Your commercial news round-up: Google, Netflix, Royal Mail, Lidl and Spotify

From listening and watching to shopping and receiving deliveries, this week’s round-up consists of a few names you may recognise and not just because they’re often in the news! Google and Lidl are both facing lawsuits, but not for the same reason. Netflix users worldwide face a clampdown on password sharing, while the Royal Mail reveals the extent of the financial damage caused by recent strikes and Spotify becomes the latest household name to announce widescale job cuts.

Reading time: four minutes

• The US Department of Justice (DoJ) is set to sue Google for supposedly using “anti-competitive, exclusionary, and unlawful means to eliminate or severely diminish any threat to its dominance over digital advertising technologies”. The anticipated lawsuit comes as part of Joe Biden’s administration’s latest crackdown on anti-competitive conduct in the US economy. The DoJ claims that Google has effectively harmed the competition of the ad tech sector by “engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising”. The lawsuit follows Biden’s large-scale sweeping order, which limits the power of big businesses and appoints progressive officials to senior antitrust roles.
   
• Streaming giant Netflix will begin its clampdown on password sharing within the next three months, following the release of its company earnings report last week. Sharing passwords with people beyond their subscriber base will become more complex and is likely to involve an additional fee to those logged into the service in “multiple locations”. The shareholder report states: “While our terms of use limit the use of Netflix to a household, we recognise this is a change for members who share their account more broadly.” The new system would continue to allow users to watch in multiple locations on mobile devices, such as smartphones, tablets and laptops, but it may end users’ ability to share a single subscription across multiple homes.
   
• The continuing dispute with the Communication Workers Union (CWU) has supposedly cost the Royal Mail £200 million so far. The strikes have seen 18 days of walkouts since August 2022. International Distributions Services, Royal Mail’s overhead, has said that the letter and parcel business lost £295 million in the nine months to the end of December. Royal Mail has said that in spite of the strikes, “robust contingency planning” ensured that 110 million parcels and 600 million letters were delivered in December. Despite this damage control, Royal Mail still requires around 5,000 to 6,000 voluntary redundancies to be made, partially due to employee turnover. In other strike news, Amazon workers at a warehouse in Coventry went on strike yesterday over pay – this is the first time Amazon’s UK employees have taken industrial action.
   
• Lidl is facing a £2.7 million lawsuit from a family-owned fruit and vegetable supplier for allegedly cancelling and reducing orders with insufficient notice. Having previously supplied Lidl with up to 57 different kinds of fruit and vegetables, Proctor & Associates ended its business with Lidl in June 2022 and has accused the discount retailer of destroying its business after it was forced to close. Its Founder Deane Proctor said: “We built our business for and around Lidl’s needs. Despite that, I feel like Lidl stabbed us in the back. They took our suppliers and delisted us without notice. I think over the last eight years or so Lidl have destroyed our business.” A Lidl spokesperson commented: “We are in the process of reviewing the claims and will be responding in due course.”
   
• Spotify has become the latest business in the technology space to announce significant job cuts. The Swedish-based US music streaming service has said a broad restructuring of its workforce will see Chief Content Officer Dawn Ostroff leave the company and 6% of its current employees face job cuts. Based on the company’s last official headcount, a 6% loss would equate to around 600 jobs with the severance cost of this set to be between £30.7 million and £39.6 million. Spotify is just the latest market leader to announce widescale job cuts, with Microsoft laying off 10,000 people last week and Facebook overhead Meta’s announcement of 11,000 job cuts in November 2022.

Check the News every Thursday for this weekly commercial news round-up. 

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