Zuck and Elon Want to Brawl? & Amazon Sued for Duping Prime Customers

0:00Hey Fidelity, how can I remember to invest every month? With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs. Oh, that sounds easier than I thought. You got this. Yeah, I do. Now, where did I put my keys? You will find them where you left them. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC, member NYSE SIPC. Good morning, Brew Daily Show. I'm Neil Freiman. And I am Toby Howell. On the show today, why the White House is rolling out the red carpet for Indian Prime Minister Narendra Modi. And we will reveal the American restaurant chain Brazilians are obsessed with.

0:45Then we'll talk about the FTC giving Amazon the business for deliberately making it hard to cancel Amazon Prime before diving into the world of lab growing meat. Is it real? Is it fake? Nah, it's just some cell cultivated steak. Neil, it's Thursday, June 22nd. Let's ride.

1:07All right, Neil, to start off the show this morning, we have to talk about the fact that we might be getting an Elon Musk versus Mark Zuckerberg cage fight in the coming weeks. Yes, I said cage fight. So here's the backstory. Elon Musk recently tweeted that he would be up for a cage fight with Zuckerberg. Ha ha, right? Elon says the damnedest things on Twitter. but then Zuck shot back by posting a screenshot of the Elon Musk tweet on his Instagram story with the caption, send me the location. So I thought this was a joke when I saw it, but apparently it's 100 % true. And get this, an official spokesperson for Meta said, the story speaks for itself when reached out to you for comment.

1:48So Neil, if this happens, we obviously have to live stream it and commentate it, right? We have to go. This is not going to happen though. Zuckerberg is a beast, right? He's this jiu-jitsu champion now. And Elon Musk, I can't even imagine he can lift a five-pound weight over his head. He's just working all the time. I know. Zuckerberg is definitely like minus 10 ,000 if this fight happens. But holy moly, please, content gods, bless us with a cage fight. That would be fun. All right, Neil, let's jump into our top story of the day. Amazon is getting sued by the FTC for allegedly, one, duping consumers into signing up for Amazon Prime without them knowing.

2:26and then two, deliberately making it hard to cancel. We've all been there, Neil. You sign up for something, you swear you cancel it, and then that charge pops up on your bill again next month. And that experience is way too common for Amazon Prime subscribers. So the FTC suit found that consumers have to click through five pages on desktop and six on the mobile app to cancel Amazon Prime. And that's kind of a no-go under a new proposed FTC regulation that would require companies to make it as easy to cancel a service as it is to sign up. They said that Amazon has not been doing that and instead used manipulative, coercive, or deceptive user interface designs known as dark patterns, and I quote, to trick consumers into enrolling and automatically renewing Prime subscriptions.

3:14So this is especially hilarious, Neil, because this lawsuit dropped yesterday, which is the same day that Amazon announced the dates for Prime Day, which is its big sales event of the year. So what do you make of the FTC kind of cracking down on the beast that is Amazon Prime? I saw so much pushback to this from the tech community. They were like, Amazon Prime is the best product in the history of the world. For, what is it,$139 a year, you get streaming on Prime Video, access to music, discounts on Whole Foods. JP Morgan said that if all of the Prime stuff was sold separately, it would cost$1 ,100 a year.

3:59So you have a lot of the tech community pushing back on this, being like, sure, they're promoting their product, but also Costco promotes its own membership and Kroger promotes its own loyalty program. But it does seem like the FTC is kind of cracking down on canceling subscriptions, and that is obviously a pain point for consumers. Absolutely. And honestly, some of the details of this suit are hilarious. The FTC complaint literally said that Amazon uses Iliad Flow to describe the process it began to get consumers to cancel their subscription, which is a reference to obviously like Homer's The Iliad, which is this epic poem about getting home from the Trojan War.

4:37So Amazon knows what it's doing to a certain extent. And this is why maybe the tech community is a little rattled is because a lot of other companies also make it very difficult for you to cancel their subscription. And so their FTC is kind of going after Amazon, which is the goat of all subscriptions, to kind of make an example that, listen, you can't get away with this anymore. Right. It all goes back to Lena Khan. And she is the FTC commissioner and she is just at war with tech. She was basically an unknown law student and she published this manifesto, a 93 page paper called Amazon's Antitrust Paradox.

5:17And she's been going after Amazon for more than a decade. So this is just an escalation of that battle. Her and the tech community are definitely not friends right now. So we'll see what happens. But this is not an antitrust lawsuit. And separately, it seems like the FTC is separately preparing a monopoly lawsuit to go after Amazon that could drop within the next few months. That would be much bigger than this one. So we'll have to see what happens. It is just so big. 167 million Americans have Prime memberships as of March. Kind of crazy. Amazon Prime biggest subscription in the world, generating$25 billion annually.

5:55So, yeah, if you're going to go after one of the fish, make it the biggest fish, I guess. All right, let's move on. Indian Prime Minister Narendra Modi is visiting the White House today in one of the most important meetings of world leaders of the past few years. India is now the world's most populous country. It passed China. It has a booming economy and Modi and Biden want to tighten their friendship to BFF status to counter China, which both countries consider a rival. The basic agenda is that Modi and Biden will have a fancy state dinner tonight. It's vegetarian because Modi is vegetarian.

6:28Modi will give a joint address to Congress, and they'll probably announce a bunch of business deals and investment that highlight their deepening business ties. There is a lot to get to here, but I first want to touch on the tech links between the U.S. and India that have grown a lot closer in the past few years. Remember back in April, Tim Cook, Apple CEO, was given a royal welcome in Mumbai when he opened the first Apple retail store there. Apple sees India as this huge growth market and also wants to increase its manufacturing presence there. kind of decrease its, you know, reliance on China's factories and make more of its flagship iPhone models in India.

7:04And then there's Elon Musk, who also sees a lot of opportunity in India for Tesla. Modi was in New York on Tuesday, and so was Musk. They met and Musk was like, I wanted to start doing business in India as soon as humanly possible, because he said it has more promise than any other big country. Yeah, I mean, this is definitely one of those win-wins. It makes a ton of sense for both countries to kind of deepen ties because you have India who has actually long relied on Russia for a lot of its military aid and then also just oil and gas. And so India wants to kind of wean itself off of Russia. And like you said, China is kind of a common adversary for both the U.S.

7:45and India. So definitely a win-win when it comes to just international diplomacy and like military might. But then I'm also just blown away about how deep some of the ties to corporate America. IBM, about half of IBM's workforce is located in India per Axios. That was a wild stat to me that half of IBM, this massive, massive American company is located in India. Right. They have a large English speaking workforce. And I mean, how many CEOs are of Indian descent? I think the stat is 60 of the Fortune 500 companies have an Indian background. um they also are this is crazy india loves chat gbt and ai did you see that they're like they have the highest public trust in ai in the world 75 of the population expresses strong trust in ai so they are just like full forward on tech and not really worried about the repercussion right and a lot of the large language models that are getting trained relies on indian workers to kind of go through that initial vetting process in training the model so yeah there's definitely deep ties there.

8:47And then also, I just want to call out this thing called yoga diplomacy that has been thrown out. Modi did yoga on the front lawn of the UN headquarters in New York City yesterday. And it's kind of funny too, because when Modi became India's leader back in 2014, he convinced the UN to adopt a resolution that declared June 21st as the International Day of Yoga. And then here you are almost a decade later, he's doing yoga on the front lawn of the UN, and just kind of showing that, yeah, how far India's come in the international stage. But we have to get to a lot of the criticism that Modi has. He has a ton of baggage.

9:24Since he came to power, the rankings of India on sort of the democracy list and the freedom of the press list have plunged. India is ranked 161st out of 180 countries in terms of press freedoms. And Freedom House has downgraded India to partly free. It fell 27 spots on the democracy list. Basically, Modi cracks down on the press like few other leaders do. The biggest instance of this that I can remember is BBC published a documentary that was critical of Modi's leadership during riots in 2002. India ordered that documentary blocked in the country and on social media. Twitter complied and took it down.

10:04and Musk was criticized for giving into government censorship when he famously called himself a free speech absolutist. Musk later said that he didn't know what happened in this particular situation, but he did say the rules in India for what can appear on social media are quite strict, which kind of proves the point that Modi is very much cracking down on the press. Jack Dorsey, the former CEO of Twitter, accused India of trying to shut down Twitter completely. So you have a lot of lawmakers like AOC that are actually boycotting Modi's joint address to Congress, being like, this guy is human rights abuses.

10:37There's a lot of anti-Muslim persecution in the country is kind of not worth the squeeze. But Biden is like, we got to like, we're just going to eat the pill, you know? I know. Exactly. Yeah. Definitely a coming out party for Modi in in the U.S., but obviously bumps along the way. All right, Neil, let's move on. You know, that saying fake it till you make it. It's kind of how we landed in these podcasting seats to begin with. But it's also how a certain protein-based dish might be landing on your dinner plate sometime soon. That's because a lab-grown meat has been cleared for sale in the U.S. So Upside Foods and Good Meat, two companies that make what they called cultivated chicken, said yesterday that they landed approval from the U.S.

11:20Department of Agriculture to start producing their meats. The United States is now the second country in the world after Singapore to authorize production and sale of lab-grown meat. So a lot of people in the industry are celebrating this as a major win because supporters of lab-grown meat say there's a much smaller environmental impact, as well as the fact as you don't have to kill animals in order to eat it. But then skeptics push past saying there are some safety risks still to eating lab-grown meat and that the environmental benefits are a little unproven still. So, Neil, what do you think about lab-growing meat potentially sneaking onto your grocery list sometime in the coming years?

11:58I'm bullish. I'm cautiously bullish. But I just want to kind of differentiate between what this is and Beyond Meat and the Impossible Foods. Those have no animal meat in them at all. Those are like pea protein. They're meat substitutes. This is actual animal cells that are grown in a culture in a lab. Yeah, let's actually talk about how— I was hoping you'd go full science teacher. I will. I do. I have, let's talk about how the sausage is made literally. So lab grown meat begins with cells taken from an animal. And those cells are fed kind of this mixture of water, salt, nutrients, everything that a growing meat needs.

12:36Then the cells multiply in these large tanks called cultivators or bioreactors. These things look a lot like the tanks that beer is brewed in, just big steel canisters. Then the product is harvested, and at that point, it's essentially minced meat, which you can then form into whatever your heart desires, sausage, fillets, whatever you want. And the meat is 100 % meat, too, as you said. It doesn't contain any bones, feathers, or beaks, or hooves, or any of the other stuff that other meat comes attached to it. So that's basically the process from cell to full-grown meat might look like. I am way more bullish on this than the meat substitutes, And I think the market is kind of showing that these companies have raised three billion dollars worldwide, sort of cell cultured meat companies, while Beyond Meat stock, I think, has plummeted 95 percent from its peak.

13:26And it's down to like twelve dollars a share. And I don't think people responded well to companies trying to make meat substitutes or fake meat from vegetables. Yeah, it's weird. Fake meat. It's just weird. It smells weird. The consistency is weird. They haven't really perfected it. But I can see someone being like, look, I just made meat for you. It's like the purest form of meat. There's no industrial agriculture involved. We didn't have to kill any animals. But, you know, they do polling on this and they say half of U.S. adults say they're unlikely to try meat grown from cells. The number one reason was because it just sounds weird.

14:04Yeah, it does. But to me, that can be overcome. Right. You look at Crocs. I would look at them and be like, I'm not going to wear them because they look weird. But then all of a sudden, Justin Bieber puts them on or some influencer wears them. And then all of a sudden, it doesn't look weird anymore, like AirPods. I did not expect to be talking about Crocs in the conversation for fake meat, but I like the analogy, Neil. All right, Neil, that was a great first half of the show. Before we jump in the next half, we're going to take a quick break. This episode is brought to you by State Farm. listening to this podcast smart move being financially savvy smart move another smart move having state farm help you create a competitive price when you choose to bundle home and auto bundling just another way to save with a personal price plan like a good neighbor state farm is there prices are based on rating plans that vary by state coverage options are selected by the customer availability amount of discounts and savings and eligibility vary by state This next one's for all you CarMax shoppers Who just want to buy a car your way Want to check some cars out in person?

15:12Uh-huh Want to look some more from your house? Okay Want to pretend you know about engines? Nah, I'll just chat with CarMax online instead Want to get pre-qualified from your couch? Woo! Want to get that car? Hey, that's a beat You want to do it your way Want to drive? CarMax All right, we are back with our Thursday segment, Neil's Numbers, very alliterative, where I kind of just share three interesting stats that I read from the week's news. The first one, so I was reading this Washington Post article that explains how Brazil, a country renowned for its beef, is in love with Outback Steakhouse.

15:56I kid you not, they're obsessed with the Bloomin' Onion even more than we are here in the U.S. The world's largest Outback is in Sao Paulo. It's twice the size of the largest Outback in the U.S. And there's a line dozens deep on a Monday for lunch. For five years, Outback has been voted Rio de Janeiro's most popular restaurant. When COVID decimated the rest of Brazil's restaurant industry, Outback kept expanding to 150 locations in the country. Brazil accounts for 83 % of Outback's entire international revenue. So what is going on? It could be a couple of things. Brazilians have been cooking a lot less rice and beans than they used to and are eating out more, particularly at American joints.

16:36Outback worked its way into shopping malls, which are super popular in Brazil. And it's just become more about the food and more of an experience. It's where you go for a birthday, an engagement, a job promotion. When there's something to celebrate in Brazil, you go to Outback. This blew my mind because, yeah, you go to Brazil for like they have an incredible like steak and culture. And then here's Outback Dominic. I'm an Outback truther, though. I love it. I think they have great burgers. Their cheesy fries are great. I'm not actually a Bloomin' Onion guy, believe it or not. But I'm all aboard the Outback.

17:09And we love Brazilian Steakhouse. Ogo to Chao is here. And I think they're going to IPO later this year. So why don't we just swap? Funny detail about Outback, right? It's like faux Australian. And apparently the founders of it purposely did not go to Australia when conceiving of the concept because they want it to be as inauthentic as possible caricature of australia yeah all right going to our second number uh cars.com released its annual report of the most made in america cars and this year the top four spots were swept by one automaker tesla the model y model 3 model x and model s ranked in spots one through four that is largely because tesla has a huge manufacturing footprint in the U.S.

17:52with factories in California, Nevada, and Texas. Here are a few other tidbits from this report. Honda has five cars in the top 10, three from its Honda brand and two from its Acura. It's obviously a Japanese automaker. GM has the most cars in the top 100 overall, and there's no 2023 model year vehicle that's made entirely in the U.S., which is not surprising given the globalization of supply chains over the past few decades. Why does this matter? Well, car production is a very politically charged issue because of how many jobs it generates. And Biden is trying to bring more auto supply chains to the U.S.

18:28by dangling incentives. His Inflation Reduction Act provides tax credits for electric vehicles, but only if they're assembled in the U.S. and hit certain thresholds for sourcing components domestically. And many EVs still don't qualify. I mean, Tesla has an entire alphabet atop that list. That was kind of crazy hearing you run down through it. I wonder if the Cybertruck is going to appear on this next year. It's possible. I mean, from the beginning, Musk has made it intentional to source his products here. But he's also building factories all around the world. Let's move on to our third number.

19:01You know that feeling of finding$20 in a pair of pants you're about to throw into the laundry? Best feeling. Well, the Pentagon just did that on a much bigger scale. This week, the department revealed that it overvalued the value of its weapons that it sent to Ukraine over the past two years by$6.2 billion, meaning now it has a lot more money it didn't know it had to spend on future aid packages to the country. So we knew previously that the Pentagon made an accounting error that overvalued the weapons by$3 billion, but apparently they checked their books again and were like, oh yeah, it's actually double that.

19:33So the error stemmed from officials incorrectly pricing the weapons by using their replacement value instead of their book value, and apparently the replacement costs are a lot pricier. This is bringing back bad memories of accounting 101 from freshman year in college. But yeah, this story was kind of blowing up on social media because everyone's like, an accounting error,$6.2 billion accounting error. When you're talking about defense department budgets, everything is, you know, multiplied by a zillion, like one fighter jet costs, you know, tens of billions of dollars to make. So, you know, I guess on the grand scheme of things,$6.2 billion is probably not that a lot for something like the Pentagon.

20:09All right, Neil, thank you for those numbers. Going to brag about all those numbers to my friends later today and pretend that I came up with them. All right, Neil, there's a major sporting event kicking off this summer that I will 100 % be tuning into. It's a Women's World Cup, which is taking place in New Zealand and Australia this coming July and August. So why are we talking about it if it's still a month away? Well, the U.S. just dropped its roster yesterday, and I just want to quickly run through it. It has the fewest returning World Cup players in programs history. It also features an 18-year-old, Alyssa Thompson, who is the youngest number one pick in NWSL history, as well as Megan Rapinoe, who is on the other side of the spectrum, now 37 years old.

20:53Speaking of the NWSL, every single player on the roster comes from the United States Domestic League, save for one, which is Lindsey Horan, who plays in the French League. So definitely check out the entire roster, But one aspect of this World Cup that is going to be tough to ignore is the time difference between New Zealand and Australia and those trying to watch it back in the States. Australia is 14 hours ahead of the U.S. That means it would be 8 p.m. in Australia if we were recording this. Due to that time difference, there's some unique legislation being passed in D.C. a local council passed an act that allows bars to stay open 24 seven throughout the duration of the world cup from july 20th to august 20th i love that they did something similar for the men's world cup but it's just the best idea i love this yeah i'm not sure i would go if i was up at 3 a.m uh to watch a game i would go to a bar and probably just sit at home right but it's nice i hope you i hope you see a lot of other uh cities doing this and their hope they're they think this is going to be an absolute viewership bonanza so FIFA officials expect uh that they're going to get 2 billion viewers this year which would be double 2019 yeah which was also double of 2015 so last World Cup in 2019 combined viewership of 1.12 billion viewers which was 106 percent increase over the 2015 World Cup and yeah for the finals 82 million people tuned in to watch the U.S.

22:16play Netherlands last or last World Cup, which was up 56%. So yeah, it's, this is a steam role. Like it's gaining a ton of momentum and I think people are going to love it. It's going to be so fun. And final note, it's going to be the first women's world cup where they're going to be equally paid as men in terms of the distribution of world cup bonuses after they reach this landmark collective bargaining agreement after this long fight for equal pay. the U.S. team the U.S. team yes sorry the U.S. team and they've sort of set the standard for a bunch of other women's teams that are also fighting for equal pay with their own respective soccer federations all right finally our final story Florida is finally introducing a quarantine but it's not for COVID no it's because there is a giant African land snail on the loose if that sounds pretty terrifying it is the snail can grow to eight inches long weigh over two pounds and has a ravenous appetite.

23:12It eats through plaster, paint, and at least 500 different plant species considered economically important. Their shells are so sharp, they can puncture tires of vehicles that run over them. Here's the key part, though. The giant African land snail is among the most invasive species in the world, laying a thousand of eggs at a time. So instead of saying people breed like rabbits, we should definitely start saying they're breeding like giant African land snails. Anyway, one was spotted in the area of Broward County, Florida. Shout out Broward County. So officials have placed a quarantine around 3.5 square miles encompassing Fort Lauderdale.

23:48Quarantine in this case doesn't really mean stay in your house. It just means you can't move the snail if you find it or anything that's been affected by it, like soil or plants until they kill this thing. These snails are an absolute menace. Like it's actually crazy how destructive they are and they just breed like crazy. But I also want to call out that we keep celebrating way too early when it comes to these snails. So the first giant African snail was actually found in Miami in 1969. And then by 1973, the city said we've destroyed 18 ,000 snails and their eggs. So in a couple of years, it went from one to 18 ,000.

24:2118 ,000. And that was by 1973. And then the snail was declared eradicated from Florida twice, once in 1975. And then for a second time in 2021 and then here we are in the year 2023 saying just kidding we found another one so you can't kill these snails they're basically unkillable and we we need to stop celebrating early i need a cage match between the snail and zuck elon put them all in a cage i would watch that all right that is our show uh you can always reach us at morning brew daily at morningbrew.com with any questions comments complaints praise whatever you want uh huge thanks to the control Full Room Hive who puts the show together.

25:00Emily Milliron is our editor and producer. Samantha Velez and Raymond Liu are the associate producers. Yuchenna Waogu is our technical director. Billy Menino is on audio, makes us sound super great. We are challenging hair and makeup to a cage match. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

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