Jun 16, 2020

Axios Login

By Ina Fried
Ina Fried

Good morning.

  • The Axios Pro Rata podcast is now Axios Re:Cap — a 10-minute podcast hosted by Dan Primach that unpacks the day’s biggest stories with a business lens. In the first episode, Jalen Rose, ESPN commentator and former NBA player, digs into his efforts to increase African American voter turnout and weighs whether players should return to the court. Tune in!

Situational awareness: The EU has opened two antitrust probes into Apple over its treatment of third-party apps that it competes with, and limits it placed involving Apple Pay functionality.

Today's Login is 1,368 words, a 5-minute read.

1 big thing: Shopify goes after Amazon with new Walmart deal
Data: Yahoo; Chart: Axios Visuals

Canadian e-commerce giant Shopify, having sealed major deals with Facebook and now Walmart, is seizing the pandemic moment to put together a challenge to industry giant Amazon, Axios' Sara Fischer and Kia Kokalitcheva report.

Driving the news: On Monday, Walmart said it will open its online marketplace, which reaches 120 million monthly visitors, to Shopify's more than 1 million business clients. That means Walmart shoppers will be able to find goods from some Shopify merchants.

Between the lines: Shopify now has deals with the largest social network on the planet and the company that calls itself the largest retailer in the world.

  • Last month, Facebook said it would partner with Shopify, among other e-commerce platforms, to launch a new online shopping marketplace called Facebook Shops.
  • Facebook CEO Mark Zuckerberg highlighted Shopify's participation during the video announcement, a nod at the importance of the partnership.
  • At the time, he interviewed Shopify CEO Tobias Lütke, who said that by pairing Shopify's e-commerce capabilities and Facebook's reach and scale, "we are reducing the barriers to entrepreneurship and advancing the future of commerce."

The state of play: With its latest deals, Shopify is moving more directly onto the turf of Amazon's Marketplace, which lets third-party retailers sell through Amazon's online store.

  • Shopify also relaunched its consumer-facing shopping app earlier this year, putting it even more squarely in competition with the Seattle e-commerce giant.
  • Unlike Amazon, Shopify only charges payment fees to merchants on its Shop app, which the company says is less of a marketplace and more of a way to help customers shop from the merchants directly.

Yes, but: Amazon has a big head start, with what it says are more than 300 million customers worldwide.

  • Shopify merchants will have to meet a variety of criteria to qualify for inclusion in the Walmart marketplace.
  • By the end of the year, Shopify says it expects more than 1,200 merchants to be able to sell through the Walmart marketplace.

The big picture: The pandemic has forced many retailers to quickly shift their business online, and Shopify has been selling them digital tools to do that.

  • In this short period, it has introduced new features, like curbside pickup and an option for customers to add tips when ordering from restaurants. It has also expanded services like Shopify Capital (its financing business for merchants), which is now available in Canada and the U.K.
  • Between March 13 and April 24, new stores created on Shopify grew 62% compared to the prior six weeks, COO Harley Finkelstein tweeted in early May.

The bottom line: Investors, well aware of Shopify's opportunities, boosted its stock roughly 150% since the start of the stay-at-home lockdowns in March.

Our thought bubble: There's a silver lining here for Amazon. When antitrust regulators are snooping around your business, it's always nice to have a credible competitor or two you can trot out.

2. Ex-eBay employees charged with harassing journalists

In a story that is mind-boggling even by 2020 standards, federal prosecutors charged Monday that at least six former eBay employees engaged in a disturbing harassment campaign against the editor and publisher of a newsletter that covers the company.

The big picture: The must-be-read-to-be-believed court papers read like the script of a caper movie gone bad, and the incident appears to be at least a part of why the company parted ways with CEO Devin Wenig last September. At the time, eBay was also under pressure from activist investors over its slow growth.

Details:

  • The feds say the former employees sent various items, including a fetal pig, funeral wreaths and books on surviving the loss of a spouse, to the husband-and-wife team that write the newsletter.
  • Two employees were arrested Monday and charged with conspiracy to commit cyberstalking and conspiracy to tamper with witnesses, while four others were named and charged in court papers.
  • In addition to the items sent to the couple's house, authorities say the pair had their personal information publicized, and pornography was sent to neighbors' addresses under the husband's name.

Later, the eBay employees offered the company's help in tracking down the persons responsible, while also interfering with a police investigation, according to U.S. attorneys. The eBay employees also allegedly tried to spy on the couple by placing a GPS tracker on their vehicle.

  • The U.S. Attorney's office alleges that, in August 2019, two members of eBay’s executive leadership team "sent or forwarded text messages suggesting that it was time to 'take down' the newsletter's editor."

What they're saying: In a statement, eBay said it "took these allegations very seriously from the outset" and terminated all the employees involved, specifically mentioning its former chief communications officer, who was not named in the charges.

  • "Upon learning of them, eBay moved quickly to investigate thoroughly and take appropriate action," the company said. "The company cooperated fully and extensively with law enforcement authorities throughout the process. eBay does not tolerate this kind of behavior. eBay apologizes to the affected individuals and is sorry that they were subjected to this."
  • As for Wenig, who stepped down last year, eBay said its internal investigation found that he didn't authorize or know in advance about the actions, but did make communications that were "inappropriate." The company said there were "a number of considerations leading to his departure." Wenig was not charged in Monday's court papers.
3. T-Mobile customers suffer daylong outage

T-Mobile customers endured a daylong service outage Monday that affected users nationwide.

Why it matters: Some had speculated that the issue was a more widespread attack on multiple internet services, but it looks like many of the problems reported at other carriers and internet services were tied to the T-Mobile outages — either calls that failed because they involved a T-Mobile customer or internet services that T-Mobile customers couldn't reach.

What they're saying: T-Mobile technology chief Neville Ray confirmed the issues on Twitter during the day and CEO Mike Sievert posted a note late Monday saying the issue was an "IP traffic related issue" that created capacity issues in the network core.

  • CloudFlare CEO Matthew Prince said in a series of tweets that T-Mobile's issues were the result of a configuration change that led to a series of cascading issues. He also said the problems were limited to T-Mobile and shot down rumors of broader internet issues or a deliberate attack.

The big picture: Such cellular network outages are rare, but not unheard of.

  • Nonetheless, FCC chairman Ajit Pai said Monday night that his agency was investigating the issue.
  • "The T-Mobile network outage is unacceptable," Pai said in a tweet. "We're demanding answers — and so are American consumers."
4. Yelp adds COVID-19 safety plan section

Photo: Yelp

Yelp is adding a section to listings where reopening businesses can share what services they are offering as well as what measures they are taking to keep customers safe. It's also adding a "waitlist" feature to help restaurants deal with seating restrictions.

Why it matters: Even with all 50 states reopening to some degree, U.S. businesses face the task of convincing customers it is safe to visit their premises. Yelp notes that, according to its data, there were more than 143,000 total business closures between March 1 and June 10.

5. Take Note

On Tap

  • I'll be interviewing Box CEO Aaron Levie this afternoon at CB Insights' online tech conference. My colleagues Courtenay Brown, Dan Primack and Kia are also moderating at the event, which runs through Thursday.
  • Oracle reports earnings.
  • Cisco's delayed Cisco Live conference runs online today and tomorrow.
  • Pai is slated to testify about the FCC’s airwaves auctions before a Senate panel, while fellow Republican FCC Commissioner Mike O'Rielly faces a separate Senate hearing on his nomination to another term at the agency.

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6. After you Login

Try doing this when your flat screen dies: Some people are turning old-school TVs into swank cat beds.

Ina Fried