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Daily Brief 12/18 – Star Wars antitrust and Robinhood

Star Wars antitrust: According to Bloomberg, “At the center of the latest antitrust lawsuit against Google is a bold claim: The company colluded with arch rival Facebook Inc. in an illegal deal to manipulate auctions for online advertising, an industry the two dominate. Google named the secret pact after a Star Wars character.”

The suit revolved around Facebook’s decision to introduce header
bidding for its own ad-selling tools in 2017 and to mobile apps a year later. This tool allowed Facebook to take small cuts of ads sold across the web and on mobile phones, not just on its own pages.

Source: https://adtelligent.com/header-bidding-trends-2020-publishers-should-be-sticking-to/

This header bidding directly competed with Google and Facebook soon pulled back from the practice. It did so, the Texas suit said, because Google cut a deal, signed at the “highest-level,” that let Facebook sell ads on mobile apps more quickly and gave it other advantages in ad auctions. This deal, too, was given a coden ame related to Star Wars. The suit redacted the name, but the Wall Street Journal reported it was “Jedi Blue.”

If true this is a pretty spicy case indeed. We don’t hold a view that Google and Facebook will be proven guilty, but we are skeptical of any tangible penalties beyond a fine. Time will tell.

Robinhood: Robinhood Markets, the popular stock trading app among millennials, has agreed to pay $65 million to settle the SEC allegations that the broker failed to properly inform clients that it sold order flows to high-frequency traders.

Here you can see who they are trading order flow to:

Source: https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%20Rule%20606a%20and%20607%20Disclosure%20Report%20Q3%202020.pdf

Robinhood has also been accused of ‘Gamification’ by the state of Massachusetts. The filing singled out one customer that the regulator said had no investment experience who made 12,700 trades within a six-month period. Please, if you value the money you’re trading and investing with, don’t make 12,700 trades over a six-month period. If you are an investor, the less trading the better. If you are a trader, I hope you know what you’re doing.

Charts and Tweets we like:

Not much to say

Initial jobless claims hit highest levels in more than 3 months

Fun chart on silver courtesy of @RenMacLLC

Ain’t this the truth

That’s your millennialmkts update! Thanks for reading, if you like this content please consider following this blog and following us on twitter @millennial_mkts

Posts are not investment advice or endorsements.

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