Jury selection kicks off in Elizabeth Holmes' criminal trial - CNN

San Jose (CNN Business)Jury selection began Tuesday in a San Jose federal courtroom for the long-awaited trial of Elizabeth Holmes, the former CEO and founder of Theranos.

The day kicked off what is likely to be a months-long affair under intense media scrutiny. Central to questioning of potential jurors was the concern that the frenzy around Holmes -- including multiple documentaries and podcasts on her rise and fall -- might bias those who will ultimately determine her fate.

Holmes arrived at the Robert F. Peckham Federal Building shortly before 8:30am PT wearing a blue medical mask and dark blazer. She was immediately surrounded by news media, some of whom had arrived several hours earlier to secure a seat in the courtroom.

Over the course of the day, Holmes' attorneys, federal prosecutors and Judge Edward Davila questioned potential jurors. Of the 39 juror candidates on Tuesday, 14 were excused for various reasons, including the financial strain of sitting on a jury for so long. On Wednesday, 46 new potential jurors are expected to come for questioning.

Holmes, 37, was indicted more than three years ago on multiple federal fraud and conspiracy charges over allegations she knowingly misrepresented the capabilities of her company's proprietary blood testing technology. She has pleaded not guilty and faces up to 20 years in prison.

Elizabeth Holmes, the founder and former CEO of blood testing and life sciences company Theranos, arrives for the first day of jury selection in her fraud trial, outside Federal Court in San Jose, California on August 31, 2021.

Of particular concern for Holmes and her defense is how much exposure potential jurors have had to the deluge of media coverage of her, her company, and the trial. In the company's heyday, Holmes was the subject of much fascination and media attention that glamorized her and her efforts. Her downfall hasn't dimmed that spotlight -- from documentaries, a forthcoming limited series, and a planned feature film to at least two podcasts devoted to covering the trial.

In addition to 12 jurors, there will be five alternates. The delays to the trial — due to the coronavirus pandemic and the birth of Holmes' first child — may have only complicated finding a pool of jurors who've yet to hear about Holmes or Theranos.

Judge Davila was careful in how he phrased questions to potential jurors about media coverage to avoid having respondents share details about what they've consumed about the case so as not to bias other potential jurors. Judge Davila asked them when they last read or heard something related to Holmes or Theranos, but not about the specifics of what they had read. He told potential jurors that they should disclose any controversial or strong opinions privately rather than within the group.

Potential jurors mentioned coming across news related to Theranos and Holmes everywhere from YouTube, to Reddit (r/investing), to documentaries, and NPR. But many said they felt they'd be able to remain impartial if selected. (One said he received an NPR notification about jury selection starting Tuesday. "My first thought was 'Yeah, yeah, I know,'" he said.)

One potential juror said she previously read "Bad Blood," the definitive book on the rise and downfall of Theranos by reporter John Carreyrou. She said she had assumed that indicating she'd read that book as part of a lengthy potential questionnaire would disqualify her from serving on the jury, regardless of whether she confirmed or denied being able to set any potential biases aside.

Some said they recalled hearing about the company or Holmes but couldn't pinpoint exactly what they consumed. One potential juror said she believed she'd seen "First Blood."

Defense attorneys for Elizabeth Holmes, founder of Theranos, arrive at the Robert F. Peckham Federal Building on August 31, 2021 in San Jose, California.

Ahead of jury selection, nearly 200 prospective jurors completed the 28-page-long final jury questionnaire, which asked questions about everything from their vaccination status to their knowledge of Holmes and their media consumption habits. Roughly half indicated they had consumed media concerning the case, according to a court filing last week.

The first dismissal on Tuesday was a man who said he worked as a producer at a radio station. He said the newsroom had run coverage in anticipation of jury selection. "Audio is all around me," he said, noting news, including of the trial, is hard to avoid due to his job.

Judge Davila suggested to potential jurors before a lunch break that they turn off news alerts on their phones to avoid media exposure.

Coverage of Holmes and Theranos has significantly ramped up in anticipation of the trial. Over the weekend, the court unsealed documents pertaining to Holmes' possible defense -- that she may claim she experienced a decade-long abusive relationship with her ex-boyfriend, also a former Theranos executive, who will be tried separately. (According to a court filing, he "adamantly denies" the claims.)

Potential jurors were also asked whether they had any experience with interpersonal abuse or violence. Several said they, or loved ones, had.

The pandemic, which has delayed the trial several times, is very much looming in the backdrop. Judge Davila said there were no-shows among potential jurors slated to attend today, citing some who phoned in about experiencing symptoms and were told to stay home. He said all court staff had been vaccinated and spoke of a newly installed $7 million HVAC system. "The air is completely circulated in this court room approximately every 10 minutes," he said. "I hope that provides you some comfort."

Some of the potential jurors also spoke about hardships they'd experienced during the pandemic, saying they'd hoped to take much-needed vacations that would be hindered by a months-long trial.

A number of other potential jurors not in the court room Tuesday were excused for reasons including health, childcare, financial hardship, bias, attending school, work obligations, and commute challenges. Attorneys for the prosecution and the defense have agreed to excuse any potential jurors who are unvaccinated. Nine were excused for indicating on the questionnaire that they were unvaccinated.

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Stock market news live updates: Stock futures rise as equities look to extend August gains - Yahoo Finance

Stock futures opened higher Tuesday evening, with the major equity indexes holding near all-time highs heading into the first session of September. 

Contracts on the S&P 500 rose. The index closed out a seventh straight monthly gain in August, rising nearly 3% during the month as strong earnings growth, an ongoing economic recovery and a still-accommodative Federal Reserve helped offset fresh concerns over the Delta variant's spread. Still, the Nasdaq outperformed with a monthly rise of 4%, with investors piling back into technology and growth stocks seen as benefiting from stay-in-place behavior.

Investors are entering a historically more challenging month, with September typically comprising the worst month of the year for stocks, according to an analysis from LPL Financial. And while equities are riding momentum from a seven-month winning streak, they are also extending an atypically long period without a pullback, given the S&P 500 has not had a 5% correction since last October. 

"I don't know that it's the month to stay on the sidelines, but I do expect that we'll have volatility," Michelle Connell, owner of Portia Capital Management, told Yahoo Finance. "I think maybe upside may be limited here through the end of the year, so I think it warrants sitting back and looking at what you own, reevaluating, looking at potential downside."

Others were also still cautiously upbeat about the path forward for U.S. equities. 

"We do think the continued growth of the economy and the reopening trade is going to continue," Cliff Corso, president and chief investment officer of Advisors Asset Management, told Yahoo Finance. "What we are looking at are things that are more value-oriented, and particularly so where there's an income component through dividends, because that tends to mute volatility."

"We think there's a lot of underpinnings as we look forward, despite some of the new challenges we're going to be facing, whether it be a tax debate, tapering, inflation — all those headwinds," he added. "We still have a very accommodative Fed, we still have the potential for a very big fiscal package, and so a lot of those underpinnings are still with us." 

New economic data out Wednesday and later this week is set to help provide a timelier view on the strength of the recovery and path forward for monetary policy. Wednesday morning, ADP will release its closely watched monthly private payrolls report, which is expected to show U.S. private-sector employers added back 638,000 jobs in August after a sharply disappointing 330,000 in July. 

—

6:09 p.m. ET Tuesday: Stock futures rise

Here were the main moves as the overnight session kicked off Tuesday evening: 

• S&P 500 futures (ES=F): +7.75 points (+0.17%) at 4,529.25

• Dow futures (YM=F): +51 points (+0.14%) to 35,391.00

• Nasdaq futures (NQ=F): +19 points (+0.12%) to 15,601.50

NEW YORK, NEW YORK - AUGUST 10: People walk by the New York Stock Exchange (NYSE) on August 10, 2021 in New York City. Markets were up in morning trading as investors look to a rare bipartisan effort in the Senate to pass a massive infrastructure bill that, if passed, will infuse billions into the American economy. (Photo by Spencer Platt/Getty Images)

—

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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Apple, Google app stores face new regulation as South Korea readies payment law - CNET

Regulators increasingly want to take tech giants to task. 

Apple; Illustration by Stephen Shankland/CNET

Apple and Google are under increasing pressure from global regulators, who say the two tech giants have abused their power in mobile devices to exert control over app developers and pad their profits in the process.

On Tuesday, South Korea's National Assembly passed a bill that will force Apple and Google to loosen restrictions they impose via the Apple App Store and Google Play Store. The bill, which will become law when signed by the country's president, prevents app store operators from unreasonably delaying the approval of apps or deleting already approved ones. It also says app markets can't require the use of their in-app purchase systems, giving developers the opportunity to choose alternatives or create their own.

South Korea's moves are the latest in a campaign by regulators and lawmakers to establish limits for the tech industry. After decades of letting tech companies grow with little oversight, governments have begun grappling with torrents of misinformation and disinformation spread through social media. The tech industry has also faced a relentless barrage of complaints about its abuses of privacy and heavy-handed business practices. 

The South Korean bill focuses on in-app purchases, a topic that has attracted the attention of other lawmakers and regulators. Apple and Google exert tight control, requiring additional purchases made inside an app be processed by them. The companies argue that in-app payment systems help to control fraud while supporting app development. In return, Apple and Google have argued, app developers get an easy way to charge for subscriptions or digital items, such as fashion accessories for avatars in games.

"Just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store," a Google spokesman said in a statement about the South Korean legislation. "We'll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks."

Apple, meanwhile, warned that the bill could make using their products worse. "The Telecommunications Business Act will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases, and features like 'Ask to Buy' and Parental Controls will become less effective," a company spokesman said.

Here's everything we know so far about legal efforts to take on Apple and Google's app stores.

It's happening in the European Union

The EU is investigating Apple in response to complaints by music app maker Spotify and others, who say the iPhone maker is stifling competition by charging as much as 30% for in-app purchases. EU Competition Commissioner Margrethe Vestager said she preliminarily agreed with Spotify's argument, adding that her team's investigation found "consumers losing out" as a result of Apple's policies. A final decision hasn't yet been issued.

The US is getting in on the action

Earlier this summer, lawmakers in the House of Representatives unveiled a series of bills designed to update the country's antitrust laws and address some of the tech industry's most controversial practices. One of the bills -- there are five in total -- would prohibit platforms from discriminating against rivals, if passed. That could apply to app stores like the ones Apple and Google run.

Read more: How new antitrust bills could hit Amazon, Apple, Facebook and Google

The Senate has also unveiled a bipartisan bill that would place new restrictions on how app stores are run. Called the Open App Markets Act, the proposed law could change the way people download programs to their phones, tablets and computers. Among its provisions: barring companies from forcing developers to use their payment systems. It would also ensure that developers can tell customers about lower pricing on other platforms. It would force companies like Apple to allow alternative ways to install apps on their devices.

Courts are making their mark too

While Apple and Google are staring down legislation and regulatory enforcement, they're also fighting high-profile court battles. Most notably, the two have locked horns with Fortnite maker Epic Games, which sued both companies in August 2020 for allegedly violating antitrust laws. 

The cases were filed after Epic quietly changed the code in its popular game, allowing players to circumvent Apple's and Google's payments systems when purchasing in-app items, including its in-game currency used for buying character accessories. In response, Apple and Google kicked Fortnite out of their app stores, saying Epic violated their rules around in-app purchases.

Epic's case against Apple was heard in a California courtroom this spring. During the trial, the iPhone maker defended different how it runs its App Store, including the guidelines Apple says developers must adhere to in order to offer their apps on the store. 

Judge Yvonne Gonzalez Rogers, who's overseeing the case, grilled Apple CEO Tim Cook during his testimony at the end of the trial, challenging what she said was lack of competition against the App Store. Epic had argued that one Apple policy is monopolistic: requiring app developers to use its payment processing service on the iPhone, with commissions of up to 30%. It appeared as though Rogers might agree. "You don't have competition for those in-app purchases," she said.

A decision is expected shortly.

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Pilots union sues Southwest Airlines, alleges violation of federal labor law - Reuters

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Aug 31 (Reuters) - A union representing Southwest Airlines Co (LUV.N) pilots has filed a lawsuit challenging forced time off and other changes to working conditions imposed by the airline during the COVID-19 pandemic.

The Southwest Airlines Pilots Association filed a complaint in federal court in Dallas on Monday claiming that the carrier implemented an "emergency time off" program, altered schedules, and scaled back prescription drug and retirement benefits without bargaining, in violation of federal labor law.

It claims Southwest should have collectively bargained with the union instead of giving itself "force majeure" rights when air travel plummeted during the pandemic.

The lawsuit marks an escalation in mounting tensions between the airline and its staff. Its pilots union has threatened to picket over the winter holidays to protest against a host of issues including a gruelling work schedule, a lack of food and accommodation and COVID-19 protocols.

The protest prompted the company last week to trim flight schedules for this fall in a bid to better align its operations with staffing. read more

In the lawsuit, the union said the airline is bound by the terms of the collective bargaining agreement that lapsed in August last year, but remains in effect until a new agreement is reached and does not contain a "force majeure" clause.

It asked the court for an injunction, requiring Southwest to stick to the provisions of the lapsed agreement, and negotiate the terms for an "emergency extended time off" program, and COVID 19-related work conditions.

In an email sent to its members on Tuesday, the union said the lawsuit was the "only recourse" to compel the company to meet its duty to collectively bargain.

Russell McCrady, Southwest vice president of labor relations, in a statement said that the airline disagrees that any COVID-related changes adopted in recent months required negotiation.

"As always, Southwest remains committed to pilots’ health and welfare and to working with SWAPA, and our other union partners, as we continue navigating the challenges presented by the ongoing pandemic," he said.

Reporting by Daniel Wiessner in New York and Rajesh Kumar Singh in Chicago; Editing by Richard Chang, Mark Porter and Richard Pullin

Daniel Wiessner

Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.

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South Korea law forces Google and Apple to open up app store payments - Ars Technica

Enlarge / Let's see, you landed on my "Google Ads" space, and with three houses, that will be $1,400.

Ron Amadeo / Hasbro

South Korea will soon pass a law banning Apple's and Google's app store payment requirements. An amendment to South Korea’s Telecommunications Business Act will stop app store owners from requiring developers to use in-house payment systems. The law also bans app store owners from unreasonably delaying the approval of apps or deleting them from the marketplace, which the country fears is used as a method of retaliation. As The Wall Street Journal reports, the law has passed South Korea's National Assembly (the country's Congress equivalent), and President Moon Jae-in is expected to sign the bill into law.

In the rest of the world, Apple and Google get a 30 percent cut of most app purchases, in-app sales, and subscriptions, and the companies don't allow developers to use alternative payment options. Once the bill passes in South Korea, app developers will be free to search for a payments provider that offers them the best deal. Google's and Apple's stores do provide some benefits, like user authentication for purchases, friction-free purchases thanks to stored payment information, and easy data hosting and distribution for digital goods. If developers don't need any of those things or are willing to roll their own solutions, standard credit card processors usually only take a 1-3 percent cut of sales.

The Verge received statements from both Google and Apple. A Google spokesperson told the site, “Just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store. We’ll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks."

Apple touted the safety of its locked-down ecosystem, saying, "The proposed Telecommunications Business Act will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, make it difficult to manage their purchases, and features like “Ask to Buy” and Parental Controls will become less effective. We believe user trust in App Store purchases will decrease as a result of this proposal—leading to fewer opportunities for the over 482,000 registered developers in Korea who have earned more than KRW8.55 trillion to date with Apple."

Neither Google nor Apple provides exact app store revenue numbers, but analytics firm Sensor Tower estimates that the App Store facilitated $72.3 billion in global spending in 2020, while Google Play did $38.6 billion. In South Korea, Samsung dominates the smartphone market (and a bunch of other markets—Samsung is around 10-20 percent of South Korea's GDP) with 67 percent market share in Q1 2021, according to Counterpoint Research. Apple picks up most of the rest with 22 percent. In third place, with 10 percent market share, is another Korean company, LG, which quit the smartphone market in July 2021. With such a focus on Android, the bill has apparently been nicknamed the "anti-Google law" in South Korea.

The South Korean law is the latest strike against Google's and Apple's app stores. Epic Games, the company behind the hit game Fortnite and the Unreal Engine, has been battling Google's and Apple's app store rules around the world, either with lawsuits or through talks with regulators. In the US, Google is being sued by 36 states, and some states are considering passing their own app store rules. Epic, Spotify, MatchGroup (the owners of Tinder), and several other app developers have formed the “Coalition for App Fairness” advocacy group to push back against exorbitant app store fees.

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Theranos founder Elizabeth Holmes on trial as jury selection begins - Ars Technica

Enlarge / Elizabeth Holmes, founder and former CEO of Theranos, arrives for motion hearing on Monday, November 4, 2019, at the US District Court House in San Jose, California.

Getty | Yichuan Cao

Nearly a decade ago, Theranos touted a revolutionary diagnostic device that could run myriad medical tests without having to draw blood through a needle. Today, the startup’s founder, Elizabeth Holmes, goes to court, where she’s facing 12 criminal counts for statements she made to investors and consumers about her company’s technology.

Holmes founded Theranos in 2003 after dropping out of Stanford University at the age of 19. Driven by her phobia of needles, Holmes wanted to create diagnostic tests that use blood from finger pricks rather than from needles. The idea caught on, attracting well-connected board members like Henry Kissinger and James Mattis, drawing over $400 million in investments from wealthy investors including Larry Ellison and Rupert Murdoch, and securing lucrative partnerships with Walgreens and Safeway. At its peak, Theranos was worth over $9 billion.

But Theranos’ myth started unwinding in 2015 when a Wall Street Journal investigation revealed that the company had been performing most of its tests on traditional blood diagnostic machines rather than its own “Einstein” device. The company’s own employees doubted the machine’s accuracy.

Problematic claims

For many tests, blood from finger pricks is difficult to analyze. Small amounts of blood typically contain more variability than larger draws from veins, and a poorly executed stick might grab interstitial fluid along with the blood. Plus, finger-prick blood comes in contact with the skin, raising the chances of contamination that can confound the results. Yet Holmes and Ramesh “Sunny” Balwani, Theranos’ president and chief operating officer, painted a rosy picture for investors, partners, and customers.

“Theranos claimed that its laboratory infrastructure yielded test results in less time than conventional labs—requiring hours instead of days. Theranos claimed that its proprietary technology and methods would minimize the risk of human error and generate results with the highest accuracy,” the indictment says. Despite this, prosecutors have said, “Holmes and Balwani knew that the analyzer had accuracy and reliability problems, performed a limited number of tests, was slower than some competing devices, and, in some respects, could not compete with existing, more conventional machines.”

Holmes and Balwani were indicted in June 2018, and soon Theranos was facing mounting civil and criminal investigations. The company settled a Securities and Exchange Commission probe and shut down shortly thereafter.

The end of Theranos didn’t halt the scrutiny of Holmes' and Balwani’s behavior, though. Three rounds of indictments have brought the total to 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. The latest indictment, which supersedes the previous two, was filed in June 2020.

Both Holmes and Balwani have pleaded not guilty, and Balwani’s trial will begin next year.

The indictments aren’t limited to claims about the company’s proprietary diagnostic machine but also include what Holmes and Balwani allegedly said to investors about revenue and business deals. The prosecution says the pair told investors that Theranos would bring in over $100 million in revenue in 2014, helping the company break even, and hit $1 billion in 2015, amounts that exceeded the executives' actual expectations. Prosecutors also say that the pair falsely told investors that the company landed contracts with the Pentagon.

Delayed trial

The road to trial has been filled with delays, first due to the COVID-19 pandemic and then again when Holmes became pregnant. Her child was born in July, around the time the trial was supposed to begin. If convicted, Holmes faces up to 20 years in prison.

Today’s proceedings kick off jury selection, in which prosecutors and defense attorneys will begin questioning over 100 potential jurors. The pool was already slashed last week, as Holmes’ attorney Kevin Downey told US District Judge Edward Davila of the Northern District of California that more than 30 jurors had “consumed substantial—and I mean lengthy, extrajudicial—material about the case and about the defendant." In a pre-trial hearing, Downey also said that selected jurors must be vaccinated, while the prosecution wouldn’t commit to a stance on the issue.

Opening statements are scheduled to begin on September 8, and the trial may run through mid-December. Holmes is expected to claim that Balwani, who was her boyfriend for much of Theranos’ existence, was an abusive and controlling partner. A court filing released on Saturday revealed that Holmes is expected to take the stand during the trial and allege that he monitored her calls, texts, and emails and was physically violent, claims that Balwani denies. Her attorneys say these actions affected her “state of mind” when the alleged fraud took place.

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Google and Apple's app stores hit by new South Korean law - Financial Times

South Korea has become the first country in the world to attack the lucrative commissions charged by Google and Apple’s app stores, after passing a law that will let mobile phone users pay software developers directly for their apps.

Despite heavy lobbying by the tech giants, South Korea’s national assembly on Tuesday passed what has been dubbed the “anti-Google bill”; it will become law once signed by President Moon Jae-in.

The law bans Google and Apple, as well as other app store operators, from requiring users to pay for apps with their own in-app purchasing systems.

It also bans app stores from delaying approvals from apps or “inappropriately” removing them from their app stores, and from insisting on exclusivity with app developers. If they fail to comply, app stores can be fined up to 3 per cent of their revenue in South Korea.

Apple and Google at present take a commission of up to 30 per cent on sales of digital goods through their app stores, and of in-app purchases, such as subscriptions.

The legislation is likely to be closely examined by other regulators around the world, as concerns grow about the monopolies on app distribution enjoyed by Apple and Google.

Tim Sweeney, chief of Epic Games, which is suing Google and Apple for alleged anti-competitive behaviour, called the law’s passage a “major milestone in the 45-year history of personal computing”.

David Heinemeier Hansson, chief technology officer at Basecamp, called the bill “the first real, big crack in the monopoly app store dam”.

Hansson had played an instrumental role trying to pass similar legislation in Arizona and North Dakota but to no avail. He said he was hopeful South Korea would be a catalyst for other countries to take action. “Korea is going to show that the world doesn’t fall, and all of Apple’s arguments will be refuted by reality,” he said.

South Korea’s regulation was triggered by Google’s announcement last year that it would make its payment system mandatory for non-gaming apps. The move sparked an outcry from software developers that alleged an abuse of market dominance.

App stores have become hugely profitable for Apple and Google, so any action by regulators worldwide to diminish their position as gatekeepers to the mobile application economy could put a significant dent in their earnings.

Disclosures from a lawsuit against Google from several US attorneys-general, which were unsealed last weekend, show that the company collected $11.2bn in revenues and $7bn in operating income in 2019 from the Play Store, including in-app payment and advertising within the marketplace.

That suggests the Play Store made up as much as 20 per cent of Alphabet’s income from operations in 2019, despite contributing less than 10 per cent of the Google parent’s overall revenues.

Bills pending in the EU and US Senate seek to clamp down on app store commissions, while Brussels and Washington have also brought antitrust enforcement actions against Apple and Google, respectively, over fees charged to app developers.

The South Korean law “will become an important precedent for the US and European countries as they increase their guard against Apple and Google”, said Wi Jong-hyun, a professor of business strategy at Chung-Ang University in Seoul. “Especially European countries, with their antipathy towards US tech companies, are likely to introduce similar bills or pressure them with this.”

The law was passed as Apple awaited a ruling in a landmark lawsuit against Epic Games, the maker of hit title Fortnite. The game was removed from the App Store after deliberately bypassing Apple’s payment system with a lower-priced alternative that gave no commission to the iPhone maker.

In the face of mounting legal and regulatory pressures over alleged anti-competitive behaviour, Apple last week relaxed restrictions in a way that would allow certain apps to advertise cheaper alternatives outside the in-app payment mechanism.

Google said this year that it would halve commissions to 15 per cent on the first $1m developers earn in revenue in a year via its app store. Apple has announced a similar move.

The Korea Mobile Internet Business Association estimated that sales of mobile apps and content in the country reached Won7.5tn ($6.5bn) last year and projected growth of more than 20 per cent in 2021. About 67 per cent of last year’s sales were handled via Google’s Android operating system, while 22 per cent were through Apple’s App Store.

Apple said last week that the bill would lead to fewer opportunities for local developers by hurting user trust in app store purchases. Google said the Play Store’s “service fee helps keep Android free, giving developers the tools and global platform to access billions of consumers around the world”. It added that it would “reflect on how to comply with the law . . . and share more in the coming weeks”.

Additional reporting by Patrick McGee in San Francisco and Tim Bradshaw in London

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Ram, Dodge, Lexus, Mitsubishi get top scores for new vehicle quality in J.D. Power study - CNBC

2019 Ram 1500

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Ram trucks topped J.D. Power's ranking of new vehicles by quality for the first time ever. Across the industry, the annual study showed drivers complained the most about new high-tech features, such as infotainment systems.

Dodge landed in second place, with Lexus and Mitsubishi tied for third for new vehicle quality. Toyota's luxury Lexus brand was the highest-ranked luxury vehicle brand, followed by Hyundai's Genesis. Ram and Dodge trucks are both produced by Stellantis, formerly Fiat Chrysler.

J.D. Power's annual Initial Quality Study is considered an important measure within the auto industry. The firm surveys thousands of new car owners and scores auto brands based on the number of problems reported per 100 vehicles within the first 90 days of ownership. Problems can range from sluggish smartphone connectivity to engine troubles and bad paint.

The 2019 Lexus LS 500h

Mack Hogan | CNBC

The average number of problems per 100 vehicles stood at 162, a 2% improvement from the prior year. The Nissan Maxima had the best score of any single model in the study, with 85 problems reported per 100 new vehicles.

The top problem reported by owners pertained to Android Auto or Apple CarPlay connectivity, which significantly worsened as automakers implemented new wireless connectivity for the phone mirroring features. It was the first time since 2011 that voice recognition was not the top problem in the study.

Quality laggards included Chrysler in last place, behind Audi and Tesla.

Tesla isn't officially part of the study because it doesn't give J.D. Power access to customer data; the automakers' permission is legally required in 15 states. However, J.D. Power researchers were able to rank Tesla in their quality study starting last year, basing their unofficial score on surveys from owners in the other 35 states.

Vice president of automotive quality at J.D. Power, Dave Sargent, said Tesla owners reported problems that had more to do with the build quality, fit and finish of its vehicles rather than the technology inside them. Examples included body panel gaps, paint issues, wind noise, interior squeaks and rattles.

Only one battery electric vehicle, an electric version of the Mini Cooper, ranked above average on the list, Sargent said.

Generally the problems owners reported with battery-powered vehicles were not directly attributable to the fact that they were EVs, he said, meaning they didn't have issues with their new electric vehicles' battery or electric motors in the first 90 days of ownership.

"These vehicles, because they are being offered generally to people who are very tech savvy, tend to be loaded up with latest features and those do not always go well on any vehicles," Sargent said, adding he believes the vehicles will get better.

With seven top-ranked vehicles, Hyundai placed as the top overall automaker in the study. Toyota was second with six vehicles, followed by BMW and Nissan at four. General Motors and Stellantis had two.

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South Korea passes bill limiting Apple and Google control over app store payments - CNBC

Visitors look at Apple Inc. iPhones and iPads on display at the SK Telecom Co. T Factory flagship store in Seoul, South Korea, June 11, 2021.

SeongJoon Cho | Bloomberg | Getty Images

South Korea's parliament has approved a bill that will make it the first country to impose curbs on Google and Apple's payment policies that force developers to only use the tech giants' proprietary billing systems.

The legislation will become law once signed by President Moon Jae-in, whose party has been a vocal supporter of the bill.

Apple and Google's policies usually require developers to pay the tech giants a commission as high as 30% of every transaction.

The bill, approved Tuesday, means that developers will be able to avoid paying commission to major app store operators — like Google and Apple — by directing users to pay via alternate platforms.

A Google spokesperson said its service fee "helps keep Android free, giving developers the tools and global platform to access billions of consumers around the world."

"We'll reflect on how to comply with this law while maintaining a model that supports a high-quality operating system and app store, and we will share more in the coming weeks," the Google spokesperson added.

Apple did not immediately respond to CNBC's request for comment.

The law, sometimes referred to as the Anti-Google Law, was submitted to parliament last August, according to Yonhap News.

It it designed to prevents app store operators with dominant positions from forcing payment systems on app developers and "inappropriately" delaying app reviews or blocks, according to Reuters.

The law also gives the South Korean government the power to mediate disputes regarding payment, cancellations and refunds in the app market, according to reports.

Some 180 of the attending lawmakers voted in favor of passing the amendment made to the Telecommunications Business Act, Reuters reported.

Media reports last week said the legislation and judiciary committee of the National Assembly approved revisions of a bill aimed at stopping app store operators from forcing developers to use specific payment systems.

Epic Games, the firm behind the popular Fortnite game, built its own in-game payment system last year as part of an effort to get around Apple and Google's current policies. Several other companies including Spotify and Tinder-owner Match have said in recent years that the tech giants should let them use their own payment systems.

"Today's historic action and bold leadership by South Korean lawmakers mark a monumental step in the fight for a fair app ecosystem," a Match spokesperson said in a statement on Tuesday.

"We look forward to the bill being quickly signed into law and implore legislative bodies around the globe to take similar measures to protect their citizens and businesses from monopolistic gatekeepers that are restricting the internet," they added.

Regulatory scrutiny

Regulators worldwide are focusing more on the app stores and fees that Google and Apple are charging developers — and the ruling in South Korea will likely be the first step toward greater scrutiny, according to Daniel Ives, managing director of equity research at Wedbush Securities.

"It's a potential watershed moment," Ives said on CNBC' "Street Signs Asia" on Monday ahead of the decision in Seoul. "Not necessarily for what this means in itself, but for the ripple effect as it shows that they're not just words, but actually actions."

Ives added that while there might be monetization opportunity for others, such as telecommunication services providers, it ultimately depends on how consumers would respond.

"The question is what will consumers ultimately do? Because the path of least resistance is to go through Apple and go through Google – and that's what consumers have gotten used to," he said.

What happened?

Last year, Google said it was planning to enforce a policy requiring developers that distributed software on the Google Play Store — a digital service to download apps — to use its proprietary in-app payment system. That means other payment alternatives will not be allowed.

Google's billing system takes a 30% cut for most in-app purchases, similar to what Apple does on its App Store.

The move was criticized by developers and regulators scrutinized Google's and Apple's hold over the smartphone operating systems and the price they charge programmers who develop apps for those platforms. The majority of the world's smartphones either run on Google's Android operating system or on Apple's iOS platform.

Both companies have since said they would cut their commission rates for certain developers.

In Apple's case, the company said it will halve charges from 30% to 15% for software developers with less than $1 million in annual net sales on the App Store. Google said in March it would cut Google Play Store fees from 30% to 15% for the first million dollars a developer makes on the platform per year.

The iPhone maker last week also reversed course on another important App Store policy: It said developers on the App Store will be allowed to email users and encourage them to pay directly, instead of through Apple — a move that was previously prohibited.

However, if users continue to make payments through the App Store, developers will have to use Apple's billing system and pay a commission.

— CNBC's Kif Leswing contributed to this report.

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Stocks making the biggest moves in the premarket: Zoom Video, Robinhood, Designer Brands and more - CNBC

Take a look at some of the biggest movers in the premarket:

Zoom Video (ZM) – Zoom reported quarterly earnings of $1.36 per share, 20 cents a share above estimates. Revenue also beat forecasts and topped $1 billion for the first time. Growth rates have slowed from the meteoric levels seen as the pandemic began in 2020. Its shares plunged 11.3% in the premarket.

Robinhood (HOOD) – Robinhood fell another 2.8% in premarket trading, following a 6.9% Monday tumble. The trading platform operator saw its stock pressured after CNBC reported that PayPal (PYPL) was exploring the launch of its own stock trading platform, as well as SEC Chairman Gary Gensler's comment that a ban of payment for order flow – which constitutes the bulk of Robinhood's revenue – was "on the table."

Designer Brands (DBI) – The footwear retailer formerly known as DSW reported quarterly earnings of 56 cents per share, compared to a 24 cents a share consensus estimate. Revenue was well above Wall Street forecasts. Comparable-store sales surged 84.9%, more than the 62.2% increase forecast by analysts surveyed by StreetAccount. Its shares surged 7.5% in premarket trading.

Chico's FAS (CHS) – The apparel retailer's shares rallied 4.5% after the company reported an unexpected quarterly profit. Chico's earned 21 cents per share, compared to consensus estimates of an 8 cents per share loss. Revenue was also well above estimates. Chico's said the results represented the company's best second quarter in eight years.

Textron (TXT) – Textron added 1.8% in premarket action after Cowen upgraded the stock to "outperform" from "market perform," based in part on robust business jet demand as well as an "underappreciated" opportunity in the electric helicopter market.

Uber Technologies (UBER) – Russian technology company Yandex (YNDX) announced a deal to buy out Uber's interest in several food delivery and ride-hailing joint ventures for $1 billion. Uber was little changed in the premarket, but Yandex gained 1.2%.

Virgin Galactic (SPCE) – Virgin Galactic gained 3.3% in the premarket after Jefferies initiated coverage on the space travel company with a "buy" rating. Jefferies notes an expected ramping up in capacity by Virgin Galactic as well as rapidly growing demand.

Square (SQ) – Square plans to offer a new paid version of its invoicing software called Invoices Plus, according to announcements shared with some sellers and seen by TechCrunch. The new service will offer some advanced features that had been tested over the past year in limited trials.

Support.com (SPRT) – Support.com remains on watch, after soaring 38% Monday, tripling over the past week and bringing its year-to-date gain to more than 1,500%. The technical support company's stock is among heavily shorted stocks that have been targeted by investors on social media. The stock added another 4.4% in premarket trading.

Moderna (MRNA) – Moderna's Covid-19 vaccine produced more than twice the number of antibodies as the Pfizer-BioNTech vaccine, according to a study published by the Journal of the American Medical Association. Moderna shares had been under pressure following the suspension of 1.63 million doses in Japan on contamination concerns, and a temporary hold on two vaccine lots in the Gunma and Okinawa prefectures which were ultimately cleared for distribution. Moderna rose 1.4% in the premarket.

NetEase (NTES) – NetEase reported better-than-expected earnings for its latest quarter, with the China-based online gaming company seeing revenue in line with forecasts. The stock had fallen 3.4% Monday amid new restrictions on online gaming imposed by the Chinese government. NetEase gained 2.1% in the premarket.

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Evidence of China’s economic slowdown grows as services sector slumps - South China Morning Post

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Here's the First Quarter-Mile Time Slip for the Quickest Ford Mustang Mach-E - The Drive

Electric vehicles have one major performance advantage over their ICE-powered forebearers, and that's torque. Electric motors can deliver peak torque from a standstill, giving EVs a serious edge when it comes to acceleration. Many owners thus enjoy taking their EVs to the drag strip to lay down some fast times. One owner of the new Ford Mustang Mach-E GT Performance Edition did just that, and posted the results online for your reading pleasure.

The GT Performance Edition boasts 480 horsepower, a hefty bump over the 346 hp of the Premium AWD model. Torque figures are healthy as well, with a full 634 lb-ft on tap to hustle the SUV down the road. The results from the strip are interesting to say the least, and the key figures are thus: a 12.657 second quarter-mile time at a trap speed of 100.02 mph, and 0-60 mph in 3.89 seconds minus the 1 foot rollout. 

MachEForum/Matt/0t60-3.5

The key point of contention in the forums is the odd disconnect between the quarter-mile time and the measured trap speed. Lower-spec Mach-E models have posted slower 13-second quarter-mile times with higher trap speeds in the past. It suggests either the driver rolling off the throttle early, or some kind of loss of power towards the end of the run. Trap speeds closer to 105-110 mph would be more typical for a mid-12 second pass. A later post with performance traces showed the driver making multiple runs in the high 12s with similar or slower trap speeds, showing consistency at least.

For context, The runs were taken with the car at a 72% state of charge, with tire pressures in the realm of 39-42psi. The owner also noted that acceleration past 100mph was slow, to the point they suspected some sort of governor was in play. The runs were made with the "Unbridled Extend" mode turned off, a feature which intends to balance power output for lap-to-lap consistency when racing on track.

It's not perfectly clear whether these times are representative of the true capabilities of the GT Performance Edition trim. Ford's own figures claim it should be capable of a 3.5 second 0-60 time, and there's that question hanging over the trap speed that suggests a faster quarter-mile is possible too. But, thus far, they're the only figures we've got. They do tell us that Ford has built a swift and spritely SUV that's quicker than the rest of the range. 

The results should give more ammunition to both sides in the ongoing debate as to whether the Mach-E deserves to wear the Mustang name. It's an argument that will rage on well into the future, of course. All we'll say is that the Ford Mustang Mach-E GT Performance Edition has an incredibly long name that makes headlining articles difficult, and it appears to be the fastest model in the Mach-E range. Right now, that's all we need to know.

Got a tip? Let the author know: lewin@thedrive.com

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Where Investors In Charge of $3 Trillion Are Putting Their Money - Bloomberg

As if the pandemic wasn’t warping global markets enough, China’s regulatory crackdown is suddenly adding new unpredictability. So how best to invest in these strange times?

Bloomberg News spoke with institutional investors with $3 trillion in combined assets under management to ask how they’re navigating economic turmoil caused by unpredictable recoveries and China’s shifting rules, which have frozen U.S. listings and almost erased the online education sector.

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Why Zoom Video and StoneCo Shares Are Falling After Hours Monday - Motley Fool

The stock market generally continued to move higher on Monday, buoyed by strong sentiment that the higher-growth area of the economy would continue to thrive. That helps explain why the Dow Jones Industrial Average (DJINDICES:^DJI) missed out, with financial stocks weighing on the average, but the the S&P 500 (SNPINDEX:^GSPC) and Nasdaq Composite (NASDAQINDEX:^IXIC) reached new record highs.

Index	Percentage Change (Decline)	Point Change
Dow	(0.16%)	(56)
S&P 500	+0.43%	+19
Nasdaq	+0.90%	+136

Data source: Yahoo! Finance.

Yet some big names made large moves lower in after-hours trading, as earnings season continued to deal out some surprises. Zoom Video Communications (NASDAQ:ZM) and StoneCo (NASDAQ:STNE) have fallen substantially from their highest levels of the past year, and even their latest financial results weren't able to generate much hope for an imminent rebound for the stocks.

Zooming lower again

Zoom Video Communications saw its stock drop nearly 11% after the end of regular trading on Monday. The video platform has continued to grow, but not at the pace that overly optimistic shareholders had anticipated this time last year.

By most standards, Zoom's business continued to do well. Second-quarter revenue rose 54% year over year, topping $1 billion for the first time. Adjusted net income came in 48% higher from the year-ago quarter, at $1.36 per share. Free cash flow was up 22% to $455 million.

Image source: Getty Images.

Moreover, Zoom's business metrics looked solid. The company had 2,278 customers contributing $100,000 or more to its annual revenue, well over double its big-client count from a year ago. Customers with more than 10 employees vaulted over the half-million mark, up 36% year over year. Net dollar expansion rates remained above 130% on a trailing-12-month basis.

But investors weren't pleased to see Zoom calling for roughly flat revenue for the third quarter compared to the second quarter. Moreover, management predicted its adjusted earnings could actually fall on a quarter-over-quarter basis.

Zoom has traded at a premium valuation for a long time, and investors have expected even sharper growth than this. That explains the after-hours drop for the stock even in the wake of a healthy business report.

Falling like a stone, slowly

Shares of StoneCo were down less sharply, falling about 3% in after-hours trading after a 4% decline in the regular session. The Brazilian fintech company's second-quarter financial results similarly failed to impress investors despite a solid showing.

The business looked strong. The number of small and midsize businesses using StoneCo's platform climbed above the 1 million mark, and total payment volume more than doubled year over year. The company's TON product has also attracted a lot of business, as the micro-merchant service added 140,000 new clients in just the past three months. All told, those figures helped StoneCo boost revenue by 68% from this time last year.

But it did run into some execution mistakes, and that led to the company making a temporary halt to extending credit and boosting its loss reserves. Moreover, StoneCo thinks it could take three to six months before it can resume operations as normal.

Even with the setback, the company is optimistic about its acquisition of software company Linx. The purchase should bolster StoneCo's overall value proposition and brings access to data that the company hopes to use to cross-sell joint customers. Nevertheless, challenges might keep the stock price down until the company can prove it's moving back in the right direction again.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Tencent and NetEase shares pare losses after China tightens gaming rules for kids - CNBC

In this article

• 9999-HK
• 700-HK

China's National Press and Publication Administration said minors will only be allowed to play online games for up to three hours a week. That is a significant reduction from previous rules.

Zhang Peng | LightRocket | Getty Images

GUANGZHOU, China — Shares of China's second-largest gaming company NetEase fell on Tuesday after regulators dramatically cut down the amount of time children were allowed to play games.

NetEase was down about 2.9% in afternoon trade in Hong Kong. Meanwhile, rival Tencent was down more than 3% earlier in the day but turned positive later in the day.

Analysts expect the latest directive to have minimal impact on China's gaming giants, perhaps one of the reasons Tencent shares reversed course.

On Monday, China's National Press and Publication Administration said children below 18 years old will only be allowed to play online games for up to three hours a week and only during specific times.

The ruling significantly reduced game time for minors who, under 2019 rules, were allowed to play for up to 90 minutes a day for most parts of the day.

Gaming is the largest source of revenue for NetEase and Tencent. But analysts don't expect a huge impact on the companies as a result of the new rules.

Tencent has previously said only a small amount of gaming revenue comes from younger players in China.

"We estimate about 5% of gaming revenue comes from minors under 18 years old, and we believe there is about 3% earnings impact to Tencent if we assume gaming contributes about 60% of total earnings," investment bank Jefferies said in a note published on Monday.

"Minors represent low singe digits of NetEase's gaming revenue," the analysts added.

For a long time, the Chinese government has been concerned about gaming addiction amongst the country's youth. Content such as games is also tightly controlled in China. 

Tencent and NetEase have been through bouts of gaming regulation before.

In 2018, regulators froze the approvals of new game releases for several months. Tencent and NetEase have already made moves to restrict the amount of time young people play their online games for.

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Robinhood Stock Drops After SEC Chairman Warns on Payment for Order Flow - The Wall Street Journal

SEC Chairman Gary Gensler said a full prohibition of payment for order flow was on the table as part of a broader agency review.

Photo: jose luis magana/Reuters

Shares of Robinhood Markets Inc. tumbled on Monday after the head of the Securities and Exchange Commission signaled that he was open to banning payment for order flow, a practice that accounts for most of the online brokerage’s revenues.

Robinhood shares closed 6.9% lower after Barron’s published an interview with SEC Chairman Gary Gensler in which he said a full prohibition of payment for order flow was “on the table” as part of a broader agency review.

Robinhood’s stock was briefly down more than 9% on Monday afternoon before recouping some of its losses. Shares of Virtu Financial Inc., an electronic trading firm that handles orders from retail brokerages such as Robinhood and TD Ameritrade, also fell on the remarks. Virtu stock declined 3.8% for the day.

In payment for order flow, or PFOF, online brokerages take payments from high-speed trading firms in exchange for sending them their customers’ stock and options orders for execution. The trading firms profit from trading against investors’ orders by collecting a small difference between the buying and selling prices of stocks.

PFOF is legal and has been common in the U.S. brokerage industry for decades. But it drew renewed attention this year after the trading frenzy in GameStop Corp. and other meme stocks spurred scrutiny of the handling of small investors’ trades.

Mr. Gensler said in June that the SEC was reviewing payment for order flow and other related aspects of the structure of U.S. equities markets. In the Barron’s interview, he articulated more clearly than in previous comments that the review could result in a ban of PFOF.

Robinhood relies more heavily on payment for order flow than other brokerages, which makes its stock especially sensitive to the outcome of the SEC’s review. In the second quarter, nearly 80% of the company’s total net revenues came from payments it received for routing investors’ orders for stocks, options and cryptocurrencies.

Brokers and traders say investors benefit from having their orders routed to high-speed traders because they get better prices on their trades than they would from stock exchanges. Payment for order flow has also made it possible for brokers like Robinhood to allow zero-commission trading.

Critics say PFOF presents a conflict of interest for brokerages, which can either collect more money from the trading firms to increase revenues, or pass that savings on to their customers.

Representatives of Robinhood and Virtu declined to comment on Mr. Gensler’s remarks.

In remarks prior to Robinhood’s initial public offering in July, Robinhood Chief Financial Officer Jason Warnick said PFOF benefited investors by allowing zero-commission trades.

“We think payment for order flow is a better deal for our customers versus the old commission structure,” he said. “It allows investors to invest smaller amounts without having to worry about the cost of commissions.”

Write to Alexander Osipovich at alexander.osipovich@dowjones.com

Corrections & Amplifications
Nearly 80% of Robinhood’s total net revenues for the second quarter came from payments it received for routing investors’ orders for stocks, options and cryptocurrencies. An earlier version of this article incorrectly said that those revenues came from routing orders for stocks, equities and cryptocurrencies. (Corrected on Aug. 30.)

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China's services activity contracts for the first time since early 2020, official data shows - CNBC

A Meituan food courier delivers a bag of food to a resident of a neighborhood under lockdown due to the recent COVID-19 outbreak on August 11, 2021, in Zhangjiajie, Hunan Province of China.

Yang Huafeng | China News Service | Getty Images

BEIJING — China's services industry contracted in August for the first time since the height of the pandemic early last year, according to official data released Tuesday.

The National Bureau of Statistics' monthly survey of businesses found the non-manufacturing Purchasing Managers' Index (PMI) fell to 47.5 in August, down from 53.3 in July.

The latest reading also marked the first drop below the 50 line since February 2020 when China shut down more than half the country in an effort to contain the coronavirus. Readings below 50 indicate contraction in business activity from the prior month, while those above 50 reflect expansion.

This month's drop in the services PMI comes as the spread of the highly infectious delta variant in late July and August prompted Beijing and many other major cities to announce travel restrictions and lockdowns on some apartment communities.

By last week, daily reports of new domestically transmitted cases had dwindled to zero and the National Health Commission said the risk of a nationwide outbreak had been contained.

The official manufacturing PMI showed businesses activity expanded for an 18th straight month in August, at 50.1. That was slightly below the 50.2 level forecast by a Reuters' poll.

China was the first major economy to contain the coronavirus pandemic last year. However, retail sales have lagged the overall recovery, and came in below expectations in July amid uncertainty about new regulation and employment prospects.

Read more about China from CNBC Pro

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