fortune--2020-06-18--Stacey Abrams: Safeguarding voting rights fights the ‘virus’ of systemic racism

How Google and Facebook ’ s 8,000-mile undersea data cable got caught in U.S.-China feud

Stacey Abrams’s new book isn’t a traditional political memoir.
Like works by most candidates for office, Abrams’s book does outline her vision for the country. But that vision reaches far into the future—and the past—going beyond the realm of her own political career.
Abrams may be helped in bucking tradition by the fact that she is not, at the moment, technically running for office. The former Georgia House of Representatives minority leader and 2018 gubernatorial candidate, who lost that race in an election marred by questions of voter suppression, has turned her attention in the years since to securing voting rights through her organization, Fair Fight. Abrams’s name has come up, however, in discussions of who could join Joe Biden’s Democratic ticket as Vice President in November; Abrams, unlike most potential VP picks, has said publicly that she would accept the position if asked.
Our Time Is Now: Power, Purpose, and the Fight for a Fair America is an in-depth history of voting rights in this country and an analysis of what the future may hold if lawmakers fix voter suppression nationwide—or if they do not. The book gets into the nitty-gritty of each aspect of safeguarding the right to vote: voter registration, access to the ballot box, ballot counting, and even the importance of the U.S. Census in shaping the electorate. It’s a work that looks beyond Abrams’s own political career to the future of U.S. politics for generations to come.
“We cannot stop the future, but if we are wise, we will prepare for variations in outcomes,” Abrams writes in the book. “If we are smart and nimble, we will shape the future as we can—because our time is now.”
Abrams spoke to Fortune last week about Our Time Is Now, nationwide protests over racism and police brutality, and the recent primary election in her home state of Georgia.
This conversation has been edited and condensed.
Fortune: You open the book with the story of your grandmother exercising her right to vote after the passage of the Voting Rights Act—and her fears about doing so. What would she make of the protests that have exploded across the country?
Stacey Abrams: What I tried to illuminate with her story is that the right to vote came about in part because of protests her children participated in. My father was arrested as a teenager helping to register black people to vote in Mississippi, and he and my mother were both very active in protests. She would understand the urgency and the despair that drives the protests. My father is now 71; he was 14 when he was arrested. This weekend, he and my mother and my 13-year-old niece participated in a community protest. They raised me to understand that protest is part of our democracy. It’s how we draw attention to the needs that we have when the normal lines of communication don’t work or are ignored.
Courtesy of Henry Holt & Company
This book takes the long view—offering solutions that may take decades, resolving well past the point of your own political career. Why was this the book you wanted to write?
I was urged to write a retrospective on my campaign for governor, which did not feel to me to be sufficient. The issue [of voter suppression] that may have been singular in its disposition [in the 2018 Georgia election] was emblematic of a larger problem in our country. It’s the reason I do what I do—the reason as a teenager I became involved in activism, the reason as an adult I ran for office. This book was an encapsulation of my vision of what we can be as a country. The subtitle means something to me: Power, Purpose, and the Fight for a Fair America. That’s what wakes me up, what galvanizes me through the day, what I think about as I go to sleep. This book was not supposed to be about my campaign; my campaign is an incident. The larger challenge is what permitted suppression to happen in Georgia and what permitted the murders of too many black people. What permitted the grotesque reaction and inaction to COVID-19. These are all part of the narrative—and the book was designed to capture the why.
What did the challenges in Georgia’s election last week say about what the nation will face in November?
There has been skepticism about what I described as the challenges of the 2018 election. I think the real-time display we saw on Tuesday should rip away the blinders from the eyes of anyone who said I was making it up. What it signaled is that this wasn’t just about a single election—it was about a system that is broken, and in this case, it was so grotesquely broken that it harmed voters of every race, every degree of partisanship. The system itself is not structured to deliver the democracy it should.
But it should also show that progress is possible, especially when we don’t allow voter suppression to defeat us and instead use it to galvanize us. We saw record turnout. That record turnout did not diminish the existence of suppression, but it challenged it. We have the power now to demand better. We are seeing that in the demonstrations, and we saw that on Tuesday. The issue is making sure we have full access to the power of citizenship, and until we fix voter suppression, we don’t.
In recent weeks, we’ve heard leaders urge protesters to vote to make a difference, and others registering skepticism that voting can enact the kind of change that is needed. What would you say to those who question how much voting can achieve?
Going to vote is a critical part of the solution—it’s just not the only thing. We need to understand what it can accomplish. Voting is an essential part of the solution. It feels inadequate. It certainly sounds inadequate when it is offered as an alternative to protest—and that’s what I push back on. I do not believe it is “don’t protest, go vote.” It is “protest in the streets, and then protest at the ballot boxes.” We have to see this as a continuum as opposed to antithetical to one another.
It’s incumbent on those who hold public office and urge voting as a remedy to explain that it operates much like medicine. There is not an instantaneous cure. It often takes repetition, and there may be setbacks. There will certainly be counterattacks by whatever disease or virus it is—in this case, systemic racism and inequity—so we can’t ever stop taking the medicine. We’ve got to keep doing it until we’ve reached the actual defeat of the illness. That’s going to take a very long time because it’s been baked into the notion of America since its inception.
You’ve said before that you would make “an excellent running mate.” How have the past few weeks affected your view of the upcoming Biden ticket and vice presidential slot?
[Laughs] What I’ve said for 14 months remains true: Yes, I would, and yes, I can. But it is up to the Vice President to determine who he believes is the right partner for him in both this campaign and in governance.
As protests over racism in the U.S. continue, Vice President Biden is hearing renewed calls that he choose a black woman as his running mate. You write in your book about “identity politics” as a logical means of political choice and a powerful tool. Is it important for Biden to choose a black woman to join him on his ticket, and what would it mean to do so?
Vice President Biden began this process by declaring his intention to select a woman, which meant he recognized the salience of the identity of gender and of the lived experience of women in our country, who have been denied autonomy and power and access for too long. By the same token, there is certainly a signal to be sent by recognizing the roiling anger and despair that pervades communities of color and particularly black communities.
A short afterword in the book addresses the coronavirus pandemic. Is the pandemic creating further threats to voting access, and what do we need to be concerned about in November?
We should be concerned about whether our states have the resources to scale elections to meet not only the pandemic, but the pressure that will be brought to bear on the system. We need the resources to make sure people can vote by mail so they are not forced to choose between their health and the right to vote. We need resources so we can expand access to early voting in every state. We need the resources for in-person early voting. All those things are critical, and they require resources. We are in the midst of an economic collapse. It is a constitutional requirement that we hold this election, therefore this is a responsibility on the part of the federal government to invest in making sure those elections can happen. We need the passage of the HEROES Act and the buy-in of our secretaries of state to execute these elections on behalf of their citizens.
You’ve mentioned participating in protests after the beating of Rodney King by law enforcement in 1992. What do these two experiences and protest movements say to you about how far the country has come, or not, over the past three decades?
In 1992, I was a college freshman who helped lead a quiet march from the Atlanta university center to City Hall. The next day there were demonstrations that resulted in the city of Atlanta cordoning off our campus and teargassing students and residents of the community. At the time, I was disturbed on behalf of those community members until I realized, there but for the grace of God go I. That renewed in that moment my commitment to trying to find solutions.
Stacey Abrams at Spelman College discussing her activism with Students for African American Empowerment (SAAE) on June 18, 1992. Nick Arroyo—Atlanta Journal-Constitution/AP Images
The difference is that in 1992, the demonstrations were done in a few days. The presidential election that followed unfortunately did not attempt to challenge what we saw. That’s different now. This presidential election is going to be defined in part by this moment. What makes me most hopeful is that this energy and determination can be brought to the ballot boxes and we will see real change.
Our Time Is Now describes challenges to the right to vote facing all kinds of communities of color in this country. What specific challenges do women of color face exercising their right to vote?
Women of color are more likely to be caregivers. They’re more likely to be in the essential worker category of nurses or home health aides, which means that their schedules are not their own. They’re more likely to be underpaid for their employment, which means when they have to sacrifice their time standing in a line that can last up to eight hours, they lose a day’s wage, which can mean the difference between making rent and buying food. While these are grotesque challenges that affect communities of color writ large, for women of color in particular, the effects of voter suppression, the incompetence of poor management of elections reverberates throughout their lives. Not only do they face harm trying to participate, they face the consequences of their inability to vote or the inability of their community to vote because change doesn’t come.
Voter suppression has to be understood not simply as blocking access to an action, but blocking access to change. That’s why it takes up half the book. It is the point of entry to the kind of fairness, equality, and equity we need to demand, particularly for women of color.


fortune--2020-06-18--The fallout of John Bolton’s China bombshells

This is the web version of Eastworld, Fortune’s newsletter focused on business and technology in Asia. Subscribe here to get future editions in your inbox.
Former White House national security advisor John Bolton says President Donald Trump “pleaded” with Chinese President Xi Jinping for help in winning the 2020 presidential election and ignored Beijing’s human rights abuses in Hong Kong and Xinjiang province.
That sentence, or some variation of it, leads a torrent of news stories over the past 24 hours detailing revelations in Bolton’s forthcoming book, The Room Where It Happened: A White House Memoir. The U.S. Justice Department asked a federal judge on Wednesday to halt publication of the book, which has already been printed and distributed to booksellers, on the grounds that it would damage national security. Bolton published a lengthy excerpt in Wednesday’s Wall Street Journal.
The excerpt depicts Trump as an erratic, ill-informed, and unscrupulous leader eager to subordinate U.S. national security objectives to boost his own bid for re-election. It’s an unflattering portrait that contradicts Trump’s claim to be the first U.S. president to “get tough” with China since Richard Nixon restored relations between the two countries in 1972.
Bolton recounts a dinner meeting between Trump and Xi during last year’s G20 summit in Osaka, Japan, in which Trump “stunningly, turned the conversation to the coming U.S. presidential election, alluding to China’s capability and pleading with Xi to ensure he’d win.” He recalls that Trump “stressed the importance of farmers and increased Chinese purchases of soybeans and wheat in the electoral outcome.”
Trump’s conversations with Xi, Bolton remarks, “reflected not only the incoherence in his trade policy but also the confluence in Trump’s mind of his own political interests and U.S. national interests.”
Bolton characterizes Trump’s 2018 reversal of penalties imposed by the Commerce Department on Chinese telecommunications giant ZTE and his 2019 offer to drop criminal prosecution against Huawei as misguided efforts to ingratiate himself with Xi—all in the hope of closing a trade deal that would help lock up the farm vote. He alleges Trump’s zeal for a deal blinded him to the significance of pro-democracy protests in Hong Kong, and Beijing’s detention of Uighurs, a predominantly Muslim minority in the northwest Xinjiang province.
He also suggests Trump, enthralled by the tales of “Wall Street financiers who had gotten rich off mainland investments,” would have few qualms about selling out Taiwan.
Trump loyalists dismiss Bolton’s account as an attempt to settle old political scores. In a Fox News interview on Wednesday night, Trump lashed out at him as a “washed-up guy” who “broke the law.” Democrats, meanwhile, are castigating Bolton for refusing to be a witness in Trump’s impeachment trial earlier this year.
It’s unclear how—or whether—”Bolton’s bombshells” will affect the “phase one” trade agreement Trump signed with China in January. Chinese purchases from the U.S. have been slowed by the coronavirus pandemic. Late last month, Trump expressed frustration over the slow pace.
In a full day of testimony before the House and Senate on Wednesday, White House trade representative Robert Lighthizer said he expects China to honor its promise to buy an additional $200 billion in American goods and services over the next two years.
Lighthizer may be right. But it also may be that Bolton has made it harder for Trump to claim political credit for the deal. Poll after poll shows that distrust of China is one of the few issues on which voters from both parties agree. Trump campaign strategists believe his efforts to blame China for the pandemic have been resonating with voters. Until yesterday, at least, many were pushing the idea that Trump is more likely than Democratic challenger Joe Biden to hold China accountable as one of the campaign’s strongest messages.
On Wednesday, Biden seized on Bolton’s allegations as evidence that Trump “was willing to trade away our most cherished democratic values for the empty promise of a flimsy trade deal.” The same day, the Lincoln Project, a group of anti-Trump Republicans, released an ad skewering Trump for getting “rolled” in his dealings with China. “They know Donald Trump is: weak, corrupt, ridiculed,” the voiceover intones. “China beats him every time.”
More Eastworld news below!
Clay Chandler
Executive Editor, Asia
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
Dragnet
Police in China have created a vast DNA collection program by retrieving blood samples from millions of Chinese males since late 2017, according to a new report from the Australian Strategic Policy Institute. Chinese authorities aim to collect samples for up to 10% of China’s male population and have even gone into schools to collect mandatory blood samples from students. Activists argue that the effort violates personal privacy and are concerned that it gives the government more power to frame and prosecute political dissidents. The report claims that Thermo Fisher, an American life sciences company, has aided Chinese authorities in the DNA collection scheme. New York Times
An oil bust in Myanmar
The precipitous drop in global oil production amid the pandemic is being felt around the world, even in rural Myanmar. This week, the independent Burmese magazine Frontier examined how a global drop in oil demand has devastated the rural state of Magway. Before the pandemic, the region had been producing roughly 8,000 barrels a day in its oil rich fields, which employed an estimated 500,000 people. Since February, however, the vast majority of those workers have lost their jobs (only 20,000 to 30,000 remain employed), leaving hundreds of thousands of locals with few opportunities for work. Frontier
The Nio normal
This week, The Wire China detailed the story of Nio, China's largest electric vehicle company and Tesla's strongest competitor in the Chinese market. The company was founded in 2014 on the idea to make sleek, high-end EVs for the Chinese market. The company rode high expectations to over $7 billion in private investments and a $12 billion valuation after its 2018 debut on the New York stock exchange. But by late 2019, the company was running out of cash. In February, the Chinese government invested $1 billion to keep it afloat, showcasing how Beijing is willing to 'grab the wheel' in achieving its goal to become a global leader in electric vehicles. The Wire China
National Security Law
The 2019 Hong Kong protests ignited over a proposed extradition bill that could send Hong Kongers to be tried in the mainland. On Monday, a senior Chinese official said Beijing’s new national security law will have the power to do just that. The news fuels growing concerns that Beijing’s power over Hong Kong may be more expansive than Beijing’s authorities have led on. This week, Bloomberg outlined how an arm of the Chinese government, the United Front Work Department, has worked behind the scenes to line up political and business support for Beijing’s new law. Victor Shih, a Chinese politics expert, also argued this week that Hong Kong’s banking system is in far more jeopardy than investors currently realize. The Guardian
From Himalayan battle to trade tensions
Sino-Indian relations are at their rockiest point in decades after a border clash this week resulted in dozens of casualties. India’s government reported that at least 20 soldiers died in hand-to-hand combat with Chinese soldiers in the Galwan Valley, a disputed border region in the Himalayan mountains between China and India. China’s army confirmed that it also suffered losses without specifying how many. The two sides have reportedly agreed to deescalate tensions, yet an Indian diplomat believes that India should reexamine its "economic dependence" on China amid the conflict. The Wall Street Journal
Coronavirus by country
China
China’s capital, Beijing, has recorded nearly 150 confirmed COVID-19 cases in the last week. It marks the country’s largest outbreak in months, and authorities in Beijing are taking aggressive measures to stamp out the spread of the virus. Beijing has locked down several neighborhoods, cancelled roughly 70% of the flights coming in and out of the city, closed schools, and is testing 90,000 Beijing residents per day. Beijing says the outbreak originated at Xinfadi, a wholesale food market in the southern portion of the city. And after closing the market, authorities found traces of the virus on a salmon cutting board, which fueled speculation that the virus may have been carried to China on salmon imported from Europe. Epidemiologists say this is “unlikely,” yet the news has sparked a country-wide boycott on imported salmon. Or, as one analyst put it, China is now dealing with the rise of “xenopescophobia, the fear of foreign fish.” Fortune
Markets and movers
JD.com—China’s second largest e-commerce company raised $3.9 billion in its debut on the Hong Kong stock exchange on Thursday. JD.com, already listed on Nasdaq, is part of a string of Chinese companies seeking secondary listings in Hong Kong as pressure ramps up on Chinese companies in the U.S. Fortune
Tesla—The electric car company (subject of last week’s newsletter) announced on Tuesday that it is entering a three-year agreement with the Japanese battery maker, Panasonic Corp., to manufacture lithium-ion batteries for Tesla vehicles. Yahoo Finance
Nomura—On Wednesday, the Japanese bank, along with cryptocurrency partners Ledger and CoinShares, launched Komainu, a ‘custody solution’ or security system that will be used to protect digital assets for financial institutions. Deal Street Asia
Grab—The southeast Asian ride-hailing company announced on Tuesday that it was laying off 5% of the company’s employees due to losses incurred by the pandemic. Grab says that the pandemic has provided a boost to its food and grocery delivery divisions, but it is not enough to make up for the loss of ride-hailing passengers amid social distancing guidelines in Southeast Asia. Jakarta Post
Final figure
28.3%
Japan’s export economy is in trouble, and it’s the U.S.'s fault. Yesterday, the Japanese government released data showing that exports were down 28.3% from January through May in comparison to the same period last year. Japan’s biggest trade partner is the U.S. and auto exports make up nearly a third of Japan’s total exports to the U.S. This year, vehicle and auto parts exports to the U.S. are down 70% compared to 2019. But it is not all doom and gloom for Japan. The government’s monthly economic report, which will be released Friday, will be more upbeat than initially expected, as the government projects that a reopening economy will provide a boost to consumer demand. Reuters


fortune--2020-06-18--How Google and Facebook’s 8,000-mile undersea data cable got caught in U.S.-China feud

U.S. officials on Wednesday said an undersea data cable backed by Google and Facebook should not connect through Hong Kong over concerns that the Chinese government might be able to access sensitive data.
Team Telecom, a government working committee with representatives from the U.S. Departments of Justice, Homeland Security, and Defense, recommended that the Federal Communications Commission (FCC) partially deny the Pacific Light Cable Network (PLCN) plan to build an 8,000-mile underwater cable connection between the U.S. and Asia.
The FCC in April approved Google’s request to operate the part of the cable that connects the U.S. to Taiwan, but not the portion that includes Hong Kong. Now, Team Telecom is advising that the whole project, which is subject to FCC approval, be rejected entirely if the route includes Hong Kong.
Team Telecom, which investigates foreign influence in U.S. telecommunications infrastructure, said in a statement released by the Department of Justice that it is “not in U.S. national security or law enforcement interests to approve subsea cables landing in [People’s Republic of China] territory when the PRC government has previously demonstrated the intent to acquire U.S. persons’ data.”
The cable’s Hong Kong landing station, the group said, “would expose U.S. communications traffic to collection by the PRC.”
Undersea cables carry more than 99% of the world’s data traffic. Google and Facebook both invested in PLCN alongside Pacific Light Data Communication (PLDC), a Hong Kong–based company that is majority owned by Chinese telecom firm Dr. Peng Telecom & Media Group.
“We are reviewing Team Telecom’s petition. We look forward to working with Team Telecom and the FCC toward obtaining a full license,” a Facebook company spokesperson said in an email statement. Google and PLDC did not respond to a request for comment.
The PLCN project was announced in 2017 and touted as the first undersea cable to connect the U.S. and Hong Kong. (Most cables stretch from the U.S. to Japan.) PLCN, if constructed, will offer speeds of 120 terabytes of data per second—equivalent to 80 million simultaneous high-definition video calls between Hong Kong and Los Angeles, where the U.S. landing station for the cable is supposed to be built.
The Justice Department statement said its data theft concerns have been “heightened” by the Chinese government’s “recent actions to remove Hong Kong’s autonomy and allow for the possibility that PRC intelligence and security services will operate openly in Hong Kong.”
The statement refers to Beijing’s approval last month of a national security law for Hong Kong that bypasses the region’s legislature. Hong Kong is a special administrative region of China, and under the “one country, two systems” policy, Hong Kong and mainland China have separate legal, financial, and political infrastructure.
The law prompted U.S. Secretary of State Mike Pompeo to announce that in Washington’s view, Hong Kong is no longer autonomous from mainland China, paving the way for the U.S. to roll back Hong Kong’s preferential economic status.
This story has been updated to include Facebook’s response.


fortune--2020-06-18--China begins testing meat imports for coronavirus following Beijing’s outbreak

This week, after authorities traced the origin of a recent COVID-19 outbreak in Beijing to the Xinfadi fresh food market in the city’s Fengtai District, the nearby port of Tianjin has begun testing all meat imports for the coronavirus, threatening to disrupt exports from the U.S.
According to Reuters, all containers carrying imported meat into Tianjin—a metropolis 70 miles from Beijing—are being opened so authorities can perform nucleic acid tests on every box of meat. Currently, the fastest tests available for humans can return a result in 15 minutes, but it’s unclear what scale of delays the new vetting procedures will introduce at the docks.
The latest outbreak—Beijing’s first in two months—has so far caused a cluster of more than 130 infections, prompting the capital to implement “wartime emergency” lockdown measures once again.
The surge also sparked a boycott of imported salmon, after officials found traces of the novel coronavirus on a fishmonger’s chopping board inside the wet market. Authorities shuttered seafood markets across the city, fearing more outbreaks spawned by salmon.
Initial reports from China’s Center for Disease Control and Prevention (CDC) claimed that Beijing’s latest coronavirus outbreak was of a European strain. On Thursday, Norway’s seafood association reported exports of salmon had dropped 34% in the past week. On Wednesday, however, Norway’s fisheries minister said both Norway and China had concluded salmon was not the source of the virus.
Now it seems China’s suspicion has turned to all meat imports. Shanghai’s municipal government declared on Wednesday that it would strengthen inspections of food imports too but stopped short of announcing widespread testing. Ordinarily, authorities would test a portion of each batch.
The increased scrutiny at Tianjin comes despite experts saying it’s unlikely the outbreak was caused by meat imports. Frank Yiannas, deputy commissioner for food policy and response at the U.S. Food and Drug Administration, said on Twitter that the FDA is aware of reports that China will “begin testing foods” but added there is “currently no evidence of the transmission of COVID-19 through food.”
China’s meat imports, especially pork, have surged in the past year as the country emerges from an African swine fever pandemic that decimated domestic pig stocks. In the first four months of the year, China imported 1.35 million tons of pork, up 170% from the same period last year. U.S. butchers have benefited from the uptick.
In April Smithfield—which is owned by China’s WH Group—exported 9,170 tons of pork to China, which the New York Times says is one of the company’s highest monthly export volumes in the past three years. In that same month, Smithfield plants in the U.S. became hotbeds of coronavirus infection.
If Chinese consumer sentiment turns against foreign meat imports, it could prove a major blow to U.S. exporters. But connecting the coronavirus to meat imports would raise issues for China too, INTL FCStone’s senior commodities analyst Darin Friedrichs wrote in a note Monday.
“China needs imports to help keep meat inflation under control. [If there is a risk of importing the coronavirus] there would need to be some increased safety measures [for the] handling and processing of imported meat. But implementing measures like that, and making changes to the supply chain, could be disruptive,” the note said.


fortune--2020-06-18--Here’s when CEOs think their businesses will have recovered from lockdown

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
How quickly will business recover from the business lockdown? We’ve got new data from a Fortune survey of CEOs, done last week in collaboration with Deloitte, that sheds light on the question. Half of the CEOs believe their revenues will have returned to, or exceeded, pre-crisis levels by January. And more than half–58%–say their employment levels will have returned to, or exceeded, pre-crisis levels by January. Not bad.
Of course, that still leaves almost half of the CEOs who expect their recovery to take longer. Another 20% of CEOs expect revenues to recover by June of 2021, and an additional 15% see revenue recovery by January of 2022. By June of 2022, all but 4% believe their revenues will have recovered, while all but 14% believe their employment levels will have recovered. So it’s not exactly a V–maybe more of a “square root” recovery.
The survey also provides compelling evidence that this economic downturn has been unique in modern times in that it 1) prompted an increase in investment, and 2) accelerated technological innovation. Some 77% of CEOs say that their company’s “digital transformation was accelerated during the crisis.” And a roughly equal percentage said the pandemic “created significant new opportunities for our company.” Moreover, significant percentages said they increased investment in workplace safety (50%), IT infrastructure (40%), innovation (36%) and consumer/end-user experience (35%). Only 16% said they didn’t increase investment in any area.
You can read more on the survey here. News below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Bolton book
A new book from former national security adviser John Bolton has provided scores of claims about President Trump. Among them: Trump offered to kill investigations as favors to dictators; he asked Xi Jinping to buy U.S. agricultural products to aid Trump's re-election chances in key states; and he told Xi that building concentration camps for Uighurs was "exactly the right thing to do." Trump denies the allegations. Fortune
Online platforms
The Justice Department wants to roll back key legal protections for online platforms, in particular the civil immunity that shields Facebook should unlawful behavior take place over its service and it's seen as complicit. This would open the platforms up to lawsuits from people allegedly harmed by online fraud, for example. That is, if the changes get passed by Congress—and this might not be the year for that. Wall Street Journal
Digital tax
The U.S., which has responded angrily to countries such as France that have unilaterally introduced "digital taxes" on the local revenues of Big Tech firms, has abruptly pulled out of OECD talks to reach international agreement on the subject. Its allies are furious. France had agreed to suspend its tax so the OECD could reach an agreement, but is now threatening to revive the plan. French Finance Minister Bruno Le Maire: "Whatever happens, we will apply a tax on digital giants in 2020 because it is a question of justice." Bloomberg
Green recovery
The International Energy Agency has released a $3 trillion plan for governments to make a green recovery from the coronavirus pandemic. IEA executive director Fatih Birol: "As they design economic recovery plans, policymakers are having to make enormously consequential decisions in a very short space of time. These decisions will shape economic and energy infrastructure for decades to come and will almost certainly determine whether the world has a chance of meeting its long-term energy and climate goals." CNBC
AROUND THE WATER COOLER
Wall Street vs AOC
Blackstone's Stephen Schwarzman and Goldman Sachs's David Solomon are among the Wall Street power players who are pouring money into the campaign of former CNBC journalist Michelle Caruso-Cabrera to unseat Alexandria Ocasio-Cortez in New York's 14th congressional district primary. Although MCC has raised just over $2 million for her Democratic primary campaign (the election takes place next week), AOC has raised $10.5 million in small donations. Financial Times
Juneteenth statement
Historians say it's a powerful statement for companies to make tomorrow a holiday for employees. Juneteenth celebrates the end of slavery, and for companies such as Twitter, Mastercard and Target to make it a day off carries real resonance. Historian Tamika Nunley notes that the original Juneteenth proclamation says "the connection heretofore existing between [former masters and slaves] becomes that between employer and hired labor"—so it's fitting for employers to make a statement. Fortune
Brexit opinion
Former Australian prime minister Kevin Rudd has made a lacerating assessment of the British idea that striking trade deals with Commonwealth countries can make up for leaving the EU: "I’m struck…with the number of times Australia, Canada, New Zealand and India have been advanced by the Brexiteers in the public debate as magical alternatives to Britain’s current trade and investment relationship with the European Union…This is the nuttiest of the many nutty arguments that have emerged from the Land of Hope and Glory set now masquerading as the authentic standard-bearers of British patriotism. It’s utter bollocks." Guardian
Shape up
Obesity and related conditions such as type 2 diabetes and cancer are pre-existing conditions that can raise the likelihood of severe illness or death in the COVID-19 pandemic. So policymakers in Europe are considering how much they should move to tackle the continent's obesity problem—some say it would be a good start to get the EU to recognize obesity as a chronic disease, as the WHO has already done. Politico
This edition of CEO Daily was edited by David Meyer.


fortune--2020-06-18--Disease, recession, war games—why none of it seems to count as bad news for today’s investors

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. Stocks and futures are climbing ahead of today’s jobless claims report.
Yesterday’s rally fizzled in afternoon trade. But for a while there, nothing could dent traders’ exuberance. Deadly border tensions between China and India? A mere trifle. A blowup on the Korean peninsula? Nothing to see here. A COVID-19 outbreak in a city of 22 million, and cases piling up in America’s Sun Belt? Yawn. War games, a pandemic, a global recession and millions out of work used to rank as markets-sinking events. But these days, there’s always something to buy—even shares in a bankrupt car rental firm that can’t seem to raise emergency funds.
Let’s go ahead and see what’s moving markets.
Markets update
Asia
Asia is mixed in afternoon trade. The Hang Seng and Japan’s Nikkei are down ( -0.4% ); Shanghai is up, barely ( +0.2% ).
and Japan’s are down ( ); Shanghai is up, barely ( ). Beijing (pop. 22 million) isn’t in lockdown—yet—but officials are growing increasingly concerned about the rising number of COVID cases , now at 158 .
(pop. 22 million) isn’t in lockdown—yet—but officials are growing increasingly concerned about the rising number of , now at . Japan was banking on an Olympics-sized surge of tourism this year, hoping for 40 million visitors. It’ll be lucky to get 5 million.
Europe
The European bourses erased early declines with the benchmark Euro Stoxx 600 up 0.2% two hour into the trading session .
erased early declines with the benchmark up two hour into the trading session Bond traders are calling today Super Thursday as the ECB starts pushing out cheap loans to banks. Earlier this week, European debt issuance topped €1 trillion for the year, a speed record.
are calling today Super Thursday as the starts pushing out cheap loans to banks. Earlier this week, European debt issuance topped for the year, a speed record. So long, and thanks for all the fish. The EU appears set to compromise on a major sticking point with the Brits—sovereignty over the UK’s fishing waters—as post-Brexit trade talks seem to be on the right track.
U.S.
The Dow and S&P 500 fell for the first time in four days yesterday; only the Nasdaq managed to hold on to its gains, helped by Microsoft and Apple. Futures are off their lows, pointing to a positive open.
and fell for the yesterday; only the managed to hold on to its gains, helped by Microsoft and Apple. are off their lows, pointing to a positive open. Hertz ‘s plan to sell $500 million in new shares stalled out yesterday. Not because of timid investor demand, but because of scrutiny by the SEC . Trading in the bankrupt car rental firm was halted Wednesday, but it still managed to gain 2.6% .
‘s plan to sell in new shares stalled out yesterday. Not because of timid investor demand, but because of scrutiny by the . Trading in the bankrupt car rental firm was halted Wednesday, but it still managed to . Fed Chairman Jerome Powell warned lawmakers not to prematurely pull unemployment aid. The $600 weekly payments are due to expire in July with extension talks stuck.
warned lawmakers not to prematurely pull unemployment aid. The are due to expire in July with extension talks stuck. The latest jobless claims numbers are scheduled to hit before the bell. Economists expect nearly 1.3 million more Americans have filed for unemployment.
Elsewhere
Gold is up.
is up. The dollar is down a tick.
is down a tick. OPEC left its full-year forecast intact despite an upsurge in demand as the global economy gets back to business. Brent is up 1%.
What’s in the piggy bank?
Yesterday, we looked at the retail sales figures as a gauge of improving consumer sentiment. Those rosy numbers followed a surprisingly upbeat jobs report from earlier in the month. Investors have taken both data points as a sign the economic recovery is well under way, pushing the equities rally higher. For good measure, Fed Chair Jerome Powell cited the jobs and retail numbers too, yesterday, in his House testimony.
I have a third data point that shows yet more consumer optimism. Gallup’s latest survey shows an upswing in Americans’ positive feeling about their personal finances. This month, 53% of survey respondents said their personal finances were “good” or “excellent.” That compares to 49% saying the same in April. “Americans are still not as positive about their finances as they were in 2019 (56%) but remain much more upbeat than during the 2007-2009 Great Recession and ensuing years of high unemployment,” Gallup wrote in its report.
So, this is no replay of the global financial crisis. At least that’s what Americans are telling Gallup pollsters.
What I found most encouraging is that the more bullish sentiment is evenly spread across income brackets and age demographics. In fact, the most optimistic are households with annual income levels of less than $40,000, as the top line in the Gallup table shows here:
It’s possible the stimulus checks are a source of this optimism, which, after all, is precisely what the measure was designed to do—stabilize finances and keep Americans upbeat about their financial future.
But there are dark clouds on the horizon. The lifeline of unemployment benefits, for example, expires in about a month. Unless Congress extends it, financially strapped Americans will be back in the same hole as they were in April, and that could impact the severity and duration of the recession.
Powell said as much yesterday. “It would be wise to look at ways to continue to support people who are out of work and also smaller businesses that may not have vast resources for a period of time…so that we can get through this critical phase,” the central bank chief told lawmakers yesterday. “That support would be well placed at this time.”
I’ll come back to this—and similar—data point to see in which direction consumer sentiment is trending. A strong consumer is vital to an economic recovery.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
A note from my Fortune colleagues on a timely new initiative:
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here. https://bit.ly/WorkingWhileBlack
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
The biggest week for IPOs. In Asia, that is. JD.com went public today in Hong Kong, but it's not exactly an initial offering. The Chinese e-commerce giant listed on Nasdaq in 2014, a few months ahead of rival Alibaba. This is the quintessential stay-at-home stock, notching big sales gains during the pandemic lockdown, Fortune's Naomi Xu Elegant reports.
Direct to investors. The Hertz share deal may be dead on the side of the road, but that kind of offering is alive and well. Since the market's momentous turnaround in late March, a number of companies have begun raising funds by selling shares via an arrangement known as at-the-market—meaning: selling at the current share price, not at a reduced price brokered by a Wall Street heavyweight. Hertz was aiming to join Shake Shack and Robin Gourmet Burgers in the ranks of firms that have taken advantage of such a financing scheme. It's good for a company in a soaring market. It's not such a great deal for investors, however, the Wall Street Journal explains.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Quiz time
This one's for you, baseball fans. Which Major League Baseball team would actually eke out a profit if it were to play its home games in an empty stadium?
a) The New York Mets
b) San Francisco Giants
c) Minnesota Twins
d) Miami Marlins
Answer: D, the Marlins. That's according to an analysis by Bloomberg's Brandon Kochkodin. The real question: would anybody notice the difference if the Marlins imposed a no-fans-allowed rule at home games?


fortune--2020-06-18--John Bolton’s new book claims Trump sought Xi Jinping’s help to win 2020 election

Former National Security Advisor John Bolton writes in a new book that President Donald Trump asked Chinese leader Xi Jinping to help him win re-election by buying more U.S. farm products, according to an excerpt published by the Wall Street Journal.
The disclosure is part of a devastating portrayal of Trump’s conduct of foreign policy by Bolton, the most senior official in this White House so far to publish an account of his experience. The book is poised to further burden Trump’s already struggling effort to secure a second term.
In the book, which is scheduled to be released next week, Bolton describes a discussion between Trump and Xi at last year’s Group of 20 summit in Osaka, Japan. Bolton writes that Trump was “pleading with Xi to ensure he’d win” but said he could not print the president’s exact words because of the government’s pre-publication review process for classified material forbade it, according to the excerpt.
The former top security aide said the result was emblematic of “the confluence in Trump’s mind of his own political interests and U.S. national interests,” writing that he routinely made foreign policy choices in order to benefit himself politically.
“I am hard-pressed to identify any significant Trump decision during my White House tenure that wasn’t driven by re-election calculations,” Bolton writes.
The Trump administration has been trying to stop the book’s publication, and on Wednesday night asked a federal judge in Washington to grant an emergency restraining order. But the New York Times and the Washington Post have both published reports on Bolton’s book on Wednesday after obtaining copies.
In an interview with Sean Hannity on Fox News Wednesday night, Trump said that Bolton “broke the law, very simple. As much as it’s going to be broken.” He belittled Bolton as a “washed up guy” when he joined the administration.
Trump earlier told the Wall Street Journal that Bolton was “a liar” and offered a vindication of his foreign policies.
A Trump campaign spokesman, Tim Murtaugh, said in an interview on Bloomberg Television that Bolton’s allegation that Trump sought Xi’s intervention in his re-election is “absurd.”
“John Bolton is just trying to sell books, that’s all there is to it,” he said.
But the White House is already struggling to consistently rebut Bolton’s account. While Trump said Monday that “maybe he’s not telling the truth,” White House Press Secretary Kayleigh McEnany said Wednesday the book is “full of classified information” without denying Bolton’s assertions.
Re-Election Lens
Bolton claims that Trump views China policy entirely through the lens of his re-election, fixated on securing a trade deal at the expense of almost everything else. That, according to Bolton, raises the possibility that Trump’s recent tough talk about China’s role in the coronavirus pandemic is nothing more than bluster that may dissolve if he wins re-election.
“The Trump presidency is not grounded in philosophy, grand strategy or policy,” Bolton writes. “It is grounded in Trump. That is something to think about for those, especially China realists, who believe they know what he will do in a second term.”
U.S. Trade Representative Robert Lighthizer said it was “absolutely untrue” that Trump asked Xi for help with the 2020 U.S. election during trade talks in Japan last year. Lighthizer made the statement in Senate testimony on Wednesday.
Bolton writes that last year, Trump offered to reverse criminal prosecutions against Huawei Technology Companies Ltd. if it would help secure a phase-one trade deal with China.
Bolton also said Trump did not study the weighty issues facing the country and knew little about other nations he dealt with. For example, Bolton writes that the president asked if Finland was part of Russia and expressed surprise upon hearing the United Kingdom is a nuclear power, according to The Washington Post.
The lack of knowledge put the president at a severe disadvantage when dealing with leaders like Russian President Vladimir Putin, Bolton said in an interview with ABC News.
“I think Putin thinks he can play him like a fiddle. I think Putin is smart, tough. I think he sees that he’s not fazed with a serious adversary here. I don’t think he’s worried about Donald Trump,” Bolton said in a clip that aired Wednesday.
The book, titled “The Room Where It Happened,” could have lasting consequences for Trump’s campaign, which has already been bedeviled by the president’s response to nationwide protests against police brutality and his handling of the coronavirus pandemic. Trump is trailing his presumptive opponent, former Vice President Joe Biden, in national polls and in many polls of key swing states.
“If these accounts are true, it’s not only morally repugnant, it’s a violation of Donald Trump’s sacred duty to the American people to protect America’s interests and defend our values,” Biden said in a statement on Wednesday.
In asking for the emergency restraining order on Wednesday night, the government argued that the book contained classified information and that Bolton failed to get approval to have it published.
The injunction should “instruct his publisher to take any and all available steps to retrieve and destroy any copies of the book that may be in the possession of any third party,” the government said in court papers.
The Justice Department on Monday filed a lawsuit seeking to block publication.
The legal wrangling, combined with Trump’s heated criticism of Bolton, has generated interest in the book, which has become a number-one best seller on Amazon.com ahead of its publication. Many former Trump aides have published accounts of their time in the White House, but none who held as high-ranking a position as Bolton.
At the very least, the book could undercut the Trump campaign’s argument that the president is far tougher on China than Biden would be, if elected. Trump’s son Donald Trump Jr. has taken to using the hashtag #BejingBiden in tweets and has accused the Democratic nominee of failing to recognize the threat posed by China’s Communist Party.
China Concessions
The list of Trump’s concessions to China are long, according to Bolton. He was uninterested in supporting Hong Kong’s pro-democracy protesters last year and told Xi in the summer of 2019 that building camps in the Xinjiang region to imprison hundreds of thousands of Uighur Muslim was “exactly the right thing to do.”
Trump, in the Wall Street Journal interview, said he did not give his assent to Xi’s plan for the widespread detentions in Xinjiang. And in the interview with Hannity, the president said, “Nobody has been tough on China and nobody has been tough on Russia like I have. And that’s in the record books and it’s not even close. The last administration did nothing on either.”
The description of Trump’s policies in Bolton’s book will lend credence to Democrats’ claims that the president’s actions essentially gave China a green light to carry out some of its most egregious abuses, including its crackdown on Uighurs and its decision to impose a new national security law on Hong Kong.
The White House announced Wednesday that Trump had signed a bill rebuking the Beijing government over its treatment of the Uighurs minutes after the book excerpts were published.
Defending Taiwan, according to Bolton, also isn’t a priority for the president. He describes Trump as being deferential and at times downright obsequious to Xi, at one point calling him the greatest Chinese leader in 300 years — and then amending it to “the greatest leader in Chinese history.”
The revelations came out at almost the exact time that Secretary of State Michael Pompeo was meeting China’s top foreign policy official, Yang Jiechi, for secretive talks at the Hickam Air Force Base in Hawaii. Both sides have so far refused to discuss the agenda for the talks.
Bolton argues that House Democrats could have expanded their impeachment inquiry beyond Ukraine to focus on what the former security aide called a “pattern of fundamentally unacceptable behavior that eroded the very legitimacy of the presidency.”
But Bolton has also faced backlash from critics for his refusal to testify in the House’s impeachment inquiry. He said he wanted to wait to see if a judge would rule if he he could testify despite White House objections.
He offered to testify during the Senate’s trial of Trump’s impeachment. Republicans who control the chamber voted not to hear from him before acquitting the president.
The New York Times reported that Bolton also wrote that Trump said he was willing to stop U.S. criminal probes “to, in effect, give personal favors to dictators he liked,” citing cases involving China’s ZTE Corp. and Turkey’s Halkbank. Bolton writes the president sought to seek favor with Xi and Turkish President Recep Tayyip Erdogan through the offers.
“The pattern looked like obstruction of justice as a way of life, which we couldn’t accept,” Bolton writes, according to the Times, adding that he expressed his concern directly to Attorney General William Barr and White House counsel Pat Cipollone.
Bloomberg News reported last October that Erdogan made multiple appeals to Trump to avoid charges against Halkbank, one of Turkey’s biggest lenders. Trump assigned Barr and Treasury Secretary Steven Mnuchin to look into the issue after an April phone conversation with Erdogan.
No action was taken for months after the call, but U.S. prosecutors released an undated indictment in October accusing the bank of fraud, money laundering and violating U.S. sanctions against Iran.


fortune--2020-06-19--Seattle police union expelled from large labor group

There is no shortage of black talent in corporate America

The largest labor group in the Seattle area has expelled the city’s police union, saying the guild representing officers failed to address racism within its ranks.
The vote Wednesday night by the King County Labor Council to exclude the Seattle Police Officers Guild comes after weeks of protests in the city over police brutality and racism following the killing of George Floyd in Minneapolis.
It’s also significant as the labor council is politically influential. Local elected leaders are reluctant to go against the umbrella group of more than 150 unions and 100,000 workers.
“Any union that is part of our labor council needs to be actively working to dismantle racism in their institution and society at large,” the labor council said on Twitter after the vote. The police union “has failed to do that work” and is no longer part of the council, the labor alliance said.
The Seattle Times reports that the delegate vote was 45,435 to expel, with 36,760 voting to keep the police union within the council.
Before the vote, police union President Mike Solan told delegates the police union wanted to stay involved with the council and was “willing to learn.”
“We are human beings and we are workers who are committed to this city and committed to the community,” Solan said. “We see a future, one that engages in these robust conversations, and in particular to race and how the institution of racism impacts all labor unions.”
Labor council representatives said the police guild could be readmitted at some point in the future.
“At this point, I just can’t justify to our members, ones who are staffing the medical tents and getting gassed” by the Seattle Police Department and having the Seattle Police Officers Guild at the table, “using our unity as a shield to justify contracts that go against our principles and mission,” said Jane Hopkins, a registered nurse and executive vice president of SEIU Healthcare 1199NW.
The Seattle City Council on Monday voted unanimously to bar police from using tear gas, pepper spray and several other crowd-control devices after officers repeatedly used them on mostly peaceful demonstrators.
The 9-0 vote came amid frustration with the Seattle Police Department, which used tear gas to disperse protesters in the city’s densest neighborhood, Capitol Hill, just days after Mayor Jenny Durkan and Chief Carmen Best promised not to do so.
Police have now largely left a several block area of Capitol Hill, which for more than a week has been the site of active protests by demonstrators who have dubbed the area the “Capitol Hill Occupied Protest.”
Black Lives Matter Seattle-King County said in a statement Thursday that it stands with the labor council in demanding acknowledgement and addressing of institutionalized racism in Seattle policing, and that police accountability be included in contract negotiations.
The organization said it has demanded a seat at the negotiating table and that the mayor has responded by putting those police contract negotiations on hold until there is a plan for community representation.


fortune--2020-06-18--Court rules Trump can’t require drugmakers to disclose prices in TV ads

In a major legal setback for President Donald Trump on a high-profile consumer issue, a federal appeals court has ruled that his administration lacks the legal authority to force drug companies to disclose prices in their TV ads.
The ruling denies Trump an easy-to-understand win on a major reelection priority for the White House, bringing down the cost of prescription medicines. Where most plans to overhaul the cost of drugs are complex, mandating that companies disclose prices is something any consumer can relate to.
Separate from the court case, legislation that would lower drug costs for Medicare beneficiaries with high bills is stuck in Congress. It’s unclear that Trump can get it moving, since it would require some hard compromises for both Republicans and Democrats. There’s also a separate bill that would mandate drug companies to disclose their prices in consumer advertising.
Trump, however, is not empty-handed. His administration recently brokered an agreement with drug companies and insurers that would give Medicare recipients taking insulin the ability to limit their copays to $35 a month, starting next year.
On TV ads, the unanimous decision by a panel of the U.S. Court of Appeals for the District of Columbia Circuit did not address a core argument of the pharmaceutical industry, that forcing companies to disclose their prices in advertising violates their free speech rights. Instead the three-judge panel ruled that the Department of Health and Human Services overstepped its legal authority by requiring disclosure under the umbrella of its stewardship of Medicare and Medicaid. The panel issued its decision Tuesday.
In a scathing rebuke to the administration, Judge Patricia Millett wrote for the court that HHS “acted unreasonably” in asserting it had authority to impose “a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs.
“Because there is no reasoned statutory basis for its far-flung reach and misaligned obligations, the disclosure rule is invalid and is hereby set aside,” the judge added.
White House spokesman Judd Deere shot back in a statement: “It makes absolutely no sense to keep patients in the dark on the true cost of care, and only the ‘D.C. Swamp’ would support such a thing. While big pharma will do everything they can to avoid even a conversation on their astronomical list prices, President Trump remains committed to making pricing information available prior to the delivery of care.”
When the disclosure rule was announced last year, administration officials were confident that it would be in effect by now.
Trump tweeted at the time that “Historic transparency for American patients is here.”
Drug pricing details were expected to appear in text toward the end of commercials, when potential side effects are disclosed.
The government hoped that patients armed with prices would start discussing affordability with their doctors, and gradually that would pressure drugmakers to keep costs of brand-name drugs in check. AARP was among the organizations supporting disclosure.
The idea was part of a multilevel blueprint Trump announced in 2018 to try to lower prescription drug costs.
In Congress, a bipartisan bill from Sens. Dick Durbin, D-Ill., and Chuck Grassley, R-Iowa, would achieve essentially the same results as the Trump administration rule, requiring companies to list prices of their prescription drugs in their consumer advertising. Although an act of Congress would may carry more weight in the courts, its path forward also seems unclear.
Democrats see an opportunity to make far bigger changes. The House passed Speaker Nancy Pelosi’s bill authorizing Medicare to negotiate prices directly with the industry. That’s a nonstarter for Republicans, though Trump once supported it.
Pelosi’s bill would plow billions from prescription price cuts into providing new benefits for Medicare recipients, such as vision, dental and hearing aids. Democratic presidential candidate Joe Biden also backs Medicare negotiations.


fortune--2020-06-18--There is no shortage of black talent in corporate America

Honeywell claims to have created the world ’ s most powerful quantum computer

The wrenching tragedies of the past several weeks have arrested the attention of our nation. Now, America is at a crossroads: We can boldly pursue a more equitable future, or we can remain content with the familiar and disappointing status quo.
Corporate America is at an inflection point as well. Companies are confronting issues with race and equity in their own ranks, including slow progress in hiring, promoting, and retaining more Black leaders.
Despite changing sentiment and emerging data, some corporate leaders contend there is simply not enough Black talent to ascend to the C-suite and corporate board service. The many thousands of talented Black executives across the country and researchers who study the topic would disagree. Preparation is not the central issue here; what we lack are opportunities for advancement.
Here is the unfortunate truth: Too often, Black corporate leaders are not seen, not valued as highly as their peers, and not positioned for success. Last fall, Korn Ferry, a leading global organizational consulting firm, released the result of its interviews with some of the most senior Black profit and loss (P&L) leaders at Fortune 500 companies. Many reported “having to work twice as hard—and accomplish twice as much—to be seen on the same level as their colleagues.”
This is what systemic inequality looks like in corporate America.
It is time to chart a new and better course. I know firsthand that intentional action and ongoing professional development can change a person’s life. Thousands of Black executives, including myself, have completed the Executive Leadership Council (ELC) leadership development programs at some point during our careers.
The ELC’s Institute for Leadership Development and Research offers several annual programs. The Mid-Level Managers’ Symposium (MLMS) is a two-day professional development experience for nearly 1,000 high-potential corporate managers. In its 26th year, MLMS allows participants to hear from highly regarded Black industry experts and interface directly with ELC members to develop insights and build executive competencies. Five programs for more seasoned managers are offered during Leadership Development Week. We host a C-Suite Academy for Black executives who are ready to enter or are beginning their tenure in the C-suite. Corporations looking to invest in their Black talent will send their high-performing employees to these conferences.
With an eye on the future, we also invest in up-and-coming Black talent. We offer undergraduate scholarships for students matriculating at historically Black colleges and universities (HBCUs). Our Honors Symposium pairs these recipients with ELC leaders for in-depth discussions on how to excel as Black executives in corporate America. We host a business case competition for Black MBA students to submit solutions to case studies on current business challenges facing the corporate world, earning them scholarships and internships. Most recently, we established a Black male initiative to increase the successful graduation rate for young men enrolled in HBCU business schools, beginning with three pilot schools.
The ELC’s in-depth curriculum and initiatives are a class apart: They are uniquely designed to develop the Black leadership pipeline from the classroom to the boardroom. And they provide Black executives and managers leadership development and mentoring they are not likely to receive in corporate America.
We are proud to help our own, but we need willing partners to create more opportunities for Black talent in corporate America. It is not just the right thing to do; research has shown that diversity of people, ideas, and experiences helps give businesses an edge. Tapping into the talent and expertise of Black executives and others will take a deliberate and sustained commitment.
Of the thousands of Black managers and executives who have benefited from the unique initiatives and networking offered by the ELC, hundreds have risen to C-suite positions and boardrooms.
An exceptional example of the path to leadership is Susan Chapman-Hughes, executive vice president/general manager and global head of digital capabilities, transformation, and operations at American Express and nominee for the board of directors of J.M. Smucker. She started as an ELC Scholar in college and went on to participate in the ELC’s MLMS and Strengthening the Pipeline program. She was a Cohort Member in the ELC’s Corporate Board Initiative, designed to prepare and position Black executives for corporate board service.
“The ELC has been an integral part of my career success. I have benefited from many of ELC’s programs over the years,” said Chapman-Hughes. “From being selected as an essay winner to being a part of the inaugural Corporate Board Initiative, the coaching, mentoring, and access I have received over the years has been invaluable.” Susan’s is one of the many success stories of how the development and networking available through the ELC’s programs can lead to executive leadership opportunities at the highest levels.
And we are not the only ones developing Black talent for corporate leadership. There are Black executives who are alumni of the Consortium for Graduate Study in Management, Management Leadership for Tomorrow, and MBA programs at Harvard, Wharton, Columbia, Darden, and Kellogg among many others. Our partnerships with INROADS, Calibr, NACD, and the National Black MBA Association are only a sample of other reputable sources.
Black executives are plentiful and have proved themselves ready to lead. If you don’t know them, you should.
Thus, my message to the leadership of corporate America is simple: Be intentional. Be bold. Be accountable. Be transparent. And let us help you. Together, we can build an inclusive economy that delivers value for society and your shareholders.
Crystal E. Ashby is interim president and CEO of the Executive Leadership Council.


fortune--2020-06-18--Tesla homes in on Austin for Cybertruck factory site

Tesla is zeroing in on an area in southeast Austin, Tex. for the electric-car maker’s second U.S. auto factory and first pickup plant.
The company has filed an application with an Austin-area school district in Travis County seeking a tax abatement, according to publicly filed documents. Elon Musk, Tesla’s chief executive officer, announced in March the Silicon Valley-based carmaker has begun scouting for sites to produce its Cybertruck, which is still in development, and Model Y crossover for customers on the East Coast.
“Tesla is evaluating the possible development, design, and construction of an electric-vehicle manufacturing plant in Travis County,” the company said in the filing. The 2,100 acre site under consideration is currently a ready mix concrete facility owned by Martin Marietta Materials Inc.
Tesla has an option to purchase this land, but has not exercised it — Elon Musk (@elonmusk) June 18, 2020
Tesla’s proposed 4 million to 5 million-square-foot plant would eventually employ 5,000 workers and become its fourth worldwide for vehicle assembly. The company bought its first factory in Fremont, California, from Toyota Motor Corp. in the wake of the global financial crisis for just $42 million. It started making Model 3 sedans on the outskirts of Shanghai early this year and is planning to begin output of vehicles near Berlin next year.
‘Critical’ Abatement
Tesla said eight states were initially identified as viable contenders and that it has received incentive package offers, without giving specifics. It has since narrowed the search and said its ability to win a school tax abatement from the Del Valle Independent School District will weigh heavily on its plant location decision.
“This is especially critical in Texas due to the high level of real and personal property taxes relative to other states,” the company said.
Oklahoma Commerce Secretary Sean Kouplen said Thursday that the city of Tulsa is still a finalist and that the state has put forward a “responsible performance-based incentives package” to attract Tesla.
“We believe Oklahoma would be the right choice for Tesla,” Kouplen said in a statement. “We’re centrally located, we’re a pro-business state, our Automotive Engineer Workforce Tax Credit will benefit both Tesla and the engineers that they recruit and our amazing quality of life is a huge plus.”
Controversial program
The proposed deal with the Texas school district makes use of a state tax program that allows districts to grant breaks to economic-development projects. The state then repays the district.
The program “has been very controversial,” Nate Jensen, a government professor at the University of Texas-Austin, said in a phone interview. “There have been a lot of scandals around incentivizing companies that were coming anyway.”
Tesla unveiled its Cybertruck prototype in November, with Musk pitching it as a radically different take on the type of vehicles Ford, General Motors, and Fiat Chrysler Automobiles count on for much of their profits. The demonstration of what were supposed to be shatterproof glass windows on the vehicle didn’t go as planned but went viral, generating enormous publicity.
Master plan
Musk’s declaration that Tesla would build the plant prompted a chorus of offers from cities and states across the country hoping to land the project. The move was reminiscent of the company’s 2014 announcement that it planned to build a massive battery factory. The carmaker chose Nevada after the state offered $1.3 billion in incentives.
The search for the Cybertruck plant began before Musk threatened to move Tesla’s headquarters and future to Texas or Nevada after a California county blocked the carmaker from reopening its Fremont factory in the midst of the coronavirus pandemic. Days after his outburst, the company defied county health officials and restarted production.
The planned Cybertruck plant would fulfill a long-held ambition of Musk. In his 2016 “Master Plan, Part Deux” blog post, the CEO wrote that Tesla’s lineup eventually would “cover the major forms of terrestrial transport,” including pickups.


fortune--2020-06-18--Honeywell claims to have created the world’s most powerful quantum computer

In the race to build commercially useful quantum computers, Honeywell just took a big leap forward.
The industrial conglomerate unveiled on Thursday what it is calling, by one measure, at least, the “world’s highest performing quantum computer,” a type of experimental computer that could be a successor to today’s supercomputers. The company’s boast rests on the computer achieving a high score on what’s known as quantum volume, an invented metric that helps characterize the performance of a quantum computer.
Honeywell’s new machine has a quantum volume of 64, making it “twice as powerful as the next alternative in the industry,” the company said. Earlier in the year, IBM, one of Honeywell’s major competitors in the quantum computing race, declared it had built a quantum computer with a quantum volume of 32.
“It absolutely is the highest performing quantum computer in the world,” said Tony Uttley, Honeywell’s quantum leader, in an interview with Fortune. Uttley said his team was able to continue working toward the goal, despite the unforeseen disruptions of the global coronavirus pandemic.
“When everything started shutting down and we started saying at home, I thought we were gonna be in a tough spot,” Uttley said. Nevertheless, the team was able to pull through thanks to a combination of remote work and reduced staffing at its two labs, one just outside of Boulder, and another in the Twin Cities area of Minnesota.
IBM proposed quantum volume as an alternative way to assess quantum machines’ computing power in 2017. It was an attempt to shift the industry away from clunkier measures.
Before quantum volume, companies often liked to tout the number of so-called qubits—or quantum bits, the quantum equivalent of classical bits—their machines possessed, regardless of quality. The quantum volume figure instead factors in a number of other important attributes, including the stability of a given system, its proneness to error, and the ease of programming.
Unlike classical binary digits—the “1” and “0,” which form the basis of traditional computing—qubits can exist in multiple states (a property called superposition) and can become tied together (entanglement). These properties, unique to particle-scale physics, give quantum computers access to potentially greater processing power.
Some companies have set their sights on different goals. In the fall, Google claimed to have achieved “quantum supremacy,” a major milestone in which a quantum computer vastly outperforms a traditional machine on a mostly useless calculation. IBM later disputed the claim, arguing that the Google team underestimated IBM’s Summit supercomputer.
Other companies working on quantum computers include Intel, Microsoft, and startups Rigetti and IonQ.
Not everyone is convinced of quantum volume’s utility. On his popular science blog, Scott Aaronson, a respected quantum computer scientist at the University of Texas at Austin, remarked in March that Honeywell’s target metric could be considered “a clear step in the right direction,” but should not overshadow a computer’s full set of specifications.
“This is nowhere near quantum supremacy (i.e., beating classical computers at some well-defined task), which is a necessary though not sufficient condition for doing anything useful,” Aaronson wrote.
Scientists and businesspeople hope quantum computers will one day be able to solve seemingly intractable mathematical problems. These range from enhanced modeling of chemical reactions, which could help people discover new drugs or develop more environmentally friendly fuels, to making machine learning techniques more efficient, among other benefits.
Honeywell said customers of Microsoft’s cloud computing unit, Azure, would gain access to its quantum computer through a partnership the two companies struck. Those customers can run operations on the quantum computer remotely, without having to own and maintain the machine.
In May, Marco Pistoia, managing director and research lead for a JPMorgan Chase R&D lab, expressed enthusiasm in an email about the bank’s work with Honeywell, which includes credit risk simulations and improved fraud detection. “We are excited to work on such a powerful machine and collaborate with the quantum information theory team at Honeywell,” he said.
Steve Tomasco, an IBM spokesperson, said the company plans to debut a computer with a quantum volume of 64 later this year. “It’s exciting to see the wider quantum computing community embrace [the] quantum volume metric,” he said.
Honeywell, meanwhile, said it expects to boost its quantum computing power by a factor of 10 each year for the next five years.


fortune--2020-06-18--‘It’s been a long journey’: Google CEO Sundar Pichai on new, widespread commitments to racial equity

“[This] feels like a one of those rare moments, capturing awareness at scale,” Sundar Pichai, CEO of Google and Alphabet, told Fortune via Google Meet. We were meeting to discuss a lengthy announcement of new commitments to racial equity that Pichai made yesterday, including increasing black employees at senior levels and a new goal to increase leadership representation of underrepresented groups by 30% by 2025.
In the announcement, Pichai vows to work more deeply with black employees to address the cultural barriers that have prevented the company from full representation in the past. “I’m also convening a task force, including senior members of the Black+ community at Google, to develop concrete recommendations and proposals for accountability across all of the areas that affect the Black+ Googler experience, from recruiting and hiring, to performance management, to career progression and retention,” he wrote.
To help fuel opportunity outside of the company, Google is dedicating more than $175 million to an “economic opportunity package” that will target black business owners, startup founders, developers, and job seekers. In addition to financing and grants for business owners and reskilling training for job seekers, Pichai is directing some $100 million in funding participation in black-led startups and capital firms, including Plexo Capital, a diversity-minded venture fund, incubated inside GV (formerly Google Ventures) by founding managing partner Lo Toney.
To reach these commitments, Pichai convened a series of internal meetings, including a race and equity “crisis response team,” modeled on one the company used to respond to the coronavirus pandemic. (Read more on that below.) Pichai hopes that other companies will set similarly big goals and become more transparent in their efforts to achieve racial equity. Sharing metrics isn’t enough, he tells Fortune. “I think it’s important to realize the top companies have a disproportionate impact on all of this,” he says. “There are more accountable goals over time, and there are areas where we are improving as a company, but I think Fortune plays a unique role in the mindshare it has amongst the top companies.”
Below is a record of our conversation, which has been lightly edited for length and clarity.
Fortune: We’ve been dealing with and discussing issues of race, equity, inclusion, and police and criminal justice for a long time. What do you think is different about this moment?
Pichai: I think it’s a good question as to why this is the tipping point now, but it’s been extraordinary to see it, that it’s not just in the U.S. For me, watching the Black Lives Matter protest in Paris—even within the company—I’ve never quite seen anything like that. When we did the gift-matching campaign [for causes related to the Black Lives movement], it was the largest participation ever in terms of number of people and the amount raised in our entire history as a company. [Google matches donations of up to $10,000 per employee per year.]
I think next week we are doing some work to reflect how unique a moment it is. Even in our Search—many terms hit all-time highs they’ve never seen before across all these topics and from people querying around all this.
So, for sure, it feels like one of those rare moments capturing awareness at scale, obviously what’s been long-lived experiences for members of our black community.
How did you formulate your plan to respond? Where did you start?
Over the last couple of weeks, we had a series of conversations with what we internally call our Black Leader Advisory Group, as well as leaders from our Black Googler Network, which is part of the wider Black+ community at Google. It’s been a long journey. I’ve heard it before, but to hear stories, particularly in this context, it’s clear that there is systemic racism that permeates not just dealings with law enforcement, but be it housing, be it education, be it health care and in the workplace, right? And so I think the question is how can we capture the moment and translate it into attention and effort that sustains over time to create change.
I’ve previewed your announcement and it’s a long list of actions. Could you identify a couple of initiatives that you’re hopeful will have an unusual impact? All of them will have impacts, but some that you’re really hopeful about.
Yeah, obviously diversity and inclusion has been one of our core values as a company. We’ve been working hard to try and make progress. And so, there’s been an ongoing effort, and as part of that, we have well-established teams with our chief diversity officer, Melonie Parker, and we have a diversity inclusion team. Through the past few weeks, we have consulted deeply with the Black Advisory Leadership Group and our Black+ community, and internally it’s one of the areas where I felt a lot of Google has come together to volunteer and spend their time. So, we set up an equity project management office for the past two weeks. We modeled some of the setup around how we responded to COVID-19.
Really? How did that work?
So, we realized when we saw COVID-19 as a crisis, we kicked into gear and set up a project management office and a crisis response team. We brought that same process to bear while this [systemic racism] is an ongoing long-term problem. We realized, if we responded that way, we could capture the energy and the desire from the company to make change also using our platform and products. So, for example, for COVID-19, we set up a products team where people from around the company could email ideas. We followed the same process for this, and that was one work stream. And as part of that, we quickly realized there has to be two broad buckets of what we can do as a company.
What was the first?
While we’ve been committed to [diversity], progress has been slow, and we still have big gaps. And so we have to commit ourselves and do the work even harder to make real change in where our internal representation is. We feel it has to start there. If we can’t address that, I don’t think we are in a position to drive change outside our walls, and so that’s been a big focus. In conversations with black leaders and members from the community, it’s been clear that there are a few things we could do better. For example, in the past, we have had diversity training, anti-racism training as a separate thing. How do we integrate it, make it more part of something which everyone goes through, as an example of how do you more structurally drive change?
What else do you think is behind the slow progress in your diversity numbers?
Last year was one of our biggest progress years in terms of actual representation of Black+ employees, particularly in tech. We are committing to a 30% increase by 2025. And, small note—when you’re a company that’s growing and adding people, the math of it is actually harder. Committing ourselves makes you think and question what is the part of the work you’ve been doing that’s working well? What’s the part of it just not necessarily working well? One example: We realize we have to, as a company, go to places and establish offices and invest where there is diverse talent available—and more importantly, they’re available in a way in which people have the community structures and institutions which will support them and help them live in a way that is fulfilling. And so it’s part of us going to these newer places. It’s understanding and saying, “Okay, let’s do long-term planning to invest in Atlanta, in D.C., in Chicago, and other places around the world that we can actually make progress.”
The retention piece is often the most challenging.
For us, it’s also been a realization that it’s not just hiring for representation, but it’s about once people are in, what does their career progression look like? How do they feel included within Google? So [we’re looking at] what happens in the context of a workplace and where we can improve.
So the second bucket is the externally focused? How did you make commitments there?
As I mentioned, drawing parallel to what we did with COVID, I think there’s a whole set of stuff we can do externally as well. For me, I’m particularly interested in investing in education and using our ability to close the gaps there. For example—I think, I’m trying to understand the numbers—but I think there are roughly a very small number of black Ph.D.s graduating in computer science in the U.S.. We hire a lot of Ph.D.s, so what is it that we can do? We know the talent is there. So, what is it that we can do to meaningfully make change? What funding can we do? What are the programs that we can sponsor? So it’s about thinking like that, and once we start thinking like that, we realize the opportunity is very broad.
Does this include your own products?
[Thinking about] how can we better support black-owned small/medium businesses—how can we better showcase them in our products like Google Maps when people are coming looking for it? In fact, black-owned businesses, it’s been an area where we see a tremendous rise in search queries for the past few weeks. People trying to understand that and people wanting to support them. So, it’s bringing all of that, so a long answer to your question of what the process has been.
I want to ask about transparency. You first released your diversity report in 2014, and a lot of people thought it was going to ignite a wave of transparency. But in my world of the Fortune 500, the number of companies making this data available is still low—barely 14%. What do you think makes people afraid?
I think it’s a great question. I think change is hard. I think people are afraid of being criticized. I think that’s part of it. I think all of us are talking about what are the right CSR—corporate social responsibility—metrics, and be it representation, be it sustainability. I think the more we can standardize and actually make it more a part of the annual reporting we all do as companies, and maybe making progress more structurally—I think that’s the way to increase the numbers from 14% to much, much higher numbers. I think the tide is turning. I think if you and I have this same conversation in a few years, I expect the numbers to be significantly different. At least that’s the hope I have.
So we’re often talking about culture change—and not just Google, but technology in general—has a certain stereotypical type of a person, perhaps a tech bro who’s maybe resistant, very proud, has a very specific way of presenting themselves in the world. Media has the same person. Finance has a different version of the same person. So part of the work is asking in a variety of small and big ways for individual people to think differently, to take a breath, to use a new term, to push past some awkwardness. How do you think about culture change? What’s your advice for any leader who’s facing their version of resistance inside to these kinds of changes?
It’s a good question. First of all, our work on representation—even our work we have done to get better gender balance over the years—all of that contributes to a better environment and world. I think the nature of tech representation is slowly changing over time. When I look at computer science programs, I can see that change underway. That’s a part of it. The training, which we are talking about, the new version, we’ve been working on this for a few months—I think this becomes a catalyst for it, to find programs which we can scale globally and make it more integrated in training as part of what everyone asks. In fact, we are having a full conversation for the entire company in lieu of our normal TGIF meeting, with john powell, who runs the Othering and Belonging Institute at Berkeley. [powell is also a professor of law, African-American studies, and ethnic studies at the University of California at Berkeley. He prefers to use lowercase letters in his name.]
We need to model it from leadership. I think we—all of us, including myself—have to acknowledge the process. I was an immigrant to this country, and it’s been a journey for me to understand race relations in America, and it’s been a learning and so acknowledging that to people and saying, “Look, all of us are learning, and we understand that there’s work at an individual level for all of us to take the change. I think it’s important.”
What should media be doing now? Or Fortune?
I think you asked this question about [diversity data from Fortune 500 companies] transparency being at 14%. I think holding all of us accountable to make sure that we’re not just sharing metrics. There are more accountable goals over time, and there are areas where we are improving as a company, but I think Fortune plays a unique role in the mindshare it has amongst the top companies. I think it’s important to realize the top companies have a disproportionate impact on all of this. And so I think it’s a very impactful way to drive it.


fortune--2020-06-18--So much for ‘high yield’: Goldman Sachs cuts rate to 1.05% on Marcus accounts

In 2016, Goldman Sachs launched its flagship consumer product, known as Marcus, and enticed new customers with the promise of “high yield” savings accounts. The rates were never jaw-dropping but, at this time last year, offered a healthy 2.15% return.
Now, the online bank’s rates are clearing 1%—but just barely. This week, Marcus told customers in an email that it was slashing savings returns to 1.05%. The email is the fifth in a series of bad news missives from the bank which began last August, with the latest cut representing a 0.25% decline from a previous cut in early May.
None of this is surprising given that the Federal Reserve signaled last week it intends to keep its benchmark interest rate near zero till 2020. But it’s still discouraging for investors who, only a year ago, could choose from a glut of online banks offering rates that topped 2.5% in some cases.
Today, Marcus’s 1.05% is about middle of the pack, according to Bankrate.com, which shows rival online bank Ally offering 1.10% while card companies Discover and AmEx are offering 1.05% and 1.15% respectively. Three banks—Citi, Comenity, and Vio—offer an industry-leading 1.35%, but that is unlikely to induce many consumers to switch or sign up.
These negligible “high yield” savings rates present a dilemma about where to park cash, especially given stock prices that have been volatile and, in the opinion of many experts, overvalued.
One option may be CDs. According to a savings rate blogger cited by CNBC, CDs with rates higher than 3% may turn up later this year. But that remains to be seen.
Another source of worry for investors is the specter of inflation, which has yet to materialize, but could be a real danger given the huge amount of money central banks, including the Federal Reserve, have printed in recent months. Indeed, the flurry of money printing has even given rise to a new meme and website called “Fed go Brrrr.”
This has led some—notably in the cryptocurrency world—to advocate for investing in assets that are relatively scarce, including real estate and Bitcoin.


fortune--2020-06-18--Florida and Texas lead states where new coronavirus cases are rising significantly

For the latest data on coronavirus cases by state, please check out our updated map here.
Even with new cases of COVID-19 climbing quickly in Florida and Texas—by more than 1,000 more new cases per day than they saw two weeks ago—governors of those states are pressing ahead with reopening initiatives.
According to a Fortune analysis of New York Times data, Florida averaged 876 new cases per day in the seven-day period ending June 3; that compares to an average of 2,193 new cases for the period ending yesterday, June 17. Earlier this week, Governor Ron DeSantis pointed to more widespread testing and the identification of asymptomatic cases through contact tracing efforts and said the state “will not roll back” the lifting of COVID-19 restrictions despite the record-breaking levels of new cases. Some of the governor’s facts have been challenged, while others have worried about the increasing rate of positive cases in the state. While Florida’s tally of new cases topped 3,000 today, that is still well below the number of new cases hard hit New York saw at its peak in April—more than 12,000 in one day.
Texas, where Governor Greg Abbott today announced plans to reopen schools this fall, averaged 2,528 new cases per day over the past seven days; two weeks ago, that figure was roughly 1,492.
New cases are trending upward in 18 states across the country. Along with Texas and Florida, eight other states saw the number of daily new cases rising significantly—by more than 200 new cases per day, on average.
The states hit hardest in the first months of the pandemic and in the early stages of reopening are for the most part seeing the number of new cases reported each day decline significantly. New coronavirus cases in Massachusetts are down by an average of 768 cases per day as compared to two weeks ago; in Illinois, new cases are down by an average of 734 cases per day.
State-by-state breakdown of daily new cases
New cases based on a seven-day average


fortune--2020-06-18--PG&E dodges 90 years in jail for fire because it’s not a person

PG&E Corp. dodged a 90-year state prison sentence for a 2018 fire that killed 84 people because it’s not a person. Instead the corporation was ordered to pay the maximum penalty under California law of $4 million.
State Judge Michael Deems said he recognized the constraints prosecutors faced under the law, but the sentence didn’t fit the enormity of the crime.
“The court’s sentencing options in this case are limited,” Deems said at a hearing Thursday, adding an individual in a similar case would likely get nine decades for the “callous disregard for the citizens of Butte county.”
Under California law, a corporation can be fined a maximum of $10,000 for each manslaughter charge. PG&E was also fined $50,000 for an unlawful fire charge. Additional state fees and the cost of prosecution boosted the penalty to $4 million.
The sentence was no surprise because it was part of an agreement under which the utility on Tuesday pleaded guilty to 84 counts of involuntary manslaughter stemming from the Camp Fire. PG&E will also report to an outside monitor who was appointed by a federal judge overseeing its criminal probation for safety violations stemming from a 2010 fatal gas-line explosion.
The sentencing came after surviving victims of the fire recounted how their family members died, and their continued suffering. Michael Ramsey, the Butte County District Attorney who prosecuted the case, told Deems the victims’ pleas for help on taped emergency call recordings were “truly scaring to the psyche and soul,” and the most disturbing he’d heard in his 40-year career.
PG&E’s interim Chief Executive Officer Bill Smith listened to the victims’ accounts Wednesday and Thursday. “We’ve heard every word,” Smith told the court. He said while no apology, plea or sentencing can undo the damage wrought by the Camp Fire, the company is “tirelessly” working to improve its safety.
“We have come before this court with humility and respect, ready to be held to account for this tragedy,” Smith said.
The case is People of the State of California v. Pacific Gas and Electric Co., 20CF01422, California Superior Court, Butte County (Oroville).


fortune--2020-06-18--Microsoft says antitrust regulators need to review app stores

Microsoft president Brad Smith said it’s time for antitrust regulators in the U.S. and Europe to discuss tactics that app stores use to take advantage of those who want to distribute their software.
Some app stores create a far higher barrier to fair competition and access than Microsoft’s Windows did when it was found guilty of antitrust violations 20 years ago, Smith said Thursday at an event sponsored by Politico. He didn’t specify which app stores he was referring to, but Apple Inc. and Alphabet Inc.’s Google operate popular ones for their devices.
“They impose requirements that increasingly say there is only one way to get on to our platform and that is to go through the gate that we ourselves have created,” Smith said. “In some cases they create a very high price per toll — in some cases 30% of your revenue has to go to the toll keeper.”
The European Commission Tuesday announced it’s investigating the way Apple regulates payments on its app store, concerned that developers are unfairly forced to provide a share of their revenue to the iPhone maker.
Representatives of Google and Apple didn’t immediately reply to requests for comment. The U.S. Justice Department couldn’t be reached for comment.
“The time has come — whether we are talking about D.C. or Brussels — for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and the tolls that are being extracted and whether there is really a justification in antitrust law for everything that has been created,” Smith said.
Microsoft’s concerns with Apple’s App Store are clear. The software maker, like all other developers on Apple’s platform, must give Apple a 15% to 30% cut of any subscription to software such as Microsoft Office or their email program Microsoft Outlook. Microsoft can’t point customers to sign up on its website either as that would circumvent the Apple fee.
Like with Spotify Technology SA and others that have made complaints against the app store, Microsoft is competing with Apple services and the iPhone maker doesn’t need to share revenue with anyone else. Apple has argued that it’s the store keeper and takes a fee to support developers and distribute their apps and services.
Beyond productivity software, Apple’s App Store rules have prevented Microsoft, among others, from launching new and popular cloud gaming services on the iPhone and iPad, Bloomberg News reported earlier this year.
Apple reacted to news of the investigation on Tuesday by saying “it’s disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don’t want to play by the same rules as everyone else.”