1. CHANCELLOR ANNOUNCES £5BN ‘RESTART GRANT’ TO HELP THE HIGH STREET
Rishi Sunak, the Chancellor of the Exchequer, has announced a £5bn scheme for High Street shops and hospitality firms in England to help stores and shops reopen as England eases lockdown.
It is reported that nearly 700,000 shops, restaurants, hotels, hair salons, gyms and other businesses would be eligible for the grant. This will replace the currently monthly grant system and will be distributed directly to firms by local authorities from April.
The Chancellor has said that this grant scheme would help people “reopen their business” and is “the right thing to do now”, as well as the fact the grant would get businesses “back on their feet”.
The Budget speech will be delivered this Wednesday 3rd March and will also include forecasts for how the UK economy could perform in the future. It is also hoped that the furlough scheme will be extended (currently set to end in April) and the £20 increase to universal credit is expected to be extended (due to end 31st March).
So far, the government has borrowed more than £271bn this financial year, up £222bn on 2019-2020. In turn, this has pushed the national debt to £2.13 trillion.
THOUGHTS AND IMPLICATIONS
Non-essential shops along with outdoor hospitality are set to reopen from 12th April. Hopefully, this grant will act as an enabler for businesses to reopen. However, the longer lockdown measures mean many businesses will not be able to reopen, even with the assistance of the grant. We will inevitably be seeing more and more of a shift to trading online rather than through physical stores, even after lockdown is lifted. Many restaurant groups may also keep focussing their efforts on takeaway orders and home deliveries, especially if people remain reluctant to eat out.
2. AUSTRALIA PASSES NEWS CONTENT LAW
Australia has passed a law aimed at making Google and Facebook pay for news content on their platforms.
The News Media Bargaining Code was passed on Thursday but has drawn staunch criticism from Facebook and Google. Facebook blocked all news content to Australians but agreed to reverse its decision after robust negotiations with the government, which led to changes to the law. It will offer four amendments to the legislation, which had already been approved by the House of Representatives.
“We are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognise the value our platform provides to publishers relative to the value we receive from them,” Facebook said in a statement.
The new ‘code’ requires tech giants and news organisations to negotiate payment deals between themselves, and commits Facebook and Google to invest tens of millions of dollars in local digital content. It also forces tech platforms to give notice to news publishers of changes to their algorithms, which decides which stories are being displayed.
Google had threatened to withdraw its primary search engine from Australia, but the company recently agreed deals with local media companies including Nine Entertainment and Seven West Media worth an estimated A$60m (£34m) in total.
THOUGHTS AND IMPLICATIONS
Tech giants have faced increased scrutiny over their power, including calls for them to do more to combat misinformation and abuse. Just a few weeks ago Facebook was being sued for “losing control” of the data of around a million users in England and Wales – following from the Cambridge Analytica Scandal where harvested data was used for advertising during elections. Perhaps this new code is a way of regulating the big tech companies and can assist in the need for higher scrutiny.
3. BYTEDANCE AGREES $92 MILLION SETTLEMENT
TikTok owner ByteDance has agreed to a $92 million class-action settlement to settle data privacy claims from some US TikTok users. In a class action lawsuit, claimants alleged TikTok unlawfully extracted private data such as biometrics, and that TikTok tracked users for targeted advertising. TikTok disagreed with the assertion but settled the case to put an end to a year-long court battle.
“While we disagree with the assertions, rather than go through lengthy litigation, we’d like to focus our efforts on building a safe and joyful experience for the TikTok community,” TikTok said last week.
TikTok has over 100 million US users and survived a potential ban from President Trump last year that came from privacy concerns.
The lawsuits claimed the TikTok app “infiltrates its users’ devices and extracts biometric data and content that defendants use to track and profile TikTok users for the purpose of, among other things, ad targeting and profit.”
The proposed settlement still requires court approval. If accepted, it would compel TikTok to compensate its users, take further measures to protect user data and launch a new “privacy compliance” training programme.
THOUGHTS AND IMPLICATIONS
Tiktok has been at the centre of controversy across the globe, mainly due to concerns of privacy and that the app was a tool of espionage for the Chinese government. The app was banned in India and was almost banned in the US by former President Trump.
Although ByteDance strongly deny allegations, they believe settling the claims is better than going through ‘lengthy litigations’ as they wish to create a ‘safe experience’, and, undoubtedly, a good reputation. However, investigators into the concerns hired by the plaintiffs’ lawyers found that TikTok went to great lengths to hide the data collection and sharing practices.
Facebook agreed to a $550 million settlement under the same Illinois biometric privacy law last February. Privacy advocates have hailed the legislation as the US’s strongest form of protection against the improper use of biometric data.
Photo by Olivier Bergeron on Unsplash
4. EPIC BLOCKED FROM SUING APPLE
Epic Games, the maker of Fortnite, has been denied permission to sue Apple in the UK for alleged breaches of competition law by the Competition Appeals Tribunal, who argued that the dispute between Apple and Epic was outside of the jurisdiction of the UK legal system as they are both US based companies.
The judge, Justice Roth, said he was “far from persuaded” that the UK was the best place for the Epic-Apple dispute. The court did acknowledge, however, that the dispute had merits in the United States.
Due to Google’s legal structure however, the tribunal held that Epic could pursue Google in the UK. The case is ongoing in the US while the EU Commission is investigating Epic’s submission.
Because Epic Games introduced a payment system in the game which bypassed fees, Fortnite was removed from the Apple App Store and Google Play Store last year. Apple and Google take a 30% cut of all in-app purchases. The tech giants claimed Fortnite breached their respective App Store and Play Store rules and so took the game down and revoked Epic’s developer accounts. Epic is now seeking to pursue Apple and Google in the UK, as well as the US and EU.
Epic Games said it was “pleased” about the decision regarding Google, and that it “will reconsider pursuing its case against Apple in the UK after the resolution of the US case”.
Photo: Epic Games
5. DEBENHAMS SHUTS DOWN IN SCOTLAND
Department store Debenhams has announced its 15 stores in Scotland will be permanently closed – a move that impacts around 650 jobs.
The collapsed department store chain confirmed that it intends to reopen its stores in England, Wales and Northern Ireland for a “short period” to complete its stock liquidation process as soon as restrictions allow from the 12th April. However, this is not due to happen in Scotland until the 26th April at the earliest, and even this would be on a tiered basis. Therefore, the stores in Scotland will not be reopening as they are planning to do in the rest of the UK.
After an administration process failed to secure any buyers to save the struggling department stores, Debenhams went into liquidation in December last year. About a month later, Debenhams’ brand and assets were purchased by Boohoo Group in a £55 million deal. However, Boohoo only bought the brand and other business assets such as their in-house brand and website, not the physical stores.
THOUGHTS AND IMPLICATIONS
Retail stores closing seems to be a continuous trend at the moment, leaving many UK high streets empty which could take a long time to be filled. Councils must now think how they can revitalise their high streets. Whether councils try to lure more retailers to fill the empty shops and stores or something else such as flats or wholesale reinvention is the vital question.
Photo: PA wires
6. WAGAMAMA OWNER SECURES ANOTHER LOAN
The Restaurant Group, which owns Wagamama, Frankie & Benny’s and Garfunkel’s chains, has secured another loan worth £500m that will help it ‘consolidate its debt’ and give it a ‘larger financial cushion’ as it prepares to reopen the rest of its sites when lockdown measures are lifted no earlier than 12th April.
The group has reported a jump in takeaway orders but warned it is burning through £5.5m a month in the latest lockdown, and would continue losing cash at a similar rate until rules are lifted. The firm, which has slashed 3,000 jobs and permanently closed 125 sites since the pandemic hit, said its net debt was around £340 million at the end of 2020.
After nationwide covid restrictions closed restaurants from serving customers on-site, takeaways have been a lifeline for the hospitality industry. The Restaurant Group have said that takeaway sales have been five times higher since before the pandemic.
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