Connect with us

Business

A woman was dragged by a self-driving Cruise taxi in San Francisco. The company is paying her millions

Published

on

A woman was dragged by a self-driving Cruise taxi in San Francisco. The company is paying her millions

General Motors’ autonomous car company, Cruise, has reportedly agreed to pay an $8-million to $12-million settlement to a woman who was hospitalized after getting dragged along the pavement by a self-driving taxi in San Francisco last year.

The woman, a pedestrian, was struck by a hit-and-run vehicle at 5th and Market streets and thrown into the path of Cruise’s self-driving car, which pinned her underneath, according to Cruise and authorities. The car dragged her about 20 feet as it tried to pull out of the roadway before coming to a stop.

She sustained “multiple traumatic injuries” and was treated at the scene before being hospitalized.

It’s unclear when the settlement was reached or the exact amount, sources familiar with the situation told Fortune and Bloomberg. The condition of the woman, whose name was not released by authorities, is unknown, but a representative of Zuckerberg San Francisco General Hospital told Fortune that she had been discharged.

Cruise initially said that its self-driving car “braked aggressively to minimize impact” but later said the vehicle’s software made a mistake in registering where it hit the woman. The car tried to pull over but continued driving 7 mph for 20 feet with the woman still under the vehicle.

Advertisement

“The hearts of all Cruise employees continue to be with the pedestrian, and we hope for her continued recovery,” Cruise said in a statement.

Cruise halted its driverless operations after its autonomous taxi license was suspended by California’s Department of Motor Vehicles. The company was also accused of lying to investigators and withholding footage of the car crash.

Cruise said this week that it would start testing robotaxis in Arizona with a “safety driver” behind the wheel in case a human needs to take control of the vehicle, according to a company news release.

“Safety is the defining principle for everything we do and continues to guide our progress towards resuming driverless operations,” according to the release.

Advertisement

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

Column: With Democratic assent, House votes to open loopholes in crypto regulation

Published

on

Column: With Democratic assent, House votes to open loopholes in crypto regulation

Money, as we all know, is the mother’s milk of politics in America. It can look even more nourishing if you can manufacture it yourself.

That’s surely what accounts for the solicitude that the cryptocurrency industry has been receiving from Congress.

The House on Wednesday passed a law reducing regulation of crypto, despite ample evidence that the asset class has been a haven for fraudsters, extortionists and worse.

The law will “make the United States safer for drug traffickers, for terrorist funders, for child and drug traffickers and those who buy and sell child pornography,” said Rep. Sean Casten (D-Ill.), listing a few of the documented users of crypto in recent years. “I did not know those groups had such proud advocates in Congress.”

Advertisement

The crypto industry’s record of failures, frauds, and bankruptcies is not because we don’t have rules or the because the rules are unclear. It’s because many players in the crypto industry don’t play by the rules.

— SEC Chairman Gary Gensler

Casten may find himself in the House minority in more ways than one. Crypto promoters have managed to peel several Democrats in the House and Senate away from the party’s strong opposition to reducing regulations on the asset class.

Earlier this month, bipartisan majorities in both chambers voted to roll back a two-year-old Securities and Exchange Commission guideline for how financial institutions should account for crypto assets left in their care by customers. President Biden said he would veto the change, and the majorities in neither chamber were large enough to overrule a veto.

Advertisement

The congressional crypto caucus handed the industry another victory Wednesday, when the House passed the Financial Innovation and Technology for the 21st Century Act, known as FIT21. The vote was 279 to 136, with 71 Democrats joining the Republican majority.

The measure’s fate is unsure in the Senate, which hasn’t yet taken it up. Biden has stated his opposition to FIT21 but hasn’t promised a veto, which the crypto gang and its supporters seem to think is a big victory. Biden said that he was willing to negotiate a regulatory system that protects crypto consumers and investors without unduly interfering with innovation, but “further time will be needed.”

If it becomes law, FIT21 would deliver to crypto promoters their most heartfelt desire: removing them from the jurisdiction of the powerful SEC and transferring oversight to the chronically underfunded and understaffed Commodity Futures Trading Commission.

Their goal is understandable, since the SEC has been explicit about its intention to regulate crypto as securities, subjecting the asset class to the disclosure rules and safeguards against fraud that have made the traditional financial markets in the U.S. the safest in the world.

During Wednesday’s floor debate, the bill’s advocates talked of the virtues of freeing an innovative technology from “overzealous regulators” — that was Rep. Cathy McMorris Rodgers (R-Wash.), mouthing words that could have been dictated to her by crypto executives — and relieving them of “regulatory uncertainty.”

Advertisement

SEC Chairman Gary Gensler put the latter claim to rest in a statement about FIT21 he issued Wednesday a few hours before the vote. “The crypto industry’s record of failures, frauds, and bankruptcies is not because we don’t have rules or because the rules are unclear,” he stated. “It’s because many players in the crypto industry don’t play by the rules.”

The bill’s advocates tried to pump up the importance of crypto as a financial asset with claims that 20% of Americans are crypto owners. There’s no evidence for this. On the contrary, the Federal Reserve has found that interest in crypto among ordinary Americans is weak and fading.

In its most recent survey of the economic condition of U.S. households, issued this month, the Fed determined that only 7% of Americans bought or held crypto as an investment (down from 11% in 2021) and only 1% had used it to buy anything or make a payment. That underscores the most important truth about crypto, albeit one its promoters seldom acknowledge: No one has yet identified a genuine purpose for crypto in the real world.

“The entities that stand to benefit from this bill are not ordinary investors trying to build wealth,” Rep. Maxine Waters (D-Los Angeles), the ranking Democrat on the House Financial Services Committee, said from the House floor Wednesday, “but rather the crypto firms. … They have already made billions of dollars unlawfully issuing or facilitating the buying and selling of crypto securities.”

Waters accurately described the effect of FIT21 as placing crypto effectively into a regulatory “no man’s land.” She described the bill as “an extreme MAGA libertarian approach, where companies can operate without regulatory scrutiny, and consumers and investors are on their own on detecting and avoiding fraudulent schemes.”

Advertisement

What’s most striking about the push for FIT21 is that it comes so closely on the heels of major scandals in the crypto space. Sam Bankman-Fried, the founder of the crypto firm FTX, was sentenced in March to 25 years in jail for crypto fraud, after having been convicted in November on seven federal counts related to fraud.

During the heyday of FTX, Bankman-Fried appeared before congressional committees to promote a tailor-made regulatory scheme for crypto bearing close resemblance to the one embodied in FIT21.

Just last month, Changpeng Zhao, founder of the international crypto firm Binance, was sentenced to four months in prison on federal money-laundering charges; Zhao had earlier agreed to pay a $50-million fine, and Binance settled the government case against it for $4.3 billion.

The SEC is pursuing a lawsuit against the crypto exchange Coinbase for selling unregistered securities. In March, federal judge Katherine Polk Failla denied the firm’s motion to quash the case. Her reasoning effectively explains why FIT21 is not only unnecessary, but harmful: “The ‘crypto’ nomenclature may be of recent vintage,” she wrote, “but the challenged transactions fall comfortably within the framework that courts have used to identify securities for nearly eighty years.”

The counterweight to the arguments against FIT21 is cash — the green variety, not the notional type marketed by cryptocurrency firms. Three super PACs formed by crypto executives and investors have raised about $85 million to spend on 2024 political races.

Advertisement

The financial potency of this industry’s campaign spending isn’t in question. One of the PACs, Fairshake, spent more than $10 million over the last year in opposition to Rep. Katie Porter (D-Irvine) in her race for the Democratic nomination for U.S. Senate.

Porter was known as a strong critic of crypto. In 2022 she joined Sen. Elizabeth Warren (D-Mass.) — the most vociferous crypto critic on Capitol Hill — in an investigation of how crypto “mining” by computer had affected the energy grid in Texas and raised energy prices for consumers.

Porter lost the Senate race. Her victorious opponent in the primary, Rep. Adam Schiff, has taken a much more indulgent position toward crypto, listing it on his campaign website among the “new developments in technology … we need to grow” in order to keep jobs and regulatory oversight in U.S. hands.

In the current congressional election cycle, Fairshake has made $702,300 in donations to Democratic campaigns and $551,700 to Republicans. Its largest single recipient is Rep. Patrick McHenry (R-N.C.), chairman of the House Financial Services Committee and sponsor of FIT21. His campaign has received $126,626 even though he has announced that he is not running for reelection this year and retiring from Congress.

In his statement, Gensler tried to strengthen the lawmakers’ understanding of the risks they were endorsing with the measure. The bill would “create new regulatory gaps and undermine decades of precedent” in the regulation of investment contracts, he wrote, “putting investors and capital markets at immeasurable risk.”

Advertisement

It would allow crypto promoters to “self-certify” that their products lay outside traditional regulations and give the SEC only 60 days to respond. By removing crypto trading platforms from the regulatory structure overseeing stock and bond exchanges, it would open the door to conflicts of interest by reducing consumer protections against the platforms commingling their funds with client funds.

The bill also exempts crypto promoters from rules requiring risky investments to be offered only to accredited investors—those with a net worth of more than $1 million, not counting their primary residence, or income over $200,000 (for couples, $300,000) in each of the prior two years.

The cynical device FIT21 uses to neuter the SEC’s oversight of crypto investments is to turn that task over to the CFTC. As the regulatory watchdog Better Markets observes, the CFTC has a budget of only $365 million, versus the SEC’s $2.1 billion, and fewer than 700 employees, compared to the SEC’s approximately 4,500 staffers).

The bill “would heap a whole new set of responsibilities on the CFTC, making it the de facto regulator of countless new crypto exchanges and broker-dealers,” Better Markets wrote, even though the CFTC “does not have the funding to fulfill all its current statutory mandates.”

The debate Wednesday that preceded the House passage of FIT21 was typically tone-deaf and filled with fictitious and factitious assertions. Rep. Mike Flood (R-Neb.) invoked the FTX scandal, which saw billions of dollars in clients’ and investors’ crypto deposits illegally appropriated by the firm’s leaders. “We need to ensure that there are the protective rules that prevent anything like that happening again,” he said.

Advertisement

Flood asserted that, under FIT21, FTX would have been barred from registering as an exchange, and it would not have been able to commingle its funds with those of its clients. One wonders what he was talking about. FTX was barred from registering as an exchange, and didn’t do so. Why? Because Bankman-Fried, its founder, knew that to do so would have subjected the firm to SEC oversight, which no one in crypto wants to undergo.

As for commingling funds, it’s already illegal — it’s one of the practices that landed Bankman-Fried in prison.

The bottom line is very clear. There’s no justification for bestowing on crypto a hand-manufactured regulatory scheme all of its own. Its promoters have no argument other than to claim that they need regulation-lite to foster “innovation,” when the result will be to facilitate the cheating of customers, laundering money or lubricating ransomware attacks like the one that has disrupted the crucial operations of the UnitedHealth Group subsidiary Change Healthcare, which manages reimbursement processes for medical providers nationwide.

If there’s a corner of the financial world crying out for tougher regulation, it’s crypto. For Congress to even contemplate a slackening of the regulation that already exists is nothing short of absurd. But Congress doesn’t respond to practicalities; it responds to money. That’s the only driver of efforts like FIT21.

Advertisement
Continue Reading

Business

Would breaking up Live Nation and Ticketmaster actually lower concert ticket prices?

Published

on

Would breaking up Live Nation and Ticketmaster actually lower concert ticket prices?

The U.S. Department of Justice’s effort to break up Live Nation and Ticketmaster has been a long time coming, following years of complaints from concertgoers who say they’ve been squeezed by exorbitant prices and hidden fees when trying to buy passes to see Taylor Swift, Beyoncé and other music megastars.

Ever since the government cleared the merger of concert promoter Live Nation and ticketseller Ticketmaster in 2010, there have been demands from consumer advocates to cleave them. The Justice Department argues that the combination is a monopoly that has resulted in harm for music fans and has clamped down competition in the multibillion-dollar live music market.

Live Nation says the arguments are off-base and will probably fail in court. Either way, it will take a long time for the case to wind through the legal system.

Why is the government suing Live Nation?

The Justice Department has raised concerns that Live Nation and Ticketmaster have retaliated against competitors and new entrants and locked out competition with exclusionary contracts.

“The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services,” said Atty. Gen. Merrick B. Garland. “It is time to break up Live Nation-Ticketmaster.”

Advertisement

Beverly Hills-based Live Nation, the world’s largest concert company, has long been a target for government scrutiny.

When the U.S. approved the 2010 merger, it did so after the companies agreed to a settlement meant to ensure fair competition in the ticketing marketplace and prohibit Live Nation from retaliating against venue owners that decided to defect to competitors. The consent decree was extended and amended in 2019.

But this time, the government is going hard at the company. In its Thursday lawsuit, the U.S. accused Live Nation of various anticompetitive practices and said the company uses its market dominance to impose fees on consumers and pressure artists to use its services.

The suit comes amid a wave of antitrust action from the Biden administration, which has sought to curb the power of conglomerates and Big Tech. The U.S. government has filed other cases against tech giants including Apple, Amazon and Google, taking them to task for their alleged impact on competition.

Live Nation said that the lawsuit will not solve issues related to ticket prices, service fees or access to in-demand shows.

Advertisement

“Calling Ticketmaster a monopoly may be a PR win for the DOJ in the short term, but it will lose in court because it ignores the basic economics of live entertainment, such as the fact that the bulk of service fees go to venues, and that competition has steadily eroded Ticketmaster’s market share and profit margin,” Live Nation said in a statement.

Would breaking up Live Nation lower prices?

Several industry observers who spoke to The Times expressed doubt that the lawsuit would significantly reduce prices for consumers.

Brandon Ross, an analyst at research firm LightShed Partners, said that artists decide how much they want to charge for a tour and then the promoter buys the tour from them. Due to Live Nation’s large scale, it is able to take a lower profit margin, with most of the money going back to the artist, Ross added.

“There is an efficiency in having a large player in the industry,” Ross said. “If that goes away, then that’s going to come out of either the artist’s take, or the artists are going to charge consumers even more.”

Artists like Swift and Bruce Springsteen are able to charge big sums for tickets because the concerts are one-time events, and some people are willing to pay. Because of supply and demand, tickets resold on the secondary market can be much higher than face value.

Advertisement

But James Sammataro, co-chair of Pryor Cashman’s music group, said he believes the lawsuit could address issues such as excess ticketing fees.

“What’s really harming the consumer is all these excess fees and the restrictions on getting the tickets,” Sammataro said. “For most artists, these ‘increased prices’ aren’t really benefiting the artists. In many cases, it’s alienating their core ticket buyers and their core audience.”

There is a larger issue in the music industry of concert tickets being bought at face value by scalpers and resold on secondary markets for astronomical prices.

It’s leading to two classes of music fans: those who can afford to pony up and those who can’t.

Meanwhile, many promoters left the industry after getting clobbered by the pandemic, which shut down or restricted many live events. Some smaller music artists have also been hurt by the lack of competition among promoters and are not given opportunities to play at larger venues, Sammataro said.

Advertisement

“The overall effect is that it leads to a very tilted playing field where it’s difficult for promoters to compete,” Sammataro said. “And when you have a lack of competition, essentially like the basis of predatory pricing, ultimately there’s going to be long term gouging.”

Could the company actually be broken up?

Anything is possible, but there is one thing everyone agrees on: This legal battle will be a long fight.

“Antitrust litigation can be long and protracted,” said Eric Enson, an antitrust partner at Crowell & Moring. “I expect that this will be a matter of years and not months.”

Music industry expert Bill Werde, who runs the music business program at Syracuse University, cautioned that splitting up such a large enterprise wouldn’t be easy, and it’s unclear what the businesses would look like after being disentangled from one another more than a decade after merging.

“They make their margin in ticketing and sponsorships, so if you break up this company, … I don’t know how Live Nation the concert promotion business necessarily lives and thrives independent of this high-margin ticketing business,” said Werde, who also publishes a weekly newsletter.

Advertisement

But even if it could lose, there are reasons the government might be motivated to go after the company in an election year. As Werde and other experts were quick to point out, there’s nothing that unites people like hating Ticketmaster.

Continue Reading

Business

With new Charter Spectrum distribution deal, Paramount breathes a sigh of relief

Published

on

With new Charter Spectrum distribution deal, Paramount breathes a sigh of relief

Paramount Global and Charter Communications have agreed to a new distribution deal for Paramount’s CBS network and cable channels, easing a concern that had threatened to complicate the media company’s sale talks.

The last three-year contract covering CBS and Paramount’s 25 cable networks expired April 30, but the two sides continued negotiations, sparing Charter’s Spectrum customers from another disruptive blackout. Last summer, a breakdown in separate talks between Charter and Walt Disney Co. resulted in Disney channels, including ESPN, going dark for 10 days for Spectrum subscribers.

While Paramount has less pull than Disney, the company still benefits from the strength of its CBS network and its entertainment schedule; news programs, including “CBS News Sunday Morning” and “60 Minutes”; and sports, including golf and the NFL.

As part of the deal, the companies said ad-supported versions of Paramount+ Essential and BET+ Essential would be included at no additional cost to Charter’s Spectrum TV customers. Charter also will make Paramount’s direct-to-consumer products available for purchase to its Internet-only customers.

Advertisement

“This innovative deal celebrates our mutual commitment to deliver flexibility, choice and value for audiences everywhere, and we look forward to bringing even more of our fan-favorite programming to Spectrum customers through our direct-to-consumer streaming services for the first time,” Ray Hopkins, Paramount’s president of U.S. Networks Distribution, said in a statement.

The Charter deal marked the first major accomplishment for Paramount since Chief Executive Bob Bakish was ousted late last month and three division leaders, comprising the “Office of the CEO,” began running the company.

For investors, it was a shot of good news during a turbulent cycle as Paramount board members have been mulling whether to pursue a complicated and controversial two-phase merger with David Ellison’s Skydance Media or accept a separate buyout bid from Sony Pictures Entertainment and Apollo Global Management.

Sony and Apollo have offered $26 billion, including the assumption of debt. Sony and Apollo are known to be cost-conscious buyers; they want to scrutinize Paramount’s financial picture, including details of the Charter distribution pact, before arriving at a valuation, according to people close to the process who are not authorized to comment publicly.

Both Charter and Paramount had plenty to lose if they had been unable to reach a new agreement.

Advertisement

Charter’s stock has tumbled more than 25% year-to-date, weighed down by concerns about weakness in its broadband internet and wireless phone business, as well as further erosion in pay TV subscribers — a trend that has had wide-reaching financial implications.

Audiences have been migrating away from general-entertainment cable channels, including BET, MTV and Nickelodeon, making them less valuable to distributors such as Charter.

Analysts have long viewed Paramount’s channels as among the weakest in the industry because they largely run low-cost reality programming, a genre that television executives say has suffered from oversaturation and higher-end competition from streaming companies, such as Netflix.

Recent Nielsen ratings shows how Paramount’s cable channels have fallen out of favor with audiences. Only three of the company’s channels — TV Land, TV Land Classic and Nick at Night — rank in the Top 20, in terms of total viewers. TV Land plays reruns of series including “King of Queens,” “Seinfeld” and “Everybody Loves Raymond.” Comedy Central and the Paramount Network lag behind, rounding out the Top 30.

Connecticut-based Charter’s executives, including Chief Executive Christopher L. Winfrey, were loath to agree to a new pact that would significantly raise fees for subscribers who continue to pay for their channel bundles. Winfrey also has demanded that programmers give Spectrum customers access to subscription services that provide network programming.

Advertisement

“From the outset, Paramount has embraced Charter’s goal of evolving the video distribution model, and we have appreciated their willingness to collaborate on a solution that benefits our mutual customers and the video industry as a whole,” said Tom Montemagno, Charter’s executive vice president of programming acquisition.

Continue Reading

Trending