Displaying items by tag: regulation

(San Francisco)

Apple’s CEO Tim Cook went on the record yesterday telling the market that he feels pending regulation of the tech sector is inevitable. Cook has been a recently strong critic of the data abuses exhibited in the sector. He argued that the free market is not doing its job to protect privacy and that governmental action is necessary. In cook’s own words, “Generally speaking, I am not a big fan of regulation … I’m a big believer in the free market. But we have to admit when the free market is not working. And it hasn’t worked here. I think it’s inevitable that there will be some level of regulation . . . I think Congress and the administration at some point will pass something.

FINSUM: We have to agree with Cook about the likelihood of regulation here. The financial incentives for companies are not aligned with protecting privacy, so the government would likely need to step in to make that happen.

(New York)

The whole Fiduciary rule saga seemed to be over earlier this year, but now that couldn’t be further from reality. While the DOL seemed to gracefully fade from the limelight in March, the truth is that the rule is a “sleeping giant’ according to one industry lawyer. That giant has now woken up, as the DOL is set to release an updated version of its rule in September of next year. The big question is how the SEC rule will be affected, and whether the rules will work in tandem. In either case, advisors and brokers seem likely to see much more regulation within a year or so.

FINSUM: The other big question is whether the political changes in Washington mean the SEC rule might be scuttled in some way. We sense some big changes happening.

(Seattle)

Amazon has just taken a big step to improve the welfare of its enormous mass of workers. The company has raised the minimum wage across all its businesses to $15 per hour. The wage will apply to the company’s 250,000 employees and 100,000 holiday workers and will begin on November 1st. Amazon also says that it will now push for an increase to the federal minimum wage of $7.25 per hour.

FINSUM: This is a good move for Amazon’s workers, but it might be even better for Amazon’s reputation. The company has recently come under scrutiny for its labor and monopolistic practices, and this is one way to offset those concerns.

(San Francisco)

Talk about comments coming right from the source. Microsoft CEO Satya Nadella went on the record this week telling the market that tech companies should “expect” regulation. Nadella walked through current areas of tech and regulations, like facial recognition or GDPR, and explained their implications for the industry. He said that “As tech becomes more and more pervasive, I think for all of us in the tech industry we should expect—whether it’s on privacy or on cybersecurity or even ethics or AI—government and regulatory bodies to take interest in it”.

FINSUM: We think the writing is on the wall that tech is going to face some form of regulation, especially given that the Trump administration is rather hard on the sector. The question is when, not if.

(New York)

As if higher rates and Europe weren’t enough, there are plenty of other dangers currently weighing on the stock market. The two big ones are a potential trade war—sparked by Trump’s proposed tariffs on metals and beyond—which could lead to a bitter battle between the US and Europe or the US and China. The other big risk is FAANG, or big tech, regulation. Tech stocks have become such a stalwart of the market, that regulations reigning them in could prompt major losses.

FINSUM: The market does appear ripe for some regulation of tech stocks. GDPR just passed in Europe and the political climate seems ready for some regulation, but we believe it is still more likely that nothing happens.