Daily Update: October 6, 2022

Start each business day with our analyzes of the most pressing developments affecting the markets today, along with a curated selection of our latest and most important news on the global economy.

Amazon vs. Regulators – A Changing Battleground

Amazon was launched in 1995 as a startup with an unusual business plan: to sell books online rather than in bookstores. The rambling underdog has since morphed into a world-class conglomerate and has drawn the attention (and sometimes the ire) of antitrust regulators. Amazon reacted to potential regulation just as it might respond to a challenger to its e-commerce or cloud hosting business — with energy and focus. Now the regulatory battles are shifting to the state level and Amazon is pivoting to meet the new challenge.

For years, Amazon had a reputation as an unstoppable force that swallowed up competitors and entire markets between quarterly earnings calls. The company has always challenged this characterization, attributing its success to low prices and a product line that meets customer needs. Regulators, responding to complaints from some of Amazon’s competitors, have been scrutinizing the company from an antitrust perspective. The main anti-competitive claim, according to S&P Global Ratings, is that Amazon’s private label sales compete with and undermine third-party sellers in its marketplace. Amazon has visibility into third-party seller data and uses it to inform its own private label strategy.

In 2021, S&P Global Market Intelligence analyzed Amazon’s lobbying expenditures, finding that its lobbying costs had risen steadily every year since 2011. In the first quarter of 2021, Amazon spent approximately $5.1 million on lobbying , according to the Center for Responsive Politics, a Washington, DC-based nonprofit that tracks money in politics.

“They know they’re going to be regulated,” said Alex Petros, policy adviser to the nonprofit public interest group Public Knowledge, at the time. “They’re trying to grow, and at the same time, Congress is waking up to the power of dominant digital platforms.”

The American Innovation and Choice Online Act, a bill sponsored by Sen. Amy Klobuchar, D-Minn., and Sen. Chuck Grassley, R-Iowa, has stalled ahead of a vote in the Senate. If the U.S. House of Representatives changes to a Republican majority in the upcoming midterm elections, the bill is unlikely to pass. While Republicans are ambivalent toward Big Tech, their criticisms focus on censorship rather than antitrust concerns.

With a divided federal government looking likely, state politicians are increasingly turning to their own laws and resources to act, according to S&P Global Market Intelligence. California Attorney General Rob Bonta filed a lawsuit in September, alleging Amazon violated California antitrust laws by requiring third-party sellers and wholesalers to offer the lowest prices for their products on Amazon. . Texas, New York and Colorado are also considering lawsuits against the e-commerce giant.

Amazon disputed the claims in the California lawsuit. But it increasingly looks like Amazon is waging a multi-frontier, multi-state battle with regulators.

Today is Thursday, October 6, 2022and here is today’s essential intelligence.

Written by Nathan Hunt.


Analyze the divergent performance of Latin American fund managers

S&P Indices vs Semi-Annual Active Scorecards measure the performance of actively managed funds against their corresponding benchmarks in various markets around the world. According to the latest SPIVA Latin America Mid-Year 2022 Dashboard, the YTD performance of managers active in Latin American countries varied significantly.

—Read the article by S&P Dow Jones Indices

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Capital markets

Smart contracts could improve the efficiency and transparency of financial transactions

Smart contracts are a central part of decentralized applications, facilitating the execution of specified tasks (such as payments) based on predetermined business rules. The use of smart contracts in financial transactions can improve efficiency and reduce reliance on third parties such as asset managers and custodians, as well as make transaction resolutions faster, thereby improving creditworthiness and integrity of business relationships.

—Read the report of S&P Global

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International trade

Trade Review: Asian Coal Market Met Sees Light on Q4 Replenishment Demand and Scarce Supplies

The marine metallurgical coal market enters the fourth quarter on firmer footing, with weather-related disruptions fueling supply concerns while year-end replenishment demand from India and China maintains prices sustained after a volatile third quarter. Platts low volatility hard coking coal benchmark prices, FOB Australia, were down $31.5/mt, or 10%, in the quarter to $270.50/mt, while PLV CFR China fell $86/mt, or 22%, to $308/mt at the end of the third quarter, according to data from S&P Global Commodity Insights.

—Read the article by S&P Global Commodities Outlook

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Political Headwinds for Clean Hydrogen in Europe Temporary: Hydrogen Council

The political headwinds facing low-carbon, renewable hydrogen projects in Europe will be temporary, with projects ready for rapid deployment once there is regulatory certainty, the Council said. hydrogen at S&P Global Commodity Insights. Ahead of the October 5 release of a report on future global hydrogen flows, Hydrogen Council Executive Director Daryl Wilson said that despite short-term EU policy uncertainty regarding rules on renewable hydrogen and that the United States took over from Europe in terms of tax incentives for hydrogen projects, Europe was still well placed to deploy production projects and infrastructures.

—Read the article by S&P Global Commodities Outlook

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Energy and raw materials

OPEC+ cuts oil quotas, in another U.S. snub, as White House threatens retaliation

OPEC and its allies on October 5 cut their production quotas by 2 million bpd for the next 14 months in a bid to stabilize falling oil prices, prompting a strong reaction from the United States, which had warned the group to avoid a potential supply. hurry and get away from Russia. The new quotas, which begin in November and will remain in place until December 2023, were agreed at the first face-to-face meeting of the OPEC+ alliance since March 2020 in Vienna.

—Read the article by S&P Global Commodities Outlook

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Technology and media

Listen: Next In Tech | Episode 85: Taming Complexity for the Digital Sequel

Melanie Posey, 451NEXUS conference chair, is back to talk about the sessions and expanded content with host Eric Hanselman. One of the biggest challenges organizations face when it comes to digitizing and moving to hybrid operations is complexity. It’s not easy to tame, but greater use of automation and operational integration can help. The conference covers that and more.

—Listen and subscribe to Next in Tech, a podcast from S&P Global Market Intelligence

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