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Amazon in collision course with regulators

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(FinancialPress) — President Trump has been very open about his distaste towards Amazon (AMZN) and its founder, Jeff Bezos.

The President tweeted out last week that he had “stated my (his) concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”

Donald J. Trump

@realDonaldTrump

I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!

President Trump‘s tweet came after Axios reported that he is determined on enforcing regulations on Amazon – a path very divergent to the one lawmakers are headed down to. The latter are searching for ways to regulate the way user data is handled and used by Facebook (FB), Twitter (TWTR), and Google (GOOGL).
This is but a new page in the long running feud between Trump and Bezos. In the past, Trump has been quoted labeling Bezos-owned The Washington Post as “fake news“ and “lobbyists for Amazon“, to name a few criticisms.
Even if President Trump isn‘t able to sway DC lawmakers into regulating Amazon for what he believes are anti-trust practices, he can immediately affect the company by interfering with its Department of Defense contracts.
Strategas analyst Dan Clifton chimed in on the subject on his company‘s behalf: “Our overall view remains that Alphabet and Facebook have direct regulatory issues in front of them. Amazon remains a political target, but is more difficult to regulate. The issue to watch with Amazon in the short run is a movement against the company receiving the sole award for cloud computing contracts for the Department of Defense.”

Ruben is a South American writer who focuses on the state of the cryptocurrency, cannabis and tech industries worldwide.

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Uber to settle data breach case for $148 million

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(FinancialPress) — Ride-hailing service provider Uber has reached an agreement to settle a 2016 data breach case. It will have to pay $148 million to close the investigation, after it was accused of intentionally hiding the event.

The settlement – the largest of its kind in recorded history – will be divided up among the 50 states that levied the case through their attorney generals, and Washington DC, said the NY attorney general.

The issue began when the company was accused of violating state-level notification laws by avoiding to disclose that their users‘ personal information had been stolen in 2016. 57 million people were affected at the time.
It was only in late 2017 that Uber revealed that they had paid off the hackers to destroy the data. The price tag was $ 100,000. Uber settled the FTC investigation on the topic in April.
The settlement compromises Uber to implement a corporate integrity program to incentivize employees to report any activities they deem unethical. It will also have to align itself to model data breach notification and data security practices. Lastly, it will be audited on its data security practices by a third party.

In a press conference, New York attorney general Barbara D. Underwood commented on the settlement: “This record settlement should send a clear message: we have zero tolerance for those who skirt the law and leave consumer and employee information vulnerable to exploitation“. Her state will receive approximately $5.1 million of the payout.

A blog post published by Uber chief legal officer Tony West reads as follows: “Our current management team’s decision to disclose the incident was not only the right thing to do, it embodies the principles by which we are running our business today: transparency, integrity, and accountability. We’ll continue to invest in protections to keep our customers and their data safe and secure, and we’re committed to maintaining a constructive and collaborative relationship with governments around the world.”

 

 

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Amazon CEO wants employees to ‘wake up every morning terrified’

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(FinancialPress) — Famed Amazon CEO Jeff Bezos knows a thing or two about the pitfalls of complacency, both in professional and personal life. That‘s what led him to use fear as a motivator in the workplace – both in the good and bad times. He feels that both work ethic and innovative thinking within his teams can be bolstered with it as a catalyst.

In a 1999 shareholder letter, Bezos revealed some of his methods: “I constantly remind our employees to be afraid, to wake up every morning terrified. Our customers have made our business what it is, and we consider them to be loyal to us – right up until the second that someone else offers them a better service.”

Terrifying his workers was by no means his goal, though. He rather aimed to make them fear not being the best at what they do anymore, gunning for “constant improvement, experimentation and innovation in every initiative“, in order to ensure that Amazon would remain competitive as time went by.

Motivating through fear is not a tactic used only by the Amazon founder. Tim Ferris, the podcast host and best-selling author is another proponent of using it as a motivator. His perspective consists of writing down the fears he wants to work on, identifying the worst-case scenario for it and figuring out a way to prevent it. Ferris attributes some of his biggest wins to sticking to this method – as it helped him get conditioned to failure in pursuit of success.

Another prominent CEO who subscribes to this method is PepsiCo‘s Indira Nooyi. She was the mind behind the company‘s shift to healthier products. That, along with the redesign of many of their packaged goods, led to a full-scale transformation of the company in the public eye, and made her one of the biggest names in the food and beverages sector.

When interviewed by Bloomberg in 2016, Nooyi revealed that fear was one of her greater motivators during the difficult transition period. “I’m always afraid that if I fail, I may have to go back to something that I don’t want to,” she said. “That fear always motivates me and so I drive myself to be better and better at my job everyday.”

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Trump mulls major changes to earnings report requirements

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(FinancialPress) — President Donald Trump has revealed that the model of quarterly financial reporting might be on its final days.

After a meeting with prominent US business leaders, he requested the US Securities and Exchange Commission to start exploring possible avenues for new, better reporting.

The move is backed by several business leaders. The likes of JPMorgan‘s Jamie Dimon, and legendary investor Warren Buffet have chimed in on the subject. In the past, they have been two of the major voices requesting change in the way that companies report their earnings guidances each quarter.

Trump‘s idea hinges on semestral reporting. So, if he is to have his way, companies would report every six months.

“In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U.S,” Trump tweeted. “‘Stop quarterly reporting & go to a six month system… that would allow greater flexibility & save money. I have asked the SEC to study!”

While several other countries already require earnings reports to be revealed only every six months, listed US companies must do so every three.

Among these countries, the UK stands out as a case study. Companies in the European nation are not required to report every quarter – but 90% of them still do so.

JPMorgan‘s Jamie Dimon and Berkshire Hathaway‘s Warren Buffet posted a a joint letter published in The Wall Street Journal in June. In it, they argue against the continuity of quarterly reports, citing an ongoing “short-termism“ in companies that abide by them.

They believe that quarterly earnings report lead to companies adopting short-term strategies for financial performances that please investors at the expense of longer-term strategy and investment.

“We are encouraging all public companies to consider moving away from providing quarterly earnings-per-share guidance,” Buffett and Dimon wrote in the letter, co-signed by prominent CEO group The Business Roundtable.

“In our experience, quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability.”

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