You Have The Right To Pay...$25,000 That is

Google has to pay a $25,000 fine because a lack of cooperation in an investigation into the company's storage of personal data over wireless networks. There has been a lot of scrutiny facing Google and how it stores its' data. Many lawmakers have a negative view of Google and this lack of cooperation strengthens that this dislike. Since May 2007, Google collected content form wireless networks and other things such as passwords and history. According to executive director of Electronic Privacy, Marc Rotenberg notes that, "Google unlawfully intercepted and stored millions of wireless communications from Wi-Fi routers. "Google violated FCC orders by delaying its search for emails and not verifying the accuracy of its submissions. There have been also other data protection issues in countries like Canada France, and the Nethederlands. We all use Google but when it starts tracing everything we do and following our every online footstep it can be a very dangerous service.

The full article can be found at: http://www.bloomberg.com/news/2012-04-15/fcc-seeks-25-000-fine-from-google-in-wireless-data-privacy-case.html                                                                                                                                      

Dodgers Here, Get Your Dodgers Here

Do you have $2.15 billion to spend? If so you can buy the Los Angeles Dodgers after they won permission to sell the Major League Baseball team. Kevin Gross, a U.S. Bankruptcy Judge, approved the reorganization plan. Major League Baseball is worried about some parts of the sale such as who will own the parking lots and whether a mediator would be necessary in the future. The current owner put the Dodgers into bankruptcy which he claims was due to MLB Commissioner Bud Selig rejecting a new contract between them and Fox Sports. This has put them into a cash crisis although they are tied for fifth-most World Series championships. Whoever owns the dodgers wil have a lot of work to do to revitalize the franchise but there is potential to make a good amount of money.

The full article can be found at:http:/f/www.bloomberg.com/news/2012-04-14/dodgers-win-court-approval-to-sell-team-exit-bankruptcy.html

Angry Birds May Be a Little Happier In China

Rovio Entertainment Oy, creator of "Angry Birds", said it's in talk with Baidu Inc. and Sohu.com Inc., Chinese companies, in order to bring its' game to the world's biggest Web market. They are looking at bringing the game, which has recorded more than 100 million downloads in China,  in new methods. The game runs on Google's Android and Apple's iPhone and iPad devices. Rovio is based in Finland and notes that smart devices are growing rapidly in China. This translates into more game downloads. Angry Birds has crossed the threshold into merchandise such as stuffed toys and coffee mugs through its online store. They are also working on an IPO though they do not know the location yet. They raised $42 million from investors last year and with a country that has 513 million Internet users. Rovia stands to make a lot of money in China.

The full article can be read at: http://www.bloomberg.com/news/2012-04-12/angry-birds-creator-in-talks-with-baidu-sohu-in-china.html

Safeway On The Rise

It has been speculated that Safeway Inc., a large grocery chain, based in Pleasanton, California might be acquired because payouts for executives had been changed "in the event of a takeover." Stocks rose 2.5 percent and advanced 7.5 percent this week, the biggest increase since 2009. On April 9, the CFO Robert L. Edwards assumed the presidency of the more than 1,600 stores. Safeway is the second-largest U.S. grocery chain rose 6.3 percent and it has a market capitalization of about $5.7 billion. Safeway is not commenting over the speculation for takeover. They adopted a practice called "double-trigger vesting acceleration" that would require executives to stay at the company to get their money in case the company is bought. It is a very unique strategy and helps further the belief that the company will be bought by some other large group.

The full article can be found at: http://www.bloomberg.com/news/2012-04-13/safeway-rallies-most-since-2009-on-possible-takeover-spec.html

Pick Your Monopoly

Apple and five leading book publishers are trying to break up Amazon’s e-book monopoly.  Currently, most e-books are sold through Amazon.com, which utilizes a “wholesale” model in which they are sold to the retailer who then sets the retail price. They would like to move to an “agency model” where publishers set the price and retailers get a fixed commission. Amazon employs the “wholesale” model and this leads to cheaper prices than the “agency model.” The government is supporting lower prices and the Justice Department’s antitrust division has threatened to take Apple and these publishers to court.  Apple’s contract would prohibit publishers from entering into “wholesale” arrangements with any other major distributor and that no other distributor could sell books for less than Apple. The antitrust division claims that there was collusion between Apple and the publishing companies and an attempt at price-fixing.

            On the other hand, Amazon’s monopoly with e-books at $9.99 has been and is continuing to drive local bookstores and even Barnes & Noble out of business. Andy Gavil, antitrust expert at Howard University, says the only safe mechanism for price setting is open competition. Furthermore, Amazon sold e-books at a price that was lower than what they were actually paying the publishers for that book. Many industry competitors see this as predatory pricing in order to create that monopoly that in all reality they have today.  What makes this different than other types of monopolies and such is that this is taking place in the technology sector, which is naturally accustomed to winner-take-all competitions. The best examples being Google and Facebook that each holds a monopoly on the search engine and social media markets.

            This relates to our class because it deals with a near-monopoly and the forming of a potential oligopoly. Amazon is a near-monopoly because although other places sell e-books, Amazon undersells them all and controls that market. This underselling also works as a barrier to entry that stops other competitors from truly competing with them. An e-book that iTunes will sell for $12.99, Amazon will have it on their site, the same item, for $9.99. Apple and the publishing companies are trying to create a differentiated oligopoly. The antitrust division believes that all these groups colluded with Apple so that they could make more money by setting prices themselves. Collusion helps ensure that each firm involved will make the most profit by having all firms use the same pricing strategy. Apple will stand there to prevent any incentive to cheat since it is the retailer handling the transactions. This article shows how open competition would be the best system and avoid all these pricing wars and strategies but technology will always be a market where they can only be one company who stands on top.

The full article can be found at: http://www.washingtonpost.com/pick-your-monopoly-apple-or-amazon/2012/03/05/gIQA0kBB4R_story.html

Vacations Will Get Even More Expensive

The airline industry is enjoying the benefits of consolidation although gas prices continue to skyrocket. So far in 2012, there have been three fare hikes even though there were 11 increases so far between the years of 2010 and 2011. Crude oil has increased nearly 30% over the past six months. The increase in oil prices has been leading to less planes in the air and furthermore, more crowded seats. United has filled nearly 80.6% of its overall seats and all these costs are just being transferred to the customer. Some predict that airlines will try three to four more fare hikes before the summer travel season with sales only to help fill during the mid-peak times. Besides those that must fly due to business, I believe this summer will have sharp declines in flight revenue because the average four person family will have a hard time paying for such a flight. When the cheapest round-trip on average is $362 and this is in March, by the time summer comes around people could be finding the cheapest tickets being at least $400 per person. More families might resort to driving to closer destinations or holding off on vacations for a year or two to save money or wait for prices to decrease.

Read the full article at: http://www.businessweek.com/articles/2012-04-02/forget-gas-prices-air-fares-are-getting-more-painful

Burger King Trying to Keep Up with Competition

Burger joints are no longer the obvious front runners when it comes to the fast food business. McDonalds is still in first place but now Subway and Starbucks claim the 2nd and 3rd spot respectively in largest chains. People are now more focused on what they are eating and are looking for healthier alternatives whenever they can get them. Smaller chains like "Five Guys" have shown that people will also pay more for a burget that is made-to-order and also contains better ingredients. Burger King has failed to keep up with the changing times and is now looking to reinvent itself and improve in the future.

Burger King has gone through a very rigorous reevaluation and examination of its current offerings after being purchased by 3G Capital. The meetings involved everything from oils and eggs in mayonnaise to the intensity of vanilla used. Many of the offerings being rolled out seem to mirror McDonalds but it is what the consumer wants. Along with the food, the restaurants themselves are being renovated from their current aging appearance. Franchisees also are getting a 50% discount on the annual $50,000 franchise fee.

Advertising is also getting beefed up with commercials featuring popular celebrities. Burger King wants to stress how much the store has changed from its past. In a competitive market like this, where fast food, no longer simply means "burgers and fries." Companies need to find ways to innovate and re-establish themselves as something modern. Burger King has been around for a very long time and so has McDonalds but McDonalds always keeps adding and removing things from their menu to stay ahead of the times.

Read the full article at: http://www.google.com/hostednews/ap/article/ALeqM5in3sqZbXhPsLKovi_S3bVBkMOq6w?docId=0d1ce06d4aab4a4db711236bab016575

BPA Business Will Still Be In Business

A ban to remove bisphenol A, or BPA, from cans and other packaging was rejected by the FDA because not enough data was provided to support the ban. BPA has been in use since the 1960s and it extends the shelf life of canned foods and beverages. Whereas companies like Campbell Soup Co. have been working on phasing out the use of the chemical, companies like Coca-Cola Co. say that it is safe and do not plan on removing it. It is argued that BPA may affect the brain and prostate gland in fetuses and young children.

BPA is a million-dollar business and a ban would hurt profits at large can-makers and the biggest producer of the chemical, Saudi Basic Industries Corp. Some believe that the FDA is no longer protecting the public by allowing this chemical to remain while others such as the chairman of the North American Metal Packaging Alliance praise the decision.

Although no one wants to have chemicals in their cans, the fact that there is large amounts of money involved means that no will would dare touch their industry. The FDA should research the different  chemicals found in food but unless anything is immediately life-threatening they will more likely just let it continue to exist. For as much as the FDA exists for regulating, it is still a business and will support other business when it comes to profit-maximization.

Read the full article at: http://www.bloomberg.com/news/2012-03-30/u-s-denies-request-to-ban-chemical-in-food-and-drink-packaging.html

Call Your Friends and Pay for Dinner...With the Same Device?

New Zealand is working on a joint venture that would essentially turn cell phones into credit cards. Phones will become "virtual wallets" that can pay for purchases at supermarkets and train stations. Paymark Ltd. is New Zealand's leading credit-card processor and is joining forces with the three top cell-phone carriers (Vodafone New Zealand Ltd., 2degrees Ltd., and Telecom Corp of New Zealand Ltd.) for this creation. With this new collaboration, customers will be able "to make secure payments, collect loyalty points and use public transport..." This service uses near-field communication which means that customers simply need to hold an enabled phone near specific terminals at locations to make the purchase.

Phones can really do anything now and are being used constantly throughout the day. Our smartphones have become our computers, our cameras, and mostly everything that we used to carry around in our pockets or backpacks. This is a great initiative and furthermore, it's even better to see these different companies working together to build a better technology. It will be interesting to see however credit card companies reaction to this because it has the possibility to eliminate the need for a credit card in the future. Although it's simply starting with just supermarkets and trains, the possibilities for this have no end. Credit card companies will have to keep an eye out to make sure that this does not come and steal their entire market away from them.

Read the full article at: http://www.bloomberg.com/news/2012-04-01/new-zealand-mobile-phones-to-become-virtual-wallets-in-venture.html