Branson and Bezos are also launching a space race for insurers
Richard Branson is slated to fly into suborbital space this Sunday, nine days before a similar trip by billionaire Jeff Bezos. These first flights for the space moguls will also take off without liability insurance.
Brokers say neither Virgin Galactic nor Branson bought coverage should the British business mogul be violated or worse. (The craft is likely covered.) The same goes for Bezos and his company Blue Origin. Virgin, Branson and Blue Origin declined or did not respond to requests for comment.
Liability insurance is required on international flights. But Virgin’s ship, the VSS Unity, takes off and lands in the same place. Hence, despite being catapulted 2,400 miles per hour to the edge of space, Branson’s flight is technically considered a domestic voyage. Virgin has said that passengers will eventually have to sign a contract agreeing to be fully responsible for their own safety, but American law makes it nearly impossible to transfer all liability in the event of personal injury or loss of life.
It is very likely that regulators will soon require liability insurance. There aren’t many options for casual travelers right now, but some insurers are keen to develop such policies. German insurance giant Allianz began designing space tourism policies in 2012, although there is no evidence of a sale. (Allianz didn’t return a request for comment.) And while space tourism is new, insurance experts say there is now more than enough data on rocket launches to know how these policies are priced.
Space tourism could create a much greater demand for coverage. “The big question for the insurance industry is whether this is more aviation insurance or more current space policy,” said Neil Stevens, senior vice president of Space Products at insurance broker Marsh. “There has never been a situation in which the insurance markets have not picked up.”
But for the time being, space travel will start without an insurance network for passengers.
Developing these guidelines is another small step likely to be required before space travel can step into a fully functional tourism market.
Markets plummet amid investor fears about the economic recovery. The S&P 500 fell as much as 1.6 percent and 10-year government bond yields fell after weekly jobless claims were higher than expected. Proponents of the Biden government’s economic plan argued that it was a reason to maintain government support for the pandemic-era.
Pfizer is pushing for Covid-19 booster vaccinations. The company said it planned to ask the FDA for emergency approval for a third dose of its vaccine and that it was working on a vaccine that would offer more protection against the Delta variant. However, shortly after Pfizer’s announcement, the FDA and CDC said that fully vaccinated individuals generally didn’t need a booster dose – not yet.
The aftermath of China’s tech crackdown is mounting. While Beijing is tightening its oversight scrutiny of Chinese tech giants – including the appointment of a powerful new overseer of the effort – an index of US-listed Chinese stocks plummeted. And Chinese medical data company LinkDoc has reportedly halted plans to go public on the Nasdaq.
The FDA is restricting access to an expensive new Alzheimer’s drug. The agency will limit the use of Aduhelm to patients with early-stage symptoms of the disease, which will drastically limit who can receive the $ 56,000 per year treatment. The move will save Medicare billions and came after the FDA was criticized for initially approving Aduhelm for all Alzheimer’s patients.
Toyota stops donations to Republicans who opposed President Biden’s victory. The move came after criticism, most recently from an advertising campaign for the Lincoln Project. While Toyota had previously defended these donations, it said yesterday that its support for the polluters “worried some stakeholders”.
Biden faces the competition in … everything
President Biden is due to sign a sweeping ordinance today aimed at powering big business. It’s the latest move in promoting competition, which his government argues is being hampered by corporate giants and dealmaking. The order itself will not produce any immediate change – that is largely left to the regulators – but it will kickstart activity in a wide variety of industries.
The contract is aimed at big tech:
It encourages the FTC to write rules that restrict the technology giants’ use of consumer data in response to criticism that companies like Amazon are exploiting their knowledge of users to unfairly compete with competitors.
It also states that the FTC should set rules for how much “sensitive personal information” technology companies should collect in the first place.
It urges regulators to step up their scrutiny of “killer acquisitions” where companies buy smaller brands to take them off the market.
It also targets monopoly risks in other areas:
Non-compete obligations. The order will encourage agencies to prohibit or restrict agreements that prevent workers from taking jobs with competitors and restrict employers ‘ability to share information about workers’ remuneration with each other, which could amount to collusion. This could affect startups that are worried about investing in new hires only to lose them to competitors.
Medication prices. The order will also direct federal agencies to work with states in importing drugs from Canada, where they will be sold at lower prices. And it will encourage the FTC to ban pharmaceutical companies from paying manufacturers to delay the entry of cheaper generic drugs into the market. (Expect this to be brought up in a Senate judiciary hearing next week.)
Ocean freighters and railways. The order calls on the Federal Maritime Commission and Surface Transportation Board to undertake some consolidation and aggressive pricing. Kansas City Southern and Canadian National, which are seeking approval for their $ 33.6 billion merger, fell on the news.
Airline baggage fees, bank bill charges, meat labeling practices, and much more. You can read the overview from our colleagues in The Morning newsletter.
The Trustbusters have their marching orders. Biden’s executive order relies heavily on the FTC and the Justice Department to “vigorously” enforce antitrust laws. But the top spot for antitrust enforcement in the Justice Department remains vacant, ostensibly because of opposition to the proposed contenders. Still, the division is not exactly idle: it only sued the merger of insurance giants Aon and Willis Towers Watson. And Lina Khan, a big tech enemy, has just been named chairman of the FTC, where she is already expanding the Commission’s competition oversight. The FTC is also questioning the vertical merger of biotech companies Illumina and Grail, which antitrust lawyers see as another sign that dealmakers will get into trouble in the years to come.
Daily business briefing
July 14, 2021 at 1:29 p.m. ET
“The harm to consumers from this under-regulated market is real and will only increase without effective SEC regulations.”
– Senator Elizabeth Warren, who wrote a letter to SEC chairman Gary Gensler, calling for stricter supervision over the exchange of cryptocurrencies.
Showdown with Martin Shkreli
Despite being behind bars for years, Martin Shkreli still exerts influence over the pharmaceutical company he once ran, now known as Phoenixus. But a group of investors, including a former ally, are trying to gain control, DealBook’s Michael de la Merced reports in the Times.
Shkreli still makes his voice heard. He was reprimanded after it was discovered that he had used a smuggled cell phone to do business in prison. But even now, while incarcerated in a Pennsylvania prison, he still hangs up on hunted calls and federal agencies accuse him of using colleagues to convey his requests.
Shareholders will vote on Monday whether to remove the board. A group of active investors, including Kevin Mulleady, a former Shkreli ally, is urging shareholders to sever ties with Shkreli.
Your case involves both moral and pragmatic arguments. “Martin Shkreli is a shame for this industry,” said Jason Aryeh, the hedge fund manager who led the activist campaign. And the group argues that the company’s business struggles are exacerbated by Shkreli’s continued presence.
The company’s board of directors rejects the allegations. In a letter to investors, the current directors said that Shkreli’s only influence was his 44 percent stake in the company and that he had no other say in the running of the drug company. They specifically targeted Mulleady, who previously served on Phoenixus’ board of directors and as CEO until he was dismissed in December (at the urging of Shkreli). Mulleady is a co-defendant with Shkreli in multiple lawsuits, including an antitrust case by the FTC and New York State.
Shkreli’s days in Phoenixus could still be numbered. The judge, who oversaw a creditors’ suit against Shkreli last week, filed a motion to appoint a bankruptcy trustee to buy his shares with the aim of selling them to pay off debt. Even if the activist group loses the vote on Monday, Shkreli could still lose his hold on the company, Mulleady said, “Martin is kind of up and dry here.”
Read the whole story here.
READ THE SPEED
Arianna Huffington’s wellness start-up, Thrive Global, has raised more than $ 700 million in new money. (Bloomberg)
Noom, a popular weight loss app, has reportedly hired Goldman Sachs to lead its IPO (Reuters).
Stellantis, the automaker that owns brands like Chrysler, Fiat, and Jeep, plans to invest $ 35.5 billion to accelerate the development of electric vehicles. (NYT)
Two US senators called on the SEC to investigate whether Didi Chuxing misled American investors in the run-up to his initial public offering (FT) about his interactions with Chinese regulators.
How the Kaseya ransomware attack took a small Maryland town offline. (WaPo)
The best of the rest
A majority of black executives at Walmart said in an internal poll that they would not recommend working there. (Bloomberg)
Instacart has hired Fidji Simo, the head of the Facebook app of the same name, as its new CEO (CNBC).
How the Sackler family “got away with it” for $ 4.5 billion. (New York Magazine)
As you read this story, you will only be putting off what you really need to do. (The Atlantic)
Can you spell the winning word of the Scripps National Spelling Bee? While you’re at it, try the Times’ own spelling game. (NYT)
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