Major supermarkets took advantage of supply chain disruptions to beat smaller rivals and protect their profits during the pandemic, according to a report released Thursday by the Federal Trade Commission.

The report found that some large companies “accelerated and distorted” the impact of supply chain disruptions, including by pressuring suppliers to favor them over competitors. Food and beverage retailers also posted strong profits during the height of the pandemic and continue to do so today, casting doubt on claims that higher grocery prices are simply keeping pace with retailers’ own rising costs, the authors reasoned .

“Some companies appear to have used rising costs as an opportunity to raise prices further to boost profits, and profits remain high even as pressure on the supply chain has eased,” the report said.

The publication of the report comes at a time when the FTC is cracking down on major supermarkets. Last month, the commission and several attorneys general filed a lawsuit seeking to block Kroger from completing its $25 billion acquisition of the Albertsons supermarket chain. They argued that the deal would weaken competition and likely result in consumers paying higher costs.

The independent federal agency’s actions have helped bolster the Biden administration’s efforts to tackle rising prices. In recent weeks, President Biden has taken a tougher stance on supermarket chains, accusing them of overcharging customers and making excessive profits. Although food prices are rising at a slower pace now, they have risen rapidly in 2022 and have not fallen overall. As a result, high food costs continued to put pressure on many consumers and posed a political problem for the government.

Mr Biden has also tried to tackle the problem by fixating on food companies, denouncing them for reducing pack sizes and portions of some products without lowering prices, a practice commonly called ‘shrinkflation’ named. During his State of the Union address earlier this month, Mr. Biden again called on snack companies to end the practice.

In its report, the FTC concluded that supply chain disruptions are not equally impacting companies across the food industry. Compared to larger companies, small supermarkets had more difficulty sourcing products during the pandemic.

“The FTC’s report examining the U.S. food industry’s supply chains finds that dominant companies have used this moment to get ahead at the expense of their competitors and the communities they serve,” said Lina Khan, FTC President , in a statement.

The report comes after the supervisor commissioned several companies at the end of 2021 to transfer ‘detailed information’ that would help shed light on the causes behind the supply chain problems and how business practices could have exacerbated the disruptions.

The report shows that major companies are pressuring suppliers to gain access to scarce products by imposing strict delivery requirements and threatening suppliers with large fines if they do not fulfill their orders. Because these measures helped major retailers increase their product inventory, they effectively helped them gain a competitive advantage over smaller rivals, the report said.

“In some cases, suppliers have preferentially allocated products to buyers, threatening to fine them,” the report said.

However, retailers did not have “unfettered discretion” to impose these fines because some suppliers had already established contractual requirements, according to the report.

FTC officials also argued that consumers continue to “face the negative impact of the pandemic’s price increases” as retailers’ profits remain high.

Based on public data on grocery retail profits, the FTC found that food and beverage retailers’ revenues accounted for 7 percent of total costs in the first three quarters of 2023. That was an increase from more than 6 percent in 2021 and the most recent peak of 5.6 percent in 2015.

“These increased profit levels warrant further investigation by the commission and policymakers,” the report said.

After the outbreak of the pandemic, the country’s food supply chain experienced massive disruptions. Households quickly moved away from eating at restaurants, and panicked shoppers stocked up on food, driving up demand for groceries. Workers became ill due to the coronavirus, putting pressure on the labor supply in supermarkets, warehouses and meat processing plants. Truck drivers, who were already in short supply before the pandemic, could not deliver fast enough. The convergence of these factors resulted in major product shortages and higher food costs.

At the end of 2021, there was an even bigger increase in food prices. As supply chain disruptions and labor shortages led to higher transportation and raw material costs, companies passed on cost increases for many products to consumers. In August 2022, food inflation peaked at 11.4 percent. Since then, food price increases have continued to cool. In March, food prices rose by 2.2 percent.

Companies across the industry have said they are planning smaller price increases this year, in part because some consumers have started to reduce their spending and cut back, which has caused some companies to see sales decline.

Kroger, Albertsons and the politics of inflation

A paradox at the heart of the US economy is that consumers are feeling pressured even though growth indicators appear strong – weighing this against President Biden’s approval ratings.

So the White House on Monday likely welcomed an initiative by the FTC and several states to block Kroger’s $25 billion bid to buy Albertsons, arguing that the largest supermarket merger in U.S. history would raise prices and weaken bargaining power. of union workers.

The Biden administration has little control over inflation, but it continues to be pressured. Consumers spend the most of their income on food in thirty years, and an internal White House analysis found that grocery prices had the greatest impact on consumer confidence.

The Fed has raised interest rates to a 20-year high in an effort to cool inflation, but progress on that front has slowed in recent months.

Biden blames big corporations. In a video released on Super Bowl Sunday, he took a dig at “shrinkflation,” lashing out at companies for reducing package sizes and food portions without lowering prices. Biden is expected to reiterate that view in his speech State of the Union Address next month.

The president could point to the FTC’s tough approach to mergers and acquisitions. The agency operates independently, but Lina Khan, chair of the FTC, has taken the most aggressive and comprehensive antitrust enforcement stance in decades. That could help Biden’s message to voters that he is fighting for their interests.

“When large companies are not controlled by healthy competition, they too often fail to pass on cost savings to consumers and exploit their workers,” a National Economic Council official said on Monday.

Some companies don’t help themselves. Kellogg’s, for example, is marketing cereal as an affordable meal option for cash-strapped families. “Dinner cereal is something that is probably more on trend now, and we expect that to continue as that consumer is under pressure,” says the Kellogg CEO. Gary Pilnick told CNBC last week.

Perhaps his comments were predictable backlash on social media.

There will be another big test on Thursday with a new set of inflation data to be published. Economists expect to see inflation is rising again.

HERE’S WHAT’S HAPPENING

Macy’s will close nearly a third of its nameplate stores. The shuttering of 150 Macy’s stores – along with an expansion of the Bloomingdale’s and Bluemercury brands – is an attempt by Tony Spring, the retailer’s new CEO, to turn the company around. Macy’s has suffered a years-long decline and an unwanted takeover bid.

Chipmakers are seeking more than $70 billion in federal subsidies. Semiconductor companies have requested about double the money set aside to support domestic chip production, according to Commerce Secretary Gina Raimondo. She added that the US will produce about 20 percent of the most advanced types of logic chips by the end of the decade.

Exxon Mobil threatens to derail Chevron’s $53 billion acquisition of Hess. Exxon and China’s CNOOC said they had a right of first refusal for deployment in an oil project in Guyana owned by Hess, Chevron disclosed in a regulatory file. Chevron disagreed; the two parties are in discussions. Much of what Chevron finds attractive in Hess rests on the Guyana project, one of the most promising oil resources in the world.

Jane Fraser’s last stand?

It was a coup for Citigroup to poach Vis Raghavan from JPMorgan Chase to head its banking division. The hire fills the last open leadership position created by a major overhaul from the Wall Street giant.

It means that Jane Fraser, Citi’s CEO, has now put together her team, and she is expected to show that she can change the company.

Fraser was already under pressure to deliver results. Her restructuring was designed to give her more hands-on control over the bank’s key operations (and led to the elimination of at least 20,000 jobs across the company). Citi’s board recently increased her annual salary to $26 millionciting her announcement what it called “the most consequential set of changes to its organizational and management model since the 2008 financial crisis.”

Analysts doubt it will be different this time. “I count twelve restructurings at Citigroup. And I count 12 restructurings that have failed at Citigroup,” Mike Mayo, the veteran banking analyst, said on an earnings call last month. “Why is it different this time?”

Raghavan is a crucial asset. He will oversee one of Citi’s most prominent businesses. He will also hold the title of executive vice chairman, meaning he will “help shape and drive our company-wide strategy and assist me with key strategic initiatives,” Fraser wrote in an internal memo on Monday.

It’s a step forward for Raghavan. The longtime JPMorgan veteran became the sole head of the investment banking division last month. He was also the head of Europe, the Middle East and Africa.

But he remained several layers away from Jamie Dimon, the bank’s CEO. At Citi he reports directly to Fraser.

Can he help Citi break back into Wall Street’s investment banking elite? The company has long lagged behind JPMorgan, Morgan Stanley and Goldman Sachs in key areas: it is not in the top three for mergers and acquisitions. or equity capital markets, as measured by deal volume, over the past decade, Dealogic said.

It has outperformed in the debt capital markets, ranking second or third at the time.

Fraser knows she is under scrutiny. “I realize that ’24 is a pivotal year,” she said during an earnings call last month. But while Citi’s share price has risen 32 percent since she revealed her reorganization plan, it has fallen 19 percent since she took over as CEO in March 2021.

Microsoft’s day-old AI deal is under scrutiny

The latest from Microsoft dealing with a vibrant artificial intelligence start-up is already causing concerns among supervisors. The Windows maker pitched its partnership with France’s Mistral as an effort to go beyond its relationship with OpenAI and help AI innovation, but skeptics say it’s the latest example of Big Tech trying to stifle competition.

Now, European regulators say they can investigate this the relation.

Mistral is one of Europe’s biggest AI hopes. The company was founded last year by a trio of former Google and Meta researchers and a former French digital minister, and has raised hundreds of millions of euros at a $2 billion valuation.

It has cast itself as a rival to OpenAI, and its backers include Andreessen Horowitz, General Catalyst, Lightspeed Venture Partners and Eric Schmidt, the former CEO of Google.

Microsoft and Mistral signed a “multi-year partnership” but released few details. The tech giant will reportedly invest approx 15 million euros ($16.2 million) and provide the cloud computing firepower needed to scale the startup’s algorithms.

Mistral’s services will also be offered on the Azure cloud platform.

Regulators on both sides of the Atlantic are already on high alert. US, British and European authorities are investigating Microsoft’s relationship with OpenAI, in which Microsoft has already invested $13 billion and has a non-voting board seat.

A European Commission representative has said regulators will analyze the deal once they have a copy of the agreement. That could lead to a formal investigation, according to Reuters.

Microsoft downplayed regulatory concerns about its Mistral investment. The company is likely hoping that its partnership with another startup will please regulators investigating ties to OpenAI.

Still, Max von Thun, director of the Open Market Institute, a competition policy think tank, said this could backfire if Mistral were now unable to compete with OpenAI and Microsoft’s competitors. “If you want a truly competitive AI ecosystem, you don’t want an OpenAI challenger dependent on Microsoft’s infrastructure and investments,” he told DealBook.

The billion-dollar legacy of a friend of Buffett

Ruth Gottesman’s $1 billion donation to the Albert Einstein College of Medicine in the Bronx, which will make tuition free, is notable for more than just the eye-popping figure. It is also part of the legacy of her late husband, the financier Sandy Gottesman, a close friend of Warren Buffett.

Gottesman made his billions by investing early in Berkshire Hathaway. (He also founded First Manhattan, an asset management firm that now manages about $20 billion.) By the time he died in 2022, Forbes estimated his net worth at $3 billion.

“There has probably never been a better return in the history of Wall Street on any stock held for 44 years,” Gottesman wrote of Berkshire a decade before his death.

He and Buffett were close for almost 60 years. From Gottesman’s obituary by The Times:

From 1963 to 1965, Mr. Gottesman regularly flew to Omaha, Mr. Buffett’s base, where he met him in the afternoon, had dinner with him and then talked with him until 2 or 3 in the morning. On one occasion, they talked so late that they found themselves locked in Mr. Buffett’s office building. Mr. Gottesman usually took an early morning flight back to New York.

Gottesman is said to have inspired Berkshire’s investment in Apple. Then Gottesman lost his iPhone in a taxi News of the incident reached Buffett in 2016, according to the book “After Steve: How Apple Became a Trillion-Dollar Company and Lost its Soul” by Tripp Mickle, a tech reporter at The Times.

Buffett saw in his friend’s desperate reaction a sign that the iPhone, and its maker, had become indispensable. He quickly built up Berkshire’s stake in Apple, shares now worth $174 billion.

Gottesman left an unexpected bundle of Berkshire stock to his wife when he died. she told The Times. His instructions were simple: “Do with it what you think is right.”

Dr. Gottesman, a former professor at Einstein and chairman of the board of trustees, decided to help the school. When asked what her husband would think of the gift, she said: “He gave me the opportunity to do this, and I think he would be happy with it – I hope so.”

READING THE SPEED

Offers

• Shein is reportedly considering going public in London or Asia instead of New York, as the Chinese-founded retailer comes under heavy scrutiny in the US (Bloomberg)

• Charter Communications is said to be considering a takeover bid for a rival cable operator. Altice USA. (Bloomberg)

Policy

The best of the rest

• How the deal to take Donald Trump’s social media platform public could give him a financial lifeline from his legal troubles. (NYT)

• Jacob Rothschild, who broke away from his famous family’s banking empire to start his own financial firm, has died; he was 87. (NYT)

We want your feedback! Send your ideas and suggestions by email to dealbook@nytimes.com.

An independent federal agency has become one of the most trusted implementers of President Biden’s efforts to combat inflation, at a time when the White House has few weapons of its own to quickly bring down stubbornly high prices of consumer goods like groceries.

The Federal Trade Commission, along with several attorneys general, filed a lawsuit Monday challenging a merger between supermarket giants Kroger and Albertsons. The the agency’s reasoning in many ways reflected Mr. Biden’s renewed efforts to blame corporate greed for rising prices and shrinking portions on supermarket shelves.

“If allowed, this merger would significantly reduce competition, likely resulting in Americans paying millions of dollars more for food and other essential household goods,” agency officials wrote in a legal complaint. Because grocery prices have risen significantly in recent years, she added, “the stakes for Americans are exceptionally high.”

That goes for consumers, and it goes for the president, too. More Americans disapprove of his handling of the economy than approve. While consumer confidence has improved in recent months, it remains relatively weak for an economy with low unemployment and solid growth like Biden’s.

An internal analysis by White House economists shows that no factor weighs more on consumer confidence than grocery prices. These costs have increased dramatically in 2022 and have not decreased, although the rate of increase has slowed.

White House officials concede there is little more Biden can do unilaterally to lower grocery prices and that the likelihood of legislative help from Congress is even slimmer. That’s why Mr. Biden has resorted to the pulpit, calling on stores to cut prices and chastising snack makers for engaging in “shrinkflation” — reducing portions while raising or maintaining prices.

That’s also why the FTC’s action Monday was so important for the president, at least politically. Administration officials suggest this shows the federal government has taken a big step to prevent food prices from rising further.

A White House statement on the FTC’s complaint on Monday included an entire section on administrative efforts to drive down grocery prices. Officials declined to comment directly on the lawsuit. But Jon Donenberg, deputy director of the National Economic Council and director for policy at the Competition Council, said in the statement that “when large companies are not controlled by healthy competition, they too often fail to pass on the cost savings to consumers and exploit their employees. ”

Kroger officials dispute the FTC rationale. They say their past acquisitions have delivered business efficiencies that have translated into lower prices. “Kroger has a proven track record of lowering prices so that more customers can benefit from fresh, affordable food, and our proposed merger with Albertsons will mean even lower prices and more choices for American consumers,” the company said Monday in a statement.

Mr. Biden and FTC Chairman Lina Khan have greeted similar arguments about the benefits of corporate mergers with intense skepticism.

Early in his term, Mr. Biden appointed Ms. Khan, who has steered the agency toward its most aggressive antitrust enforcement in decades. The president also issued a 2021 executive order aimed at promoting competition in the economy, with guidance for the FTC — including to more rigorously scrutinize certain types of mergers.

The agency responded strongly. It has now taken action against about 40 mergers, including the merger of video game heavyweights, discount companies, hospital chains and pharmaceutical companies. About half of those mergers have been halted, although the agency has not always succeeded: a federal judge cleared the way last year for the acquisition of video game maker Activision Blizzard by its rival Microsoft.

These actions have largely delighted a school of progressive economists who blame increased corporate concentration for higher consumer prices and lower wages for workers.

Some new advocates for aggressive antitrust enforcement, including some Republican senators, have urged the agency to go even further and break up big tech companies. A bipartisan group of lawmakers has pushed for the recently announced merger between credit card titans Capital One and Discover.

When Biden issued his competition order, less than six months into his presidency, he focused on workers. When companies grow too big, he argued, they gain power to keep wages low.

Since then, Mr. Biden has seen his economic message consumed by the fastest price increases America has seen in four decades. By the end of his first year, Biden’s aides began framing his competitive efforts in the language of taming inflation.

FTC officials have leaned on the price argument. “Fair competition and checks on corporate monopoly power lower the costs of everything from prescription drugs and cars to staples like milk, bread and eggs,” Douglas Farrar, an agency spokesman, said Monday.

Former Biden officials say the agency is now helping advance the president’s inflation efforts.

“Researching, developing and litigating these things takes time,” said Bharat Ramamurti, a former economic aide to Mr. Biden and architect of his competitiveness agenda.

“I like to think this was all part of the plan.”

The Federal Trade Commission filed a lawsuit Monday seeking to block Kroger, the supermarket giant, from completing its $24.6 billion acquisition of the Albertsons supermarket chain, saying the deal would harm competition in the industry.

The agency said the deal, which would be the largest supermarket merger in US history, would also likely result in higher grocery prices for consumers and, with fewer supermarkets, reduce the ability for supermarket workers to negotiate higher wages and better working conditions. .

“This mega-merger of supermarkets comes as American consumers have seen the cost of groceries steadily rise in recent years,” Henry Liu, director of the FTC’s Bureau of Competition, said in a press release. “Kroger’s acquisition of Albertsons would lead to additional grocery price increases for everyday goods, further exacerbating the financial pressures consumers across the country face today.”

The agency’s lawsuit is the latest step by the Biden administration to take a tougher stance on mergers. In recent years it has contested several major deals, including drugmaker Amgen’s $27.8 billion acquisition of pharmaceutical company Horizon Therapeutics; JetBlue’s proposed $3.8 billion purchase of Spirit Airlines; and Microsoft’s $70 billion acquisition of video game maker Activision Blizzard.

But in many cases the FTC has lost in court, including in its attempt to block the Microsoft merger.

In the 16 months since Kroger announced plans to acquire Albertsons, the proposed merger has been met with opposition. Executives from the supermarket giants – two of the largest supermarket chains in the United States – argued that the merger was necessary to compete with major retailers such as Walmart, Costco and Amazon. These retailers, executives said, use their size to negotiate better prices with manufacturers and suppliers, allowing them to sell cereal, yogurt, pasta and other staples to consumers at lower prices.

“Our merger with Albertsons will deliver meaningful, measurable benefits to American consumers, employees of both companies and the communities we serve,” Kroger said in a statement last year.

But a chorus of critics, including consumer advocates, politicians, labor unions and independent grocery chains, said the merger of Kroger and Albertsons would create a powerful giant with sales of more than $200 billion and about 5,000 stores, including recognized chains such as Ralphs, Safeway and Vons. .

As inflation continues to drive up food prices, critics say, the proposed merger would give shoppers in some regions little or no choice about where they can buy household staples. Others warned that with less competition, the merger would result in higher grocery prices and possible layoffs.

In an effort to address some of these concerns, Kroger and Albertsons have decided announced plans last September to sell 413 stores nationwide to C&S Wholesale Grocers for $1.9 billion. The sale is subject to approval of the merger between Kroger and Albertsons.

Critics also portrayed the proposed merger as a big payday for Albertsons’ private equity owners. Early last year, after surviving a legal challenge from the Washington attorney general, Albertson made a special $4 billion dividend payment to its shareholders. The biggest recipients of that dividend, which was funded by a combination of cash and debt added to Albertsons’ balance sheet, were Albertsons’ private equity owners, including Cerberus, which owned 73 percent of the company at the time.

When the New York magazine financial advice columnist quit an article that went viral on Thursday about falling victim to a $50,000 scam made my heart jump.

My own financial planner does went to prison years ago, which I had written down in a few columns. Almost all of us are vulnerable to scams, at least sometimes. What would I have done if someone called and insisted that my children in particular were in grave danger?

The author, Charlotte Cowles, who once had a weekly business column at The New York Times, described crooks who told a fantastic story: First they posed as Amazon and told her she had been a victim of identity theft. Then a thief passed her off to someone posing as a Federal Trade Commission investigator, who told her that nine vehicles, four properties and 22 bank accounts were in her name. Finally, an alleged “lead investigator” for the Central Intelligence Agency convinced her to withdraw money from her bank and deposit it for safekeeping while her husband and son watched.

But what would any of those entities do if they thought one of us was? Actually victim of a form of identity fraud? What would they say, ask and tell us to do?

I called them all and asked. This is what they said.

Amazon has no direct line to the Federal Trade Commission.

Ms. Cowles' story begins with a phone call in October purporting to be from Amazon, when a woman on the line told her about $8,000 in fraudulent purchases and said she was a victim of identity theft.

The woman then offered to connect Ms. Cowles to Amazon's contact at the FTC. Soon he was on the line.

But Amazon does not transfer customers to the FTC or any other government agency, spokesman Tim Gillman said.

The company will sometimes call people to verify account activity, which will likely become much more difficult as Ms. Cowles' story continues to go viral. But if the call seems suspicious, just hang up and contact them directly through the Amazon app or website.

“Do not call numbers sent by text or email or found in online search results,” Mr Gillman added. And if anyone suggests that you download or install Amazon customer service software, don't do it.

The FTC does not offer a badge number.

When Ms. Cowles was on the phone with the alleged FTC investigator, he provided his badge number and asked about the contents of her bank account.

On Thursday afternoon, Lina Khan, chairwoman of the Federal Trade Commission, said: posted on X: “Being a victim of scams can be devastating. A reminder that no one from @FTC will ever give you a badge number, ask you to confirm your social security number, ask how much money you have in your bank account, wire you to a CIA agent, or text you out of the blue to steer .”

Coincidentally, the FTC came out on Thursday rounded a new rule that gives him more powerful tools to fight criminals masquerading as companies. Consumers reported fraud losses of more than $10 billion for the first time in 2023 according to the agency, an increase of 14 percent compared to the previous year.

Last month the FTC issued this a warning about fraudsters trying to get you to move your money to a safer place. It was very similar to what had already happened to Mrs. Cowles.

The CIA probably isn't going to call you.

Before the FTC impersonator tricked her into transferring her money, she wanted to pass her along to the lead investigator on her case, who reportedly worked for the Central Intelligence Agency. She had her doubts, but he called from what she thought was the FTC's main phone number.

She thought he might be “spoofing,” using tools to pretend he was actually calling from that number. But he soon moved on and told her not to talk to her husband or a lawyer about the situation. The exchange soon turned into freezing her assets and issuing a replacement Social Security number.

The CIA declined to comment on the incident. But the website makes a few points that are relevant. The agency collects foreign intelligence and carries out covert actions. 'We are not a law enforcement organization' the site says. And while it may work with law enforcement agencies, it usually involves issues like counterintelligence and terrorism.

Are FAQ goes into even more detail, noting that it “does not require employees/contractors to obtain security of money or personal information (such as your Social Security number, driver's license, or banking information) in order to enter into a relationship.”

Nevertheless, Ms Cowles' contact told her to go to her bank and withdraw $50,000 – and not tell the bank why.

Banks might not stop you from leaving their branches with a backpack full of $100 bills.

Mrs. Cowles did as her CIA nanny told her. At a Bank of America branch, someone directed her up the stairs, where a teller handed over the money a piece of paper with some warnings about scams.

“When I went in, I was honestly hoping they would say no to my admission or make me wait, but that didn't happen,” Ms. Cowles told me via email. “The fraud warning made me think for a moment, but the scammers had not yet told me to give the money Unpleasant I didn't feel like it really applied to my situation. Plus, I was so afraid of what would happen if I didn't follow the instructions that it destroyed my skepticism.”

Mrs. Cowles is not an elderly person. If so, the bank teller might have slowed things down a bit. Banks are very concerned about elder fraud and will close any account someone has if they suspect something untoward.

Ms Cowles said she was not targeting Bank of America as it was in fact her money she was withdrawing. But do banks typically hand over large amounts of cash?

“We have extensive efforts to warn customers to avoid scams,” Bank of America spokesman William P. Halldin said via email. The bank declined to comment further.

“We do not limit customers' access to their funds,” Justin K. Page, a Chase spokesman, said via email. “However, there are cases where funds are held for additional verification. This also applies to cases where one of our bankers suspects that our customer may be accompanied by someone who appears to be putting pressure on him. We train our bankers to pay attention to this.”

Hijackers are in brains, not airplanes.

The thief posing as the CIA agent eventually told Ms Cowles to hand over the money. He said that after all, she would be charged with money laundering; If the agency could convert the money into a check from the government using its new Social Security number, it would get $50,000 clean.

This sounds ridiculous. However, it also created a contradictory internal dialogue.

“People who have always used their brains don't pay attention to their emotions, and I think we should pay attention to what our bodies are telling us,” said Amy Nofziger, director of fraud victim support for AARP's Fraud Watch Network. “The intestines are basically a scientific dump of chemicals. I have had countless victims say to me, “My gut told me not to do this, but my brain told me to do it.”

Eva Velasquez, who has seen it all as president of the Identity Theft Information Center, viewed the situation in the same way. “The bad actors are hijacking our brains,” she said. “And it works, because we are all human after all.”

Tara Siegel Bernard reporting contributed.

The Federal Trade Commission said its first “undercover telephone investigation” of funeral homes across the country found dozens failed to accurately disclose charges for services to callers.

Of the more than 250 FTC funeral home employees who called FTC, 38 did not answer questions about pricing or provided inconsistent prices for identical services, the commission said. Many homes offered “materially different” prices for the same services during two separate phone calls.

Another home promised to send an itemized price list, the agency said, but instead sent a list of package prices, which do not meet disclosure requirements.

The 39 funeral homes received warning letters in january that they had failed to comply with a law known as the Funeral rule. The FTC enforces the ruleoutlining protections for consumers seeking funeral services.

“It's really important that consumers can compare stores,” said Melissa Dickey, an FTC attorney and co-coordinator of the Funeral Rule. “Not everyone can come by in person to pick up a price list.”

Regarding the funeral home sending a list of package options, Ms. Dickey said, “You don't have to buy a package.” The funeral home should only let you purchase the services you want.

One of the homes also misrepresented local requirements for embalming or preserving the body after death, the FTC said. Some funeral homes require embalming as part of their own policies, but most states do not require it, the commission said, and the few others require it only in limited circumstances.

Relatives are stressed and vulnerable when contacting funeral homes, and in an increasingly mobile society, family members often have to make arrangements from out of state, said Sara Williams, president of the Funeral Consumers Alliance, a nonprofit organization that strives for fair treatment of people looking for funeral services.

Ms. Dickey declined to share details about what FTC officials said to funeral homes during the calls. But, she said, the law requires funeral directors to provide pricing information by telephone. Callers do not have to provide their name, address or phone number, she said, and they do not have to be a relative of the deceased.

“The funeral home cannot refuse to provide information,” Ms. Dickey said. “They should answer questions no matter who calls.”

In a rack Of the sweep, the National Funeral Directors Association said, “While the compliance rate should certainly be higher, the FTC reported a compliance rate of more than 85 percent.” That matched, if not exceeded, the results of previous committee investigations involving secret shoppers who visited funeral homes in person, the industry group said.

Funerals can be expensive. The typical cost of a funeral with casket and burial is $8,300, while the cost of a funeral with cremation, which includes a special casket and an urn, is $6,280, according to Data from 2023 of the national association, which represents approximately 11,000 funeral homes.

The FTC did not recommend prosecution of the violations but asked the homes to take “immediate remedial action” to comply with the law, which in part requires funeral homes to provide written price lists for products and services to people visiting in person. and to share prices by telephone upon request. Homes that don't follow the rules face fines of more than $51,000 per violation, as shown by the warning letters.

The FTC is considering updates to the 40-year-old burial rule. Because it predates the widespread use of the Internet, the rule does not address digital price disclosure. Consumer advocacy groups are urging the agency to modernize the law by requiring funeral homes to post their price lists online.

Ms Williams of the Funeral Consumers Alliance said doing initial research electronically could make a difficult task easier, and that requiring online price disclosures would simply acknowledge that “it is how we live now.”

Some funeral homes do post prices on their websites, but do not always make the information easy to find, according to A Report 2023 from the Consumer Federation of America, a nonprofit organization. Requiring online posting would make monitoring compliance with the law easier, said Stephen Brobeck, a senior fellow at the federation. Instead of making undercover calls or visits, investigators could simply check websites.

The association of funeral directors, in writing comments According to the FTC, requiring online price disclosure was not justified because data showed that the “small minority” of consumers who shopped for a funeral by comparing prices did not do so on the Internet.

“Overwhelmingly, funeral consumers prefer to visit or call the funeral home they plan to use, rather than searching online,” the association said.

Christopher L. Farmer, the funeral directors association's general counsel, said in a telephone interview that the group supports price transparency, but funeral homes should be able to choose whether to disclose prices online.

Consumer advocates say more people would shop for funeral services online if prices were widely available there.

Here are some questions and answers about obtaining information about funerals and related services:

What else do I need to know when calling a funeral home for pricing information?

Although they are not required to do so, many funeral directors can send or email their price lists if you request them. The funeral home can't require you to visit, Ms. Dickey said, but if you do go in person, you are also entitled to a copy of the price list there. “If they won't give you the information,” she said, “find another company.”

The FTC provides more tips on its website.

You can also check to see if your state has a chapter of the Funeral Consumers Alliance, which may have information about providers. Ms. Williams, who is also president of the alliance's North Carolina branch, said her group periodically collected price lists from funeral homes in the state and posted them on its website.

What if I have a complaint?

If you encounter a problem with services that cannot be resolved with the funeral director, most states have a funeral director or board that can assist you. (The Funeral Consumers Alliance provides a list of state contacts, along with suggestions for formulating a complaint, at his website.) You can also file a complaint with the Consumer Affairs department of the attorney general's office in your state. The FTC also accepts complaints on its website.

When is the FTC expected to announce whether it will propose changes to the burial rule?

An FTC spokeswoman said no update on the timing was available. The Consumer Federation's Mr Brobeck said he was “optimistic” the agency would issue a proposed update sometime this year.

AI handelt in het vizier

Techgiganten als Microsoft, Amazon en Google hebben een voorsprong gezocht in de race op het gebied van kunstmatige intelligentie door te investeren in innovatieve start-ups als OpenAI en Anthropic.

Maar die strategie trekt meer aandacht, nu de FTC zich aansluit bij internationale tegenhangers bij het onderzoeken van deze deals. Het is de laatste poging van het bureau om de macht van Big Tech te controleren, maar roept vragen op over de vraag of dit ook het vermogen van start-ups zal belemmeren om het benodigde geld bijeen te brengen.

De grote vraag: hinderen deze deals de concurrentie? Geen van de afspraken is een regelrechte overname. Maar in de Microsoft-OpenAI-deal lijkt de relatie bijzonder nauw: Microsoft heeft toegezegd 13 miljard dollar te investeren in de moedermaatschappij ChatGPT voor een belang van 49 procent (in een poging onder de 50 procent te blijven in een poging antitrustonderzoek te vermijden) en heeft rechten verworven om Het intellectuele eigendom van OpenAI.

Microsoft heeft geen vertegenwoordiging in het bestuur van OpenAI. Maar de invloed ervan op de start-up kwam in november in de schijnwerpers te staan, toen het aanbood Sam Altman in dienst te nemen nadat hij was afgezet als CEO van OpenAI.

Amazon en Google lijken niet zoveel invloed te hebben op Anthropic, hoewel ze samen hebben beloofd er 6 miljard dollar in te investeren. (Een Google-woordvoerder merkte op dat de deal van zijn bedrijf met Anthropic geen exclusieve technologierechten met zich meebrengt, in tegenstelling tot de investering van Microsoft in OpenAI.)

De FTC wil meer informatie over de deals, inclusief hun strategische grondgedachte en implicaties voor de concurrentie. “Ons onderzoek zal licht werpen op de vraag of investeringen en partnerschappen van dominante bedrijven het risico lopen de innovatie te verstoren en de eerlijke concurrentie te ondermijnen”, zegt Lina Khan, voorzitter van de FTC, in een verklaring.

Het onderzoek van de FTC volgt op onderzoeken van de Britse Competition and Markets Authority en de Europese Commissie over soortgelijke problemen.

Toezichthouders proberen fouten uit het verleden te vermijden. Khan werd beroemd door nieuwe antitrustbenaderingen voor te stellen om internetgiganten in bedwang te houden. Ze heeft gezegd dat de AI-industrie een soortgelijk toezicht nodig heeft en schreef vorig jaar in een Times Guest Essay dat “de toenemende adoptie van AI het risico inhoudt dat de marktdominantie van grote gevestigde technologiebedrijven verder wordt verankerd.”

AI-bedrijven hebben wel zorgen: Hun activiteiten zijn enorm duur en vereisen enorme hoeveelheden rekenkracht om hun AI-systemen te laten draaien. De investeringen in OpenAI en Anthropic betreffen cloud computing-credits, die helpen de kosten te dekken. Het beperken van de mogelijkheden van Big Tech om in deze bedrijven te investeren zou hun vermogen om te blijven innoveren kunnen belemmeren.

• In ander AI-nieuws: de xAI van Elon Musk is naar verluidt op zoek tot 6 miljard dollar in nieuwe financiering, onder meer van investeerders in Hong Kong – wat politieke zorgen in de VS zou kunnen veroorzaken

HIER IS WAT ER GEBEURT

Het Witte Huis is van plan de export van vloeibaar aardgas te beperken. De regering-Biden zei vrijdag dat dit wel het geval zou zijn de goedkeuring van nieuwe vergunningen stopzetten voor dergelijke zendingen, omdat de impact op het milieu nauwkeurig wordt onderzocht. Deze stap zou klanten in Azië en Europa kunnen schaden, die steeds afhankelijker zijn geworden van Amerikaans aardgas sinds Rusland Oekraïne in 2022 binnenviel.

JPMorgan Chase herschikt zijn topbestuurders. Jennifer Piepszak en Troy Rohrbaugh wel co-CEO worden van een onlangs uitgebreide commerciële en investeringsbank, terwijl Marianne Lake het enige hoofd zal worden van de enorme commerciële bank van het bedrijf. Alle drie worden getipt als potentiële opvolgers van Jamie Dimon, de CEO van de bank, hoewel hij heeft gezegd dat hij niet snel zal vertrekken.

Beleggers zetten zich schrap voor inflatiecijfers. Minister van Financiën Janet Yellen zei donderdag dat de inflatie “goed onder controle”, een stelling die zou kunnen worden getest wanneer de prijsindexgegevens van de persoonlijke consumptie-uitgaven vrijdag worden vrijgegeven. Economen verwachten dat uit het nauwlettend in de gaten gehouden rapport zal blijken dat de prijzen voor ‘kern’-goederen en -diensten de afgelopen maand zijn gestegen met 3 procent op jaarlijkse basis. Het is het laatste grote inflatierapport vóór de rentebesluitvergadering van de Fed volgende week.

Cruise wijt de vijandigheid tegenover de toezichthouders voor de problemen. De divisie autonome voertuigen van General Motors zei dat leidinggevenden weliswaar de toezichthouders niet hebben misleid over een incident waarbij een van de auto's een voetganger meesleepte, maar dat ze er wel in slaagden de belangrijkste details uit te leggen. Dat leidde tot een landelijke opschorting van operaties en onderzoeken door onder meer het ministerie van Justitie; verschillende leidinggevenden, waaronder de medeoprichter van de GM-dochter Kyle Vogt, hebben al ontslag genomen.

Het openen van de App Store

Apple heeft ingestemd met een ingrijpende herziening van zijn digitale dienstenactiviteiten, waardoor klanten in de EU apps van concurrerende appstores kunnen downloaden, betalingssystemen van derden kunnen gebruiken en gemakkelijker een standaardbrowser kunnen kiezen die niet Safari is.

Het is het nieuwste voorbeeld van toezichthouders die grote veranderingen opleggen aan Big Tech.

Apple voert de wijzigingen door om te voldoen aan de EU Digital Markets Act, die in maart van kracht wordt. De wet is een grote test voor het blok, dat al jaren probeert de marktdominantie van Amerikaanse bedrijven als Apple, Amazon en Google te beperken, uit angst dat hun omvang de concurrentie en de consumenten schaadt.

De EU is een grote markt voor de iPhone-maker. Het blok is goed voor ongeveer 6 procent van de App Store-activiteiten van het bedrijf, die de wereldwijde omzet op 24 miljard dollar schat. Apple-aandelen daalden donderdag met 1 procent na het nieuws.

Apple waarschuwde dat de vereisten slecht zouden zijn voor klanten. Phil Schiller, hoofd van de App Store-activiteiten, mopperde tegen The Financial Times dat de vernieuwing het bedrijf werd opgedrongen en dat de maatregelen de gebruikerservaring in Europa inferieur zullen maken aan die van ‘de rest van de wereld’.

Het openen van de App Store komt tegemoet aan enkele kritiek van ontwikkelaars en toezichthouders. Apple heeft zich lang verzet tegen het aanbrengen van wijzigingen in de App Store, die onder vuur is komen te liggen door ontwikkelaars als Spotify en Epic Games omdat ze hoge kosten in rekening brachten en eisen dat ze hun technologie aanpassen aan het Apple-platform.

App-ontwikkelaars beschouwen de DMA als een geweldige leveller. In een blogpost deze week zei Spotify dat zijn EU-klanten die Apple-producten gebruiken binnenkort hun abonnementen kunnen wijzigen en voor die wijzigingen in de app kunnen betalen.

“Het zou voor elke Spotify-klant zo eenvoudig moeten zijn overal”, schrijft het bedrijf.

Een “rilling over de ruggengraat” van het westerse bedrijfsleven in China

Ian Stones bracht tientallen jaren door in China als een vooraanstaand lid van de internationale zakengemeenschap, waar hij bedrijven als General Motors en Pfizer hielp bij het opzetten van hun activiteiten. Vijf jaar geleden was hij dat wel in het geheim vastgehoudenaldus The Wall Street Journal, in een zaak die aanleiding geeft tot bezorgdheid over de risico's waarmee buitenlandse managers en bedrijven in het land worden geconfronteerd.

De familieleden van Stones zeggen dat ze geen Chinese gerechtsdocumenten hebben gezien. Een woordvoerder van het Chinese ministerie van Buitenlandse Zaken zei vanochtend dat Stones in 2022 was veroordeeld tot vijf jaar gevangenisstraf wegens “het illegaal verkrijgen van inlichtingen voor buitenlandse acteurs” en dat zijn beroep afgelopen september was afgewezen. De dochter van Stones, Laura, vertelde The Journal dat hij niet had bekend en dat noch de familie, noch functionarissen van de Britse ambassade zijn proces mochten bijwonen.

Amerikaanse experts op het gebied van de Chinese wet zeggen dat de geheimhouding rond zijn detentie erop wijst dat ook andere buitenlandse leidinggevenden worden vastgehouden.

De arrestatie van zo’n prominente directeur zou westerse bedrijven een rilling kunnen bezorgen. Peter Humphrey, een Britse due diligence-expert 23 maanden vastgehouden in China, is een oude vriend van Stones. Hij zei dat de detentie van Stones een teken is van het onzekere zakenklimaat onder president Xi Jinping. “Dit zou een rilling over de ruggengraat moeten doen lopen van elke westerse zakenman die zich in China bevindt”, vertelde hij aan DealBook.

Japan gaat omhoog, China gaat omlaag

De Japanse benchmarkaandelenindex, de Nikkei 225, handelt op de hoogste niveaus die voor het laatst in 1989 werden gezien en bevindt zich op zeer korte afstand van een record. De markt stijgt omdat de zwakke yen ervoor zorgt dat aandelen er goedkoop uitzien en bedrijfshervormingen aandeelhouders meer rechten hebben gegeven.

Geopolitiek heeft ook geholpen, terwijl westerse investeerders op zoek gaan naar alternatieve bronnen van groei terwijl ze China verzuren, waar het tegenovergestelde verhaal is. De groei is vertraagd. De vastgoedmarkt verkeert in grote problemen en de aandelenkoersen zijn de afgelopen jaren weggekwijnd.

Het zien van de verschillen, investeerders, inclusief Warren Buffettstorten geld in Japan omdat ze een groeiverhaal in de maak zien.

Wrijving fixeermiddelen

Grote bedrijven worden geblokkeerd door bureaucratie, inefficiëntie en processen die vaak eerder belemmeren dan helpen. In 'The Friction Project' onderzoeken Bob Sutton en Huggy Rao, professoren aan de business school van Stanford University, waarom het moeilijk kan zijn om dingen gedaan te krijgen in organisaties, en hoe je dat kunt oplossen.

DealBook sprak met Sutton over de wrijving die het zakendoen kan vertragen. Dit interview is bewerkt en ingekort.

Hoe ontstaat wrijving?

Of het nu gaat om het repareren van een universiteit, het repareren van een Lego-model of het plannen van een reis, onze standaardaanpak bij het oplossen van problemen is het toevoegen van steeds meer en meer complexiteit. Bovendien creëren organisaties een heleboel prikkels om nog meer complexiteit toe te voegen. Mensen bouwen koninkrijkjes, vooral mensen die zich bezighouden met zaken als boekhouding, HR of juridische zaken. Sommige van deze functies zijn waardevol, maar vormen vaak obstakels om dingen gedaan te krijgen.

Hoe ziet ‘goede’ wrijving eruit?

Laszlo Bock, hoofd van Google, vertelde ons dat het bedrijf in het verleden sollicitanten maar liefst 25 keer heeft geïnterviewd voordat ze hen een baan aanboden. Daarom stelde hij een simpele regel: als je iemand vaker dan vier keer gaat interviewen, moet je zijn schriftelijke toestemming krijgen. Dat was een voorbeeld van het gebruik van goede wrijving om slechte wrijving te stoppen.

Hoe kunnen leiders slechte wrijvingen opmerken en oplossen?

We noemen het het aftrekkingsspel. Ga naar de persoon naast je om te brainstormen over wat je gek maakt, en identificeer vervolgens dingen waar je echt vanaf kunt komen en die de zaken gemakkelijker zouden maken.

Ik speelde dit spel met een farmaceutisch bedrijf. De General Counsel zei: “We hebben meer dan 85 verschillende ouderschapsverlofbeleidslijnen, en ik denk dat we het beter kunnen doen dan dat.” Twee weken later waren dat er nog maar zestig.

DE SNELHEID LEZEN

Aanbiedingen

• Blackstone's winst over het vierde kwartaal steeg met 4 procent toen de private equity-activiteiten zich herstelden; Ondertussen is het bedrijf van plan dat te doen 10 miljard dollar ophalen voor een nieuw opportunistisch kredietfonds. (Bloomberg)

• A groep obligatiehouders in Farfetch probeert een overname van de omstreden online luxemarktplaats door Coupang aan te vechten. (Nieuwsbericht)

Beleid

• Conservatieve activisten en lobbyisten uit de technologie-industrie zijn van plan zich te verzetten tegen het uitvoerend bevel van president Biden dat AI-bedrijven daartoe verplicht meer details bekendmaken over hun grootste projecten. (Politiek)

• Liz Cheney, de voormalige Republikeinse vertegenwoordiger, drong er bij Nikki Haley op aan om tot en met Super Tuesday in maart in de voorverkiezingen van de Republikeinse Partij te blijven. (NYT)

Het beste van de rest

• In ontslagnieuws: Microsoft schrapt 1.900 banen in zijn videogamedivisie na het afronden van de overname van Activision Blizzard; Verkoopsteam ontslaat 700 werknemers; en Business Insider schrapt 8 procent van zijn personeelsposities. (NYT, WSJ)

• “Elon Musk verspreidt verkeerde verkiezingsinformatie, maar de factcheckers van X zijn al lang voorbij” (NYT)

Wij willen graag uw feedback! Stuur uw ideeën en suggesties per e-mail naar dealbook@nytimes.com.

Federal regulators have ruled that Intuit, the maker of tax-filing software TurboTax, must stop marketing its services as free unless they are free for everyone or exceptions are clearly disclosed.

TurboTax has claimed for years that customers could file their taxes online for free. The Federal Trade Commission said in an opinion and final order Monday that its advertising was misleading because two-thirds of taxpayers were ineligible to apply for the free product.

The commission also found that the company's attempts to publicize that not everyone was eligible for free services were “ineffective and often unobtrusive.”

Examples of taxpayers who are not eligible include those claiming mortgage and property deductions, charitable donations of more than $300, unemployment income, investment income, rental property income and certain education expenses. Gig workers who reported income as independent contractors, including many delivery drivers, were also ineligible.

Samuel Levine, director of the FTC's Bureau of Consumer Protection, described Intuit's violations as “egregious.”

Federal regulators cited misleading language in the company's “AbsoluteZero” advertising campaign. That campaign included the phrase “Free Guaranteed” and told consumers, “At least your taxes are free.”

“The order also sends a message to the entire industry – 'free' means free – not 'free for a few' or 'free for some,'” Mr. Levine said. said in a statement. “Companies can face an FTC enforcement action if they leverage the power of 'free' in the unfair way Intuit did.”

The FTC order not only prohibits TurboTax from marketing its products as free unless the products are free to everyone, but also requires TurboTax to “clearly and conspicuously” disclose the percentage of taxpayers or consumers who qualify for the free product or free service. Alternatively, TurboTax could announce that a majority of consumers are ineligible.

Intuit said in a statement that the decision was “deeply flawed” and that the company would appeal it.

“This decision is the result of a biased and broken system where the Commission acts as prosecutor, judge, jury and then as appellate judge in the same case,” the statement said.

In 2022, following a multi-state investigation led by New York Attorney General Letitia James, Intuit agreed to refund $141 million to more than four million Americans who were wrongly charged for tax services that were improperly were advertised as free. The company admitted no wrongdoing in the settlement.

Settlement checks were sent out last year The Associated Press. Those affected were predominantly low-income taxpayers who qualified for a free federal tax service program managed by the Tax Authorities.