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Senate Democrats call for close scrutiny over Uber’s Grubhub deal

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A group of Senate Democrats, led by Sen. Amy Klobuchar (D-MN), is calling on the Trump administration Wednesday to launch an antitrust investigation into Uber and Grubhub if the two companies decide to merge.

In their Wednesday letter, Klobuchar, Sen. Cory Booker (D-NJ), Sen. Richard Blumenthal (D-CT), and Sen. Patrick Leahy (D-VT) requested that the Justice Department and Federal Trade Commission “closely monitor” talks of a deal between the two food delivery companies. If they reach an agreement, the senators are asking that the government “initiate an investigation.”

Earlier this month, Bloomberg reported that Uber made an offer to buy Grubhub and that a deal could be reached as early as June. Uber operates its own food delivery service, Uber Eats, which directly competes with Grubhub. If the two companies merged, their combined sales transactions would place them at a 45 percent hold on the app delivery market, according to Edison Trends.

“Consumers should be able to look forward to a future in which online food delivery is more efficient, more innovative, and less expensive,” the senators wrote. “A merger of two of the three biggest rivals in an already concentrated market risks [deprives] consumers of that outcome by potentially eliminating competition between the existing market participants.”

Over the weekend, Uber and Grubhub continued to discuss the details of a potential acquisition, The Wall Street Journal reported Sunday. Still, talks continue and a deal has not been reached. If a deal is announced, regulators like the Justice Department and FTC would have to sign off on it.

While Uber’s latest earnings report trailed by $2.9 billion from the previous year, its Uber Eats division went up over 54 percent year over year, largely due to the novel coronavirus pandemic and increased demand for food delivery.

“There has been a tremendous increase in restaurant sign-ups leading up to rapid improvement in selection in major markets like the US as well as behavioral shifts,” Uber CEO Dara Khosrowshahi said earlier this month. “We believe these trends are here to stay and will result in expansion of the entire category.”

Still, regulatory pressure continues to increase as lawmakers cast a skeptical eye toward corporate mergers during the pandemic. Chairman of the House Judiciary Committee’s antitrust subcommittee David Cicilline (D-RI) has pushed for a general moratorium on mergers until the pandemic ends.

“We cannot allow these corporations to monopolize food delivery, especially amid a crisis that is rendering American families and local restaurants more dependent than ever on these very services,” Cicilline said of the merger discussions earlier this month.

Other lawmakers, including Sen. Elizabeth Warren (D-MA) and Rep. Alexandria Ocasio-Cortez (D-NY), have proposed legislation that would impose a large merger moratorium until the FTC “determines that small businesses, workers, and consumers are no longer under severe financial distress.”

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Trump gives TikTok a new deadline: 90 days instead of 45

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President Trump issued an executive order Friday giving ByteDance 90 days to either sell or spin off its TikTok business in the US.

“There is credible evidence that leads me to believe that ByteDance … might take action that threatens to impair the national security of the United States,” Trump wrote in the order, which references national security concerns. ByteDance is based in China, and the Trump administration has recently suggested that the company could share information about Americans with the Chinese government. The company has denied it does so.

The move gives TikTok a bit of a reprieve from Trump’s August 6th order that would have blocked all US transactions with ByteDance, TikTok’s parent corporation, due to what the president referred to as an effort to “address the national emergency with respect to the information and communication technology supply chain.” Originally, TikTok had a September 20th deadline; now, it has until November 12th.

The latest executive order requires ByteDance to destroy any TikTok data from US users, and report to the Committee on Foreign Investment in the United States once all the data has been destroyed. ByteDance must also destroy any data collected from TikTok precursor app Musical.ly, which the company bought in 2017. The original order with the 45-day deadline didn’t include those requirements.

“As we’ve said previously, TikTok is loved by 100 million Americans because it is a home for entertainment, self-expression, and connection,” ByteDance said in an email statement to The Verge on Friday. “We’re committed to continuing to bring joy to families and meaningful careers to those who create on our platform for many years to come.”

Microsoft has been in talks to acquire TikTok — though co-founder Bill Gates has since called the potential deal a “poisoned chalice” — and reports last week suggested Twitter also was interested. It’s not clear how Friday’s executive order affects a potential sale, but Microsoft said it expected to complete the discussions “no later than September 15th, 2020.” Theoretically, Trump’s original timeline would have been enough for Microsoft, so we’re curious if anything has changed.

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Trump will prohibit transactions with Bytedance beginning September 20 in apparent TikTok ban

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President Trump has signed a new executive order which will block all transactions with Bytedance, TikTok’s parent corporation, in an effort to “address the national emergency with respect to the information and communication technology supply chain.” It isn’t effectively immediately, but has a 45 day deadline.

“The spread [of apps controlled by the Chinese government] continues to threaten the national security, foreign policy, and economy of the United States,” the order reads. “The United States must take aggressive action against the owners of TikTok to protect our national security.”

A parallel order banned transactions with WeChat, a popular texting app in China that maintains a small user base in the US.

The move comes after months of escalating tensions, which saw Secretary of State Mike Pompeo and others at the White House warn that TikTok presented a national security threat because of its Chinese ownership. On Friday, President Trump told reporters aboard Air Force One that he was preparing to sign some sort of order banning the app.

Those efforts have been complicated by discussions of a potential sale to Microsoft. On Sunday, Microsoft CEO Satya Nadella confirmed that he had spoken with President Trump about potentially acquiring the portions of TikTok based in the US, Canada, Australia and New Zealand, although huge portions of the deal remain in flux. The company also cautioned that discussions were still tentative and “there can be no assurance that a transaction which involves Microsoft will proceed.”

Microsoft pledged to conclude discussions by September 15th, a date that has been echoed by President Trump. Trump’s new order is set to take effect 45 days after its release or September 20th — just after the deadline set for negotiations in the Microsoft deal.

In both orders, the president names the International Emergency Economic Powers Act as authority for the move, as well as the National Emergencies Act — effectively naming TikTok’s continued operation within the United States as a national emergency. Such a move is highly unusual, and will likely be subject to a legal challenge.

The executive branch has the power to levy sanctions against individuals and corporations by placing them on the “entity list,” as the US did against Huawei and ZTE last year. But such sanctions are typically put in place by the Commerce Department rather than the White House, and subject to a specific rule-making procedure that seems to have been short-circuited by the surprise executive order.

The President also has the power to force the divestiture of US companies from foreign ownership through the Council on Foreign Investment in the United States (or CFIUS). But doing so also requires a specific process that seems to have been discarded in favor of a broader executive order.

It’s unclear how the order will affect TikTok’s ability to operate in the short term. Unlike Huawei and ZTE, the company does not require licenses to to operate its network, and nothing in the order seems to require app stores to cease hosting the app. However, it explicitly covers subsidiaries of Bytedance — specifically the US-based TikTok division — and will apply to any and all financial transfers to and from those subsidiaries. As a result, TikTok is likely to seek a stay of the order in court, or be forced to abruptly discontinue services as it takes effect.

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Facebook and Twitter remove manipulated video from president’s accounts after DMCA complaint

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Facebook has removed a manipulated video posted on President Trump’s account after receiving a copyright complaint from the rights owners.

The manipulated video shows a black toddler running away from a white toddler, with a CNN chyron reading “terrified toddler runs from racist baby.” The original video, which went viral last year, sees the total opposite, with the two toddlers running toward each other on the sidewalk so they can hug. The video was created by Carpe Donktum, a prolific pro-Trump meme creator who the president has amplified in the past, and uploaded to both Facebook and Twitter. It arrives as protests across the country fighting against systemic racism in the United States, and on the eve of Juneteenth — a day that many people celebrate as the day slavery ended.

Facebook took the video down after “one of the children’s parents lodged a copyright claim,” according to CNN. A Facebook representative confirmed to The Verge that a complaint was received by the rights holder. It had more than four million views by the time Facebook removed it, according to CNN. Jukin Media, a third-party company that often acquires the rights from people to viral videos, told CNN that “neither the video owner nor Jukin Media gave the President permission to post the video, and after our review, we believe that his unauthorized usage of the content is a clear example of copyright infringement without valid fair use or other defense.”

“We received a copyright complaint from the rights holder of this video under the Digital Millennium Copyright Act and have removed the post,” Andy Stone, a Facebook spokesperson, told The Verge.

Jukin Media has also filed a copyright claim complaint to Twitter, according to a statement posted on the company’s account. While Twitter labeled the video as “manipulated media,” it was still active on the President’s account until Friday evening. It appeared to be the first time one of Donktum’s edits has received the “manipulated media” tag, which is usually found on deepfakes. The video has been viewed nearly 20 million times at the time of this writing. It’s still unclear whether Donktum or the president’s team will argue the meme is transformative enough that it’s allowed to exist under fair use.

“We have submitted a DMCA takedown notice on behalf of the video’s creator, and in accordance with Twitter’s policy,” Jukin’s statement reads. “Separately, in no way to we support or condone the manipulate video or the message it conveys. We hope and expect Twitter will take swift action to remove the video.”

On Friday evening, Twitter disabled the video. The video was taken down due to a DMCA notice from the rights holder.

“Per our copyright policy, we respond to valid copyright complaints sent to us by a copyright owner or their authorized representatives,” a Twitter spokesperson told The Verge.

Update June 19th 5:40pm ET: Updated to include comment from Twitter and note it was removed after a copyright complaint. The headline has also been changed to reflect the update.

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