Good morning.
Here’s a record Nvidia didn’t want to set: the biggest one-day loss in market cap, down $280 billion yesterday as its shares sank 9.5% to close at $108. While the chipmaker is coming off a year of giddy highs, one factor that set yesterday apart was the arrival of a subpoena from the U.S. Justice Department to investigate whether Nvidia violated antitrust laws. (Another was investor fears of an economic slowdown.) DOJ officials want to know if the AI chipmaker makes it hard for buyers to switch or shop around.
Antitrust officials are investigating other tech companies, too, so Nvidia is not alone. In fact, it’s hard to think of a moment in history when so many faced antitrust scrutiny—for monopolistic, hubristic, collusive or otherwise anti-competitive behavior. Federal Trade Commission (FTC) Chair Lina Khan and her peers at the Department of Justice have targeted alleged anti-competitive behavior in industries ranging from aviation, pharma and grocery to financial services, fast food and energy. And, of course, Big Tech.
That’s not intended to be a partisan stance. Antitrust rules are designed to make companies compete for our hearts and wallets. While America’s three core federal antitrust laws were forged more than a century ago, how they get enforced varies widely for a range of reasons. President Joe Biden’s Executive Order on Competition, signed in July 2021, argues that ‘monopoly products’ and ‘economic consolidation’ are significant impediments to a “fair, open and competitive marketplace.” And Khan’s antitrust push is widespread, garnering criticism from nonpartisan observers.
As an example, let’s leave tech and enter the world of fashion, where the FTC has sued to stop Tapestry’s merger with Capri, arguing that bringing brands like Coach and Versace into the same house will give Tapestry “a dominant share of the ‘accessible luxury’ handbag market.” When I met with Tapestry CEO Joanne Crevoiserat earlier this summer, she noted that hers is not an industry that lends itself to monopolies. A judge might agree and toss out the case. But antitrust suits that don’t hold up in court can still do a lot of damage as momentum is lost and people have to build again.
More news below.
Diane Brady
diane.brady@fortune.com
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TOP NEWS
JPMorgan stock is downgraded for doing so well
In a note published Tuesday, Deutsche Bank analyst Matt O'Connor downgraded JPMorgan's stock from a buy to a hold rating because the Wall Street giant has little room to improve after a stellar year. The stock is up 30% so far in 2024, though O'Connor thinks upcoming interest rate cuts will slow the bank's growth. Fortune
Volkswagen hits the brakes on home country
Volkswagen CEO Oliver Blume warned that the company could close down one of its German factories for the first time in its 87-year history as the automaker seeks to cut €10 billion in costs amid low consumer demand. Blume also announced that the company is trying to reduce headcount by ending a union agreement that makes sure Volkswagen workers have jobs until 2029. Fortune
Meta and Apple team up in court
Apple is coming to the defense of Meta by requesting that a federal judge keep two documents sealed that detail a "confidential" contract between the two tech giants. The judge is currently presiding over a case accusing Meta of operating a monopoly over social media advertising, and the documents could detail a data-sharing agreement between the two. Fortune
AROUND THE WATERCOOLER
Audi executive dies in fall from 10,000-foot mountain by Orianna Rosa Royle
How tech’s booms and busts have evolved over time—and how they’ve stayed the same, according to Venrock’s Ethan Batraski by Allie Garfinkle
How far is it possible to ‘green’ an airplane? by Alex Ledsom
Canva says its new AI features justify raising subscription prices by 300% by Sydney Lake
Honeywell’s CEO reveals how AI will give his company a competitive edge—and what won’t by Jeremy Kahn
Faced with bullish bosses, workers in Japan hire firms to help them quit by Chloe Berger
Warren Buffett’s Berkshire Hathaway dumped $6.2 billion in Bank of America stock in under 2 months by Will Daniel
This edition of CEO Daily was curated by Joey Abrams.