs right away. His description of how he chooses them is a valuable guide for anyone hiring or looking to be hired for the new skills a company needs, whatever they may be. “Obviously [candidates] should have the right technical credentials,” he says. “That goes without saying. But I can tell you what I’m really looking for. I’m looking for people who are flexible thinkers, who are mission oriented, people who can communicate and collaborate very effectively with others, who can see the world from another person’s point of view, who can represent diverse ideas, diverse ways of thinking about things. That’s what I’m looking for.”
Goodarzi, 52, became Intuit’s CEO in January 2019 after leading each of its major businesses. Born in Tehran, he came to the U.S. at age 9; he worked at Honeywell and Invensys before joining Intuit 14 years ago. He spoke recently with Fortune about Intuit’s latest reinvention, the recent acquisition of Credit Karma, a Federal Trade Commission investigation of TurboTax marketing, and more. Edited excerpts:
Many companies are using A.I., but you’re doing more—putting it at the center of Intuit’s reinvention. How come?
Goodarzi: There have been two platforms that have ignited global innovation. One was electricity, which was long before our time. The second was the Internet. It ignited an incredible amount of innovation, and we’re still innovating based on that. And to me, the third one is A.I. We’re going to look back at A.I. in five to 10 years and, undisputed, it will be as powerful as the impact of electricity and the Internet.
That’s why it’s core to our strategy. We spent quite a bit of time describing what we mean by A.I., because everybody uses the word “A.I.”—it’s a fancy word to use. We defined A.I. as machine learning, knowledge engineering, and natural language processing. Those three elements we believe fundamentally can accelerate innovation.
When you look at our strategy, it is about being an A.I.-driven expert platform. It’s all about technology solving massive customer problems and digitizing services.
Practically, what will be the role of A.I.? What can it do that couldn’t be done before, and how will it add value?
If you’re in New York or California and you’re engaging with an expert, the expert can be anywhere. They can be in Boise, Idaho. A.I. instantly helps that bookkeeper in Boise understand your tax situation based on everything we know about you. It will lay out the three insights the bookkeeper needs to share with you. It’s all about building your confidence and building a relationship. A.I. will help the bookkeeper deliver insights that will save you money. It can do the same thing with a small business. Based on all the data we see, we think you can go buy inventory. And by the way, based on what we know about you and your creditworthiness, you’re eligible for taking out a $100,000 loan. A.I. does all that rather than the bookkeeper having to crunch all the work. And based on what it knows about you and people like you, it also knows how to skip a bunch of stuff that’s not relevant for you.
Intuit has never laid off as many employees as you laid off in June. Why was that the right way to go?
To manage these complex distributed A.I. models in the cloud, we need systems engineers, full-stack engineers, engineers who have a lot of experience with native computing and mobile computing in the cloud. We need a lot of workforce analysts and process engineers. This requires training our folks, but it also requires bringing skills in from the outside. The training side is really hard. It’s really hard. It’s much easier to go hire someone with these skills versus training, but there aren’t actually too many people like this. So you have to invest the time doing both.
We’re investing in our training capability because we do have people who understand systems engineering, for example, or full-stack engineering, but we need to build the capability to provide the training. So the approach we’re taking is to build out our educational capabilities and teach internally while also using partners like Amazon—we’re very close partners with them since we’ve shifted everything to Amazon Web Services—to teach these capabilities.
And in the past 18 months we’ve made three “acquihires” where we’ve brought in skills in this area—Applatix [a maker of cloud software], Origami Logic [marketing analytics], and we just acquired TradeGecko [software to help small businesses manage inventory and orders].
The U.S. Justice Department recently cleared your $7.1 billion acquisition of Credit Karma after the company agreed to sell its tax preparation business to Square. Why this deal?
We have 57 million customers; Credit Karma has 100-million-plus customers. They have all your spending and credit history. We have all your income information. With your permission, we’re going to give you the power of that data so you can get access to the best financial products that are right for you at the lowest rates—credit cards, personal loans, home loans, auto loans, home and auto insurance. Right now, when you go get a credit card, you don’t know if it’s the best rate you can get based on your credit score. We can now make that happen.
Last year 23 million people went to get payday loans and paid exorbitant amounts of money. We can give you early access to your tax refund and your paycheck based on what we know about you. And by the way, we can give you live expertise if you need it, because it’s just a service that will plug into Credit Karma.
Intuit’s mission is “powering prosperity around the world,” but the business is still mostly in the U.S. When will it become truly global?
We are getting traction. We now have almost 30% of all of our cloud QuickBooks customers international, and revenue is growing at 52%. We studied our own history to understand, when we went into a country, how did we make that decision? What choices did we make? We also studied companies that were born international or have been successful internationally. So we studied one of our competitors, Xero [a New Zealand–based tax and accounting software company that operates globally]. We studied Airbnb and PayPal to understand how they approach building a global company. All of that informed a global playbook, and because of that playbook we’ve been able to accelerate in countries that we’re in and make decisions to back off of certain countries. We just announced in September that we’re backing off from India because financial management is not a strong category in India. A lot of other things are, but not financial management.
You’ll probably be talking about the success of international with the next CEO, because it’s going to take us another 10 to 15 years to really have it be a substantial part of the company. But I like our progress. That’s essential to our future.
The Federal Trade Commission has been investigating Intuit over allegations that it deceived users of TurboTax into paying for the service when they could have filed for free through the IRS Free File program. This all arose out of reporting by ProPublica. Where does the matter stand?
Our very strong belief is that the notion of making free taxes available to customers is an important part of what we do as a company and actually an important part of our strategy. The work that we’ve done with the IRS around the Free File program has all been philanthropic. It has all been around doing good, and the matter has just been very much twisted by a certain outlet. So far in every engagement we’ve had with the FTC and attorneys general, their feedback has been, “Now that we understand the data, we’re not actually sure what the fuss is about.” So we have a lot of confidence in terms of how this will play out, because we have not only a track record, but documentation that everything we’ve done is philanthropic.
The biggest learning we’ve had, and I’ve shared this with the company, is that even when you’re doing something that’s good and philanthropic, if you have a hard time explaining it, then it’s time to step back and say, well, is this the right place for us to be investing philanthropic efforts? That’s what we’re evaluating now more than ever. It’s proceeding, and I would say the facts are on our side, and that will reveal itself very soon.


fortune--2020-12-22--Google, Microsoft look to team up with Facebook for legal fight against Israeli company

Google Inc., Microsoft Corp. and other tech giants asked for permission to join Facebook Inc.’s legal fight against an Israeli company that the social media company accuses of installing malware on the phones of unsuspecting users.
The companies asked the federal appeals court in San Francisco on Monday to let them file a motion in support of a lawsuit that WhatsApp, Facebook’s messaging service, brought last year against NSO Group.
WhatsApp accused the spyware maker of using a since-closed vulnerability in the messaging service to install spyware on the phones of at least 1,400 users. The spyware allowed NSO to surreptitiously collect data from users’ phones, according to the suit.
Allowing companies like NSO to deploy cyber-surveillance tools across U.S. systems creates large-scale, systemic cybersecurity risk, the tech companies said in the brief at the appeals court.
NSO says it can’t be sued in a U.S. court because it was doing its work as an agent of foreign governments and so is entitled to foreign sovereign immunity.
U.S. District Judge Phyllis Hamilton in Oakland, California, in July denied NSO’s request to dismiss the lawsuit.
The tech companies urged the appeals court to treat NSO like any other company doing business in the U.S. In their brief, the companies described NSO’s cyber-surveillance tools as “dangerous” and said they could be “exploited by malicious actors other than the initial customer to cripple infrastructure, commit large-scale financial crime, or cause other catastrophic damage.”
Google and Microsoft were joined in their request by Cisco Systems Inc., GitHub, Inc., LinkedIn Corp., VMware Inc., and the lobbying group, the Internet Association.
Reuters reported on the filing earlier.


fortune--2020-12-22--After mutant virus fears cut off trucking routes to Europe, U.K. businesses look to cargo jets and f

After mutant virus fears cut off trucking routes to Europe, U.K. businesses look to cargo jets and freight trains

U.K. firms desperate to maintain supply lines after France blocked truck traffic are looking at switching to cargo jets and freight trains to keep goods flowing.
J Sainsbury Plc and Tesco Plc are exploring all options to keep supplies flowing, including the use of planes for some fresh-vegetable shipments instead of truck ferries, while Deutsche Lufthansa AG may add dedicated freighter flights to the U.K. Eurotunnel, which operates the Channel Tunnel rail link between Britain and France, said talks are underway about running extra freight trains.
“There’s been a great deal of discussion with a number of companies contacting us, both existing customers and potential new ones,” Eurotunnel spokesman John Keefe said. “We’d already seen an increase in demand because of the Brexit deadline but there’s plenty of spare capacity.”
Trucks bound for the continent are lined up on the M20 motorway outside Dover, Britain’s busiest ferry port, after a new coronavirus strain prompted France on Sunday to bar drivers from crossing the Channel. The ban, which also applies to Eurotunnel’s truck shuttles, threatens to disrupt just-in-time supply chains and to create shortages of some foods and perishable goods.
Sainsbury said it’s exploring alternatives to trucks to keep its stores stocked with lettuce, cauliflowers, broccoli and citrus fruits from the Continent. Air-freight is an option, though the grocer hopes that France and Britain will reach an agreement to reopen links, spokeswoman Victoria Durman said.
Tesco, Britain’s biggest supermarket, has “plenty of food for Christmas,” said Shona Buchanan, a spokeswoman. But if the disruption continues beyond the next two days, “there may be reduced supply on a few items later this week.”
Grocers cannot stockpile perishable fresh produce, meaning regular replenishment of supplies is essential. Alternative supply routes being considered alongside air freight include the use of ferries sent directly from Spain and increasing stock from Holland and the U.K.
Dedicated Freighters
Lufthansa will continue to fly passengers to Britain unless there’s a ban on doing so, according to spokesman Helmut Tolksdorf. The aircraft will return to Germany empty, though, after it and others closed their borders to arrivals from the U.K. Operating a dedicated cargo service would help plug the gap should inbound flights to London, Manchester and Edinburgh also have to cease. Lufthansa Cargo operates planes including Boeing Co. 777Fs capable of carrying 100 metric tons.
Virgin Atlantic Airways Ltd. said cargo-only flights between Britain and Europe that use belly-space in Airbus SE A350 passenger jets currently surplus to requirements sold out this morning. The carrier is looking to add as many services as possible for Tuesday, spokeswoman Laura Brander said.
Chunnel Trains
Eurotunnel currently operates four or five dedicated freight trains a day, carrying bulk products including car parts, steel, aluminum and liquids. That compares with six shuttle trains an hour during normal times carrying trucks through the sub-sea rail route. Before the service was halted, traffic on those trains had increased 11% from a year earlier as companies rushed to stock up ahead of the Dec. 31 no-deal deadline.
Spokesman Keefe said freight services have seen a pickup in chilled foods sent to Britain from more distant parts of Europe as a result of earlier concerns about delays at Dover.
Running more trains through the tunnel would be a simple matter, he said, though securing pathways across Europe can take a few weeks in normal times. Channel Tunnel cargo services are operated by GB Railfreight and Deutsche Bahn AG’s DB Cargo.
Other options for offsetting the loss of truck traffic might including sending more goods in containers, usually the reserve of long-distance shipments from Asia. Felixstowe, Britain’s biggest container port, has been suffering delays and snarl ups of its own amid a surge in volumes from restocking before Christmas and the Brexit deadline.


fortune--2020-12-22--The world’s longest COVID-19 free streak is over

The first locally transmitted case of Covid-19 in more than eight months was reported in Taiwan, ending what was the world’s longest stretch without a domestic infection and providing a reminder of the virus’s ability to outfox even the most successful efforts to contain it.
A 30-year-old woman was confirmed to have caught Covid-19 in Taiwan, Health Minister Chen Shih-chung said at a briefing in Taipei Tuesday. While it has seen cases in travelers arriving from outside, Taiwan’s last infection within the community was April 12.
The woman came into repeated contact between Dec. 7 and Dec. 12 with a pilot from New Zealand who had caught Covid-19 in the U.S. before traveling to Taiwan, according to Chen. The government will fine the Eva Airways Corp. pilot up to NT$300,000 ($10,000) for failure to report details of his close contacts and steps.
Health officials have identified 167 other people the newest case came into contact with before she was isolated, the Centers for Disease Control said in a statement. The patient is an employee of an affiliate of Quanta Computer Inc., which said it has tightened virus-control measures and asked close contacts of the employee to quarantine at home.
Police tracked down the latest case after investigating all people the pilot came into contact with before testing positive. Two other confirmed cases contracted the virus from the pilot while working with him on a flight from the U.S. to Taiwan on Dec. 15. Eva Airways shares dropped 6.7%, the most since March, while the Taiwan’s benchmark stock index lost 1.4% Tuesday.
Success Story
The re-emergence of a local outbreak threatens to derail one of the standout success stories in the global fight against the pandemic. Taiwan currently holds the No. 2 spot in Bloomberg’s Covid Resilience Ranking, a measure of the best places to be in the Covid-19 era.
Taiwan has managed to keep its total number of cases to 770, with just seven deaths, through a combination of restricting travel into the island early in the outbreak and implementing a strict quarantine and contact tracing strategy.
Yet many regions that showed initial success in fighting off the virus, from Thailand to South Korea, are now facing their worst outbreaks as cases are spiking around the globe with the onset of winter.
“The pandemic today outside the borders of Taiwan is worse than ever,” said Raina MacIntyre, professor of global biosecurity at the University of New South Wales. For places like Taiwan that have prevented transmission, “the international border is the weak link which may let infection in.”
The continued spread of the coronavirus worldwide has meant Taiwan’s authorities have had to remain on their guard. Since the last case of domestic transmission in April, more than 300 cases have been brought in by people returning from overseas.
The absence of the virus has allowed for life to continue pretty much as usual in Taiwan, an island about 80 miles off the southeastern coast of China. Offices, schools and businesses have largely remained open as the government avoided implementing a lockdown, though mask-wearing is still encouraged. Taiwan’s successful handling of the outbreak meant it dodged the economic damage seen elsewhere, putting it among the few places to still be predicting growth this year.
The domestic travel industry has seen something of a boom, with Taiwan’s 24 million people unable to travel overseas for vacations due to the restrictions. Meanwhile, external demand for Taiwan’s technology — it is home to Hon Hai Precision Industry Co., a key iPhone manufacturer, and a swathe of chipmakers — remains strong as people purchase laptops and tablet computers to work and study from home.
The economy will likely expand around 2.3% this year, according to economists surveyed by Bloomberg, in stark contrast to most other developed economies around the world which are expected to fall into recession.
New Waves
Highly contagious and manifesting in some with little or no symptoms, the virus has re-emerged in a number of places where it was thought to have been largely eliminated.
Thailand, the first country to record a Covid-19 case outside of China, hadn’t reported more than 100 infections in any day since early April, until a new outbreak was found on Dec. 17. The Southeast Asian nation reported 427 new cases on Tuesday, as a cluster in a province outside of Bangkok expanded around workers at seafood processing plants.
South Korea has repeatedly prevented the coronavirus from spreading uncontrollably, applying its elite testing-and-tracing practices that have become a global model for managing the pandemic. Now that country is being tested as infections topped 1,000 for five consecutive days through Sunday.
“The key lesson is that unless this problem is dealt with on a global level, then human-to-human transmission is always going to be probable,” said Nicholas Thomas, associate professor in health security at the City University of Hong Kong. “The danger is that as cases drop and countries seek to open their borders – either widely or in the form of travel bubbles – places that were previously disease free are going to be re-exposed.”
–With assistance from Jinshan Hong.


fortune--2020-12-23--U.S. government accuses Walmart of fueling opioid crisis, alleging it ignored internal warnings from

U.S. government accuses Walmart of fueling opioid crisis, alleging it ignored internal warnings from pharmacists

The U.S. government accused Walmart Inc. of fueling a nationwide opioid crisis by ignoring warnings from its own pharmacists that the chain wasn’t properly set up to screen painkiller prescriptions in violation of federal regulations.
The complaint filed Tuesday in Delaware comes two months after the world’s largest retailer filed its own case in Texas accusing the U.S. of scapegoating Walmart for government failures in dealing with the crisis. More than 400,000 Americans’ deaths have been tied to legal and illegal opioid-based drugs over the last two decades.
In the new case, the U.S. alleges the retailer sought to boost profits with a system designed to make it almost impossible for overworked store pharmacists to catch red flags about overly large numbers of painkiller prescriptions. Walmart is in the unusual position of serving as the distributor of opioid-based medicines to its own stores.
“Given the nationwide scale of those violations, Walmart’s failures to follow basic legal rules helped fuel a national crisis,” the U.S. said in the complaint filed in federal court in Wilmington.
The suit is a blow for Walmart after it recently began opening its own low-cost health clinics, with plans to expand them in Georgia and the Chicago area. The retailer is also getting into the insurance business, and said it would start selling Medicare plans in October through its own licensed brokerage, Walmart Insurance Services.
“The Justice Department’s investigation is tainted by historical ethics violations, and this lawsuit invents a legal theory that unlawfully forces pharmacists to come between patients and their doctors, and is riddled with factual inaccuracies and cherry-picked documents taken out of context,” Walmart said in an emailed statement.
Walmart’s shares fell on the news, closing Tuesday down 1.2% at $144.20.
The Bentonville, Arkansas-based company is already a target of more than 2,000 suits filed by states, cities and counties, which claim the retailer intentionally turned a blind eye to suspicious prescribing of painkillers by doctors and profiting from opioid addictions and overdoses. The U.S. lawsuit boosts the pressure on the company.
Walmart and pharmacy chains such as Rite Aid Corp. and Walgreens Boots Alliance Inc. are facing a trial next year in federal court in Cleveland over the allegations. The case had been set for November, but was delayed by the coronavirus outbreak.
The wave of litigation has prompted at least three makers of opioid-based painkillers to seek bankruptcy protection to deal with the lawsuits. One of them, Purdue Pharma, also pleaded guilty to criminal charges tied to the illegal marketing of its OxyContin painkiller. Members of the billionaire Sackler family — which owns Purdue — also agreed to pay $225 million to settle potential civil claims against them personally.
Opioid distributors McKesson Corp, Cardinal Health Inc. and AmerisourceBergen Corp — along with ex-opioid maker Johnson & Johnson — have negotiated a proposed $26 billion-dollar settlement with a group of state attorneys generals suing to recoup billions in tax dollars spent on the opioid epidemic’s fallout. That deal has yet to finalized.
In their suit, Justice Department lawyers contend Walmart executives set up a system that turned its 5,000 in-store pharmacies into one of the country’s biggest suppliers of highly addictive opioid painkillers. The chain used low prices to lure customers and then demanded pharmacists pick up the pace of filling prescriptions, leaving little time for proper monitoring, according to the suit.
Federal law requires companies handling regulated drugs to compile information on doctors’ prescriptions to make it easier for pharmacists to spot so-called “red flags,” including excessive orders from medical practices informally known as pill mills.
While Walmart collected such data, it didn’t share information about “problem prescribers” with its pharmacists or federal regulators and ignored their staffers’ alerts about such practices, the Justice Department said in the suit.
“As a wholesale drug distributor, Walmart had an obligation to notify” federal regulators “of suspicious orders of controlled substances,” Acting U.S. Attorney for the Eastern District of New York Seth DuCharme said in a statement. His office was involved in putting the suit together. “Walmart failed to comply with both of its obligations, and thereby failed in its responsibility to prevent the diversion of controlled substances,” he added.
Justice Department lawyers in Texas had launched a criminal investigation about Walmart’s handling of opioid painkillers and were prepared to bring charges, according to media reports. But the Justice Department’s top officials decided in 2018 to defer in bringing a criminal case and file suit instead.
The case is U.S. v. Walmart Inc., 20-cv-1744, U.S. District Court, District of Delaware (Wilmington).
–With assistance from Leslie Patton and Christopher Yasiejko.