Today’s Tech Headlines

This is the tech news you need to know this Monday.

  1. Google is paying out $11 million to settle an age-discrimination case from 2015, Bloomberg reports. The class action case comprises of 227 people, meaning an average payout of $35,000 each.
  2. A New York Times reporter went undercover as a deliveryman for Uber Eats and Doordash to see what it’s like to work for food delivery apps. He found a large proportion of his deliveries didn’t come with a tip.
  3. Elon Musk tweeted that his tunnel transportation system Hyperloop hit a new top speed of 288 mph. Musk also tweeted that next year’s Hyperloop engineering competition, run by his company SpaceX, will be “in a 10km vacuum tunnel with a curve.”
  4. Netflix was threatened with legal action over its Cambridge Analytica documentary “The Great Hack,” the Guardian reports. The lawyers Arron Banks, the businessman behind Leave.EU which had ties to Cambridge Analytica, wrote to Netflix with concerns about “false and defamatory allegations” in the film.
  5. The FTC has finalised a settlement with Google over failing to protect children on its platform and improperly collecting their data, the Washington Post reports. Google is expected to pay a multimillion dollar fine, sources told the Post.
  6. Google honored Apollo 11 software developer Margaret Hamilton with a 1.4-square-mile portrait using moonlight and more than 100,000 mirrors. Hamilton, 82, was awarded the Presidential Medal of Freedom by Barack Obama in 2016.
  7. Police in Florida have ditched Amazon’s facial recognition technology because of glitches and resourcing issues. The technology, called Rekognition, is designed to use facial recognition algorithms to find and track suspects in real-time.
  8. A new app called “Who’s in Town” lets people’s Instagram followers track their location, Wired reports. The app was created to show how much of our data is hoovered up by apps like Instagram.
  9. A YouTube executive denied to the BBC that the platform sends users “down a rabbithole.” YouTube’s managing director for the UK Ben McOwen Wilson was responding to a BBC investigation into how YouTube helped propagate flat-Earth theories.
  10. Images of the new Pixel 4 from Google appear to show a large bezel running across the top of the device to carry an array of sensors. Google showed images of the back of the phone in June, after earlier leaks, but didn’t show the front of the device.

Why Facebook’s stock jumped despite facing a record-breaking $5 billion FTC penalty



  • Facebook’s stock rose around 1% after news broke that it is facing a record-breaking $5 billion penalty from the Federal Trade Commission.
  • Investors are breathing a collective sigh of relief that the settlement isn’t more serious.
  • Why? Facebook is absolutely vast, and makes three times the penalty in revenue every quarter.
  • Critics of the company have immediately accused the FTC’s decision of being inadequate.

The Federal Trade Commission is gearing up to hit Facebook with a staggering, record-breaking $5 billion penalty.

Wall Street is viewing this as a good thing.

And the reason why speaks volumes about the sheer scale and power of Facebook today.

Some background: For the last year, the FTC has been investigating Facebook’s various privacy snafus. The agency started with a probe into whether Cambridge Analytica’s misappropriation of 87 million users’ data amounted to a breach of the company’s 2012 consent decree with it. It later expanded the inquiry to incorporate the California tech giant’s myriad other recent privacy scandals.

This process is now drawing to a close. According to multiple reports, the commission has agreed to a settlement that would include a fine of roughly $5 billion.

That amount is extraordinarily large. It’s an order of magnitude bigger than the previous record penalty imposed by the agency — the $22.5 million fine it levied against Google in 2012. But when the news broke on Friday, Facebook stock actually rose, trading up around 1%. 

This is likely because, despite the penalty’s unprecedented size, it’s still just a drop in the ocean compared to the gigantic amount of cash Facebook regularly produces. The company makes billions of dollars in profit and generates three times the total settlement amount in revenue every three months or so. It also set $3 billion aside in preparation for this back in April 2019, warning investors that it expected a penalty between $3 billion to $5 billion — meaning the cost of the settlement was already baked into the company’s share price months ago.

While Wall Street is relieved, critics are furious

In fact, Wall Street seems to be breathing a sigh of relief, as evidenced by the slight stock uptick, that the penalty wasn’t more severe.

We don’t yet know exactly what the settlement will look like, and the devil will be the details. Both Facebook and the FTC declined to comment about it when approached by Business Insider.

But it seems unlikely the deal will require the kind of fundamental changes the company’s staunchest critics have called for and that could significantly affect its bottom line. To wit, The New York Times reported that “none of the conditions in the settlement will restrict Facebook’s ability to collect and share data with third parties.”

Accordingly, the settlement has drawn criticism inside and outside the FTC. The Democratic members of the commission reportedly voted against it, pushing for harsher penalties.

Meanwhile, David Cicilline, a Democratic congressperson for Rhode Island, labeled it “a slap on the wrist” and said “the FTC just gave Facebook a Christmas present five months early.” Connecticut senator Richard Blumenthal called it a “seemingly inadequate, unconscionably delayed, and historically hollow result” and called for a congressional hearing.

Georgetown Law attorney Lindsey Barrett added: “Anyone saying that a [$5 billion] fine without other meaningful restrictions for a company that made [$22 billion] this year and has repeatedly engaged in illegal conduct at a massive scale is spinning, and spinning for a reason.”

Mark Zuckerberg’s personal security chief accused of sexual harassment and making racist remarks about Priscilla Chan by 2 former staffers

Facebook says it ‘unintentionally uploaded’ 1.5 million people’s email contacts without their consent

Years of Mark Zuckerberg’s old Facebook posts have vanished. The company says it ‘mistakenly deleted’ them.

Car-bomb fears and stolen prototypes: Inside Facebook’s efforts to protect its 80,000 workers around the globe



Wall Street’s most sophisticated, high-speed traders are growing hot on fintech investing



The ax that was hanging over Deutsche Bank finally fell. On Sunday, the bank said it was firing 18,000 people in a massive restructuring that would see it dump equities trading entirely. The next day we were on the ground to report what was going on outside the bank’s 60 Wall St. office.

Insiders around Wall Street struggled to understand Deutsche Bank’s move, and many said the businesses that survived the cuts, like research and equity capital markets, didn’t add up to a compelling future for the bank. Deutsche Bank didn’t say much about its plans publicly, but we learned it told a hedge-fund client details about who would be spared in research departments around the world.

As for those who were laid off, insiders told us prospects to land a new gig may not be great and that most of the top talent had already been poached out of the bank before Sunday.

Deutsche Bank’s week from hell didn’t end with job cuts. In fact, the bank’s list of regulatory headaches is growing. The Department of Justice, which had investigated Goldman Sachs’ dealings with the Malaysian fund 1MDB, is also now delving deeper into an ex-Goldman exec who later went on to Deutsche Bank, reports said. Also on Thursday, another report said senior managers had overruled compliance-staff concerns about the bank’s dealings with Jeffrey Epstein, who is facing charges of sex trafficking. 

It’s hard to imagine that we had time to write about anything other than Deutsche Bank, but as you can tell from the list below, the team also churned out excellent reads on CBD, chatbots, and more. 

And for those of you interested in the cannabis business, our star reporter Jeremy Berke has a new newsletter called Cultivated, which will give you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.


‘Some of the conversations we had in 2006 we are having again’: Bain and Carlyle are teaming up in rare deal that private equity has been reluctant to do since the financial crisis

Bain Capital and The Carlyle Group have teamed up to buy the German light-bulb maker Osram Licht for $3.8 billion in a rare instance of private-equity giants coinvesting.

In the first half of 2019, there were 107 deals with more than one private-equity investor, down 57% from the same period last year.

The deal, which will give Osram a capital injection after it issued warnings to investors about a weak light market, comes at a time when private-equity firms have been reticent to team up with rivals for large transactions, instead looking to their own clients for capital, including pension funds and sovereign wealth funds.

Morgan Stanley is rolling out an AI chatbot to research clients early next year. Wall Street thinks the tech could save $8 billion annually.

Morgan Stanley has developed an artificial-intelligence-powered chatbot to help its workers sift through the bank’s research.

AskResearch was originally created for internal use by analysts and sales employees, but the bank plans to offer it to clients in early 2020 via a mobile app.

The chatbot is the latest effort by Wall Street to create AI-powered virtual assistants to cut down on menial work for employees and clients.

Wall Street’s most sophisticated, high-speed traders are growing hot on fintech investing. Execs from 5 firms explain how they find their best investments.

Electronic trading firms, known for their ability to quickly move between positions, have shown an increasing interest toward financial-technology investing.

Some firms have gone as far as setting up completely separate funds to make deals.

Business Insider spoke with executives from five electronic trading firms about their strategies toward fintech investing.

The hedge-fund industry has a problem with managers cherry-picking performance. One group wants to stop that.

Hedge-fund performance has been underwhelming. An influential professional organization has overhauled its reporting standards in order to bring more funds into the fold, but adoption would force portfolio managers to give up tactics to make returns look better.

The notoriously opaque hedge-fund industry has never widely adopted any broad guidelines for calculating performance figures. Managers can overstate returns by selective reporting, observers say, and many are supportive of centralized, transparent rules.

It’s another example of the transformation the once niche industry has made into a more institutional business.

Quote of the week:

“It was a s— show on Monday, it’s a s— show today” — a uBiome employee this week after the troubled startup laid off half its staff in the wake of an FBI raid as part of an investigation into the company’s billing practices. 

In markets:

  • Ray Dalio revealed to us the one key investing strategy he’s used to build his $18 billion fortune
  • BlackRock’s global research chief explains why the stock market’s principal driver just changed — and breaks down how investors should adjust to the big shift

In tech news:

  • The 100-hour weeks, intense culture, and divisive hires that made Deliveroo a $2 billion business with backing from Amazon
  • Trillion-dollar Microsoft is gearing up for another potentially ‘unprecedented’ growth spurt
  • As its CEO prepares to step down, $1.4 billion Cloudera says it will start giving away all its software for free in a big change to its business

Other good stories from around the newsroom:

  • CBD and hemp startups are using creative loopholes to skirt Facebook’s ad ban. Here’s how they’re doing it.
  • Airbnb’s former CMO left his high-profile job to help tech brands like Pinterest and Uber find their purpose — and his consultancy is on track to make $8 million in revenue in its first year