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How to freeze your credit to prevent fraud or identity theft

Thu, 06/13/2019 - 4:19pm

A credit freeze prevents credit bureaus from sharing your credit report with any person or lender without your permission.

"If you've been the victim of a data breach or identity theft, a credit freeze is a good way to mitigate the risk of further damage to your finances and identity," says Greg Mahnken, credit industry analyst with Credit Card Insider. "If an identity thief or unauthorized person tries to apply for credit in your name, they will not be able to access your credit reports and the application will be denied."

A credit freeze doesn't damage your credit and you can lift it when you need a credit check, like when you're applying for a loan or opening a credit card. However, you do need to contact each of the three credit bureaus (Equifax, Experian, and TransUnion) to place the freeze, and you must contact them again when you want to lift it, even temporarily.

Here are the steps you need to take to freeze your credit:

How to freeze your credit 1. Gather your information

You'll need to request the freeze from each of the major credit bureaus. It's important to note that they will not notify each other, so you'll need to freeze your credit from all three bureaus individually, says Mahnken.

For each of the bureaus, you'll need to provide personal information including your full legal name, Social Security number, date of birth, and home address.

2. Reach out all three credit bureaus

This can be accomplished online, by phone, or by mail. These three credit bureaus are Equifax, Experian, and Transunion.

How to do an Equifax credit freeze: You can easily freeze your credit with Equifax on its website, or via an automated phone line: 1-800-685-1111 (1-800-349-9960 for New York residents). If you'd rather talk to a human, its customer care number is 1-888-298-0045.

How to do an Experian credit freeze: To freeze your credit at Experian, you can visit its online Freeze Center. You can also call 1-888-EXPERIAN (1-888-397-3742).

How to do a TransUnion credit freeze: TransUnion allows you to place a credit freeze online. You can also add a freeze via the automated phone system (or opt to speak to a live agent) by calling 1-888-909-8872.

There is no cost for credit freezes by law as of September 2018.

"Freezing your credit is an effective, cost-free way to make it harder for thieves to open up credit cards or other financial accounts in your name," says Credit Karma's VP and financial advocate, Dana Marineau. "But keep in mind that it can be a hassle to remove a freeze from all three bureaus every time you need a credit check."

According to the Federal Trade Commission, after receiving your freeze request, each credit bureau will provide you with a unique PIN (personal identification number) or password. Keep the PIN or password private and in a safe place. It will be needed when and if you choose to lift the freeze.

3. Understand how to unfreeze it

A credit freeze can be lifted at any time online or by phone, and will remain in place until you ask the credit bureau to temporarily lift or remove it.

If you request a lift of the freeze, the credit bureau must lift it within one hour, according to the Federal Trade Commission. If you make your request by mail, the credit bureau must lift the freeze within three business days after it gets your request. There is no charge to lift the credit freeze.

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A titan of global investing just booted Facebook from its do-good index as a direct result of privacy concerns

Thu, 06/13/2019 - 4:13pm

  • S&P Dow Jones Indices is removing Facebook from its S&P 500 ESG Index, which tracks companies that score well in its environmental, social, and corporate governance rankings.  
  • The index provider said it came to that decision after privacy concerns surrounding the company, "including a lack of transparency," led Facebook to fall short of its ESG standards.
  • The move underscores not only the pressure on Facebook amid a string of privacy scandals, but the rise of firms incorporating ESG metrics into their investment decisions. 
  • Track Facebook's stock price here in real-time.

S&P Dow Jones Indices is removing Facebook's stock from its S&P 500 ESG Index, which tracks companies that score well in its environmental, social, and corporate governance rankings, the global index provider said this week. 

The company said it dropped Facebook from the index amid a regular rebalancing on April 30, as privacy concerns had depressed its ESG score according to S&P DJI's standards. Other components including Wells Fargo, Oracle, and IBM were dropped, but Facebook was the largest name removed. 

"The specific issues resulting in these scores had to do with various privacy concerns, including a lack of transparency as to why Facebook collects and shares certain user information," Reid Steadman, S&P's global head of ESG, wrote in a release.

The social network has come under immense pressure for more than a year as various privacy issues have included access to more of users' personal data than it had disclosed, the misuse of personal information, and the hacking into millions of users' accounts.

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All of those issues created "uncertainty about Facebook's diligence regarding privacy protection, and the effectiveness of the company risk management processes and how the company enforces them," Steadman said, which led to the company's ESG performance lagging behind its peers. Facebook did not immediately respond to Markets Insider's request for comment.

S&P DJI's decision is symbolic of trends on Wall Street that extend beyond Facebook's idiosyncratic issues.

Read more: Facebook shares drop sharply after unearthed emails reportedly show Mark Zuckerberg is aware of 'problematic privacy practices'

The move highlights not only the mounting pressure on Facebook and CEO Mark Zuckerberg, particularly as regulatory scrutiny builds, but the rise of firms incorporating ESG metrics into their investment decisions. 

At the time of Facebook's removal, it scored a weak 21 out of 100 according to S&P DJI's ESG rating. Specifically, while its environmental score came in at a strong 82, its social and governance scores had fallen to 22 and 6, respectively.

For all of Facebook's scandals and the stock's volatility, Wall Street analysts are sanguine on the social network's future. Among those polled by Bloomberg, 45 carry "buy" ratings, six carry "hold" ratings, and two carry "sell" ratings. The average price target of $219.64 implies a rally of 24% from current levels. 

S&P DJI said that while the index's composition is rebalanced annually, so there is a chance the component could once again join, the company would have to push to fix various issues. 

"As Facebook's peers raise the bar in their ESG performance," Steadman wrote, "Facebook will need to do even more to rejoin the ranks of the S&P 500 ESG Index."

Now read more markets coverage from Markets Insider and Business Insider:

Trump and Xi are supposed to meet at the upcoming G20 summit. Here's why experts say the outcome will dictate the fate of the entire stock market.

Beware a 'Trump recession': JPMorgan unloads on the president's role in erasing a full year of market progress — and lays out a scenario that could save the day

Oil is surging after a suspected torpedo attack on 2 tankers in the Gulf of Oman

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Online tech publisher CNET is shutting down its print magazine after less than five years (CBS)

Thu, 06/13/2019 - 4:04pm

The tech-news publisher CNET is shutting down its namesake magazine, Business Insider has learned.

The organization informed employees of the closure of CNET Magazine at a company meeting last month, current and former employees said.

CNET confirmed the closure in a statement emailed to Business Insider, saying it would no longer publish the magazine "on a regular basis." The last issue of the magazine was its summer issue, which CNET already sent out to subscribers.

"We are proud of all of the hard work that went into producing the publication for the last four years and thankful to everyone on the team for their contributions to the magazine and their ongoing contributions to," the company said in the statement.

A company representative declined to offer a specific reason for the shutdown. No layoffs are expected as a result of it.

CNET, which is owned by CBS, launched the magazine in 2014. CNET published it quarterly.

The magazine was an unusual and eyebrow-raising effort by a digital-media company to move into the print-media market, which has been battered by declining readership over the past decade but still carries a certain prestige. The magazine featured celebrities like rapper LL Cool J and actress Sophia Vergara on its covers and included multipage feature stories on tech culture, product reviews, and gift guides.

It's unclear how wide of a following it had. When it launched, CNET promised advertisers a circulation of 200,000. But the Alliance for Audited Media didn't list CNET Magazine among the 364 publications whose circulation it tracked at the end of last year. Meanwhile, is running a promotion that allows people to sign up for a year's subscription to the magazine for $5, which is 79% off the cover price.

Got a tip about the tech industry? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Here's why the failed attempt to break up Microsoft will make or break the crackdown on Facebook, Amazon, and Google, according to 2 top lawyers in the Microsoft case

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Chase has announced the Freedom credit card's Q3 bonus categories — including 5% cash back at gas stations

Thu, 06/13/2019 - 3:31pm

Business Insider may receive a commission from The Points Guy Affiliate Network if you apply for a credit card, but our reporting and recommendations are always independent and objective.

  • The Chase Freedom card offers 5% cash back — or 5x points — in different categories each quarter.
  • The categories for Q3 — July through September 2019 — have just been announced.
  • You can combine your cash back with the points earned from cards like the Chase Sapphire Reserve, making it even more valuable.

Summer is pretty much here, with July just around the corner. That means that it's time to start thinking about your credit card's rotating quarterly bonus categories.

Chase issues two strong cash-back cards — the Chase Freedom and Chase Freedom Unlimited. Although they're both marketed as cash-back, they actually earn points that you can redeem for cash — or, if you have a premium Chase card, you can combine points from the two cards.

While the Freedom and Freedom Unlimited are slightly different, they're both great options and both earn points quickly — I personally have both cards.

What's unique about the regular Freedom is that while it generally earns 1% cash back — or 1x Chase Ultimate Rewards point per dollar spent, if you combine that "cash back" with the points you'll earn from a card like the Sapphire Reserve — it earns 5% (or 5x points) in a different bonus category each quarter.

Chase has announced that this year's Q3 bonus categories are:

  • Select streaming services (including Netflix, Hulu, Spotify, and more)
  • Gas stations

Any purchases that fall into those three categories will be eligible to earn 5% throughout July, August, and September. The category list may be a short one, but it's potentially lucrative — especially for those who drive a lot.

The bonus is capped at $1,500 of spend each quarter. After that, you'll still earn the normal 1% back. Keep in mind that in order to get the bonus, you need to activate your account each quarter. To do so, just log into your account or visit this site.

Chase usually announces Q4's categories in early-to-mid-September; activation starts on September 15.

If you don't have the card, this is a good opportunity to sign up. In addition to points you earn from spending, you'll get a sign-up bonus of $150 (or 15,000 Ultimate Rewards points) when you spend $500 in the first three months.

Click here to learn more about the Chase Freedom from Insider Picks' partner: The Points Guy.

SEE ALSO: The best credit card rewards, bonuses, and benefits of 2019

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An astounding number of bankruptcies are being driven by student loan debt

Thu, 06/13/2019 - 3:30pm

The student loan debt crisis in America continues to get uglier.

According to a new LendEDU study, 32% of consumers filing for Chapter 7 bankruptcy carry student loan debt. Of that group, student loan debt comprised 49% of their total debt on average.

As of 2019, student loan debt is at an all-time high with a national total of $1.5 trillion. According to Student Loan Hero, the average student-loan debt per graduating student in 2018 who took out loans was a whopping $29,800.

The LendEDU data illuminates the dire effects of the growing burden of student loan debt. Coupled with a high cost of living and the fallout of the recession, student loans make it harder for millennials to save and put them financially behind — to the point where they may need to declare bankruptcy to be able to pay them off.

Digging into the data

To determine these findings, LendEDU analyzed 1,083 individual bankruptcy cases from Upsolve, a non-profit that helps low-income consumers file for Chapter 7 bankruptcy — liquidation bankruptcy for people with limited incomes who can't pay back all or a portion of their debt. The goal of Chapter 7 bankruptcy is to discharge the debt.

Note that this does not include data for consumers who file for Chapter 13 bankruptcy, which involves a restructuring of debt — the consumer makes payments for three or five years, with the goal of getting the debt discharged at the end.

However, student loan debts are generally non-dischargeable in bankruptcy, attorney Simon Goldenberg of The Law Office of Simon Goldenberg, PLLC, told Business Insider. Those seeking to discharge their credit cards and other unsecured debts would free up their budget to pay student loans, he said.

So if the 32% of student loan debt-carrying consumers filing for Chapter 7 bankruptcy through Upsolve get their debts discharged, they still need to repay nearly half of their debt, since it's comprised of student loans. 

Read more: College is more expensive than it's ever been, and the 5 reasons why suggest it's only going to get worse

Student loan debt has reached record levels

Student loan debt is one aspect of The Great American Affordability Crisis plaguing millennials.

College tuition has more than doubled since the 1980s, Business Insider previously reported. Consequently, millennials have taken on at least 300% more student debt than their parents, according to Michael Hobbes of HuffPost. Baby boomers had to work only 306 hours at minimum wage to pay off four years of college, he found, while millennials would have to work 4,459 hours.

More than half of indebted millennial respondents in an INSIDER and Morning Consult survey said attending college wasn't worth the student loans.

And some borrowers are even fleeing the US to keep from paying off their student loans, Business Insider's Allana Akhtar reported, citing a CNBC report.

SEE ALSO: Nearly half of indebted millennials say college wasn't worth it, and the reason why is obvious

DON'T MISS: 2019 is the final class of millennial college graduates. Next stop: The Great American Affordability Crisis.

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Target is doubling down on same-day shipping as Walmart and Amazon spar over one-day delivery (TGT)

Thu, 06/13/2019 - 12:01am

Target is going all in on same-day delivery.

The company is now offering same-day delivery through its own website, This isn't Target's first foray into the same-day fray; the retailer acquired same-day delivery service Shipt for $550 million in 2017. In January, Target expanded its Shipt service to include all major product categories.

As part of its latest push, Target shoppers will be able to order 65,000 items for same-day delivery from In a presentation provided to Business Insider, Target said that one out of five of its same-day orders were placed by customers who'd never put in a digital Target order before. The retailer is already reporting repeat rates of nearly 80% for the service in the first quarter.

Target said in a statement that certain products could be delivered "in as soon as an hour." Same-day delivery will be accessible in 47 states and involve 1,500 of Target's stores. The service won't immediately be added to Target's app, but it will be added some time before the 2019 holiday season.

Read more: Target just unrolled its highly anticipated Vineyard Vines collaboration, but shoppers are complaining that the clothing has already sold-out

Target will continue to use Shipt to fulfill same-day orders, but shoppers won't necessarily have to fork over an annual membership fee — $49 a year through Target — for the service.

According to a release from Target, customers can either pay a delivery fee of $9.99 or test Shipt out for a free four-week trial. Shoppers will now also be able to put their Target REDcards to use, meaning they could snag rewards and get 5% off their orders.

Target's announcement comes about as retail rivals like Walmart and Amazon spar over next-day delivery. The Minneapolis-based retailer is instead focusing on its stable of pick-up and delivery options, including free order pick-up and drive-up services and free two-day shipping and restocking for customers with a REDcard.

"With same-day delivery now available directly within the experience, we've made it even easier for our guests to shop at Target — while still getting the great value, curated product assortment and helpful guest service they've come to expect," Target's digital SVP Dawn Block said in a statement.

Are you a Target employee with a story to share? Contact this reporter at

SEE ALSO: Target just boosted its minimum hourly wage to $13 in the latest salvo in the war for retail talent

DON'T MISS: Target employees share the 8 wildest returns they've ever seen

SEE ALSO: 8 celebrities who love to shop at Target

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A Wall Street firm pinpointed 8 corners of the market most vulnerable to trade war-induced chaos

Wed, 06/12/2019 - 11:42pm

  • US stock indices may be trading just below record highs, but they've taken a hit over the past year as a direct result of the trade war between the US and China.
  • Under the surface, each segment of the equity market — particularly trade-sensitive industries like agriculture and aerospace — has reacted to trade-war developments in different ways.
  • Deutsche Bank equity strategists have pinpointed exchange-traded funds most vulnerable to trade rhetoric, based on their analysis of flows data, in a new guide for investors.
  • Visit Markets Insider's homepage for more stories.

On the surface, the stock market seems to have shrugged off headwinds introduced by the US-China trade war. The major US indices are within striking distance of their all-time highs, and just posted their best weeks of 2019.

But a new industry-level analysis shows investors have fled corners of the market tossed and turned by the trade dispute even as the broader markets have recovered.

Exchange-traded funds associated with trade tensions saw increased activity in May, a particularly brutal month for equities, according to a Deutsche Bank analysis of exchange-traded fund (ETF) flows over the last two years.

The firm created a guide detailing some of the large ETFs that have seen notable flows on trade war "angst" — and are likely to see further volatility this month amid ongoing tensions between Washington and Beijing. 

Strategists Chin Okoro and Hallie Martin narrowed in on the eight stock markets or sectors they deemed most sensitive to trade rhetoric: the Chinese market, semiconductors, Mexican equities, agriculture, metals and mining, electronics, aerospace, and retail. 

"DB economists expect trade tension to escalate further in June, highlighting retaliatory actions by China in response to US measures against Huawei," the firm wrote. "Furthermore, any signs of placating ongoing tensions would likely materialize post G20 summit."

Markets Insider selected one ETF from each of the trade-sensitive industries Deutsche Bank laid out, and broke them down below. The ETFs are ranked from worst performing to best performing:

VanEck Vectors Gaming ETF

Ticker: BJK

This fund tracks: Stocks in the gaming, sports betting, and gaming technology industries

1-year performance: -26% 


Ticker: XRT

This fund tracks: Stocks in the retail space, including apparel and department store names

1-year performance: -17%

iShares China Large-Cap ETF

Ticker: FXI

This fund tracks: Chinese equities

1-year performance: -15% 

iShares PHLX Semiconductor ETF

Ticker: SOXX

This fund tracks: Semiconductor stocks

1-year performance: -1.5% 

VanEck Vectors Agribusiness ETF

Ticker: MOO

This fund tracks: Stocks in the agricultural industry like agri-chemicals, fertilizer, and seeds

1-year performance: -0.2% 

iShares MSCI Mexico ETF

Ticker: EWW

This fund tracks: Mexican equities 

1-year performance: +1% 

VanEck Vectors Gold Miners ETF

Ticker: GDX

This fund tracks: Gold miner stocks

1-year performance: +2.5% 

SPDR S&P Aerospace & Defense ETF

Ticker: XAR

This fund tracks: US-listed aerospace and defense stocks

1-year performance: +10%  


Trump's tariffs are inflicting pain and uncertainty across the market. Comments from very different American companies show how.

Epic Games, the maker of 'Fortnite', acquired teen chat app Houseparty in a surprise deal

Wed, 06/12/2019 - 7:11pm

  • "Fortnite" creator Epic Games acquired group video-chat platform Houseparty on Wednesday.
  • "We kept hearing that people were using Houseparty to talk to their real life friends while gaming together and one game came up over and over again: Fortnite," Houseparty CEO Sima Sistani Tweeted.
  • Visit Business Insider's homepage for more stories.

"Fortnite" creator Epic Games announced its acquisition of Houseparty, a social networking app for group video-chats, on Wednesday. 

The price of the acquisition was not announced, but the unexpected deal immediately sparked speculation about what the maker of the most popular video game might do with the teen-focused chat app.

Officials from Epic Games and Houseparty stressed the social interaction aspects of each respective product. Fortnite has become a worldwide gaming phenomenon, allowing up to 100 people anywhere in the world to connect online and play in the same round. 

Still, company officials were mum on specific plans to integrate the two products' features. 

Houseparty has been installed by 35 million users via App Store and Google Play, with 40 percent of those users outside of the US, according to mobile data analyst Sensor Tower. Users spend an average of one hour on the app everyday, Houseparty measures. 

The joint press release focused on the shared vision for Epic Games and Houseparty to facilitate meaningful human connections through virtual means. 

"Joining Epic is a great step forward in achieving our mission of bringing empathy to online communication," Houseparty CEO Sima Sistani said in the press release. "We have a common vision to make human interaction easier and more enjoyable, and always with respect for user privacy."

In a Tweet on the day of the announcement, Sistani predicted that the next decade of social media will be characterized not by sharing, but by participation.

If the last decade of social media was about sharing, the next decade will be about participating. Today we’re announcing that @houseparty is joining @epicgames and I couldn’t be more excited!!

— sima sistani (@SimaSistani) June 12, 2019

"Houseparty brings people together, creating positive social interactions in real time," Epic Games CEO Tim Sweeney said in the press release.

Houseparty will not be collapsed into Epic Games. Users with both Houseparty and Epic Games accounts will not be able to combine their accounts, and Houseparty will remain available as a standalone platform.

A spokesperson for Epic Games declined to comment on what an integration of Houseparty and Epic Games may look like in the future. However, a Tweet from Sistani highlights how users have already used the platforms together:

We kept hearing that people were using Houseparty to talk to their real life friends while gaming together and one game came up over and over again: Fortnite.

— Sima Sistani (@SimaSistani) June 12, 2019

While Fortnite does have an in-game voice chat function, many players opt to use independent group chat programs to communicate with fellow gamers. The group chat networks, like Houseparty and Discord, have the added benefit of existing outside of the game as social media platforms; players can talk regardless of whether they're gaming, unlike in-game voice chats. Could Epic Games' acquisition of Houseparty mean incorporation of Houseparty's social, video chat technology into video games like Fortnite? 

Houseparty is no stranger to online gaming internally. Houseparty moved into the gaming space in January, when it began offering games for users to play with friends in-app. Its first game was Ellen DeGeneres' mobile charades game Heads Up!. The Verge characterized this move as Houseparty's "first effort to generate revenue." In April, Houseparty launched a trivia game, and in May, it introduced word-association game, Chips and Guac. 

The acquisition of Houseparty could yield a larger female demographic of Fortnite players, according to the The Wall Street Journal.

Epic Games made nearly $2.5 billion through "Fortnite" in 2018, and in January it acquired video graphic design firm 3Lateral, which specializes in hyper-realistic human CGI. It had amassed a total of 250 million registered players by March.

SEE ALSO: The creators of 'Fortnite' just bought the studio behind one of the most popular games on the planet

Join the conversation about this story »

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The Ford Ranger is an excellent midsize pickup truck — here are its best features (F)

Wed, 06/12/2019 - 6:10pm

  • The 2019 Ford Ranger is the Blue Oval's return to the midsize-pickup-truck market in the US.
  • The segment is quite large. Folks who enjoy what pickups can do, such as hauling around mountain bikes and going on Home Depot runs, but don't want an F-150 or a Silverado in the driveway.
  • The 2019 Lariat SuperCrew four-wheel-drive Ranger I recently tested was nicely equipped and cost almost $45,000. But it was loaded with great features.
  • Visit Business Insider's homepage for more stories.

At Business Insider, we avidly anticipated the new Ford Ranger, which is actually a built-in-America version of a global pickup that Ford has been selling outside the US. The Blue Oval is already super-strong in full-size trucks — can you say "F-150"? — and back in the day, the Ranger was a popular starter pickup.

In 2019, the entire pickup-truck market is driving US sales, and the midsize offerings are much improved over the little pickups that used to cover this segment. They're really more like shrunken-down full-sizers, and where Chevy (as well as GMC, with the Canyon) and Ford are concerned, the idea is to offer a solid hauler that's simply more compact than a big boy.

We've sampled pretty much everything the market has to offer on this front, so a key question was, "What does Ford bring to the party with the new Ranger?"

The answer is a great truck, with some great features.

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In May, I checked out the impressive 2019 Lariat SuperCrew four-wheel-drive Ranger, nicely equipped and stickering at almost $45,000. The base-price pickup is a little more than $24,000. I couldn't find much to complain about. And I found lots to like.

Read the review »

1. The Ranger's design. The styling of this midsize truck isn't wild or radical. But it is solid, and my tester looked sharp in "Lightning Blue."

2. The "Ranger" call-out across the liftgate. This is a cool thing, as well as a throwback to day when pickups proudly announced themselves to whomever might be in the rearview mirror.

3. The versatile, lined short-box and bed. The SuperCrew configuration that I tested sported a 5-foot bed, but the Ranger can be had with a two-door cab and a 6-foot bed. I used the Ranger for both a run to Costco and to transport some furniture about 120 miles.

4. The 2.3-liter EcoBoost four-cylinder engine is a turbocharged power plant that cranks out 275 horsepower and 310 pound-feet of torque. Towing capacity is 7,500 pounds — enough to tow just about anything owners of the Ranger would want to.

5. Superb ground clearance. With hefty off-road tires, the Ranger is prepared to leave the pavement.

6. Serious four-wheel-drive. The Ranger boasts a solid 4x4 system — FX4 — with a locking differential. The package adds another grand or so to the price.

7. A no-nonsense, easy-to-care for interior. The Ranger's cabin is comfortable and well-appointed, but far from fussy.

8. The smooth-shifting 10-speed transmission. Combined with the turbocharged engine, this powertrain yields 20 mpg city, 24 highway, and 22 combined.

9. Ford's Sync 3 infotainment system. In the Ranger, it runs on an 8-inch touchscreen. Sync 3 is one of the best in the industry. It provides superb navigation, easy Bluetooth connectivity, and AUX and USB device-connection options.

Sync 3 also offers a suite of apps and has both CarPlay and Android Auto available. And the 10-speaker Bang & Olufsen audio system in my test truck is a terrific extra. It sounds too good for a truck this small!

10. The old-school parking brake!

What a truck!

In my review, I wrote that "Ranger is a winner."

I added, "It's going to compare favorably with the Chevy Colorado and provide a much nicer package than the Toyota Tacoma (although the Tacoma is noted for its toughness, so the new Ranger should require some time to distinguish itself on that front)."

The Ranger has been available outside the US for a while, but with its return to our shores, Ford made sure to outfit the pickup with a nice range of appealing features.

Merrill Lynch's 'thundering herd' of advisers are winning over troves of new millionaires, and the growth is coming from a surprising place

Wed, 06/12/2019 - 5:44pm

      • Bank of America Merrill Lynch's wealth management group has seen explosive client growth in the last year and a half. 
      • Such growth had been tough to come by in recent years as the industry reckoned with a generational shift to passive investing. 
      • Surprisingly, Merrill veterans with more than 30 years of experience were responsible for a significant share of the growth, matching the output of younger advisers who are far less established.
      • Click here for more BI Prime stories.

The wealth management division at Bank of America Merrill Lynch had an explosive year in 2018, and 2019 is off to a torrid pace as well, adding thousands of new millionaire clients. And it's getting help from a surprising group among their "thundering herd" of nearly 18,000 financial advisers. 

At a financial conference Wednesday, Merrill Lynch Wealth Management president Andy Sieg said his division's net new households grew by more than four-fold in 2018, a pace that has further accelerated in 2019.

While the company is spending billions upgrading technology and crafting customer friendly features, Sieg attributed much of the growth to a change within the thundering herd itself.

Surprisingly, veteran Merrill advisers were responsible for a significant share of the growth, matching the output of scrappy millennial advisers who are far less established.

"Interestingly, in 2018, the biggest increases we saw in terms of new client acquisition were financial advisers who have been with Merrill 30 years or more," Sieg said. "They are now acquiring clients at the same pace as financial advisers who have been with us 5 years or 10 years in the business."

Merrill added 29,000 net new households last year, up from 7,000 added in 2017. It's on pace for 47,000 this year.

The growth is primarily coming among the sought-after millionaire client set. The average new Merrill Lynch household has $1.4 million in assets, and the firm holds a 20% market share among clients with more than $10 million in assets — tops among competitors for ultra-high-net-worth clients, according to Sieg. 

"The core of this organic growth strategy has really been to try to get the Merrill thundering herd on the move again in terms of driving client acquisition. And we've had some remarkable success from that perspective," Sieg said.

Client growth helped boost profits in the bank's global money management group to $4 billion in 2018, up 33% from 2018, on revenues of $19.5 billion.

Outside of poaching star brokers from rivals, such growth had been tough to come by in recent years as the industry reckoned with a generational shift to passive investing. 

Aside from industry pressures, Sieg acknowledged his firm had "grown bureaucratized in many ways" and had erected internal barriers that stymied growth. 

In part, the bank is crediting the successful turnaround to technology, as banks are increasingly doing

Bank of America spends $10 billion on tech annually, $3 billion of which is earmarked for developing new products.

Sieg said his division is a major beneficiary of that tech budget, and that's helped streamline the lives of financial advisers handling all those new clients. For instance, quarterly client wealth reviews have been trimmed to less than 10 minutes from 40 minutes thanks to automation tools, and faxes and other paper documents are disappearing in favor of digital files. 

"In ways big and small, we're using technology to make the day of our financial adviser" more efficient, Sieg said. 

But Sieg said Merrill's financial advisers deserved much of the credit.

The strategy that helped kick advisers into recruiting overdrive — even old-school advisers — isn't too complicated: money. 

For 2018, Merrill Lynch changed its compensation plan to incentivize growth, rewarding advisers for adding wealthy clients and new assets and penalizing advisers who didn't. 

Financial advisers are paid primarily via percentage of the commissions and fees they produce on a sliding scale from roughly 35% to 50% — the more revenue you generate for the firm the larger the cut of the profits. Brokers that exceeded client and asset growth targets could collect an additional 2% of their production, while those that failed hit minimum hurdles could lose 2%. 

Sieg said the change was controversial, but he felt it was a necessity to jump-start moribund client growth in an industry watching trillions in wealth flood into index- and exchange-traded funds provided by giants like Vanguard and BlackRock as well as upstart robo-advisers like Betterment. 

"If you're an individual financial adviser and you're looking at your own practice and business, projecting it forward 5 or 10 years, there is steady pricing compression that's happening in the marketplace, obviously," Sieg said. "We were reminding financial advisers, if you're not setting out to double your asset base over a 5- or 6- or 7-year period of time, you're not going to like what your business looks like personally in the medium and longer term."

The results have been stark: A few years back, the average financial adviser was adding less than one net new household per year, and this year they're averaging more than four, Sieg said. 

There's plenty of room for more growth, too. Among the so-called "mass affluent" households with $250,000 to $1 million in assets, there are 6.6 million that do business with Bank of America but don't invest with Merrill.

"So that is an ideal target for us in terms of driving next legs of growth for the business," Sieg said. 

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Amazon just got hit with a lawsuit that claims it's putting children's privacy at risk by recording what they say to Alexa

Wed, 06/12/2019 - 5:40pm

Amazon's Alexa smart home devices have sparked a new lawsuit that alleges the company recorded audio from millions of children without first getting proper consent from their parents. According to the Seattle Times, a new lawsuit filed in the city's federal court accuses Amazon of violating privacy laws in eight different states that require all parties to consent to a voice recording, regardless of age.

Alexa-powered devices regularly record audio when activated with a wake word, which is "Alexa" by default. Earlier this year Bloomberg found that Amazon employees listen to these recordings and occasionally annotate an "extremely small sample" of them for training purposes. Bloomberg reported that members of the Amazon team that listens to these recordings can listen to as many as 1,000 clips during a nine-hour shift.

The lawsuit claims that Alexa records people regardless of whether they purchased the device or signed up to use the Alexa app, and doesn't warn unregistered users that they're being recorded. The suit goes on to allege that Amazon is violating laws in Florida, Illinois, Michigan, Maryland, Massachusetts, New Hampshire, Pennsylvania, and Washington by not obtaining explicit consent.

Read more: There's a simple way to make sure Amazon workers can't listen to what you say to Alexa — here's how to do it

While consent is required regardless of age in these states, the lawsuit is specifically concerned with protecting minors. The lawsuit claims that Amazon is using the data to glean the habits and personal information of children and "has strong commercial incentives to collect as many Alexa recordings as possible."

If the court finds in favor of the plaintiff, the lawsuit wants Amazon to delete all recordings of underage users and prevent future recordings unless the user grants consent. Additional damages would be considered by the court during the trial. 

Alexa owners can manage how Amazon reviews their data via the Alexa app, but you need to opt-out of the "help develop new features" option. Following the Bloomberg report, Amazon introduced a new feature to have Alexa delete all of your voice recordings, but you have to opt in to activate the deletion command and it will only delete your recordings from the current calendar day. The company also launched a new Alexa privacy hub to make it easier to delete your past recordings and manage your smart device settings.

SEE ALSO: There's a simple way to make sure Amazon workers can't listen to what you say to Alexa — here's how to do it

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Lululemon's profits and sales top Wall Street's expectations — again (LULU)

Wed, 06/12/2019 - 4:44pm

  • Lululemon shares jumped late Wednesday after the retailer reported better-than-expected first-quarter results.
  • Profits and revenue topped analysts' expectations, though guidance came in lower than expected.
  • Shares have risen 40% this year, handily outperforming the broader market.
  • Watch Lululemon trade live.

Lululemon reported a second-straight quarter that impressed investors, sending shares higher by 3% late Wednesday.

The athleisure retailer's first-quarter profits and sales topped analysts' expectations, while its full-year earnings-per-share guidance came in lighter than was forecast. The strong headline numbers followed last quarter's blowout results that sent the stock soaring back in March. 

"Lululemon continues to see strong momentum across the entire business," Calvin McDonald, the company's chief executive officer, said in the statement. 

The quarterly results highlight Lululemon shares' breakneck rally in recent years as the market has bet on investors embracing athletic apparel, as well as the company's push beyond its core women's athleisure offerings. The stock has soared 230% over the past two years, handily outperforming the broader market's 19% gain during that time.

Here's what Lululemon reported ,compared with what analysts surveyed by Bloomberg were expecting: 

  • Revenue: $782.3 million ($756 million expected)
  • Adjusted earnings per share: $0.74 ($0.70 expected) 
  • Full-year EPS guidance: $4.51 to $4.58 (the company originally expected $4.48 to $4.55)

Wall Street expects profits and sales to rise over the next three quarters, according to Bloomberg estimates, with analysts broadly positive on the retailer. Of those polled by Bloomberg, 21 recommend "buy," 13 recommend "hold," and one says "sell." The average analyst's price target of $184.77 implies a rally of 8% from current levels.

While investors are likely to focus on near-term trends, Lululemon is well-positioned for the long-term, Credit Suisse analysts wrote Wednesday. The firm is encouraged by Lululemon's efforts in menswear, its international expansion, and the loyalty program it debuted late last year.

John Morris, an analyst at D.A. Davidson, lifted his earnings-per-share estimates last month as a result of his positive outlook for Lulu's merchandising margins. He holds a "neutral" rating on the stock. 

"Given the strength of average pricing remaining higher on both total average price and markdown average price, expecting gross margin to exceed consensus, although this is likely factored into the stock," Morris wrote.

Now read more markets coverage from Markets Insider and Business Insider:

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4 credit cards that get you free or discounted access to Delta Sky Club airport lounges

Wed, 06/12/2019 - 4:36pm

Business Insider may receive a commission from The Points Guy Affiliate Network if you apply for a credit card, but our reporting and recommendations are always independent and objective.

One of the benefits of Delta's two mainstream credit cards — the Gold Delta SkyMiles and the Platinum Delta SkyMiles cards from American Express — is the ability to purchase discounted access to Delta's Sky Club airport lounges.

Until recently, anyone could purchase one-time access to Sky Clubs for $59 at any lounge's front desk. However, these day passes were eliminated in mid-November 2018.

Fortunately, single-visit passes are still available for Gold and Platinum Delta SkyMiles cardholders. If you have one of those cards, you can buy access to the Sky Club for just $29 — about half the price of what used to be available to anyone flying Delta.

Those discounted lounge passes are great for travelers who occasionally fly Delta, or would only use the lounge access a few times each year — for instance, in case of delays, long connections, or a tendency to arrive for flights a bit early.

If you can see yourself using the Sky Club more often, you should instead consider Delta's premium card — the Delta Reserve Credit Card from American Express — which gives the cardholder complimentary access to Sky Clubs whenever they're flying Delta. That helps offset the card's $450 annual fee.

The Delta Reserve card comes with a few other perks, including a domestic first class companion pass, and higher upgrade priority for Delta Medallion members.

An alternative, if you're looking for the widest lounge access you can get from a credit card, the best option is the (not Delta-branded) Platinum Card® from American Express. In addition to Sky Club access whenever flying Delta, that card offers access to Priority Pass lounges, AmEx's own Centurion and International Lounges, and more. That's a network of over 1,200 lounges around the world.

The AmEx Platinum has a high $550 annual fee, but it's easy to get more value than that — in my first year with the card, I got over $2,000 in value. Right now, the card offers 60,000 AmEx Membership Rewards points after spending $5,000 in the first three months.

Click here to learn more about the Gold Delta SkyMiles card from Business Insider's partner: The Points Guy. Click here to learn more about the Platinum Delta SkyMiles card from Business Insider's partner: The Points Guy. Click here to learn more about the Delta Reserve card from Business Insider's partner: The Points Guy. Click here to learn more about the AmEx Platinum card from Business Insider's partner: The Points Guy.

SEE ALSO: 9 lucrative credit-card deals new cardholders can get this month — including up to 75,000 Delta SkyMiles

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AmEx has announced its latest Centurion Lounge, making the Platinum Card even more useful for cardholders

Wed, 06/12/2019 - 4:30pm

Business Insider may receive a commission from The Points Guy Affiliate Network if you apply for a credit card, but our reporting and recommendations are always independent and objective.

American Express Platinum cardholders have another new airport lounge to look forward to.

AmEx has announced its newest Centurion Lounge will be opening at Phoenix Sky Harbor International Airport, the sixth new location announced in the past two years.

Currently scheduled to open in 2020, the Phoenix Centurion Lounge joins lounges currently under construction in New York's JFK airport, Los Angeles, Denver, Charlotte, and London Heathrow.

The Phoenix lounge will be located in Terminal 4, which serves major airlines including American Airlines and Southwest.

In addition, AmEx is working with MAG USA, an airport experience company, to open a third-party Escape Lounge.

While Centurion Lounges are exclusive to AmEx Platinum cardholders, customers with the small-business version of the card (the Business Platinum® Card from American Express), and the invite-only Centurion Card members, the Escape Lounges can also be accessed by anyone who purchases a day pass for $45 (or $40 in advance).

According to American Express, both lounges will offer complimentary food, alcoholic and non-alcoholic drinks, seating areas, Wi-Fi, showers, and more. Since cardholders have access to both, they can choose either space, depending on which has more space.

The Phoenix location is the first new Centurion Lounge to be announced in 2019, and represents a continued push to offer demonstrable value as competition among rewards credit cards remains high.

Including Phoenix, six new locations are slated to open between this year and 2020 — the others are in New York-JFKDenver International AirportLos Angeles International Airport, Charlotte Douglas Airport, and London Heathrow. AmEx currently operates eight Centurion Lounges in US airports, and one in Hong Kong.

In addition to the Centurion Lounges, American Express operates 11 "International American Express Lounges" at foreign airports, including in Mumbai, Delhi, Buenos Aires, Mexico City, Sydney, and, most recently announced, Melbourne. International lounges tend to to vary depending on the market, while Centurion Lounges are designed to offer a relatively consistent experience, according to a representative for AmEx.

Aside from the American Express-branded lounges, AmEx Platinum cardholders can access Delta Sky Club lounges at 33 airports when flying with Delta, and more than 1,200 additional lounges through the Priority Pass network.

Click here to learn about the AmEx Platinum Card from Insider Picks' partner: The Points Guy

SEE ALSO: The best credit card rewards, bonuses, and benefits of 2019

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Beyond Meat rockets higher after Tim Hortons says it'll offer plant-based meat in breakfast sandwiches across Canada (BYND)

Wed, 06/12/2019 - 4:12pm

  • Beyond Meat's stock gained nearly 12% after Tim Hortons announced it'll offer plant-based meat in breakfast sandwiches across Canada. 
  • Shares plunged 25% on Tuesday after JPMorgan downgraded the name. 
  • An increasing number of fast-food restaurants are adding vegan and vegetarian options to their menus. 
  • Watch Beyond Meat trade live.

Breakfast sandwiches have boosted Beyond Meat's stock after Wall Street analysts cooled on the company.

Shares of Beyond Meat traded up as much as 16% Wednesday after the company announced that three of its breakfast sandwiches are available on menus at Tim Hortons across Canada.

The news came after analysts earlier this week rushed to cut ratings on the stock. On Tuesday, shares tanked 25% after JPMorgan's Ken Goldman cut his rating to "neutral," and on Wednesday, Sanford C. Bernstein's Alexia Howard the last bullish voice on Wall Street cut her rating "market perform." Both analysts cited Beyond Meat's stretched valuation. 

Shares have had a volatile few days of trading following a meteoric 600% climb since the May 1 initial-public-offering pricing and the company's better-than-expected earnings release. Traders have had to contend with Nestle announcing its own plant-based burgers  and grocery stores saying they weren't sure Beyond Meat burgers belonged in the meat aisle.

Tim Hortons has been testing Beyond Meat breakfast sandwiches in Canada since May. In April, its sister brand Burger King announced that its Impossible Whopper would be rolled out nationwide by the end of 2019 after a successful limited launch at locations in and around St. Louis, Missouri. The Impossible Whopper was the result of a partnership with Impossible Foods, a competitor to Beyond Meat.

Beyond Meat's stock could see a major boost if it secures a partnership with a chain such as McDonald's, analysts at Jefferies wrote in a note. An increasing amount of fast-food chains are adding vegan items to menus to meet the growing demand for plant-based meat alternatives. Del Taco, Taco Bell, and Chipotle have all began to offer vegan and vegetarian options recently. Chick-fil-A and McDonald's are also exploring adding vegan options to their menus. 

Join the conversation about this story »

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Howard Schultz takes a 'detour' in travels across America, postponing any announcement on whether or not he'll actually run for president

Wed, 06/12/2019 - 3:49pm

  • Howard Schultz announced on Wednesday that he would put his travels across American "on hold" after three back surgeries.
  • "Today, I am feeling much better, and my doctors foresee a full recovery so long as I rest and rehabilitate," Schultz wrote in an email. "I have decided to take the summer to do just that."
  • In January, Schultz announced he was "seriously considering running for president as a centrist independent." 
  • Visit Business Insider's homepage for more stories.

Howard Schultz is putting his travels across American on hold, without any announcement about if he will run for president or not. 

On Wednesday, the former Starbucks CEO announced that he planned to take the summer to recuperate after three back surgeries in the past two months. 

"Today, I am feeling much better, and my doctors foresee a full recovery so long as I rest and rehabilitate," Schultz wrote in an email. "I have decided to take the summer to do just that."

"I take this detour from the road reluctantly," Schultz added. "My concern for our country's future remains, as does my belief that the American people deserve so much more from our elected officials. Civility. Honesty. Real problem solving. My belief in these ideals will never waver."

In January, Schultz announced he was "seriously considering running for president as a centrist independent." In the months that followed, Schultz traveled America discussing his political ideology, first on his book tour and then on his "Heart of America" tour. 

Before his surgeries, Schultz indicated he would announce his decision on if he would run for president or not in the spring or early summer.

On Wednesday, HuffPost reported that Schultz told staff this morning that he would not make a decision about declaring his candidacy until after Labor Day. HuffPost's Amanda Terkel reported that Schultz told staff "if Biden does not appear to be the nominee, he would think about jumping into the presidential race after Super Tuesday."

Schultz has espoused a centrist ideology, slamming both the right and the left. 

"I'm as concerned with the current left-leaning tilt of the Democratic Party toward socialism and the leading Democratic nominees at this point ... as I am about reelecting Donald Trump," Schultz told Business Insider in March.

Read more: Howard Schultz on big business, socialism, and the presidential potential of Joe Biden and Alexandria Ocasio-Cortez

Schultz also told Business Insider that he admired former Vice President Joe Biden. 

"I admire Vice President Biden. I know him, I've traveled with him. How could I not admire him? He served the country for 40-plus years — he's a great man," Schultz said. 

At the time, Schultz said it was "too early" to say whether Biden's decision to enter the race would influence his decision to run for president. In May, Fox Business reported that Schultz's decision on running for president would be linked to how Biden's campaign fares. 

"I think it's instructive that Mayor Bloomberg did not run as a moderate Democrat, could not find a path," Schultz said. "Whether Vice President Biden runs or not, it would be interesting to see whether he can find a path."

Schultz stepped down as Starbucks CEO in 2017. He led Starbucks to incredible growth, especially after returning as CEO in 2008 after a period serving as chairman. His leadership was also marked by his continued commitment to social issues.

Schultz left his position as chairman in June 2018 after leading the company for three decades. The move triggered rumors of a presidential bid. 

SEE ALSO: Former Starbucks CEO Howard Schultz is cooling it on his potential 2020 presidential run because of Joe Biden

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The US budget deficit skyrocketed to a record $207.8 billion in May

Wed, 06/12/2019 - 2:53pm

  • The US budget deficit ballooned to a record high in the month of May, as federal spending continued to outpace income despite a solid economy.
  • The gap between the amount the government takes in and spends rose nearly 42% last month.
  • In the first eight months of the fiscal year, the deficit increased about 39% to $738.6 billion.

The US budget deficit ballooned to a record high in the month of May, as federal spending continued to outpace income despite a solid economy.

The gap between the amount the government takes in and spends came in at $207.8 billion last month, the Treasury Department said Wednesday, nearly 42% higher than a year earlier. The increase happened in part because of June 1 falling on a Saturday, a non-business day, meaning some benefit payments were made earlier than usual.

Lawmakers typically try to reduce the deficit when the economy is strong, but recent legislation has taken it in the opposite direction. In the first eight months of the fiscal year, the deficit increased about 39% from a year earlier to $738.6 billion.

Tariff receipts were up sharply in May, rising 80% from a year earlier. President Donald Trump has imposed duties on several of the US's largest trading partners in a bid to pressure concessions on policies seen as unfair. But evidence shows that tariffs act as a tax on businesses and consumers at home.

The sweeping tax-cut package that took effect last year is expected to cost $1.9 trillion over the next decade as it constrains government receipts. Republicans vowed the package would pay for itself through higher growth, but evidence suggests otherwise.

Meanwhile, federal spending has jumped more than 9% since the fiscal year began in October. The nonpartisan Congressional Budget Office expects the annual deficit to come in at around $1 trillion by 2022 and remain above that level for at least seven years.

SEE ALSO: A key GOP lawmaker just reversed on the promise that Trump's tax cuts will pay for themselves

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Investor behavior has reached an extreme not seen in 15 years. Here's why that could be signaling a stock-market explosion to new highs.

Wed, 06/12/2019 - 2:45pm

  • A recent study from Bernstein found that flows into bonds and out of stocks have diverged to a degree not seen in 15 years.
  • The firm said this ongoing bifurcation could send stocks soaring higher in the future and provided historical context to support its assertion.
  • Click here for more BI Prime stories.

The word "rational" rarely comes to mind when investors think about the mercurial day-to-day gyrations of the market. When tensions and emotions run high, it's easy to focus on the minutiae, make ill-informed decisions, and lose a sense of the bigger picture.

The quantitative-strategy team at Bernstein believes investors have done just that. In a new research note, the firm sounded the alarm on the glaring divergence between recent flows into bonds and the corresponding exodus from equities. 

Since the beginning of the year, total equity-fund outflows have tipped the scales at $155 billion, while bonds absorbed aggregate inflows of $182 billion over the same period. That marks the largest bifurcation between the two asset classes in 15-plus years.

"There are often tensions like this in the market, but the degree of this tension is at the extremes of historical experience," Inigo Fraser-Jenkins, a senior analyst at Bernstein who leads the firm's global quantitative and European equity strategy, said in the client note.

And at present time, this extreme trend is showing no signs of stopping. Last week alone, net bond inflows grew $17.5 billion — the largest deposit in more than four years — while investors redeemed $10.5 billion worth of equity holdings.

The graph below shows just how out of whack flows are compared with the past.  

But there's one big catch: Bernstein finds that, historically speaking, these overextended conditions have portended large stock-market gains ahead. And considering the benchmark S&P 500 is already roughly 2% from all-time highs, a new record seems imminently attainable.

The chart below — which shows the forward returns for global stocks when Bernstein's indicator has moved more than two standard deviations away from its average — provides investors with a sanguine outlook for equities when these metrics are overemphasized. The most compelling column is arguably the rightmost one, which shows 52-week gains exceeding 10% following each prior instance.

Today, the disparity is even more exaggerated — crossing over three full standard deviations — which strengthens the case for a reversal.

Ultimately, Bernstein believes that irrational investor behavior has overexaggerated current allocations — setting the stage for what could be a sharp, forceful turnaround over the medium term.

However, it's important to note that even though these metrics are stretched on a historical basis, Bernstein doesn't see a sharp, short-term trend reversal without an exogenous catalyst or event to get the ball rolling.

When areas of the market are this afflicted, historical analysis and proper positioning can set investors up to reap the rewards of this reversion to the mean.

SEE ALSO: A full-blown recession and double-digit stock losses: Morgan Stanley just unveiled its revised bear case for the trade war — and it's not pretty

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A top DOJ official just outlined why the agency has everything it needs to go after Big Tech — and Facebook, Google, and Amazon should be nervous (AAPL, GOOGL, FB, AMZN)

Tue, 06/11/2019 - 7:58pm

  • The nation's antitrust laws provide enforcement officials with all the tools they need to promote competition in the tech industry, Assistant Attorney General Makan Delrahim said Tuesday.
  • Delrahim made the comments as the Department of Justice and the Federal Trade Commission are beginning to scrutinize Apple, Alphabet, Facebook, and Amazon.
  • He also defended the DOJ against the charge that it focuses too much on consumer prices in weighing the effects of companies' market power, acknowledging there can be other harms.
  • Delrahim's comments come as his own role in the investigating the tech companies has come under scrutiny.
  • Visit Business Insider's homepage for more stories.

Makan Delharim thinks the current legal code is more than sufficient to safeguard competition in the tech industry.

As federal enforcement officials begin to probe Alphabet, Apple, Facebook, and Amazon over potential antitrust violations, some policymakers and legal experts have questioned whether new laws are needed to rein in the companies. But in a speech at a conference in Tel Aviv Israel Tuesday, Makan, the top antitrust official in the Justice Department, made clear he's not among them.

"We already have in our possession the tools we need to enforce the antitrust laws in cases involving digital technologies," Makan, an assistant attorney general, said in the speech, which CNBC previously reported. "US antitrust law is flexible enough to be applied to markets old and new."

Pointing to the government's case 20 years ago against Microsoft and the nation's long history of challenging the power of dominant companies, he added: "Those who say we need new or amended antitrust laws to address monopoly concerns should look to history and take heart."

Debate has been growing over what, if anything, policymakers should do about the power wielded by the big-tech companies. Google parent Alphabet has already been fined by European regulators three times for anti-competitive actions. Apple just lost a decision at the US Supreme Court in an antitrust case and is the subject of a formal antitrust complaint in Europe made by Spotify. Facebook has drawn intense scrutiny for all the data it's collected on its billions of users and the ways in which its immense social network has been hijacked to widely spread propaganda.

Antitrust laws are old but adequate

Earlier this month, the Washington Post reported that the DOJ and the Federal Trade Commission have divvied up oversight over the four biggest tech companies, with the DOJ looking at Apple and Alphabet and the FTC taking on Amazon and Facebook.

But some antitrust experts and other policymakers have argued that new laws are needed to control the companies. Senator Elizabeth Warren, who is running for president, has called for legislation that would classify as "utilities" any tech company with more than $25 billion in revenue that runs a marketplace or has its own platform. It would also bar those tech utilities from owning companies that participate on their service.

The US has two major antitrust laws — the Sherman Antitrust Act and the Clayton Antitrust Act. Both are more than 100 years old and were written in an earlier era of monopolies, but in Delrahim's view, they are robust enough to handle any of today's problems.

"Through their general wording, and their focus on competitive process and consumer welfare, the antitrust laws allow US courts to continue to apply legal principles and sound economic reasoning to identify harmful practices that the antitrust laws should prevent," he said.

Read this: Top antitrust enforcer at DOJ reveals 3 ways the agency could make a case against big tech companies like Google and Apple

The DOJ is concerned with more than just prices

In recent years, many antitrust experts on the left have charged that the courts and enforcement regulators have paid too much attention to consumer prices when it comes to evaluating the impact of a company's dominance over a particular market or potential mergers. But Delrahim pushed back against that view.

The DOJ recognizes that monopolies sometimes lower prices and that limited competition can have harms other than just increased consumer costs, he said. Innovation and quality can also be hampered when companies have too much power or too few rivals to keep them honest.

"The Antitrust Division does not take a myopic view of competition," Delrahim said. "It is well-settled ... that competition has price and non-price dimensions," he continued.

But as the DOJ ramps of its probe of Alphabet and Apple, Delrahim himself is now facing criticism. Warren on Tuesday called for him to recuse himself from any investigations into the two companies, because of lobbying work he did for them. Delrahim lobbied on Google's behalf in 2007 for its acquisition of DoubleClick and on Apple's behalf in 2006 and 2007 on patent issues.

"Your past work as a lobbyist for two of the largest and most scrutinized tech companies in the world creates the appearance of conflict of interest," Warren said in a letter to Delrahim, which was previously reported by The Verge. "As the head of the antitrust division at the DOJ, you should not be supervising investigations into former clients who paid you tens of thousands of dollars to lobby the federal government."

Got a tip about the tech industry? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Here's why the failed attempt to break up Microsoft will make or break the crackdown on Facebook, Amazon, and Google, according to 2 top lawyers in the Microsoft case

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Amazon, Apple and Google dominate some surprising markets, researcher finds, giving the government a lot of fodder for investigations (GOOG, AMZN, AAPL)

Tue, 06/11/2019 - 7:30pm

  • The head of antitrust at the Department of Justice said Tuesday that officials will be scrutinizing big tech companies looking for anticompetitive behavior.
  • Interestingly, several top tech companies actually have significant market share in areas that you might not expect.
  • Their command of so many markets could give federal investigators a lot of things to look at, should they want to peer deeply into these company's businesses.
  • Visit Business Insider's homepage for more stories.

The head of antitrust at the Department of Justice said Tuesday that officials will scrutinize big tech companies in search of evidence of anticompetitive behavior.

The Department of Justice and the Federal Trade Commission have already agreed to divvy up responsibility for the fresh burst of oversight, with the DOJ looking at Google and Apple, and the FTC looking at Amazon and Facebook, according to recent news reports.

On Tuesday, Assistant Attorney General Makan Delrahim explained, in a video speech to a conference in Tel Aviv, Israel, the kinds of behavior and market conditions the DOJ will look for. On his radar: higher prices, loss of consumer privacy, exclusive deals and mergers designed to protect a monopoly or harm a competitor.

Read: Breaking up Facebook would make Instagram less safe for people, executive says

For the big tech companies that now have targets on their backs, there's a lot of risk: Google, Amazon, and Apple each command a giant swath of various tech markets. Here are some of the biggest markets dominated by the Big Tech threesome, according to market research firm Gartner, which could attract the attention of regulators.


  • Amazon is a giant in ecommerce sales, the No. 1 online retailer, based on US total sales, with an estimated more than 100 million paid Prime members.
  • But it is also the No. 1 — by a mile — cloud computer provider, too, based on revenue. Interestingly, its size has meant that it is the only meaningful challenger to Google in its core market of online product searches.
  • Gartner estimates that 55% of product searches start on, signaling a shift away from traditional search engines.


  • Apple commands only about 14% of the worldwide smartphone market, which makes it the No. 2 player behind Samsung for 2017 and 2018.
  • Apple is the No. 4 player in the PC market behind Lenovo, HP and Dell with almost 7% share in the first quarter of 2019. (Data does not include iPads.)
  • Because Apple makes its own chips for use in its products, its semiconductor business is huge, too. In 2018, it commanded a nearly 9% share of the market, Gartner says, which amounts to being in second place in terms of market share behind Samsung. 

That kind of buying power on electronics materials gives Apple a lot clout. And its clout could rise higher if Apple ever moves away from Intel chips for its PCs, switching to its own design, as it's been rumored to be working on for years and reportedly could do next year. For now, its still using Intel, including its brand new, high end, $6,000 Mac Pro


  • Google is the internet search advertising leader by a mile. Google has been in antitrust hot water in Europe for years, including billions of dollars in fines involving its search and Android businesses.
  • But Google is also the No. 3 cloud provider behind Amazon and Microsoft, Gartner points out.
  • When it comes to online advertising, Google and Facebook combined control 75% of the market. They are often referred to as the duopoly.

SEE ALSO: Amazon consumer CEO Jeff Wilke says that he's okay with government scrutiny but that the company shouldn't be broken up

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