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Tag: Corporate management

  • Major retailers are offering summer deals to entice inflation-weary shoppers

    Major retailers are offering summer deals to entice inflation-weary shoppers

    NEW YORK — Americans who spend Memorial Day scouting sales online and in stores may find more reasons to celebrate the return of warmer weather. Major retailers are stepping up discounts heading into the summer months, hoping to entice inflation-weary shoppers into opening their wallets.

    Target, Walmart and other chains have rolled out price cuts — some permanent, others temporary — with the stated aim of giving their customers some relief. The reductions, which mostly involve groceries, are getting introduced as inflation showed its first sign of easing this year but not enough for consumers who are struggling to pay for basic necessities as well as rent and car insurance.

    The latest quarterly earnings reported by Walmart, Macy’s and Ralph Lauren underscored that consumers have not stopped spending. But multiple CE0s, including the heads of McDonald’s, Starbucks and home improvement retailer Home Depot, have observed that people are becoming more price-conscious and choosy. They’re delaying purchases, focusing on store brands compared to typically more expensive national brands, and looking for deals.

    “Retailers recognize that unless they pull out some stops on pricing, they are going to have difficulty holding on to the customers they got,” Neil Saunders, managing director of consulting and data analysis firm GlobalData, said. “The consumer really has had enough of inflation, and they’re starting to take action in terms of where they shop, how they shop, the amount they buy.”

    While discounts are an everyday tool in retail, Saunders said these aggressive price cuts that cover thousands of items announced by a number of retailers represent a “major shift” in recent strategy. He noted most companies talked about price increases in the past two or three years, and the cut mark the first big “price war” since before inflation started taking hold.

    Higher-income shoppers looking to save money have helped Walmart maintain strong sales in recent quarters. But earlier this month, the nation’s largest retailer expanded its price rollbacks — temporary discounts that can last a few months — to nearly 7,000 grocery items, a 45% increase. Items include a 28-ounce can of Bush’s baked beans marked down to $2.22, from $2.48, and a 24-pack of 12-ounce Diet Coke priced at $12.78 from $14.28.

    Company executives said the Bentonville, Arkansas-based retailer is seeing more people eating at home versus eating out. Walmart believes its discounts will help the business over the remainder of the year.

    “We’re going to lead on price, and we’re going to manage our (profit) margins, and we’re going to be the Walmart that we’ve always been,” CEO Doug McMillon told analysts earlier this month.

    Not to be outdone by its closest competitor, Target last week cut prices on 1,500 items and said it planned to make price cuts on another 3,500 this summer. The initiative primarily applies to food, beverage and essential household items. For example, Clorox scented wipes that previously cost $5.79 are on shelves for $4.99. Huggies Baby Wipes, which were priced at $1.19, now cost 99 cents.

    Low-cost supermarket chain Aldi said earlier this month that it was cutting prices on 250 products, including favorites for barbecues and picnics, as part of a promotion set to last through Labor Day.

    McDonald’s plans to introduce a limited-time $5 meal deal in the U.S. next month to counter slowing sales and customers’ frustration with high prices.

    Arko Corp., a large operator of convenience stores in rural areas and small towns, is launching its most aggressive deals in terms of their depth in roughly 20 years for both members of its free loyalty program and other customers, according to Arie Kotler, the company’s chairman, president and CEO. For example, members of Arko’s free loyalty program who buy two 12-packs of Pepsi beverages get a free pizza. The promotions kicked off May 15 and are due to end Sept. 3.

    Kotler said he focused on essential items that people use to feed their families after observing that the cumulative effects of higher gas prices and inflation in other areas had customers hold back compared to a year ago.

    “Over the past two quarters, we have seen the trend of consumers cutting back, consumers coming less often, and consumers reducing their purchases,” he said.

    In the non-food category, crafts chain Michaels last month reduced prices of frequently purchased items like paint, markers and artist canvases. The price reductions ranged from 15% to up to 40%. Michaels said the cuts are intended to be permanent.

    Many retailers said their goal was to offer some relief for shoppers. But Michaels said its new discounts brought prices for some things down to where they were in 2019.

    “Our intention with these cuts is to ensure we’re delivering value to the customer,” The Michaels Companies said. ”We see it as an investment in customer loyalty more than anything else.”

    Target said it was difficult to compare what its price-reduced products cost now to a specific time frame since inflation levels are different for each item and the reductions varied by item.

    The Bureau of Labor Statistics, which tracks consumer prices, said the average price of a two-liter bottle of soda in April was $2.27. That compares with $1.53 in the same month five years ago. A pound of white bread cost an average of $2 last month but $1.29 in April 2019. One pound of ground chuck that averaged $5.28 in April cost $3.91 five years ago.

    U.S. consumer confidence deteriorated for the third straight month in April as Americans continued to fret about their short-term financial futures, according to the latest report released late last month from the Conference Board, a business research group.

    With shoppers focusing more on bargains, particularly online, retailers are trying to get customers back to their stores. Target this month posted its fourth consecutive quarterly decline in comparable sales — those from stores or digital channels operating at least 12 months.

    In fact, the share of online sales for the cheapest items across many categories, including clothing, groceries, personal care and appliances, increased from April 2019 to the same month this year, according to Adobe Analytics, which covers more than 1 trillion visits to U.S. retail sites.

    For example, the market share for the cheapest groceries went from 38% in April 2019 to 48% last month, while the share for the most expensive groceries went down from 22% to 9% over the same time period, according to Adobe.

    GlobalData’s Saunders said he thinks companies are subsidizing price cuts with a variety of methods — at the expense of profits, at the cost of suppliers and vendors, or by reducing expenses. Some retailers may be using a combination of all three, he said.

    Saunders doesn’t think retailers are raising prices on other items to make up for the ones they lowered since doing that would bring a backlash from customers.

    Target declined to disclose details but said its summer price promotion was incorporated into the company’s projected profit range, which falls below analysts’ expectations at the low end.

    GPM Investments, LLC, a wholly owned subsidiary of ARKO Corp. said its suppliers are funding the convenience store promotions.

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  • CEO of Brazil’s oil and gas giant Petrobras steps down following dustup over dividends

    CEO of Brazil’s oil and gas giant Petrobras steps down following dustup over dividends

    RIO DE JANEIRO — The head of Brazil’s state-controlled oil and gas giant Petrobras has stepped down, the company said Wednesday, following months of tensions with the federal government.

    Petrobras opted not to pay extraordinary dividends to its shareholders earlier this year, souring relations between Petrobras CEO Jean Paul Prates and Brazil’s President Luiz Inácio Lula da Silva, head of the ruling leftist Workers’ Party.

    Lula had defended that move, calling the market a “voracious dinosaur” after Petrobras’ shares plunged following the decision regarding dividends.

    The company’s shares fell by as much as 9% after the announcement of Prates’ departure, before paring losses. They were down by 7% by Wednesday afternoon.

    Local newspaper O Globo reported that Lula himself informed Prates of his dismissal.

    Prates, a former senator for the Workers’ Party, will be replaced by engineer and former director of Brazil’s oil and gas regulator ANP, Magda Chambriard. Petrobras appointed the executive director of corporate affairs, Clarice Coppetti, as interim president.

    Brazil’s federal government has a controlling stake in Petrobras, while private investors also hold shares. That often creates a clash of interests between the government and minority shareholders.

    “Magda Chambriard appears to have a more nationalist vision, that is, of Petrobras serving national interests more than those of shareholders,” said Rafael Schiozer, a finance professor at the Getulio Vargas Foundation, a university and think tank.

    Prates “had a more pro-market vision — he was more concerned with the company’s value creation,” Schiozer added.

    Chief Financial Officer Sergio Caetano Leite will also step down from his role. Petrobras appointed the current finance executive manager, Carlos Alberto Rechelo Neto, as interim, until the election of a new chief financial officer by the board of directors.

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  • Profit drops at Warren Buffett’s firm but thousands still want to hear from the investing guru

    Profit drops at Warren Buffett’s firm but thousands still want to hear from the investing guru

    OMAHA, Neb. — Warren Buffett’s company reported a steep drop in earnings Saturday because the paper value of its investments fell and it sold off part of its massive Apple stake, but the tens of thousands of shareholders filling an Omaha arena to hear Buffett answer questions at the annual meeting later can take heart that Berkshire Hathaway’s many businesses performed well.

    Berkshire reported a $12.7 billion profit, or $8.825 per Class A share, in the quarter. That’s roughly one-third of the $35.5 billion, or $24,377 per A share, that Berkshire reported a year ago.

    But those figures were heavily swayed by a large drop in the paper value of Berkshire’s investments. That’s why Buffett encourages investors to pay more attention to the conglomerate’s operating earnings that exclude the investment figures. By that measure, Berkshire’s operating earnings jumped 39% to $11.222 billion from last year’s $8.065 billion as its insurance companies led a strong performance.

    The three analysts surveyed by FactSet Research had predicted operating earnings of $6,701.87 per Class A share.

    Buffett did sell off nearly $6 billion in stocks during the quarter, including trimming about 13% of Berkshire’s massive Apple stake. The investment in the iPhone maker is still the biggest one in the $364 billion portfolio at $135.4 billion, and Buffett said he expects Apple to remain the biggest investment for years — even up to when his successor takes over.

    But the estimated value of Berkshire’s Apple stake suggests that Buffett sold off more than 100 million shares. Buffett has said he invested in Apple’s stock because of how devoted consumers are to the iPhone and other Apple products.

    Apple CEO Tim Cook, who is at the Berkshire meeting, told CNBC that he still considers it a privilege to have Berkshire as a major shareholder, and he knew about the sales before Berkshire disclosed them Saturday.

    Berkshire reported a $2.6 billion underwriting profit at its insurers, up from $911 million a year ago.

    BNSF railroad’s profits did disappoint and drop 8% to $1.143 billion, but most of its many other companies delivered solid results, including a 72% jump in operating profits at the utility unit that added $717 million to Berkshire’s total.

    Berkshire’s revenue grew 5% to $89.87 billion in the quarter. The two analysts who reported estimates to FactSet predicted $87.044 billion revenue.

    With no major acquisitions in sight, Berkshire’s massive cash pile continued to grow to a record $188.993 billion in the quarter. Berkshire even spent $2.6 billion repurchasing shares during the first three months of the year, but its companies that include Geico insurance, BNSF railroad, several major utilities and an assortment of dozens of others keep generating mountains of cash.

    “We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money,” Buffett said.

    Tens of thousands filled the arena eager to vacuum up tidbits of wisdom from billionaire Warren Buffett, who famously dubbed the meeting ‘Woodstock for Capitalists.’

    But a key ingredient is missing this year: It’s the first meeting since Vice Chairman Charlie Munger died.

    The meeting opened with a video tribute to Munger recounting his life and highlighting some of his best known quotes from the meetings over the years that drew applause, including classic lines like “If people weren’t so often wrong, we wouldn’t be so rich.” The video also featured old interviews with Buffett and Munger talking about their epic friendship.

    The video also featured several of the classic skits the investors made for meetings over the years with hoiliday stars like a “Desperate Housewives” spoof where one of the women introduced Munger as her boyfriend and another video where Jaimie Lee Curtis swooned over Munger.

    As the video ended, everyone in the arena gave Munger a prolonged standing ovation to thank him for being what Buffett called “the architect of Berkshire Hathaway.

    For decades, Munger shared the stage with Buffett every year for the marathon question and answer session that is the event’s centerpiece. Munger routinely let Buffett take the lead with expansive responses that went on for several minutes. Then Munger himself would cut directly to the point. He is remembered for calling cryptocurrencies stupid, telling people to “marry the best person that will have you” and comparing many unproven internet businesses in 2000 to “turds.”

    He and Buffett functioned as a classic comedy duo, with Buffett offering lengthy setups to Munger’s witty one-liners. Together, they transformed Berkshire from a floundering textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to BNSF railroad to several major utilities and an assortment of other companies.

    Munger often summed up the key Berkshire’s success as “trying to be consistently not stupid, instead of trying to be very intelligent.” He and Buffett also were known for sticking to businesses they understood well.

    “Warren always did at least 80% of the talking. But Charlie was a great foil,” said Stansberry Research analyst Whitney Tilson, who was looking forward to his 27th consecutive meeting with a bit of a heavy heart because of Munger’s absence.

    That absence, however, may well create space for shareholders to get to know better the two executives who directly oversee Berkshire’s companies: Ajit Jain, who manages the insurance units, and Greg Abel, who handles everything else. Abel will one day replace the 93-year-old Buffett as CEO. Abel and Jain are sharing the main stage with Buffett for the first time this year in the spot Munger used to occupy.

    The first time Buffett kicked a question to Abel, he mistakenly said “Charlie?” out of habit.

    Morningstar analyst Greggory Warren said he hopes Abel will speak up more this year and let shareholders see some of the brilliance Berkshire executives talk about. Ever since Munger let it slip at the annual meeting three years ago that Abel would be the successor, Buffett has repeatedly reassured investors that he’s confident in the pick.

    Experts say the company has a solid culture built on integrity, trust, independence and an impressive management roster ready to take over.

    “Greg’s a rock star,” said Chris Bloomstran, president of Semper Augustus Investments Group. “The bench is deep. He won’t have the same humor at the meeting. But I think we all come here to get a reminder every year to be rational.”

    ___

    For more AP coverage of Warren Buffett look here: https://apnews.com/hub/warren-buffett. For Berkshire Hathaway news, see here: https://apnews.com/hub/berkshire-hathaway-inc. Follow Josh Funk online at https://www.twitter.com/funkwrite and https://www.linkedin.com/in/funkwrite.

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  • New federal rule would bar ‘noncompete’ agreements for most employees

    New federal rule would bar ‘noncompete’ agreements for most employees

    WASHINGTON — U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday, though the rule is sure to be challenged in court.

    The Federal Trade Commission voted Tuesday 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time. According to the FTC, 30 million people — roughly one in five workers — are now subject to such restrictions.

    The Biden administration has taken aim at noncompete measures, which are commonly associated with high-level executives at technology and financial companies but in recent years have also ensnared lower-paid workers, such as security guards and sandwich-shop employees. A 2021 study by the Federal Reserve Bank of Minneapolis found that more than one in 10 workers who earn $20 or less an hour are covered by noncompete agreements.

    When it proposed the ban in January 2023, FTC officials asserted that noncompete agreements harm workers by reducing their ability to switch jobs for higher pay, a step that often provides most workers with their biggest pay increases. By reducing overall churn in the job market, the agency argued, the measures also disadvantage workers who aren’t covered by them because fewer jobs become available as fewer people leave their positions. They can also hurt the economy overall by limiting the ability of other businesses to hire needed employees, the FTC said.

    The rule, which doesn’t apply to workers at non-profits, is to take effect in four months unless it is blocked by legal challenges.

    “Noncompete clauses keep wages low, suppress new ideas and rob the American economy of dynamism,” FTC Chair Lina Khan said. “We heard from employees who, because of noncompetes, were stuck in abusive workplaces.”

    Some doctors, she added, have been prevented from practicing medicine after leaving practices.

    Business groups have criticized the measure as casting too wide a net by blocking nearly all noncompetes. They argue that highly paid executives are often able to win greater pay in return for accepting a noncompete.

    “It’ll represent a sea change,” said Amanda Sonneborn, a partner at King & Spalding in Chicago who represents employers that use noncompetes. “They don’t want somebody to go to a competitor and take their customer list or take their information about their business strategy to that competitor.”

    But Alexander Hertzel-Fernandez, a professor at Columbia University who is a former Biden administration Labor Department official, argued that lower-income workers don’t have the ability to negotiate over such provisions.

    “When they get their job offer,” he said, “it’s really a take-it-or-leave-it-as-a-whole,” he said.

    The U.S. Chamber of Commerce said Tuesday that it will file a lawsuit to block the rule. It accused the FTC of overstepping its authority.

    “Noncompete agreements are either upheld or dismissed under well-established state laws governing their use,” said Suzanne Clark, the chamber’s CEO. “Yet today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy.”

    Two Republican appointees to the FTC, Melissa Holyoak and Andrew Ferguson, voted against the proposal. They asserted that the agency was exceeding its authority by approving such a sweeping rule.

    Noncompete agreements are banned in three states, including California, and some opponents of noncompetes argue that California’s ban has been a key contributor to that state’s innovative tech economy.

    John Lettieri, CEO of the Economic Innovation Group, a tech-backed think tank, argues that the ability of early innovators to leave one company and start a competitor was key to the development of the semiconductor industry.

    “The birth of so many important foundational companies could not have happened, at least not in the same way or on the same timeline and definitely not in the same place, had it not been for the ability of entrepreneurs to spin out, start their own companies, or go to a better company,” Lettieri said.

    The White House has been stepping up its efforts to protect workers as the presidential campaign heats up. On Tuesday, the Labor Department issued a rule that would guarantee overtime pay for more lower-paid workers. The rule would increase the required minimum salary level to exempt an employee from overtime pay, from about $35,600 currently to nearly $43,900 effective July 1 and $58,700 by Jan. 1, 2025.

    Companies will be required to pay overtime for workers below those thresholds who work more than 40 hours a week.

    “This rule will restore the promise to workers that if you work more than 40 hours in a week, you should be paid more for that time,” said Acting Labor Secretary Julie Su.

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  • Google is combining its Android software and Pixel hardware divisions to more broadly integrate AI

    Google is combining its Android software and Pixel hardware divisions to more broadly integrate AI

    SAN FRANCISCO — Google will combine the software division responsible for Android mobile software and the Chrome browser with the hardware division known for Pixel smartphones and Fitbit wearables, the company said Thursday. It’s part of a broader plan to integrate artificial intelligence more widely throughout the company.

    In a letter to employees, Google CEO Sundar Pichai said the changes will “turbocharge the Android and Chrome ecosystems” while helping to spur innovation.

    The decision will place both operations under the oversight of Rick Osterloh, a Google executive who previously oversaw the company’s hardware group. Not long ago, Google insulated Android development from the hardware division, saying it wanted to avoid giving its phone designers an unfair advantage over the other major smartphone makers who used Android — including Samsung and Motorola, as well as Chinese companies such as Oppo and Xiaomi.

    Then a few years ago, Google started to position the Pixel as a flagship for demonstrating what AI could accomplish and leaned heavily into developing features that could demonstrate its potential. That meant more integration of AI hardware and software to power those features on mobile devices.

    In an interview with The Verge, a tech publication, Osterloh noted that AI is the primary reason for bringing together Google’s consumer hardware and software engineers. He argued that phone technology is already growing more dependent on AI, citing the development of the Pixel camera, which among other things uses the technology for features that enhance nighttime photos or automatically choose the best of several closely timed shots.

    Combining the teams, Osterloh added, is a way for Google to move even faster on infusing AI into its features. Designing the Pixel camera several years ago, he said in the interview, required deep knowledge of not just the complex hardware and software systems involved, but also the then-early AI models used for image processing.

    “That hardware-software-AI integration really showed how AI could totally transform a user experience,” Osterloh said. “That was important. And it’s even more true today.”

    “What you’re now starting to see Google do is flex its core AI innovation engines,” said Chirag Dekate, an analyst with Gartner. “Google wants to dominate the AI, the commanding heights of the emerging AI economy, both on the consumer side as well as on the enterprise side, essentially by infusing AI everywhere and by connecting it.”

    Meanwhile, the chief of Google’s software division, Hiroshi Lockheimer, is left without a title and, according to Pichai’s letter, will be starting some other unnamed projects. Lockheimer did join Osterloh for the Verge interview, though, and the two men insisted the changes weren’t the result of a power struggle.

    Google is also reorganizing its AI research and responsibility groups, although those changes mostly won’t directly affect consumer products — at least not for now.

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  • Microsoft splits Teams from Office after antitrust scrutiny

    Microsoft splits Teams from Office after antitrust scrutiny

    FILE – The Microsoft logo is pictured outside the headquarters in Paris, on Jan. 8, 2021. Microsoft will stop packaging its Teams videoconferencing app with its Office software after the practice attracted antitrust scrutiny. The tech giant said Monday, April 1, 2024, that customers buying Office subscriptions starting this week won’t get Teams bundled with the service. Microsoft will start selling the two products separately around the world, following a move last year to separate the products in Europe. (AP Photo/Thibault Camus, File)

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  • Is Donald Trump’s Truth Social headed to Wall Street? It comes down to a Friday vote

    Is Donald Trump’s Truth Social headed to Wall Street? It comes down to a Friday vote

    NEW YORK — Donald Trump’s return to the stock market could be right around the corner.

    All eyes are on a vote scheduled for Friday by shareholders of Digital World Acquisition Corp., a publicly traded shell company that is looking to merge with the former president’s media business. The deal’s approval would open the door for Trump Media & Technology Group, whose flagship product is the social networking site Truth Social, to soon begin trading on the Nasdaq stock market in Digital World’s place.

    If the merger is greenlit, which is likely, Trump stands to receive a sizeable payout. He would own most of the combined company — or nearly 79 million shares. Multiply that by Digital World’s current stock price of more $42, and the total value of Trump’s stake could surpass $3 billion.

    The prospect of the deal arrives at a time the presumptive Republican presidential nominee is facing his most costly legal battle to date: a $454 million judgment in a fraud lawsuit.

    But even if the Digital World merger is approved Friday, Trump wouldn’t be able to immediately cash out his windfall, unless some things change, due to a “lock-up” provision that prevents company insiders from selling newly issued shares for six months.

    Trump’s earlier foray into the stock market didn’t end well. Trump Hotels and Casino Resorts went public in 1995 under the symbol DJT — the same symbol Trump Media will trade under. By 2004, Trump’s casino company had filed for bankruptcy protection and was delisted from the New York Stock Exchange.

    Digital World listed many of the risks its investors face, as well as those of the Truth Social owner, if Trump Media also goes public.

    One risk, the company said, is that Trump would be entitled to vote in his own interest as a controlling stockholder — which may not always be in the interests of all shareholders. Digital World also cited the high rate of failure for new social media platforms, as well as Trump Media’s expectation that it would lose money on its operations “for the foreseeable future.”

    Trump Media lost $49 million in the first nine months of last year, when it brought in just $3.4 million in revenue and had to pay $37.7 million in interest expenses.

    Trump Media and Digital World first announced their merger plans in October 2021. In addition to a federal probe, the deal has faced a series of lawsuits leading up to Friday’s vote.

    Truth Social launched in February 2022, one year after Trump was banned from major social platforms including Facebook and Twitter, the platform now known as X, following the Jan. 6 insurrection at the U.S. Capitol. He’s since been reinstated to both but has stuck with Truth Social as a megaphone for his message.

    Trump promoted Truth Social in a post on the social media network Thursday evening, saying: “TRUTH SOCIAL IS MY VOICE, AND THE REAL VOICE OF AMERICA!!! MAGA2024!!!”

    Trump Media doesn’t disclose Truth Social’s user numbers. But research firm Similarweb estimates that it had roughly 5 million active mobile and web users in February. That’s far below TikTok’s more than 2 billion and Facebook’s 3 billion — but still higher than rivals like Parler, which has been offline for nearly a year but is planning a comeback, or Gettr, which had less than 2 million visitors in February.

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  • Want to feel special? Stores and restaurants with paid memberships are betting on it

    Want to feel special? Stores and restaurants with paid memberships are betting on it

    NEW YORK — How much does it cost to feel special?

    At Chuck E- Cheese, the family entertainment and pizza chain, the price is $7.99, $11.99 or $29.99 per month. At the other end of the spectrum, the founder of a shopping app called Long Story Short wants to charge members $1,000 monthly for anonymous access to such hard-to-get goods as a rare Keith Haring artwork.

    Paid loyalty programs are all the rage in the restaurant and retail worlds. Looking for reliable sales in an unpredictable spending environment, more companies have extended their points-based loyalty tiers to making their most dependable customers feel valued for an up-front fee.

    Consumers bombarded with membership offers are promised perks such as free deliveries and first dibs on new launches, but also in some cases the right to jump ahead of non-members on reservation lists and in customer service queues.

    It’s a method rooted in both the business case for treating big spenders well – it’s cheaper for businesses to keep an existing customer than to find a new one — and in the fundamental human need for belonging, said Valerie Folkes, a consumer psychologist and marketing professor emerita at the University of Southern California’s Marshall School of Business.

    “If they’re seated earlier than other people or there’s a special line for them at the registers, then they feel they’re special,” Folkes said. “It makes them feel that there’s a stronger link or a bond between themselves and the company.”

    In retailing, Target Corp. is taking on the Amazon Prime juggernaut with a paid loyalty program that will cost $49 a year between April 7 and May 18, and $99 annually thereafter. Members of Target Circle 360 can expect free two-day shipping and free deliveries of orders over $35 in as little as an hour, the company announced last week.

    Target executives said the 100 million-plus customers enrolled in the company’s free Target Circle loyalty plan already spend five times more than non-members. CEO Brian Cornell told The Associated Press the hope is the new paid membership “builds more relevance, more stickiness.”

    Chuck E. Cheese piloted a paid program with bronze, silver and gold tiers in Santee, California in December and launched it in the rest of the San Diego area in February. The program offers discounts on food and drinks and freebies like cotton candy. Members also receive free “play points,” which allow customers to play arcade games and get snacks, and e-tickets, which are typically earned from playing arcade games and redeemed for prizes. The tickets and points are automatically loaded on to the customer’s card.

    Gold tier members, for example, pay $29.99 per month, received 50% off their meals and earn 1,000 tickets. Bronze members, who pay $7.99 a month, have food and beverages discounted at 20% and get 200 tickets. The higher the tier, the better discounts and the more e-tickets and play points customers get.

    Mark Kupferman, the company’s chief insights and marketing officer, said the program offers good value for repeat customers at a time when families paying higher costs for basic necessities may feel financially stretched.

    “So this gives them options that they can come more often,“ Kupferman said. ”We want our members to feel special.”

    For companies concerned about churn rates, creating a fee-based loyalty program can seem like a win-win in terms of revenue. A 2020 McKinsey survey found members of paid loyalty programs were 60% more likely to spend more on the brand after opting in, while free loyalty programs only increased that likelihood by 30%.

    E-commerce site Hive Brands, a startup launched in 2020, wants to be the go-to online marketplace for eco-friendly cleaning products, toiletries and pantry staples from soup to nuts. But after finding shoppers not returning as frequently as hoped, it launched a loyalty program in January that costs $60 a year.

    Members get speedier shipping and a $120 credit for recurring deliveries. Hive also plans to tag them for priority treatment to ensure their inquiries or orders are dealt with first.

    “Customer care across the board for us is really important. And so we make that pretty democratic,” Hive co-founder and Chief Commercial Officer Katie Tyson said. “However, there’s lots of incremental opportunities that members are going to get with Hive in a way that nonmembers can not.”

    Tech entrepreneur Joseph Einhorn, the founder of Fancy, a shopping and scrapbooking site, is looking to take VIP rewards to a new level with Long Story Short. The $1,000 a month app still is in a testing phase, but several hundred potential power shoppers have created accounts to apply for membership, Einhorn said.

    Once admitted, they can view roughly 50,000 hand-selected luxury items, including rare watches and a private island. Members also can request to have items procured for them anonymously, and Einhorn’s team will serve as a go-between to get the best price, he said.

    “We are like a concierge,” he said. “We can get you anything and will be a buffer between you and wherever it has to come from.”

    As the number of loyalty programs with entry costs rises in the mass market, however, some experts think businesses run the risk of making customers who can’t afford to opt in feel left out and diminished.

    Alexander Chernev, a marketing professor at Northwestern University’s Kellogg School of Management, said shoppers previously satisfied with the customer service they were getting may become dissatisfied when they see others getting more.

    “It’s about whether the extra benefits ( … ) are at the expense of someone else,” Chernev said.

    Walmart was the recent subject of complaints on social media from customers who noticed some self-checkout kiosks reserved for Walmart+ members, who pay $98 per year for free next-day and two-day shipping on many online orders.

    Walmart spokeswoman Kelsey Bohl said that during times of limited self-checkout access, some stores were designating select self-serve registers for Walmart+ members using the retailer’s Scan and Go app and for independent contractors who make deliveries and returns for the chain and other stores.

    “The decision is intended to better manage checkout availability,” she noted in an emailed statement to The Associated Press.

    Some skeptics think paid memberships might be a way for companies to disguise cost increases or to cheat their subscribers by changing the program perks down the road.

    Anna McDonald, a senior technical writer who lives in Valparaiso, Indiana, said she’s not happy that video streaming services have started adding charges for ad-free viewing. She’s noticed hotels increasingly charging an extra fee for a flexible reservation cancellations or cutting back on providing new sheets and towels daily.

    “If you’re providing a service, it should be providing the full customer service,” McDonald, 40, said. “There are some basics that come with that. And companies are just trying to nickel and dime to the basics.”

    ___

    AP Airlines writer David Koenig in Dallas contributed to this report.

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  • OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

    OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

    OpenAI is reinstating CEO Sam Altman to its board of directors and said it has “full confidence” in his leadership after the conclusion of an outside investigation into the company’s turmoil.

    The ChatGPT maker tapped the law firm WilmerHale to look into what led the company to abruptly fire Altman in November, only to rehire him days later. After months of investigation, it found that Altman’s ouster was a “consequence of a breakdown in the relationship and loss of trust” between him and the prior board, OpenAI said in a summary of the findings Friday. It did not release the full report.

    OpenAI also announced it has added three women to its board of directors: Dr. Sue Desmond-Hellman, a former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, a former Sony general counsel; and Instacart CEO Fidji Simo.

    The actions are a way for the San Francisco-based artificial intelligence company to show investors and customers that it is trying to move past the internal conflicts that nearly destroyed it last year and made global headlines.

    “I’m pleased this whole thing is over,” Altman told reporters Friday, adding that he’s been disheartened to see “people with an agenda” leaking information to try to harm the company or its mission and “pit us against each other.” At the same time, he said he’s learned from the experience and apologized for a dispute with a former board member he could have handled “with more grace and care.”

    In a parting shot, two board members who voted to fire Altman before getting pushed out themselves wished the new board well but said accountability is paramount when building technology “as potentially world-changing” as what OpenAI is pursuing.

    “We hope the new board does its job in governing OpenAI and holding it accountable to the mission,” said a joint statement from ex-board members Helen Toner and Tasha McCauley. “As we told the investigators, deception, manipulation, and resistance to thorough oversight should be unacceptable.”

    For more than three months, OpenAI said little about what led its then-board of directors to fire Altman on Nov. 17. An announcement that day said Altman was “not consistently candid in his communications” in a way that hindered the board’s ability to exercise its responsibilities. He also was kicked off the board, along with its chairman, Greg Brockman, who responded by quitting his job as the company’s president.

    Much of OpenAI’s conflicts have been rooted in its unusual governance structure. Founded as a nonprofit with a mission to safely build futuristic AI that helps humanity, it is now a fast-growing big business still controlled by a nonprofit board bound to its original mission.

    The investigation found the prior board acted within its discretion. But it also determined that Altman’s “conduct did not mandate removal,” OpenAI said. It said both Altman and Brockman remained the right leaders for the company.

    “The review concluded there was a significant breakdown in trust between the prior board, and Sam and Greg,” Bret Taylor, the board’s chair, told reporters Friday. “And similarly concluded that the board acted in good faith, that the board believed at the time that its actions would mitigate some of the challenges that it perceived and didn’t anticipate some of the instability.”

    The dangers posed by increasingly powerful AI systems have long been a subject of debate among OpenAI’s founders and leaders. But citing the law firm’s findings, Taylor said Altman’s firing “did not arise out of concerns regarding product safety or security.”

    Nor was it about OpenAI’s finances or any statements made to investors, customers or business partners, Taylor said.

    Days after his surprise ouster, Altman and his supporters — with backing from most of OpenAI’s workforce and close business partner Microsoft — helped orchestrate a comeback that brought Altman and Brockman back to their executive roles and forced out board members Toner, a Georgetown University researcher; McCauley, a scientist at the RAND Corporation; and another co-founder, Ilya Sutskever. Sutskever kept his job as chief scientist and publicly expressed regret for his role in ousting Altman.

    “I think Ilya loves OpenAI,” Altman said Friday, saying he hopes they will keep working together but declining to answer a question about Sutskever’s current position at the company.

    Altman and Brockman did not regain their board seats when they rejoined the company in November. But an “initial” new board of three men was formed, led by Taylor, a former Salesforce and Facebook executive who also chaired Twitter’s board before Elon Musk took over the platform. The others are former U.S. Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, the only member of the previous board to stay on.

    (Both Quora and Taylor’s new startup, Sierra, operate their own AI chatbots that rely in part on OpenAI technology.)

    After it retained the law firm in December, OpenAI said WilmerHale conducted dozens of interviews with the company’s prior board, current executives, advisers and other witnesses. The company also said the law firm reviewed thousands of documents and other corporate actions. WilmerHale didn’t immediately respond to a request for comment Friday.

    The board said it will also be making “improvements” to the company’s governance structure. It said it will adopt new corporate governance guidelines, strengthen the company’s policies around conflicts of interest, create a whistleblower hotline that will allow employees and contractors to submit anonymous reports and establish additional board committees.

    The company still has other troubles to contend with, including a lawsuit filed by Musk, who helped bankroll the early years of OpenAI and was a co-chair of its board after its 2015 founding. Musk alleges that the company is betraying its founding mission in pursuit of profits.

    Legal experts have expressed doubt about whether Musk’s arguments, centered around an alleged breach of contract, will hold up in court.

    But it has already forced open the company’s internal conflicts about its unusual governance structure, how “open” it should be about its research and how to pursue what’s known as artificial general intelligence, or AI systems that can perform just as well as — or even better than — humans in a wide variety of tasks.

    Taylor said Friday that OpenAI’s “mission-driven nonprofit” structure won’t be changing as it continues to pursue its vision for artificial general intelligence that benefits “all of humanity.”

    “Our duties are to the mission, first and foremost, but the company — this amazing company that we’re in right now — was created to serve that mission,” Taylor said.

    ___

    The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives.

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  • OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

    OpenAI has ‘full confidence’ in CEO Sam Altman after investigation, reinstates him to board

    OpenAI is reinstating CEO Sam Altman to its board of directors and said it has “full confidence” in his leadership after the conclusion of an outside investigation into the company’s turmoil.

    The ChatGPT maker tapped the law firm WilmerHale to look into what led the company to abruptly fire Altman in November, only to rehire him days later. After months of investigation, it found that Altman’s ouster was a “consequence of a breakdown in the relationship and loss of trust” between him and the prior board, OpenAI said in a summary of the findings Friday. It did not release the full report.

    OpenAI also announced it has added three women to its board of directors: Dr. Sue Desmond-Hellman, a former CEO of the Bill & Melinda Gates Foundation; Nicole Seligman, a former Sony general counsel; and Instacart CEO Fidji Simo.

    The actions are a way for the San Francisco-based artificial intelligence company to show investors and customers that it is trying to move past the internal conflicts that nearly destroyed it last year and made global headlines.

    “I’m pleased this whole thing is over,” Altman told reporters Friday, adding that he’s been disheartened to see “people with an agenda” leaking information to try to harm the company or its mission and “pit us against each other.” At the same time, he said he’s learned from the experience and apologized for a dispute with a former board member he could have handled “with more grace and care.”

    In a parting shot, two board members who voted to fire Altman before getting pushed out themselves wished the new board well but said accountability is paramount when building technology “as potentially world-changing” as what OpenAI is pursuing.

    “We hope the new board does its job in governing OpenAI and holding it accountable to the mission,” said a joint statement from ex-board members Helen Toner and Tasha McCauley. “As we told the investigators, deception, manipulation, and resistance to thorough oversight should be unacceptable.”

    For more than three months, OpenAI said little about what led its then-board of directors to fire Altman on Nov. 17. An announcement that day said Altman was “not consistently candid in his communications” in a way that hindered the board’s ability to exercise its responsibilities. He also was kicked off the board, along with its chairman, Greg Brockman, who responded by quitting his job as the company’s president.

    Much of OpenAI’s conflicts have been rooted in its unusual governance structure. Founded as a nonprofit with a mission to safely build futuristic AI that helps humanity, it is now a fast-growing big business still controlled by a nonprofit board bound to its original mission.

    The investigation found the prior board acted within its discretion. But it also determined that Altman’s “conduct did not mandate removal,” OpenAI said. It said both Altman and Brockman remained the right leaders for the company.

    “The review concluded there was a significant breakdown in trust between the prior board, and Sam and Greg,” Bret Taylor, the board’s chair, told reporters Friday. “And similarly concluded that the board acted in good faith, that the board believed at the time that its actions would mitigate some of the challenges that it perceived and didn’t anticipate some of the instability.”

    The dangers posed by increasingly powerful AI systems have long been a subject of debate among OpenAI’s founders and leaders. But citing the law firm’s findings, Taylor said Altman’s firing “did not arise out of concerns regarding product safety or security.”

    Nor was it about OpenAI’s finances or any statements made to investors, customers or business partners, Taylor said.

    Days after his surprise ouster, Altman and his supporters — with backing from most of OpenAI’s workforce and close business partner Microsoft — helped orchestrate a comeback that brought Altman and Brockman back to their executive roles and forced out board members Toner, a Georgetown University researcher; McCauley, a scientist at the RAND Corporation; and another co-founder, Ilya Sutskever. Sutskever kept his job as chief scientist and publicly expressed regret for his role in ousting Altman.

    “I think Ilya loves OpenAI,” Altman said Friday, saying he hopes they will keep working together but declining to answer a question about Sutskever’s current position at the company.

    Altman and Brockman did not regain their board seats when they rejoined the company in November. But an “initial” new board of three men was formed, led by Taylor, a former Salesforce and Facebook executive who also chaired Twitter’s board before Elon Musk took over the platform. The others are former U.S. Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo, the only member of the previous board to stay on.

    (Both Quora and Taylor’s new startup, Sierra, operate their own AI chatbots that rely in part on OpenAI technology.)

    After it retained the law firm in December, OpenAI said WilmerHale conducted dozens of interviews with the company’s prior board, current executives, advisers and other witnesses. The company also said the law firm reviewed thousands of documents and other corporate actions. WilmerHale didn’t immediately respond to a request for comment Friday.

    The board said it will also be making “improvements” to the company’s governance structure. It said it will adopt new corporate governance guidelines, strengthen the company’s policies around conflicts of interest, create a whistleblower hotline that will allow employees and contractors to submit anonymous reports and establish additional board committees.

    The company still has other troubles to contend with, including a lawsuit filed by Musk, who helped bankroll the early years of OpenAI and was a co-chair of its board after its 2015 founding. Musk alleges that the company is betraying its founding mission in pursuit of profits.

    Legal experts have expressed doubt about whether Musk’s arguments, centered around an alleged breach of contract, will hold up in court.

    But it has already forced open the company’s internal conflicts about its unusual governance structure, how “open” it should be about its research and how to pursue what’s known as artificial general intelligence, or AI systems that can perform just as well as — or even better than — humans in a wide variety of tasks.

    Taylor said Friday that OpenAI’s “mission-driven nonprofit” structure won’t be changing as it continues to pursue its vision for artificial general intelligence that benefits “all of humanity.”

    “Our duties are to the mission, first and foremost, but the company — this amazing company that we’re in right now — was created to serve that mission,” Taylor said.

    ___

    The Associated Press and OpenAI have a licensing and technology agreement that allows OpenAI access to part of AP’s text archives.

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  • Microsoft says it hasn’t been able to shake Russian state hackers

    Microsoft says it hasn’t been able to shake Russian state hackers

    BOSTON — Microsoft said Friday it’s still trying to evict the elite Russian government hackers who broke into the email accounts of senior company executives in November and who it said have been trying to breach customer networks with stolen access data.

    The hackers from Russia’s SVR foreign intelligence service used data obtained in the intrusion, which it disclosed in mid-January, to compromise some source-code repositories and internal systems, the software giant said in a blog and a regulatory filing.

    A company spokesman would not characterize what source code was accessed and what capability the hackers gained to further compromise customer and Microsoft systems. Microsoft said Friday that the hackers stole “secrets” from email communications between the company and unspecified customers — cryptographic secrets such as passwords, certificates and authentication keys —and that it was reaching out to them “to assist in taking mitigating measures.”

    Cloud-computing company Hewlett Packard Enterprise disclosed on Jan. 24 that it, too, was an SVR hacking victim and that it had been informed of the breach — by whom it would not say — two weeks earlier, coinciding with Microsoft’s discovery it had been hacked.

    “The threat actor’s ongoing attack is characterized by a sustained, significant commitment of the threat actor’s resources, coordination, and focus,” Microsoft said Friday, adding that it could be using obtained data “to accumulate a picture of areas to attack and enhance its ability to do so.” Cybersecurity experts said Microsoft’s admission that the SVR hack had not been contained exposes the perils of the heavy reliance by government and business on the Redmond, Washington, company’s software monoculture — and the fact that so many of its customers are linked through its global cloud network.

    “This has tremendous national security implications,” said Tom Kellermann of the cybersecurity firm Contrast Security. “The Russians can now leverage supply chain attacks against Microsoft’s customers.”

    Amit Yoran, the CEO of Tenable, also issued a statement, expressing both alarm and dismay. He is among security professionals who find Microsoft overly secretive about its vulnerabilities and how it handles hacks.

    “We should all be furious that this keeps happening,” Yoran said. “These breaches aren’t isolated from each other and Microsoft’s shady security practices and misleading statements purposely obfuscate the whole truth.”

    Microsoft said it had not yet determined whether the incident is likely to materially impact its finances. It also said the intrusion’s stubbornness “reflects what has become more broadly an unprecedented global threat landscape, especially in terms of sophisticated nation-state attacks.”

    The hackers, known as Cozy Bear, are the same hacking team behind the SolarWinds breach.

    When it initially announced the hack, Microsoft said the SVR unit broke into its corporate email system and accessed accounts of some senior executives as well as employees on its cybersecurity and legal teams. It would not say how many accounts were compromised.

    At the time, Microsoft said it was able to remove the hackers’ access from the compromised accounts on or about Jan. 13. But by then, they clearly had a foothold.

    It said they got in by compromising credentials on a “legacy” test account but never elaborated.

    Microsoft’s latest disclosure comes three months after a new U.S. Securities and Exchange Commission rule took effect that compels publicly traded companies to disclose breaches that could negatively impact their business.

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  • A former TikTok executive sues the company, alleging gender and age discrimination

    A former TikTok executive sues the company, alleging gender and age discrimination


    A former TikTok executive has filed a lawsuit against the social media platform, alleging she was retaliated against and fired from her position because the company’s owners in China determined she “lacked the docility and meekness” required of female employees.

    Katie Puris, who was the Global Head of Brand & Creative at TikTok, alleged in a lawsuit filed this week in a Manhattan federal court that she was fired in 2022 after making internal complaints about gender and age discrimination linked to what she called a preference among company executives for hiring young people.

    According to the complaint, Puris also reported an incident of sexual harassment at an off-site TikTok event, which she says the company didn’t respond to appropriately and led her to miss a TikTok event that the alleged harasser was expected to attend.

    Both TikTok and its parent company ByteDance in Beijing, which is listed as a defendant, did not immediately respond to a request for comment.

    In the lawsuit, Puris’ attorneys claim she was given positive performance reviews after joining TikTok in late 2019 and was eventually invited to participate in bi-weekly meetings with ByteDance’s chairman Lidong Zhang the following year.

    The lawsuit claims Zhang was displeased with the presentations Puris gave “because she celebrated her team’s successes and achievements, which he felt was inappropriate because he believes that women should always remain humble and express modesty.” Puris alleges the company eventually began micromanaging her team and recommending their projects for cancellation.

    Furthermore, the complaint states during a leadership meeting in 2021 where Puris was in attendance, Yiming Zhang, ByteDance’s CEO at the time, said he would rather hire a young inexperienced person because older people are “less willing to change, less innovative and slower.”

    The lawsuit says Puris, who was nearing 50 at the time, expressed her concerns to the head of global human resources at TikTok. The company attributed her firing to “performance reasons,” the complaint said.



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  • Alibaba approves additional $25 billion share buyback as revenue disappoints

    Alibaba approves additional $25 billion share buyback as revenue disappoints


    SINGAPORE — Chinese e-commerce firm Alibaba Group Holding on Wednesday approved an additional $25 billion authorization to its share buyback program, amid lower-than-expected sales revenue for the last quarter of 2023.

    Alibaba posted a 5% increase in sales to 260.3 billion yuan ($36.67 billion) for its quarter ended December, slightly missing analyst estimates.

    Net income sank to 14.4 billion yuan ($2 billion), down 77% compared to the same time last year. The Hangzhou-based firm attributed the drastic drop in net income to the decrease in value of its equity investments and a decrease in income from operations due to that.

    Alibaba’s New York-listed stock price fell about 4% in premarket trading following the report.

    “Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing,” said Alibaba CEO Eddie Wu in a statement.

    He pledged to step up investment to improve user experience and drive growth for its e-commerce platforms Taobao and Tmall, as well as strengthen market leadership.

    The company, once a leader in China’s e-commerce industry, has faced increasing competition from rivals such as Pinduoduo and ByteDance, which operates TikTok and Douyin.

    In an attempt to drive growth, Alibaba in December named current CEO Eddie Wu as the new head of its e-commerce business, replacing longtime Alibaba executive Trudy Dai. The move was made weeks after rival PDD, which operates Pinduoduo, had surpassed Alibaba in market value.

    The company has struggled to recover following a regulatory crackdown on the technology industry and a $2.8 billion fine after authorities deemed that it had violated antitrust regulations.

    Alibaba’s revenue growth has slowed even as its e-commerce rivals have gained market share. The firm’s New York-listed stock has plunged nearly 26% over the past year.

    Alibaba restructured its businesses in March, splitting them into six units that would eventually raise their own capital and go public.

    Its cloud unit had been expected to be among the first to hold an initial public offering, but Alibaba has since scrapped plans to spin-off the business, citing uncertainties over U.S. export curbs on advanced chips used for artificial intelligence.



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  • How RealPage influences rent prices across the U.S.

    How RealPage influences rent prices across the U.S.


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    RealPage software is used to set rental prices on 4.5 million housing units in the U.S. A series of lawsuits allege that a group of landlords are sharing sensitive data with RealPage, which then artificially inflates rents. The complaints surface as housing supply in the U.S. lags demand. Some of the defendant landlords report high occupancy within their buildings, alongside strong jobs growth in their operating regions and slow home construction.

    09:56

    Sat, Feb 3 20248:27 AM EST



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  • Meta, TikTok and other social media CEOs testify in heated Senate hearing on child exploitation

    Meta, TikTok and other social media CEOs testify in heated Senate hearing on child exploitation


    Sexual predators. Addictive features. Suicide and eating disorders. Unrealistic beauty standards. Bullying. These are just some of the issues young people are dealing with on social media — and children’s advocates and lawmakers say companies are not doing enough to protect them.

    On Wednesday, the CEOs of Meta, TikTok, X and other social media companies went before the Senate Judiciary Committee to testify at a time when lawmakers and parents are growing increasingly concerned about the effects of social media on young people’s lives.

    The hearing began with recorded testimony from kids and parents who said they or their children were exploited on social media. Throughout the hourslong event, parents who lost children to suicide silently held up pictures of their dead kids.

    “They’re responsible for many of the dangers our children face online,” Senate Majority Whip Dick Durbin, who chairs the committee, said in opening remarks. “Their design choices, their failures to adequately invest in trust and safety, their constant pursuit of engagement and profit over basic safety have all put our kids and grandkids at risk.”

    In a heated question and answer session with Mark Zuckerberg, Republican Missouri Sen. Josh Hawley asked the Meta CEO if he has personally compensated any of the victims and their families for what they have been through.

    “I don’t think so,” Zuckerberg replied.

    “There’s families of victims here,” Hawley said. “Would you like to apologize to them?”

    Zuckerberg stood, turned away from his microphone and the senators, and directly addressed the parents in the gallery.

    “I’m sorry for everything you have all been through. No one should go through the things that your families have suffered,” he said, adding that Meta continues to invest and work on “industrywide efforts” to protect children.

    But time and time again, children’s advocates and parents have stressed that none of the companies are doing enough.

    One of the parents who attended the hearing was Neveen Radwan, whose teenage daughter got sucked in to a “black hole of dangerous content” on TikTok and Instagram after she started looking at videos on healthy eating and exercise at the onset of the COVID lockdowns. She developed anorexia within a few months and nearly died, Radwan recalled.

    “Nothing that was said today was different than what we expected,” Radwan said. “It was a lot of promises and a lot of, quite honestly, a lot of talk without them really saying anything. The apology that he made, while it was appreciated, it was a little bit too little, too late, of course.”

    But Radwan, whose daughter is now 19 and in college, said she felt a “significant shift” in the energy as she sat through the hearing, listening to the senators grill the social media CEOs in tense exchanges.

    “The energy in the room was, very, very palpable. Just by our presence there, I think it was very noticeable how our presence was affecting the senators,” she said.

    Hawley continued to press Zuckerberg, asking if he’d take personal responsibility for the harms his company has caused. Zuckerberg stayed on message and repeated that Meta’s job is to “build industry-leading tools” and empower parents.

    “To make money,” Hawley cut in.

    South Carolina Sen. Lindsay Graham, the top Republican on the Judiciary panel, echoed Durbin’s sentiments and said he’s prepared to work with Democrats to solve the issue.

    “After years of working on this issue with you and others, I’ve come to conclude the following: Social media companies as they’re currently designed and operate are dangerous products,” Graham said.

    The executives touted existing safety tools on their platforms and the work they’ve done with nonprofits and law enforcement to protect minors.

    Snapchat broke ranks ahead of the hearing and is backing a federal bill that would create a legal liability for apps and social platforms that recommend harmful content to minors. Snap CEO Evan Spiegel reiterated the company’s support on Wednesday and asked the industry to back the bill.

    TikTok CEO Shou Zi Chew said the company is vigilant about enforcing its policy barring children under 13 from using the app. CEO Linda Yaccarino said X, formerly Twitter, doesn’t cater to children.

    “We do not have a line of business dedicated to children,” Yaccarino said. She said the company will also support Stop CSAM Act, a federal bill that makes it easier for victims of child exploitation to sue tech companies.

    Yet child health advocates say social media companies have failed repeatedly to protect minors.

    Profits should not be the primary concern when companies are faced with safety and privacy decisions, said Zamaan Qureshi, co-chair of Design It For Us, a youth-led coalition advocating for safer social media. “These companies have had opportunities to do this before they failed to do that. So independent regulation needs to step in.”

    Republican and Democratic senators came together in a rare show of agreement throughout the hearing, though it’s not yet clear if this will be enough to pass legislation such as the Kids Online Safety Act, proposed in 2022 by Sens. Richard Blumenthal of Connecticut and Marsha Blackburn of Tennessee.

    “There is pretty clearly a bipartisan consensus that the status quo isn’t working,” said New Mexico Attorney General Raúl Torrez, a Democrat. “When it comes to how these companies have failed to prioritize the safety of children, there’s clearly a sense of frustration on both sides of the aisle.”

    Meta is being sued by dozens of states that say it deliberately designs features on Instagram and Facebook that addict children to its platforms. New Mexico filed a separate lawsuit saying the company has failed to protect them from online predators.

    New internal emails between Meta executives released by Blumenthal’s office show Nick Clegg, the company’s president of global affairs, and others asking Zuckerberg to hire more people to strengthen “wellbeing across the company” as concerns grew about effects on youth mental health.

    “From a policy perspective, this work has become increasingly urgent over recent months. Politicians in the U.S., U.K., E.U. and Australia are publicly and privately expressing concerns about the impact of our products on young people’s mental health,” Clegg wrote in an August 2021 email.

    The emails released by Blumenthal’s office don’t appear to include a response, if there was any, from Zuckerberg. In September 2021, The Wall Street Journal released the Facebook Files, its report based on internal documents from whistleblower Frances Haugen, who later testified before the Senate. Clegg followed up on the August email in November with a scaled-down proposal but it does not appear that anything was approved.

    “I’ve spoken to many of the parents at the hearing. The harm their children experienced, all that loss of innocent life, is eminently preventable. When Mark says ‘Our job is building the best tools we can,’ that is just not true,” said Arturo Béjar, a former engineering director at the social media giant known for his expertise in curbing online harassment who recently testified before Congress about child safety on Meta’s platforms. “They know how much harm teens are experiencing, yet they won’t commit to reducing it, and most importantly to be transparent about it. They have the infrastructure to do it, the research, the people, it is a matter of prioritization.”

    Béjar said the emails and Zuckerberg’s testimony show that Meta and its CEO “do not care about the harm teens experience” on their platforms.

    “Nick Clegg writes about profound gaps with addiction, self-harm, bullying and harassment to Mark. Mark did not respond, and those gaps are unaddressed today. Clegg asked for 84 engineers of 30,000,” Béjar said. “Children are not his priority.”

    ___

    Associated Press writer Mary Clare Jalonick contributed to this story.



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  • The world’s largest cruise ship has 20 decks, 7 pools and would cover almost 4 city blocks

    The world’s largest cruise ship has 20 decks, 7 pools and would cover almost 4 city blocks


    MIAMI — The world’s largest cruise ship — the size of almost four city blocks — is set to begin its maiden voyage Saturday as it leaves from the Port of Miami.

    Royal Caribbean’s Icon of the Seas runs nearly 1,200 feet (365 meters) from bow to stern.

    The ship, which is leaving South Florida for its first seven-day island-hopping voyage through the tropics, was officially christened Tuesday with help from soccer legend Lionel Messi and his Inter Miami teammates.

    “Icon of the Seas is the culmination of more than 50 years of dreaming, innovating and living our mission – to deliver the world’s best vacation experiences responsibly,” Royal Caribbean Group President and CEO Jason Liberty said earlier this week. “She is the ultimate multigenerational family vacation, forever changing the status quo in family travel and fulfilling vacation dreams for all ages on board.”

    The ship sets sail as Royal Caribbean’s cruises are having a moment online. Since December, the company’s 9-month “Ultimate World Cruise” has captivated — and confused — a following of avid watchers on social media.

    Millions are following the journey through the eyes of the passengers, as they live and post their lives aboard a vessel they’ll be on for nearly a year. If it sounds like a reality show, that’s exactly what some watchers have turned it into.

    When the Icon of the Seas was first revealed in October 2022, the ship spurred the single largest booking day and the highest volume booking week in Royal Caribbean’s then 53-year history, according to the cruise line.

    The Icon of the Seas is divided into eight neighborhoods across 20 decks. The ship includes six waterslides, seven swimming pools, an ice skating rink, a theater and more than 40 restaurants, bars and lounges. The ship can carry up to 7,600 passengers at maximum capacity, along with 2,350 crew members.

    It is powered by six dual-fuel engines, which can be powered by liquefied natural gas (LNG), a fuel alternative that the Cruise Lines International Association says reduces sulfur and greenhouse gas emissions. However, some environmentalists worry LNG-powered ships increase methane emissions. Other say that vacationers generate eight times more carbon on a cruise than they do on land.

    Royal Caribbean says every kilowatt used on the Icon of the Seas “is scrutinized for energy efficiencies and emission reductions.”



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  • Japanese carmaker that faked safety tests sees long wait to reopen factories

    Japanese carmaker that faked safety tests sees long wait to reopen factories

    TOKYO — A Japanese automaker that cheated on safety tests for decades said Monday it doesn’t expect to resume shipping cars any time soon.

    The Japanese government ordered a subsidiary of Toyota to halt production of its entire lineup after reports of faked safety test results emerged last year.

    The Daihatsu Motor Co. skipped mandatory safety tests by copying data from testing on one side of cars to the other, and used timers to ensure airbags went off in tests, a review found.

    No major accidents have been reported in connection with the cheating, but the news has raised serious questions about oversight at Daihatsu, as well as its corporate parent Toyota.

    Japanese regulators approved five of the company’s models on Friday after more testing, but Daihatsu executives said its factories will remain shuttered as it waits on suppliers.

    “We face a very tough road ahead in winning back customer trust about safety and security,” corporate manager Keita Ide said Monday, stressing that customers felt betrayed. He said the company is working on a plan to prevent cheating in the future.

    Daihatsu is known for kei cars, or light automobiles, including the popular Daihatsu Tanto “kei,” or small, car. It also produces the Toyota Raize hybrid sport-utility vehicle, also sold as the Daihatsu Rocky.

    An investigation including third-party experts found 174 cases of faked tests affecting dozens of models, including cars sold under the Toyota Motor Corp. nameplate. The review found that cheating went back 30 years.

    The scandal began after a whistleblower came forward in April last year. Daihatsu has apologized and promised sweeping reforms of its corporate culture. Daihatsu President Soichiro Okudaira has attributed the cheating to pressure on workers to meet tight deadlines.

    Daihatsu said there may be recalls, although none have been announced yet. Japanese media reports said the recalls are likely to total more than 300,000 vehicles.

    The Toyota group has been rocked by similar scandals before, ensnaring truckmaker Hino and Toyota Industries Corp., which makes engines, machinery and vehicles. That’s prompted some questions about the leadership of Chairman Akio Toyoda, the former chief executive and grandson of Toyota’s founder.

    “The standards of governance at the Toyota group are being questioned,” nationally circulated Sankei newspaper said in an editorial. “Getting to the bottom of this is needed, as consumer trust in the overall Toyota brand is at risk.”

    ___

    Yuri Kageyama is on X https://twitter.com/yurikageyama

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  • Wayfair, Travelers rise; PPG Industries, iRobot fall, Friday, 1/19/2024

    Wayfair, Travelers rise; PPG Industries, iRobot fall, Friday, 1/19/2024

    NEW YORK — Stocks that traded heavily or had substantial price changes on Friday:

    J.B. Hunt Transportation Services Inc., up $1.78 to $198.72.

    The trucking company’s fourth-quarter earnings fell short of analysts’ forecasts, but revenue beat expectations.

    PPG Industries Inc., down $3.56 to $141.39.

    The Pittsburgh-based paint and coatings maker gave investors a weak profit forecast for this quarter.

    Super Micro Computer Inc., up $111.92 to $423.36.

    The server technology company gave investors an encouraging financial update.

    iRobot Corp., down $6.36 to $17.26.

    European regulators reportedly plan to block Amazon’s buyout of the robot vacuum maker.

    Wendy’s Co., down 7 cents to $19.19.

    Wendy’s Co. named a longtime PepsiCo executive as its new CEO on Thursday.

    Spirit Airlines Inc., up 98 cents to $6.68.

    The airline said bookings were strong over the holidays and it expects to report solid fourth-quarter revenue.

    Wayfair Inc., up $5.23 to $56.13.

    The online furniture seller is cutting about 1,650 jobs, or 13% of its global workforce.

    Travelers Cos., up $13.32 to $211.67.

    The insurer beat analysts’ fourth-quarter earnings forecasts.

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  • Following review, Business Insider stands by reports on wife of ex-Harvard president's critic

    Following review, Business Insider stands by reports on wife of ex-Harvard president's critic

    NEW YORK — Business Insider’s top executive and parent company said Sunday they were satisfied with the fairness and accuracy of stories that made plagiarism accusations against a former MIT professor who is married to a prominent critic of former Harvard President Claudine Gay.

    “We stand by Business Insider and its newsroom,” said a spokesman for Axel Springer, the German media company that owns the publication.

    The company had said it would look into the stories about Neri Oxman, a prominent designer, following complaints by her husband, Bill Ackman, a Harvard graduate and CEO of the Pershing Square investment firm. He publicly campaigned against Gay, who resigned earlier this month following criticism of her answers at a congressional hearing on antisemitism and charges that her academic writing contained examples of improperly credited work.

    With its stories, Business Insider raised both the idea of hypocrisy and the possibility that academic dishonesty is widespread, even among the nation’s most prominent scholars.

    Ackman’s response, and the pressure that a well-connected person placed on the corporate owners of a journalism outlet, raised questions about the outlet’s independence.

    Business Insider and Axel Springer’s “liability just goes up and up and up,” Ackman said Sunday in a post on X, formerly Twitter. “This is what they consider fair, accurate and well-documented reporting with appropriate timing. Incredible.”

    Business Insider’s first article, on Jan. 4, noted that Ackman had seized on revelations about Gay’s work to back his efforts against her — but that the organization’s journalists “found a similar pattern of plagiarism” by Oxman. A second piece, published the next day, said Oxman had stolen sentences and paragraphs from Wikipedia, fellow scholars and technical documents in a 2010 doctoral dissertation at M.I.T.

    Ackman complained that it was a low blow to attack someone’s family in such a manner and said Business Insider reporters gave him less than two hours to respond to the accusations. He suggested an editor there was an anti-Zionist. Oxman was born in Israel.

    The business leader reached out in protest to board members at both Business Insider and Axel Springer. That led to Axel Springer telling The New York Times that questions had been raised about the motivation behind the articles and the reporting process, and the company promised to conduct a review.

    On Sunday, Business Insider CEO Barbara Peng issued a statement saying “there was no unfair bias or personal, political and/or religious motivation in pursuit of the story.”

    Peng said the stories were newsworthy and that Oxman, with a public profile as a prominent intellectual, was fair game as a subject. The stories were “accurate and the facts well-documented,” Peng said.

    “Business Insider supports and empowers our journalists to share newsworthy, factual stories with our readers, and we do so with editorial independence,” Peng wrote.

    Business Insider would not say who conducted the review of its work.

    Ackman said his wife admitted to four missing quotation marks and one missed footnote in a 330-page dissertation. He said the articles could have “literally killed” his wife if not for the support of her family and friends.

    “She has suffered severe emotional harm,” he wrote on X, “and as an introvert, it has been very, very difficult for her to make it through each day.”

    For her part, Gay wrote in the Times that those who campaigned to have her ousted “often trafficked in lies and ad hominem insults, not reasoned arguments.” Harvard’s first Black president said she was the subject of death threats and had “been called the N-word more times than I care to count.”

    There was no immediate comment Sunday from Nicholas Carlson, Business Insider’s global editor in chief. In a memo to his staff last weekend that was reported by The Washington Post, Carlson said he made the call to publish both of the stories and that he knew the process of preparing them was sound.

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  • Following review, Business Insider stands by reports on wife of ex-Harvard president's critic

    Following review, Business Insider stands by reports on wife of ex-Harvard president's critic

    NEW YORK — Business Insider’s top executive and parent company said Sunday they were satisfied with the fairness and accuracy of stories that made plagiarism accusations against a former MIT professor who is married to a prominent critic of former Harvard President Claudine Gay.

    “We stand by Business Insider and its newsroom,” said a spokesman for Axel Springer, the German media company that owns the publication.

    The company had said it would look into the stories about Neri Oxman, a prominent designer, following complaints by her husband, Bill Ackman, a Harvard graduate and CEO of the Pershing Square investment firm. He publicly campaigned against Gay, who resigned earlier this month following criticism of her answers at a congressional hearing on antisemitism and charges that her academic writing contained examples of improperly credited work.

    With its stories, Business Insider raised both the idea of hypocrisy and the possibility that academic dishonesty is widespread, even among the nation’s most prominent scholars.

    Ackman’s response, and the pressure that a well-connected person placed on the corporate owners of a journalism outlet, raised questions about the outlet’s independence.

    Business Insider and Axel Springer’s “liability just goes up and up and up,” Ackman said Sunday in a post on X, formerly Twitter. “This is what they consider fair, accurate and well-documented reporting with appropriate timing. Incredible.”

    Business Insider’s first article, on Jan. 4, noted that Ackman had seized on revelations about Gay’s work to back his efforts against her — but that the organization’s journalists “found a similar pattern of plagiarism” by Oxman. A second piece, published the next day, said Oxman had stolen sentences and paragraphs from Wikipedia, fellow scholars and technical documents in a 2010 doctoral dissertation at M.I.T.

    Ackman complained that it was a low blow to attack someone’s family in such a manner and said Business Insider reporters gave him less than two hours to respond to the accusations. He suggested an editor there was an anti-Zionist. Oxman was born in Israel.

    The business leader reached out in protest to board members at both Business Insider and Axel Springer. That led to Axel Springer telling The New York Times that questions had been raised about the motivation behind the articles and the reporting process, and the company promised to conduct a review.

    On Sunday, Business Insider CEO Barbara Peng issued a statement saying “there was no unfair bias or personal, political and/or religious motivation in pursuit of the story.”

    Peng said the stories were newsworthy and that Oxman, with a public profile as a prominent intellectual, was fair game as a subject. The stories were “accurate and the facts well-documented,” Peng said.

    “Business Insider supports and empowers our journalists to share newsworthy, factual stories with our readers, and we do so with editorial independence,” Peng wrote.

    Business Insider would not say who conducted the review of its work.

    Ackman said his wife admitted to four missing quotation marks and one missed footnote in a 330-page dissertation. He said the articles could have “literally killed” his wife if not for the support of her family and friends.

    “She has suffered severe emotional harm,” he wrote on X, “and as an introvert, it has been very, very difficult for her to make it through each day.”

    For her part, Gay wrote in the Times that those who campaigned to have her ousted “often trafficked in lies and ad hominem insults, not reasoned arguments.” Harvard’s first Black president said she was the subject of death threats and had “been called the N-word more times than I care to count.”

    There was no immediate comment Sunday from Nicholas Carlson, Business Insider’s global editor in chief. In a memo to his staff last weekend that was reported by The Washington Post, Carlson said he made the call to publish both of the stories and that he knew the process of preparing them was sound.

    Source link