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Lina Khan\u2019s career has come full circle. The F.T.C., which she chairs, and 17 states sued Amazon on Tuesday<\/a>, accusing the tech giant of using illegal practices to maintain its monopoly position in e-commerce.<\/p>\n The toll was swift: Shares in Amazon fell 4 percent, wiping about $50 billion off its market value. The case is being closely watched as a real-life test of the legal theories Khan outlined in a 2017 research paper on Amazon that challenged the fundamentals of antitrust policy.<\/p>\n The F.T.C. says Amazon harms rivals, sellers and consumers. <\/strong>The agency contends that the company stifles competition on price, product selection and quality, and that its policies prevent rivals from attracting new customers.<\/p>\n Khan stopped short of calling for Amazon to be broken up<\/a>, but wants the company to stop effectively forcing merchants to pay its rates and use its advertising and logistics services. \u201cAmazon\u2019s far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small and affect over a hundred million shoppers,\u201d the F.T.C. said.<\/p>\n<\/div>\n<\/div>\n Amazon denies the charges and says an F.T.C. victory would weaken the market. <\/strong>The company, which has tried to get Khan recused from antitrust cases<\/a> pertaining to it, said the case shows the agency has veered from its mission to protect consumers and competition. \u201cThe F.T.C. has it backwards and if they were successful in this lawsuit, the result would be anticompetitive and anti-consumer,\u201d said David Zapolsky<\/a>, Amazon\u2019s global counsel.<\/p>\n The fight has been a long time coming.<\/strong> Khan argued in \u201cAmazon\u2019s Antitrust Paradox<\/a>,\u201d the paper published when she was still a law student, that competition law\u2019s focus on consumer prices was outdated in an era of big tech platforms. She contended that Amazon\u2019s cheap-pricing strategy was anticompetitive because it enabled the company to amass market share and helped it dominate the infrastructure on which other merchants relied.<\/p>\n The case will hinge on how a market is defined. <\/strong>Amazon says it represents a tiny fraction of the retail sector if brick-and-mortar stores are included. But the F.T.C. defines the market as \u201conline superstores,\u201d a narrower category of e-commerce companies.<\/p>\n What next?<\/strong> Some legal experts say the F.T.C. will have a tough task proving its case in court<\/a>. Doug Melamed, a scholar-in-residence at Stanford Law School who used to work at the Justice Department\u2019s antitrust division, said he didn\u2019t expect Amazon to win on the definition of a market, but he predicted a long legal fight.<\/p>\n<\/div>\n<\/div>\n \u201cThe allegedly illegal conduct will be hotly contested,\u201d he told DealBook. \u201cBoth what they did and whether it is illegal.\u201d<\/p>\n The September stock market swoon worsens<\/strong>. S&P 500 futures were up modestly this morning \u2014 but after a sharp drop on Tuesday that left the index down more than 5 percent<\/a> for the month. Investors are concerned about the Fed\u2019s interest rate policy and the prospect of a government shutdown. All eyes are on the House, after the Senate reached a stopgap spending deal<\/a> on Tuesday.<\/p>\n A judge rules Donald Trump committed fraud by inflating the value of his businesses. <\/strong>The surprising decision<\/a> in New York State\u2019s lawsuit against the former president could strip him of control over signature properties including Trump Tower and his golf club in Westchester. The trial in the case, filed by the New York attorney general Letitia James, is scheduled to begin as early as Monday.<\/p>\n McKinsey agrees to pay an additional $230 million to settle opioid suits.<\/strong> The move by the consulting firm, which has already paid more than $640 million to resolve claims over its work advising the OxyContin maker Purdue Pharma, is meant to resolve lawsuits<\/a> by hundreds of local governments and school districts.<\/p>\n<\/div>\n<\/div>\n In the Biden administration\u2019s other<\/em> big antitrust case against Big Tech, new details emerged on Tuesday on how Google clinched one of the most lucrative pieces of virtual real estate in the tech world: a deal to make it the default search engine for Apple\u2019s Safari browser on billions of devices, including iPhones and iPads.<\/p>\n Eddy Cue, Apple\u2019s top dealmaker, helped broker the agreement with Google, which the government says helped the search company establish a monopoly and build an online advertising juggernaut. Analysts at Bernstein, a research firm, estimate that Google will pay Apple about $19 billion<\/a> this year for the search contract.<\/p>\n Here are three takeaways from Cue\u2019s testimony:<\/p>\n Cue said that Google won the contract because Apple picked the \u201cbest\u201d search engine, while allowing customers to easily switch. He added that there \u201cwasn\u2019t a valid alternative.\u201d<\/p>\n<\/li>\n When the two tech giants renegotiated their deal in 2016, Cue felt Apple \u201cdeserved\u201d to be paid a higher percentage of the revenue Google derived from search via Apple\u2019s devices and browser. \u201cIt was the right thing and the fair thing for us\u201d to demand better terms, Cue said<\/a>. In an email to Tim Cook, Apple\u2019s C.E.O., he wrote that the company couldn\u2019t proceed with Google if it didn\u2019t agree to a better deal. But he testified that Apple never seriously considered what it would do if it didn\u2019t come to an agreement with Google.<\/p>\n<\/li>\n Cue referred to Apple\u2019s philosophy around product design, which involves not bogging the consumer down with too many choices. \u201cThe more choices or the more options that you get, it frustrates customers,\u201d Cue said.<\/p>\n<\/li>\n<\/ul>\n JPMorgan Chase\u2019s $75 million settlement<\/a> with the U.S. Virgin Islands over claims that the bank abetted crimes by Jeffrey Epstein, as well as a separate deal with a former top executive, Jes Staley, appears to wrap up its legal battles over the convicted sex offender, who died by suicide in 2019.<\/p>\n The agreement is the latest sign of how deeply ensnared top institutions and figures were in the Epstein case \u2014 and how much it has cost them in money and reputation.<\/p>\n<\/div>\n<\/div>\n JPMorgan has now paid out $365 million in legal settlements related to Epstein,<\/strong> who was a client of the bank until 2013 \u2014 years after the financier had pleaded guilty to soliciting prostitution from a teenage girl. The bank had already paid $290 million to nearly 200 victims of Epstein, who had a private residence in the Virgin Islands.<\/p>\n JPMorgan executives have insisted that they weren\u2019t aware of Epstein\u2019s crimes, though victims had accused the bank of repeatedly ignoring red flags about the financier so it could keep him as a client. When it announced the settlements on Tuesday, the bank didn\u2019t admit any liability but repeated that it \u201cdeeply regrets any association\u201d with Epstein.<\/p>\n JPMorgan had sued Staley over his efforts to keep Epstein as a client<\/strong>. Terms of their settlement weren\u2019t disclosed; the bank had been seeking reimbursement for some litigation-related costs.<\/p>\n The total amount earmarked for Epstein-related settlements has grown to over $700 million, <\/strong>including proceeds from sales<\/a> of his estate. This spring, Deutsche Bank, which took Epstein on as a client after he was dropped by JPMorgan, agreed to settle victims\u2019 claims for $75 million. And the private equity mogul Leon Black, who had decades-long business and social ties to the disgraced financier, paid $62.5 million in July to settle claims by the Virgin Islands.<\/p>\n \u2014 <\/em>Barbara Fried<\/em><\/a>, the Stanford Law School professor and mother of Sam Bankman-Fried, the founder of the failed crypto exchange FTX who is awaiting a criminal fraud trial next month. She and her husband, Joseph Bankman, told The New Yorker that they have spent \u201csubstantially everything we have\u201d on the defense of their son. Meanwhile, since the collapse of FTX, the crypto industry\u2019s lobbyists have found it <\/em>harder to gain access<\/em><\/a> to the corridors of power in Washington.<\/em><\/p>\n Donald Trump is set to address union members in Michigan on Wednesday, a day after President Biden became the first U.S. leader to walk a picket line. \u201cLet\u2019s keep going,\u201d Biden told U.A.W. workers<\/a>, who are on strike against the big three Detroit automakers.<\/p>\n The dueling appearances underscore the strength of organized labor and the value of its votes, as a major union in Las Vegas moved closer to a strike and the Writers Guild of America unveiled more details of its deal with Hollywood studios.<\/p>\n<\/div>\n<\/div>\n \u201cYou deserve what you\u2019ve earned,\u201d<\/strong> Biden told U.A.W. members, \u201cand you\u2019ve earned a hell of a lot more than you get paid now.\u201d The president squarely aligned himself with autoworkers, including their demand for a 40 percent pay raise.<\/p>\n Trump will court that same demographic today in hopes of wiping out Democrats\u2019 slim hold on Michigan, which Biden won by 2.8 percentage points in 2020.<\/p>\n Meanwhile, another politically potent union is moving toward a walkout.<\/strong> Hospitality workers in Las Vegas voted overwhelmingly to authorize a strike<\/a> against the city\u2019s major resorts, potentially leading to an economically crippling work stoppage ahead of big sports events.<\/p>\n If a strike happens, there may be pressure on Biden to weigh in there as well: He won the state in 2020 by just 2.4 points.<\/p>\n The W.G.A. has officially ended its strike, <\/strong>after the union\u2019s leadership approved the tentative agreement<\/a> with major studios. It also gave more information about what\u2019s in the proposed contract<\/a>, which must still be ratified by its 11,000 members:<\/p>\n Series ordered for at least six episodes must employ at least six writers. (Exceptions were made for shows written by a single writer, like HBO\u2019s \u201cThe White Lotus.\u201d)<\/p>\n<\/li>\n Studios must now pay bonuses for made-for-streaming shows and movies based on how many domestic subscribers watch a program. <\/p>\n<\/li>\n And the W.G.A. won guardrails on how studios can use artificial intelligence, including a ban on A.I.-written material being used to undermine writers\u2019 credits. (Studios can still train A.I. models on writers\u2019 work<\/a>, however.)<\/p>\n<\/li>\n<\/ul>\n Writers appear to have gotten much of what they had sought from studios \u2014 but it\u2019s not clear if those gains will hold up<\/a> if the streaming business takes a downturn.<\/p>\n<\/div>\n<\/div>\n Deals<\/strong><\/p>\n Liberty Media proposed a complex deal<\/a> to spin off a division that holds its 83 percent stake in SiriusXM. (Bloomberg)<\/p>\n<\/li>\n Guy Metcalfe<\/a>, the chairman of Morgan Stanley real estate investment banking practice who worked on over $850 billion worth of deals, is retiring. (Bloomberg)<\/p>\n<\/li>\n<\/ul>\n Policy<\/strong><\/p>\n Best of the rest<\/strong><\/p>\n \u201cBehind Ozempic Media Buzz, Undisclosed Drugmaker Money<\/a>\u201d (Lee Fang)<\/p>\n<\/li>\n Co-authors of a paper touting the discovery of a new kind of superconductor have asked the journal Nature to retract the study<\/a>, accusing the lead researcher of misrepresenting their findings. (WSJ)<\/p>\n<\/li>\n<\/ul>\n We\u2019d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com<\/a>.<\/p>\n<\/div>\n<\/div>\nHERE\u2019S WHAT\u2019S HAPPENING <\/span><\/h3>\n
Apple takes the stand in Google\u2019s antitrust case<\/h2>\n
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\nJPMorgan moves to end its Epstein travails<\/h2>\n
<\/div>\n<\/div>\n\u201cSam will never speak an untruth. It\u2019s just not in him.\u201d <\/h2>\n
<\/div>\n<\/div>\nOrganized labor flexes its muscles <\/h2>\n
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THE SPEED READ <\/span><\/h3>\n
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