Welcome to this week's edition of The Weekly Briefing!
Where we break down the commercial stories law students should actually be paying attention to.
Why the EU Wants Instagram and Facebook to Be Less Addictive
On the 10th of July, the European Commission preliminarily found that Meta may have breached the Digital Services Act through the design of Instagram and Facebook. It specifically targeted its most lucrative features: infinite scrolling, autoplay, push notifications and highly personalised recommendations. Meta could eventually face a fine of up to 6% of its worldwide annual turnover.
The investigation found that Meta had not done enough to mitigate the risks of their addictive features, especially for minors and vulnerable adults. Meta argues that they clearly state that their apps are only for those 13 and older, and that during the time of the investigation, Meta had rolled out Teen Accounts which allowed parents to control their children's screentime. The European Commission believes this is not enough, and may ask Meta to disable autoplay and infinite scroll.
Autoplay and infinite scroll are the two main ways Meta increases user time. Increasing user time allows Meta to collect more data on interests, thereby providing more tailored ads and securing more money. If Meta were to disable these features, not only would Facebook and Instagram look different, it might cost Meta money.
Currently, the findings are preliminary, and even if Meta is found guilty, it is highly likely they'll fight this in court, especially as they've started to roll out more safety features.
Why Two American Companies are Fighting Over easyJet
Two American companies (Apollo and Castlelake) are currently in the middle of a bidding war over easyJet. But why?
easyJet is a well-known budget airline company with a strong holiday business. However, its share prices have struggled since the pandemic and have yet to fully recover. Many American businesses believe that easyJet's current share price isn't a truthful reflection of its potential, so are hoping to buy easyJet "on the cheap". Originally, Castlelake and easyJet were about to agree on an offer of £6.90 per share (£5.5bn) but Apollo (a management firm with experience in aviation) outbid Castlelake with an offer of £7.15 per share (£5.7bn).
The offer hasn't been set in stone, so Castlelake still has an oppourtunity to outbid Castlelake, who are being advised by Slaughter & May and Milbank. Apollo are being advised by Clifford Chance and Paul Weiss. Lawyers on either side of this bidding war (as well as easyJet's in-house lawyers) will have to consider:
- How to get around EU regulations that require European airlines to remain (mostly) in control of European investors
- For easyJet - how long do they let Castlelake and Apollo hike up offers before they decide? Having the companies fight over EasyJet is good for shareholders, but they also need to consider long-term growth
As of current, easyJet is "minded to reccomend" Apollo's deal, meaning that they are more likely to accept Apollo's deal, but nothing is final.
Thank you for reading this week's Weekly Briefing.
We'll be back next week with more stories future lawyers should be paying attention to.