The Department of Justice yesterday filed its first antitrust action since President Biden took office, to block the proposed merger of Aon and Willis Towers Watson. It argued that combining two of the three largest insurance brokers would create an anticompetitive “behemoth.” The $30 billion transaction would “eliminate substantial head-to-head competition and likely lead to higher prices and less innovation,” the department’s complaint said.
The action came on an already big day for American antitrust. Lina Khan, 32, was sworn in as chair of the Federal Trade Commission, “the youngest in the agency’s history and its most progressive in at least a generation,” write The Times’s David McCabe and Cecilia Kang. Khan is a Big Tech critic whose views on Amazon changed how many think about monopoly in the internet era. She will now have power to reshape the rules: Her leadership role signals that the Biden administration will act on the trustbusting promises made on the campaign trail.
Right now, cracking down on corporations is one of the few things that unites a divided government. Democrats and Republicans at the state and federal level are calling for new antitrust rules and challenging Big Tech in court for alleged abuses of competition law. Notably, the very progressive Khan has some staunch Republican support. And the review of the insurance brokers’ merger began last year, when Donald Trump — another vocal Big Tech critic — was in office. Doug Melamed, a Stanford Law professor and the former acting assistant attorney general of the D.O.J.’s antitrust division, told DealBook that if the complaint’s analysis of the market is accurate, the government “almost” had to challenge the combination.
More tough antitrust enforcement officials may be on the way. The top antitrust position at the D.O.J. is vacant, and one rumored favorite to take over in a permanent capacity is the lawyer Jonathan Sallet. Sallet, a senior counsel for a coalition of state attorneys general going after Google, has faced criticism from progressives for refusing to ally with Republicans in that effort. Another top contender and vocal Google critic, Jonathan Kanter, has gained praise from progressive groups like Public Citizen and MoveOn.
HERE’S WHAT’S HAPPENING
The Fed moves up its expected timeline for raising interest rates. Policymakers at the central bank now expect to raise rates twice by the end of 2023, earlier than previously predicted. It’s a sign that the Fed acknowledges the rapidly strengthening economy — “we’re going to be in a very strong labor market pretty quickly here,” Jay Powell, its chairman, said — and is more wary of rising inflation.
Wall Street warns about the end of the trading boom. Leaders at Citigroup, JPMorgan Chase and Morgan Stanley said recently that blockbuster results from their trading floors likely won’t continue, as the Fed prepares to raise rates. (Citi, for example, expects second-quarter trading revenue to drop 30 percent year-on-year.)
Cyberwarfare takes center stage in the Biden-Putin talks. Though President Biden and President Vladimir Putin of Russia spoke of improving U.S.-Russia relations after their summit yesterday, they traded warnings about economically disruptive hacks. Biden said the U.S. would respond in kind if Russia accelerated its cyberattacks; Putin denied responsibility for recent incidents.
CureVac’s Covid-19 vaccine falls short. The highly anticipated shot had an efficacy of just 47 percent in a clinical trial, which doesn’t bode well for it getting adopted anywhere.
G.M. speeds up its electric-vehicle production targets. The auto giant said it would build two new U.S. battery plants and now plans to spend $35 billion on E.V.s by 2025, up from a forecast of $20 billion a year ago. It’s the latest sign of the auto industry’s embrace of electric vehicles as key to its future.
Jonathan Bush is back
Jonathan Bush, the former C.E.O. of Athenahealth, who left the company he founded amid a campaign by activist hedge fund Elliott Management and revelations about his personal life in 2018, has a new gig. He’s launching Zus Health, a health care information platform that can be used by other developers to build software products like patient management systems for doctors’ practices and even remote therapy apps.
The name, pronounced “Zeus,” appears to be a nod to Bush’s former company, a software maker (also named after a Greek god) that Bush ran for more than two decades and that was worth about $6 billion when he departed. Zus Health could run into the same problem as Athenahealth, which made software for doctors’ networks: Getting people to share health information isn’t easy.
The company has some big-name backers. They include Andreessen Horowitz, which is leading a $34 million funding round. Julie Yoo, a partner at Andreessen, founded Kyruus, a partner of Athenahealth. “Whatever I was going to do, I was going to do with Julie Yoo,” Bush told DealBook.
It’s a shot at redemption. Bush, who is a cousin of former President George W. Bush, was lauded for his innovative approach to the staid health care industry. But when growth slowed, Elliott stepped in. The activist fund’s campaign critiqued Athenahealth’s stock market performance and coincided with a very public airing of Bush’s personal troubles, including allegations of domestic violence. (Bush, at the time, said he “took responsibility” for the “regrettable incidents,” and that he had mended things with his ex-wife.)
As for redemption, Bush said, channeling the Austrian poet Rilke, “Your goal is not to be torn down, it’s to be destroyed each time by something larger than the thing that destroyed you last time.”
“We needed to stop being about what men want and to be about what women want.”
— Martin Waters, who was appointed C.E.O. of Victoria’s Secret in February, on the lingerie brand’s turnaround effort. “Rarely has a company so dominant in its sector been exposed as trailing so far behind the culture as Victoria’s Secret was in the wake of the #MeToo movement,” write The Times’s Sapna Maheshwari and Vanessa Friedman.
Exclusive: Ayanna Pressley wants banks to open up
When customers apply for a loan, banks scrutinize their history and assess their risks. Representative Ayanna Pressley, Democrat of Massachusetts, wants the biggest banks to face the same kind of scrutiny. Today, she’s advancing a bill to make that happen, she told DealBook first. “We must have more transparency and oversight of these institutions — now more than ever,” she said.
“We can’t allow our biggest banks to continue making decisions behind closed doors,” Pressley said. In May, the C.E.O.s of the country’s six biggest banks testified before House and Senate committees, the first time they faced such extensive public questioning since the financial crisis. Pressley believes transparency should be a regular practice, not a rarity. She also wants the largest lenders — the eight banks that hold nearly half of all domestic banking assets — to report annually on their size and complexity, market activity, employee wages, diversity, climate risk and environmental harms, misconduct, forced arbitration, cybersecurity measures, and any enforcement or regulatory actions.
What are the bill’s chances of passage? Pressley first introduced the bill, the Greater Supervision in Banking Act, during the last Congressional session. Now she’s trying again, as talk and action on more corporate transparency is on the rise. Proposals calling for more disclosure are in vogue among shareholders this proxy season. Yesterday, the House passed corporate reporting requirements covering environmental, social and governance issues (E.S.G.) like climate risks, political spending, C.E.O. pay and tax rates. The S.E.C. is considering increased disclosure mandates. All of these efforts will face resistance — for example, from Senator Pat Toomey, the ranking Republican on the Senate Banking Committee and a vocal opponent of E.S.G. disclosure — but a push toward greater transparency seems to be gaining steam.
Why ‘mediocre’ men survive in finance
This week, the European Central Bank proposed using gender diversity as a criteria for approving board members at the banks it supervises. Such mandates are one lever for increasing representation of women in an industry still dominated by men. Another lever — the focus of a recent study — is to change how banks distribute opportunities and rewards.
When women were asked to reflect on their careers by the London-based nonprofit Women in Banking & Finance, a common complaint was that they were required to find an innovative niche in order to succeed in the finance industry. Men, on the other hand, were more welcome on traditional paths, and did not face the same sink-or-swim dichotomy. It was even worse for Black women, for whom “the headwinds were more intense and the tailwinds were fewer,” according to the report.
Half of women surveyed specifically mentioned “mediocre” men, who they said could survive more easily than women with comparable abilities because of factors that included:
Being in a social group where other members are gatekeepers.
Always being around, while women are more likely to take parental leave.
A greater reluctance to “manage out” men because they are viewed as breadwinners.
Competent, empathetic managers and bonuses for collaboration could be the fix. Women said empathetic managers gave them the access and freedom to pursue career-enriching opportunities, but they said empathy alone wasn’t the answer. (Some managers just faked the emotion.) Instead, the report’s authors suggested solutions that included:
Restructuring bonuses to be based at least partly on team performance.
Regular assessments of the allocation of stretch assignments and promotions by gender.
Formal programs for easing in employees returning from parental leave.
THE SPEED READ
Morgan Stanley has hired Greg Weinberger, the global head of M.&A. at Credit Suisse, luring a top deal maker away from the embattled Swiss bank. (WSJ)
Wise, one of Britain’s most prominent fintech companies, plans to go public in London through a direct listing. (CNBC)
The Blackstone Group offered just over $3 billion to buy the office developer Soho China, a major bet on corporate real estate in Asia. (Bloomberg)
Politics and policy
The National Association of Realtors is pushing lawmakers to put more money toward housing, as new-home construction has fallen short of historical levels. (WSJ)
A $213 billion activist bond investor is pushing Australia — yes, the entire country — to cut its carbon emissions. (Bloomberg)
Apple’s ambitious health care goals have reportedly been hamstrung by employee turnover and questions about data integrity. (WSJ)
“He Warned Apple About the Risks in China. Then They Became Reality.” (NYT)
Best of the rest
Robin Hood, the antipoverty nonprofit beloved by Wall Street, named Richard Buery Jr. as its new C.E.O. (Robin Hood)
Adam Neumann may have sold many of his homes after stepping down from WeWork, but he also just spent $44 million on a new compound in Miami. (WSJ)
How the soccer star Cristiano Ronaldo wiped $4 billion off Coca-Cola’s market value with one gesture. (Guardian)
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