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Giphy says it’s so ‘cringe’ Meta should be allowed to buy it

Giphy is making good use of its stodgy reputation. Meta acquired the company—known for its library of GIFs and video clips—for $400 million in May 2020. But last November, the U.K.’s Competition and Markets Authority ordered Meta—owner of Facebook, Instagram, and WhatsApp—to sell Giphy.

Appealing the antitrust decision in filings submitted last month, Giphy argued that GIF usage has seen an “overall decline” and “waning” interest among users and content partners, with fewer uploads on its platform in recent years. The company also called its platform “out of fashion,” arguing younger users consider it “cringe” and more suited for baby boomers.

It’s a hard argument to make when Meta paid so much for the company. At the time of the purchase, Meta said the GIFs would help users have more entertaining conversations on its platforms. 

The watchdog argued last November, however, that it was “protecting millions of social media users and promoting competition and innovation in digital advertising.” It said the acquisition removed Giphy as a “potential challenger” in the display advertising market, about half of which Facebook/Meta already controlled.

What’s more, it said that with the deal Meta was “denying or limiting other platforms’ access to Giphy GIFs, driving more traffic to [Meta-owned] sites—Facebook, WhatsApp and Instagram—which already account for 73% of user time spent on social media in the UK.” 

It said Meta was also “changing the terms of access by, for example, requiring TikTok, Twitter and Snapchat to provide more user data in order to access Giphy GIFs.”

The watchdog acknowledged that the GIF format was invented in the 1980s, a fact that would seem to further support Giphy’s argument of being outdated. But it also noted:

 “The onset of social media provided an opportunity to reimagine the GIF as a part of modern internet culture. The main GIF libraries that are used today were launched less than ten years ago, and the popularity of GIFs has grown enormously since then. Every day, millions of users in the UK post content that includes a GIF.”

As for why a British regulator is ordering around companies based in the United States, the agency explained, the important question is whether the merger “may have an impact on competition in the U.K.”

For Meta, it’s already been a rough year, with a falling share price and shrinking profits. This month, the Wall Street Journal reported that the company axed its Responsible Innovation team, tasked with addressing ethical concerns about its products.

Just last year, Margaret Stewart, a vice president who established the team, wrote that she was “optimistic” the group would help Meta “proactively surface and address potential harms to society in all that we build.”

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Kwasi Kwarteng vows ‘no more distractions’ after scrapping key U.K. tax provision

U.K. Chancellor of the Exchequer Kwasi Kwarteng sought to reassure jangled nerves in his ruling Conservative party with a pledge to deliver on the government’s economic strategy just hours after making a humiliating U-turn on a plan to cut taxes for top earners.

“No more distractions,” he told the Conservative party conference in Birmingham on Monday. “We have a plan and we need to get on with it.”

Kwarteng’s keynote speech to the Tory faithful came after he backtracked on a plan to scrap the 45% rate of income tax in order to head off the growing threat of a party rebellion. He began the speech remarking: “What a day. It has been tough but we need to focus on the job in hand.”

The policy reversal—just 10 days after first announcing the measure—is a major embarrassment for Kwarteng and Prime Minister Liz Truss. The abolition of the top rate was a signature part of their “plan for growth”, as they unveiled the biggest set of unfunded tax cuts in half a century in a dramatic fiscal statement on Sept. 23.

The package sparked a market rout, sending the pound to an all-time low against the dollar and forcing the Bank of England into a dramatic intervention to stave off a gilt market crash. 

‘A Little Turbulence’

“I know the plan from 10 days ago has caused a little turbulence,” Kwarteng said. “We are listening and have listened and now I want to focus on delivering major parts of our growth package.” 

Kwarteng said he planned to push ahead with other elements of his fiscal strategy, including reversing an increase in the National Insurance payroll tax brought in earlier this year by former Chancellor Rishi Sunak, bringing forward a 1 percentage-point cut in the basic rate of income tax, and canceling Sunak’s plan to raise corporation tax to 25% from 19%. 

“This government will always be on the side of those who need help the most,” he said.

That was an attempt to undo the damage of the original plan on the 45% tax rate, which had triggered dismay among some Conservative MPs over the apparent unfairness of a tax cut for the rich while poorer Britons struggle during a cost-of-living crisis. 

Benefits

At the same time, government ministers have been laying the ground for more public spending cuts including on welfare payments. Earlier in the year, Sunak said benefits would increase in line with inflation later in the year, but on Monday, Work and Pensions Secretary Chloe Smith told Bloomberg TV that no decision had yet been taken.

That’s sparked concern among some ex-ministers, who warned they could not support any real-term cuts in welfare payments. Esther McVey, a former holder of Smith’s post, told a side event at the conference it would be “a huge mistake not to give a cost of living increase in benefits.”

Michael Gove, the former minister who has become an unofficial recruiting sergeant for unhappy Tories, told Times Radio he also would “need a lot of persuading” to back benefits not being uprated in line with inflation.

But Gove did indicate he would support the government’s tax measures now the abolition of the top tax rate had been shelved.

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Elon Musk’s ‘peace’ plan for Russia and Ukraine met with backlash

Elon Musk took a break from his day job of leading carmaker Tesla and space cargo company SpaceX to post a “peace” plan for ending the war in Ukraine. But his proposal was quickly met with backlash—including from Ukrainian President Volodymyr Zelensky.

On Monday, Musk posted a poll on Twitter with four suggestions to ending the war. The first: Enlist the United Nations to supervise a redo of the recent sham elections by Russia of four Ukrainian regions that it formally annexed last week. Next, he called for Crimea—invaded by Russia in 2014 and currently occupied by it—to formally become part of Russia. Then, he said Crimea’s water supply should be assured. And lastly, he argued, Ukraine should remain neutral rather than joining NATO. 

“This is highly likely to be the outcome in the end – just a question of how many die before then,” Musk wrote, as a follow up. “Also worth noting that a possible, albeit unlikely, outcome from this conflict is nuclear war.” 

Less than three hours after his first tweet, Zelensky responded to Musk with his own poll, mocking Musk’s plan. 

“Which @elonmusk do you like more?” Zelensky asked. The two choices? One who supports Ukraine, and one who supports Russia. 

Ukraine’s ambassador to Germany, Andrij Melnyk, also piled on Musk in atypical fashion for a diplomat. “Fuck off is my very diplomatic reply to you,” he wrote. Melnyk later added that no Ukrainian would ever buy a Tesla, telling Musk “good luck.”

Musk, however, persisted. 

“Let’s try this then: the will of the people who live in the Donbas & Crimea should decide whether they’re part of Russia or Ukraine,” he wrote—asking his Twitter followers to answer either “yes” or “no.”

Financial Times correspondent Christopher Miller replied to Musk’s tweet, referring to the Ukrainian Independence Referendum, when Ukrainians were asked to vote on the country’s independence.

“Let’s not try that, @elonmusk,” he wrote. “The people of Donbas & Crimea made their decision in 1991, when Ukrainians from those areas & all others voted freely & unanimously to be in Ukraine.” 

Donbas, a region in Eastern Ukraine, is now nearly fully occupied by Russia. But Ukraine has vowed to liberate it. 

In suggesting Crimea—a peninsula that’s been at the center of Russia and Ukraine’s conflicts—should formally become part of Russia, Musk made clear his belief that the region belongs to Russia, adding that Crimea’s being transferred to Ukraine from Russia by Soviet Premier Nikita Khrushchev was a “mistake.” 

A top advisor to Zelensky responded sarcastically to Musk’s Twitter diplomacy  by saying there was a “better peace plan”—including Ukraine liberating its territories, Russia demilitarizing and denuclearizing so it can no longer threaten others, and war criminals be put on trial. 

It’s not just Ukrainian officials who pushed back against Musk. Many of his Twitter followers sounded off in the comments, calling him a “disappointment” and asking that he refrain from weighing in on a topic so outside of his expertise.  

Despite the often hostile response, Musk gave his peace plan one more push on Twitter. 

“Russia is doing partial mobilization. They go to full war mobilization if Crimea is at risk. Death on both sides will be devastating,” the tweet said. “Russia has >3 times population of Ukraine, so victory for Ukraine is unlikely in total war. If you care about the people of Ukraine, seek peace.”

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Global recession could happen because of wealthy nations raising interest rates, United Nations says

Governments around the world are determined to bring down inflation whatever the cost, but a growing chorus of voices is pointing out that aggressive monetary policies could have some serious and long-lasting consequences on the world economy.

Central banks in the U.S., Europe, and the U.K. have pursued relentless monetary tightening policies this year to reduce domestic inflation, but transnational institutions including the World Trade Organization and the International Monetary Fund have warned that this approach could push the world into a long period of low economic growth and persistently high prices, according to a Monday report.

“The world is headed towards a global recession and prolonged stagnation unless we quickly change the current policy course of monetary and fiscal tightening in advanced economies,” the UN Conference on Trade and Development (Unctad) cautioned in an annual global trade forecast report released on Monday.

The report predicted that current monetary policies in wealthy nations could spark an economic downturn worldwide, with growth slipping from 2.5% in 2022 to 2.2% next year. The UN says that such a slowdown would leave global GDP well below its pre-pandemic norm, and cost the world economy around $17 trillion, or 20% of the world’s income. And developing nations will be the most negatively impacted, according to the report, and many might be facing a recession worse than any financial crisis in the past 20 years.

“The policy moves that we have seen in advanced economies are affecting economic, social, and climate goals. They are hitting the poorest the hardest,” Unctad director Rebeca Grynspan said in a statement accompanying the report’s release.

“They could inflict worse damage than the financial crisis in 2008,” Grynspan said.

A ‘policy-induced’ recession

The UN agency made clear it will hold central banks around the world responsible for causing the next global recession.

“Excessive monetary tightening and inadequate financial support” in advanced economies could backfire spectacularly, resulting in high levels of public and private debt in the developing world, the report says.

Rising interest rates and fears of a coming recession have sent the value of the U.S. dollar soaring against all other currencies this year. And while this has been great news for American tourists traveling abroad, it’s a fiscal nightmare for developing countries, where import prices are rising fast and servicing dollar-denominated debt is becoming untenably expensive.

Debt levels in emerging markets have been hitting record highs for months, but the strong dollar has exacerbated uneven balances and raised inflation in developing nations as well, according to a separate economic report from the UN published on Monday.

With debt becoming more expensive to service, emerging economies have fewer funds available to invest in health care, climate resilience, and other critical infrastructure, the Unctad report warned, which could lead to a prolonged period of economic stagnation.

“We may be on the edge of a policy-induced global recession,” Grynspan said. 

The report urged advanced economies to consider ways to reduce inflation other than raising interest rates. Grynspan insisted that inflation in every country today is because of a “distributional crisis,” caused by supply-chain bottlenecks unresolved from the pandemic-era, and recommended wealthy nations invest more in developing nations and optimizing supply chains around the world.

Grynspan also called for more debt relief and restructuring packages for emerging economies that are struggling to service their debt.

Unctad joins a growing number of transnational institutions calling on wealthy nations to consider what their efforts to reduce inflation at home is doing to the global economy. Last week, World Bank president David Malpass urged wealthy countries to focus on the supply side of the inflation problem by investing more in production in developing nations and in optimizing supply chains.

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