Month: February 2020

Enlarge / FTC Chairman Joe Simon speaking at a press conference in September, 2019. (credit: MANDEL NGAN | AFP | Getty Images)

The Federal Trade Commission this week announced another set of probes to add onto the heaping mound of antitrust investigations the nation's biggest tech firms now face. This time around, they're digging into a decade's worth of acquisitions that were small enough to escape scrutiny the first time around but may have proven to have big consequences after the fact.

The review will cover acquisitions made by Alphabet (Google), Amazon, Apple, Facebook, and Microsoft between 2010 and 2019, the FTC said. The probe is not a criminal investigation but rather a "wide-ranging study" to help regulators better understand what trillion-dollar companies are doing when they gobble up little startups and their staffs.

The smaller transactions escaped scrutiny the first time around thanks to the Hart-Scott-Rodino Act—the same law that mandates a look at bigger transactions. Under HSR, plans for mergers and acquisitions above a certain dollar threshold must be submitted to the FTC and Department of Justice in advance. The process is called, fittingly, premerger notification. Once a company has submitted its premerger filing, regulators have 30 days to take a look at the proposal and determine whether to probe deeper. If the waiting period expires or the FTC grants it early termination, the companies can move forward.

• 

  Samsung's new Galaxy S20 phones. [credit: Samsung ]

Flagship phones like the just-announced Samsung Galaxy S20 or the iPhone 11 Pro get a lot of the marketing and press hype, but most people aren't buying. The small percentage of consumers who are buying face a difficult choice that's about much more than just benchmarks, specs, or camera features.

A recent NPD report claimed that fewer than 10 percent of Americans buy flagship smartphones (in this case, defined as phones costing more than $1,000). After a year of smartphone shipments and revenues gradually sliding down a hill, global smartphone shipments finally grew in the fourth quarter of 2019—but only by one percent. Of the market's 369 million units in Q4, Apple shipped 78 million iPhone 11 models, and Samsung shipped 71 million. In other words, Samsung and Apple together accounted for 40 percent of the smartphones hitting the market. Looking at what they're doing tells us a lot about what today's priorities are.

When you look across the whole product lineups of these two companies, you see very different strategies. But at the top of each line, the phones are mostly similar. The latest flagship smartphones from these market behemoths focus on cameras and screens above all else, and on those counts, the Samsung Galaxy S20 and the iPhone 11 Pro aren't actually that radically different from one another.

Enlarge / Juul went with a fashionable, "cool" marketing strategy. (credit: Mass.gov)

Popular e-cigarette maker Juul intentionally and egregiously tailored its marketing to appeal to underage youth, according to a lawsuit filed by Massachusetts Attorney General Maura Healey on February 12.

The company’s early marketing in 2015 and 2016 purposefully used young, “cool” models in its launch campaign, recruited teen “influencers” on social media, and bought banner and video advertisements on numerous websites aimed at teens and children, including Cartoon Network’s cartoonnetwork.com and Nickelodeon’s sites Nick.com and NickJr.com. Juul even went so far as to give advice to underage consumers over email on how to get around age restrictions to make online purchases of the company's e-cigarettes.

The lawsuit lands as public health officials across the nation are still grappling with an explosion in e-cigarette use by youth, which the Food and Drug Administration has referred to as an “epidemic.” Between 2011 and 2019, recent use of e-cigarettes by middle schoolers increased from 0.6 percent to 10.5 percent, according to the Centers for Disease Control and Prevention. For high schoolers, use increased from 1.5 percent to 27.5 percent in that timeframe. That means that by 2019, more than 1 in every 4 high school students said they had used e-cigarettes within the last 30-days from the time of the survey.