US Officials Probe Activision Blizzard’s Brunch; Amazon Sellers Report an “Unfair” Marketplace

by Zara Briggs on 4th Apr 2022 in News

In today’s ExchangeWire news digest: Officials at the US Department of Justice and Securities and Exchange Commission are probing a meeting between Activision Blizzard’s CEO Bobby Kotick and Alexander von Furstenberg; a report conducted by the Institute for Local Self-Reliance reports Amazon sellers struggling; and Shein are reportedly discussing a new funding round.

US Officials to examine a meeting between Bobby Kotick and Alexander von Furstenberg

Officials at the US Department of Justice and Securities and Exchange Commission are probing a meeting between Activision Blizzard’s CEO Bobby Kotick and Alexander von Furstenberg to uncover whether any insider dealings took place, according to people familiar with the matter.

The meeting proceeded just days before von Furstenberg bought options in the group in the wake of the USD$75bn (~£57.25bn) Microsoft acquisition. The deal was made on behalf of Barry Diller (von Furstenberg’s mother’s husband), and music magnate David Geffen, and has raised concerns as to whether non-public information about the unannounced acquisition was used for personal gain.

Activision options were bought at $40 (~£30.53) per share by all three aforementioned on 14th January. Microsoft’s all-cash deal was announced four days later, valuing the Call of Duty developer at $95 (~£72.52) per share.

Diller and Kotick have denied the allegations, marking the event as merely “a coincidence”. “We had zero knowledge of that transaction and it belies credulity to think that if we did we would have proceeded,” the media mogul declared in a statement.

Amazon sellers are struggling on the tech giant's marketplace

Amazon sellers are reportedly struggling to thrive on Amazon’s marketplace due to “unfair” algorithms and fees, according to a report conducted by the Institute for Local Self-Reliance.

The research, which involved 908 businesses (94 of which were third-party sellers on Amazon’s Marketplace) concluded that over half of the participants were battling with biased algorithms, thought Amazon’s fees to be “unreasonable”, and thought it impossible to succeed on the platform. When asked why they continued to use the e-commerce platform, 63% of the respondents said there is no feasible alternative.

According to research conducted by Insider Intelligence, Amazon’s US retail e-commerce sales accounts for 41.8% of the country’s total retail e-commerce sales, concluding just why people feel hesitant about switching marketplaces.

Back in October, Amazon were accused of rigging search results to promote their own product lines in India at the expense of other sellers. Those claims also mirrored reports made by the Wall Street Journal in 2020, accusing Amazon employees of studying internal data to manipulate the market with similar products to that of independent sellers.

Suggestions listed in the survey to improve conditions for sellers on the e-commerce platform include: “ending subsidies for big business, breaking up and/or regulating Amazon, and strengthening antitrust policy and enforcement”.

Shein are reportedly discussing a new funding round

Chinese fast-fashion retailer Shein are reportedly talking with investors in hopes to raise USD$1bn (~£763.4m) in a potential funding round, Bloomberg disclosed on Sunday (3 April).

According to sources close with the matter, the e-commerce giant are reaching for an USD$100bn (~£76.34bn) valuation, and investors such as General Atlantic could be involved in the investment. If Shein can reach this milestone, they will join ByteDance Ltd. and SpaceX in the top three most valuable startups.

Shein also hope to go public and have been considering an overseas IPO since 2020. Plans have, however, been obstructed by market unease amid rising geopolitical tensions - more recently the Russian invasion of Ukraine.

Progress on the IPO has been kept quiet by the Chinese retailer.