A powerful new sheriff is looking into the tech giants, but here’s why industry experts say you won’t see Facebook or Google get broken up (FB, GOOGL, MSFT, AMZN)

• The Federal Trade Commission announced a new task force which will look at antitrust behavior in the technology market.
• It's the first major moved by the FTC to address growing public concern over the size of tech companies like Facebook, Google and Amazon.
• The new task force will look at industry practices and conduct law enforcement investigations. It also has the ability to look at both past and present mergers.
• But industry insiders said they don't expect to see the FTC break up large tech companies, even if there is precedent set by its past actions in the hospital industry.

Big Tech got a big scare on Tuesday when federal regulators launched a task force to police the market for signs of outsized power and to re-examine the validity of mergers that closed years ago.

The prospect that the likes of Facebook and Google could be forced to give up crown jewels acquired for billions of dollars — WhatsApp, in the case of Facebook, and YouTube or DoubleClick, for Google — is the most striking sign yet of the public's unease with the corporations that dominate the internet age. 

But while the Federal Trade Commission's so-called Technology Task Force heralds a new era of scrutiny for an industry accustomed to hands-off treatment, industry insiders say the chances of mergers being reversed are highly unlikely.

"The idea of breaking up any company, particularly a company that doesn't have easily separable assets like a tech company, that's the nuclear option and it's almost never used," said Mark Ostrau, an antitrust lawyer with Fenwick & West.

Ostrau said what's more likely is that the task force looks "more seriously" at new, technology-specific theories of what violates antitrust laws.

The unprecedented changes enabled by online technology, from retail to transportation, have upended long established industries and, some say, allowed newcomers to sidestep ground rules that no longer reflect the realities of the market. 

Most recently, antitrust law in the US has focused on whether or not consumers have access to low-cost goods. So while a company like Walmart may have had a large share of a market, regulators weren't concerned so long as there wasn't price gouging. 

Read more: US antitrust merger investigations neared record lows in 2018 even as scrutiny of Facebook, Google and Amazon picked up

But since many of today's largest tech companies offer free products to consumers, antitrust theorists will have to consider new issues, like whether consumers have the option to opt out of a service if they don't like its privacy policies, or whether network effects prohibit new competition from entering the market, Ostrau said. 

On the more obscure side, Ostrau said, he also expects to see new developments in laws relating to anticompetitive price fixing through algorithms which enable competitors to automatically compare and adjust prices.

"That's not so much a new theory," Ostrau said, "but instead of clandestine face to face meetings, [companies are] achieving it through automatic algorithms."

There's precedent with Microsoft, CDK Global

The FTC's move comes at a time when concern over data privacy and the concentration of advertising dollars have come into sharp focus. High-profile scandals such as the Facebook/Cambridge Analytica data leaks, as well as concerns over the content that ges shared on social media, have increased pressure on the government to act. 

One of the most striking parts of the FTC's announcement is that it will look at both "prospective merger reviews in the technology sector and reviews of consummated technology mergers."

This indicated to some that the FTC could retroactively challenge past mergers, such as Facebook's $19 billion WhatsApp acquisition in 2014 or Google's $3.1 billion acquisition of DoubleClick in 2007.

One lawyer familiar with the FTC's thinking said that in all likelihood the agency won't waste its resources trying to break up high-resource companies who will fight its decision in court.

The 2001 DC Circuit ruling on Microsoft's antitrust case set the precedent against breaking up a company which grew organically, and a merger would need to be directly tied to anticompetitive conduct for a company to be broken up as a punishment, the person said. 

The FTC has recently prevented mergers in tech, but it's rare.

CDK Global's plan to acquire Auto/Mate, which was announced in May 2017, terminated in March 2018 after the FTC blocked the deal on antitrust grounds. In that case, the person said, it appeared that CDK Global wanted to acquire its emerging competition to squash it. This is likely different from a situation like Facebook and Instagram, where the latter grew into a formidable player in social media once it was acquired, the person said.

The current antitrust laws would need to completely change for a merger like Facebook and Instagram to be broken up over unrelated privacy concerns, the person said.

Whether or not the SEC wins its cases, Ostrau said that technology antitrust law could move forward on momentum alone.

"There is some benefit in just opening the investigations and bringing the cases, even if the FTC doesn't ultimately win or get a consent decree because it heightens the sensitivity to particular area of conduct and has an effect on the industry," Ostrau said. "To say, this is an area of potential concern, so we ought to tread carefully, whether or not there's a case."

Hospital mergers show a way forward

Microsoft isn't the only antitrust case to set a precedent. Others, including the FTC, point to its past work on hospital mergers as a precedent for what could happen with technology.

The FTC said that its new Technology Task Force is modeled after the Merger Litigation Task Force, which was launched in 2002 to monitor mergers in the hospital space. That task force did in fact successfully challenge consummated mergers, including ProMedica Health System’s acquisition of St. Luke’s Hospital.

That acquisition closed in 2010, but the hospitals operated separately during the FTC's investigation which launched in 2011 and ultimately required divestiture. ProMedica finally divested St. Luke's in 2016.

While the FTC may consider this a success of its task force, not everyone is convinced that it went far enough.

"The impact is merely slowing down a bad trend, not stopping it or reversing it," said Matt Stoller, a fellow with the Open Markets Institute, a think tank that advocates against corporate monopolies. "I don't think this new task force is meaningful. I think it's a new seating arrangement inside the building and I don't care about that."

As for whether or not it's too difficult to break up two companies which have already merged, Stoller said companies prove they can do it anytime they decide to sell one of their assets of their own volition.

"It's not like building moon bases on Jupiter, this is stuff they do all the time," he said.

SEE ALSO: Meet the jet-setting Goldman Sachs banker who led Qualcomm through a hostile takeover, got stuck in Trump's trade war, and made magic happen across the semiconductor industry

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NOW WATCH: What's going on with Jeff Bezos and Amazon

source https://www.businessinsider.com/why-ftc-technology-task-force-wont-break-up-tech-giants-2019-2

The SEC's claim that Elon Musk is in contempt of court is highly unusual, a former SEC lawyer says (TSLA)

• The Securities and Exchange Commission's allegation that Tesla CEO Elon Musk is in contempt of the federal court that approved a settlement between Musk and the agency is highly unusual, former SEC senior counsel Thomas Gorman told Business Insider.
• It's particularly rare for the SEC to bring contempt proceedings against a corporate executive, rather than the operator of an illegal enterprise, such as a Ponzi scheme, Gorman said.
• The most likely outcome is that Musk is sanctioned, fined, and given a stern warning about the consequences of disobeying his settlement with the SEC, Peter Haveles, a partner at Pepper Hamilton, said.

The Securities and Exchange Commission's (SEC) allegation that Tesla CEO Elon Musk is in contempt of the federal court that approved a settlement between Musk and the agency is highly unusual, former SEC senior counsel Thomas Gorman told Business Insider.

Being in contempt of court means either misbehaving in a courtroom or deliberately disobeying a court order (the SEC is accusing Musk of the latter). The SEC rarely brings contempt proceedings, Gorman said.

"There just aren't very many of these cases around," he said.

It's particularly rare for the SEC to bring contempt proceedings against a corporate executive, rather than the operator of an illegal enterprise, such as a Ponzi scheme, Gorman said.

Read more: A judge just set a deadline for Elon Musk to defend himself against the SEC's claims that he is in contempt of court

The SEC sued Musk in September, alleging that Musk made "false and misleading statements" in August about the possibility of taking the automaker private. Musk and the agency reached a settlement in September, under which Musk didn't admit or deny the allegations in the agency's lawsuit but stepped down as the chairman of Tesla's board of directors for three years and paid a $20 million fine. The settlement also required Tesla to monitor Musk's communications, including on platforms such as Twitter.

But in the months after the settlement, Musk criticized the SEC, saying in an interview with "60 Minutes" that he didn't respect the agency. And, on February 19, Musk tweeted a projection about Tesla's 2019 vehicle production that exceeded what the automaker had said in its most recent earnings letter.

Musk corrected the tweet, but the SEC said in a court filing on Monday that Musk had violated the terms of his settlement with the agency by not seeking or receiving approval from Tesla before publishing his tweet about vehicle production. The agency asked a judge to hold Musk in contempt of the federal court that approved the settlement.

But proving that Musk violated the terms of the settlement will be difficult for the SEC, which faces a burden of proof just below what is necessary for a criminal case, Gorman said.

"The SEC has to prove they're right by clear and convincing evidence. It's not enough to have a preponderance."

The most likely outcome is that Musk is sanctioned, fined, and given a stern warning about the consequences of disobeying his settlement with the SEC, Peter Haveles, a partner at Pepper Hamilton, said.

"It's going to be the equivalent of hitting him across the head with a two-by-four in order to get his attention."

• Read more:
• SEC says Elon Musk violated his settlement with the agency and asks a judge to hold him in contempt of court
• Elon Musk says 'something is broken' at the SEC after the agency asked a judge to hold him in contempt of court
• A 'boxing match with the SEC is the last thing investors wanted': Here's what Wall Street is saying about Elon Musk's latest battle with the SEC
• 'How embarrassing': Elon Musk fired back at the SEC in latest fight over Tesla production numbers

SEE ALSO: New York wants drivers to pay for its crumbling subway

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Pre-IPO companies like Uber and Airbnb could 'test the waters' with investors sooner under new SEC proposal

• The Securities and Exchange Commission is taking new steps to help pre-IPO companies like Uber and Airbnb get feedback from institutional investors.
• A new rule proposed Tuesday would let larger private companies consult with institutional investors before filing IPO paperwork with the SEC.
• Currently, the rules let emerging growth companies talk with such investors about pricing and demand. But this excludes most companies with revenue over $1 billion, including many of the most valuable companies in Silicon Valley.

New rules proposed by federal regulators will let mega-startups like Uber and Airbnb seek early feedback about investor appetite for an initial public offering. 

On Tuesday, the Securities and Exchange Commission proposed a new "test the water" reform which would allow all pre-IPO companies to consult with qualified institutional buyers before filing paperwork to go public. 

These meetings give startups the chance to see if investors are actually interested in buying their stock before going through the work of filing with the SEC. And it helps institutional investors like Fidelity and T. Rowe Price the chance to see what's coming up in the IPO pipeline while setting the tone on valuation and price. 

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"It makes the process more informed," said Edwin O'Connor, a capital markets lawyer at Goodwin. "So when [companies] are ready to go to market, they have heard the investors' concerns and have the time to address it."

Currently, the privilege to chat with investors only extends to the smaller emerging growth companies, which excludes most companies with annual revenue over $1 billion. These so-called EGCs, which make up the vast majority of IPO registrants, have been able to get feedback on price and demand since 2012, when the Jumpstart Our Business Startups Act, known as the JOBS Act, was signed into law.

Larger private companies with revenue of more than $1 billion, however, must file an S-1 registration statement in order to be allowed to seek feedback from institutional investors. That would change, if the proposed rules become law.

"Everyone's been waiting for this," said Anna Pinedo, a securities lawyer at Mayer Brown. "It's been much anticipated, so it's great to see it out."  

An outsized impact on tech

Such reform could have an outsized impact in tech, Pinedo said, where startups are waiting longer and growing larger before tapping the public markets.

Ride-hailing service Uber, which is expected to go public this year, brought in $11.4 billion in revenue in 2018. Airbnb, another 2019 IPO prospect, announced that it brought in more than $1 billion in revenue in one quarter alone in Q3 2018. Both have too much revenue to count as an EGC.

While Uber and Lyft would not directly benefit from the new rules, as each has already confidentially filed IPO paperwork with the SEC, the new rules could come in handy for other startups reportedly weighing an IPO, such as Airbnb and Palantir. Depending on how the 60-day public comment period goes, the new rules could take effect as soon the end of April. 

This reform won't just impact pre-IPO unicorns, according to O'Connor. The proposal also gives public companies more flexibility when it comes to issuing new shares.

Currently, executives at public companies can chat with investors about raising more capital. But the banks underwriting these offerings can't. The reform would change that to allow authorized representatives to "engage in oral or written communications with potential investors." 

"[The reform] probably won't move the needle much on IPOs because for private companies, most won't need this," O'Connor said. "But I think it will help companies raise money after they're public. It might incrementally increase capital raising activity in the public markets." 

Though the SEC will take comments for 60 days before making the reform official, both Pinedo and O'Connor said they don't expect to see any opposition prevent this from happening.

"Lawyers' industries groups and trade associations have been talking about extending the 'test the waters' for a couple of years now," Pinedo said. "I doubt that there will be any opponents or natural critics for this."

If one were too oppose to reform, it would be on behalf of the investors themselves. And while many SEC regulations are designed to prevent investors from being mislead by the companies issuing securities, the new reform only impacts institutional investors.

"These are sophisticated investors," O'Connor said. "They can fend for themselves."

SEE ALSO: $1 billion video conferencing startup Zoom has picked banks but is sitting in SEC purgatory ahead of a planned IPO

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A former Apple executive was just accused of insider trading by the SEC

• Gene Levoff, who worked as Apple's Senior Director of Corporate Law and Corporate Secretary until September 2018, has been accused of insider trading by the SEC.
• The SEC's lawsuit suit, filed Wednesday morning, says Levoff exploited his positions to unlawfully trade Apple securities ahead of Apple's quarterly earnings announcements.
• Levoff profited and avoided losses of approximately $382,000 through illegal insider trading that took place from 2015-2016, according to the SEC.

Former Apple executive Gene Levoff has been accused of insider trading by the SEC, according to court documents filed Wednesday.

The lawsuit alleges that Levoff, formerly Apple's Senior Director of Corporate Law and Corporate Secretary, "exploited his positions as a senior attorney and a member Apple's Disclosure Committee to unlawfully trade Apple securities ahead of Apple quarterly earnings announcements." CNBC first reported the lawsuit.

Levoff violated the duty of trust and confidence he owed Apple and its shareholders in two respects, the lawsuit says: "First, as head of the Corporate Law group at Apple, Levoff was responsible for ensuring compliance with the company's insider trading policy and determining the criteria for those employees (including himself) restricted from trading around quarterly earnings announcements. At the same time, as a member of Apple's Disclosure Committee, Levoff received material nonpublic information about Apple's financial results."

Apple has not responded to Business Insider's request for comment. 

According to the document, Levoff traded on the basis of insider information on at least three occasions in 2015 and 2016. In July 2015, for example, Levoff received material nonpublic financial data that showed Apple would miss analysts' third-quarter estimates for iPhone unit sales, the lawsuit says. Levoff is said to have profited and avoided losses of approximately $382,000 through illegal insider trading that took place in 2015-2016, according to the document.

Before being terminated in September 2018, Levoff served as Director of Corporate Law at Apple from 2008 through 2013 and was named Senior Director of Corporate Law in 2013, as the lawsuit states. He also served on Apple's Disclosure Committee from Sept. 2008 through July 2018. 

See below for the full document: 

United States Securities an... by on Scribd

 

This story is developing...

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Pennsylvania might slap a 10% tax on violent video games, but the industry says the proposed law is fundamentally flawed

• The Pennsylvania General Assembly is considering a bill that would place a 10% tax on video games with a Mature or Adults Only rating from the Entertainment Software Rating Board (ESRB).
• Rep. Christopher Quinn first proposed the bill in October 2018, and it has been re-introduced for the 2019 legislative session with bi-partisan support.
• Revenue generated by the tax would be used to fund school safety measures.
• The Entertainment Software Association, which is responsible for the ESRB ratings, claims that the bill violates the first amendment by targeting video games based on their content.

Pennsylvania lawmakers are considering a bill that would slap a 10% tax on video games that are rated Mature or Adults Only by the Entertainment Software Rating Board (ESRB). Rep. Christopher Quinn submitted House Bill 109 to the state's General Assembly on January 28th with bi-partisan support from Rep. Ed Neilson and and Rep. Carol Hill-Evans.

Revenue generated from the video game tax would be used to fund new safety measures in Pennsylvania's public schools. Speaking to NBC10 in Philadelphia, Quinn said violent video games are a factor in real world violence, and the video game tax would help counteract their impact on society. 

"This bill does not prohibit violent video games, instead it simply provides a revenue stream — it tries to recoup some of the societal costs — to help make our schools safer by taxing an industry that has been shown to lead to violence," Quinn said.

As you might expect, the $43 billion video game industry has a different perspective on the bill's premise that video games lead to real world violence. And the game industry's main lobbying group is also arguing that video games are a form of protected speech under the US Constitution. 

Here are the key issues that could determine whether Pennsylvania becomes the first state in the nation to tax violent video games:

SEE ALSO: Trump vs violent video games

SEE ALSO: ESRB cracks down on microtransactions

Many of the best-selling games of 2018 were rated mature.

Eight of the 20 best-selling video games of 2018 were rated M by the ESRB. Mature games are rated for players 17-years-old and up. The two best-selling games of 2018, "Red Dead Redemption 2" and "Call of Duty: Black Ops 4" (pictured above) were both rated M.

By contrast, only a handful of games receive the Adult Only rating, which is usually reserved for sexually explicit content. Many retailers refuse to carry AO titles in stores, so game developers typically try to avoid the rating at all costs.

The Entertainment Software Association claims the video game tax would violate the constitution.

The Entertainment Software Association, the lobbying group that also oversees the ESRB ratings, stated that Pennsylvania's proposed video game tax is an unconstitutional violation of the first amendment. The group argues that the tax singles out video games based on their content, violating the constitutional free speech rights of the game's publishers. 

While the ability to tax violent games is not a matter of settled law, the game industry has one important U.S. Supreme Court decision in its favor. In 2011, a California law banning the sale of violent video games to children under age 18 was struck down in a decision by the Supreme Court. In its decision on Brown v. Entertainment Merchants Association, the court found that video game content was protected as free speech.

The video game industry is also pushing back against the bill's claim that video games lead to real-world violence.

"Numerous authorities – including scientists, medical professionals, government agencies, and the US Supreme Court – found that video games do not cause violence," The ESA wrote in a statement.

"We encourage Pennsylvania legislators to work with us to raise awareness about parental controls and the ESRB video game rating system, which are effective tools to ensure parents maintain control over the video games played in their home.”

See the rest of the story at Business Insider

source https://www.businessinsider.com/pennsylvania-video-game-tax-2019-2

Accused Russian spy Marina Butina wants 14 more days to square her account with US investigators

• The high-profile, gun-loving Russian agent arrested for infiltrating the National Rifle Association on behalf of the Kremlin has asked for two more weeks with US investigators before returning to court to hear sentencing.
• In a joint application, lawyers for Butina and the United States agreed that they required more time so Butina can finish sharing all that she knows with US officials.
• According to the jointly signed statement, it appears the Kremlin operative has much more to tell and prosecutors are keen for her to keep talking.

• In December the 30-year-old pleaded guilty to a single charge of conspiracy to act as an unregistered foreign agent instantly becoming the first Russian national convicted for seeking to influence US politics during the fraught 2016 presidential campaign.

A Russian operative who pleaded guilty to infiltrating the National Rifle Association on behalf of the Kremlin has asked a US court for two more weeks with investigators before she faces sentencing.

In a joint application, lawyers for both Maria Butina and the United States agreed that they required more time so that Butina can finish sharing all that she knows with US officials.

According to the jointly signed court application there's two weeks of cooperation still to come.

"As part of her plea agreement, the defendant agreed to cooperate with the United States," the application reads. "The defendant’s cooperation is not yet complete."

Investigators have at most 14 more days with the foreign agent.

As part of her original deal, Butina pleaded guilty in December to a single charge of conspiracy to act as an unregistered foreign agent and she agreed to cooperate with investigators.

Read more: Accused Russian agent Maria Butina pleaded guilty to engaging in a conspiracy against the US

The gun-toting Kremlin operative who tried to infiltrate conservative US political groups as Donald Trump rose to power during the 2016 presidential election, was the first Russian national to be convicted on charges of seeking to have an influence on US politics during campaign and election proceedings.

The case is separate from special counsel Robert Mueller’s investigation into Russian interference in the 2016 presidential election.

Butina, who swiftly gained traction and some notoriety within conservative circles as a gun-rights activist has admitted that she was in fact a secret agent for the Kremlin who sought with some degrees of success to infiltrate conservative American political groups as part of a now well-documented coordinated attempt by Russian state actors to impact presidential elections and political discourse in the United States.

Butina, 30, had been suspected by US investigators of collaboration with a high-ranking Russian government official to destabilize and influence US policy to the advantage of the Kremlin and targeted the NRA to achieve such outcomes..

Federal prosecutors alleged that the gun-loving agent, indicted at the beginning of last year, sought to establish some kind of "back channel" between Russia and sympathetic conservative US groups, using the NRA as a base of operations and access.

The US prosecutors case, Butina's outlandish mission and the apparent ease of her initial success have given a startling glimpse into another aspect of Russia’s influence operations in the US and the near open-arm naivety that gave it wings.

The case explicitly details how Russia identified and ruthlessly and efficiently exploited hot-button, divisive social issues in the US, in this case gun-control, to gain easy access through a far-right entrance into the mainstream political sphere.

Prosecutors say Butina and her patron, the notorious Russian banker Alexander Torshin, manipulated their various NRA contacts to pursue back channels into American conservatives during the 2016 campaign.

And it worked. In May, Spanish police turned over to the FBI wiretaps of conversations involving Torshin, himself a suspected money launderer, as he met with now-President Donald Trump's eldest son, Donald Trump Jr., during the 2016 US campaign.

The case highlights that with agents on the ground, and the Russian troll farm known as the Internet Research Agency, agitating through cyberspace, its unsurprising US intelligence quickly determined that Russia was trying to help elect Trump in part by releasing emails stolen from Democratic Party organizations, and by conducting a sophisticated social media campaign to sow and harvest social and political discord.

Butina will face court again on February 26.

SEE ALSO: A timeline of the suspected Russian plot for Maria Butina to infiltrate the NRA and GOP

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Medium, the blog site Jeff Bezos used to attack the Enquirer, won't say whether the post violated its rules — but it says Bezos wont get paid a dime (AMZN)

• Medium isn't commenting on whether or not Jeff Bezos violated its terms of service with his astonishing post on Thursday.
• The online publishing site also won't say whether Bezos gave it a heads up before he published it.
• But Medium did confirm that, no matter how many people like his post, he won't get paid for it.

When Amazon CEO Jeff Bezos decided to accuse David Pecker, the CEO of National Enquirer's parent company, of blackmail on Thursday, he chose an interesting way to do it: a post on Medium. 

Medium is a blogging media site founded by Evan Williams, one of the founders of Twitter. Bezos also tweeted about his blog post, to his 834,000 followers, so that's a double score for technologies created by Williams and used by Bezos in this drama. (Just in case you haven't been following closely: intimate photos and text messages between Bezos and the woman he was having an affair with were obtained by the Enquirer, which published some of the trove and threatened to publish others).

Read: Jeff Bezos' investigator doesn't think his phone was hacked. Here are all the other theories of how the National Enquirer got his private photos

Medium was a curious choice for Bezos to strike back at the Enquirer because Bezos owns the Washington Post. He certainly could have run an editorial there. And he runs Amazon which has Amazon Web Services, one of the biggest internet tech companies on the planet. It was more than capable of hosting his post, as well.

But, by choosing a neutral third-party blog-hosting site for his revelations and accusations, he clearly avoided some political, and perhaps legal, ramifications. His Medium post alleges that one of the reasons he wound up in this drama was because he owns the Washington Post, which has made him a political target of Donald Trump and the Saudis, who are not happy wth the Post's coverage. And he said his role at Amazon had been used by Enquirer publisher AMI as a justification for some of its editorial decisions.

Did Bezos go too far in publishing the emails? 

Bezos held nothing back in his Medium post.  Not only did he explicitly accuse the Enquirer of extortion and blackmail, he published emails that he said proved it. He didn't edit the emails to remove embarrassing details about his personal life. He also didn't edit out all the sender's phone numbers and email addresses.

And that's caused an interesting sidebar in the drama, with some journalists wondering if Bezos violated Medium's terms of service.

As Wired's Louise Mtsakis pointed out, the post appears to violate Medium's rules, which doesn't allow "Posting copies of private communications between private individuals without the explicit consent of all parties to the communication."

And Medium has definitely used this rule to take down posts before.

Medium had no comment on that when asked by Business Insider. It also wouldn't say if Bezos gave the company a heads up that the post was coming or if it just showed up on their platform as a surprise.

But they did tell us that he will not get paid for the post. Medium pays writers based on how many claps they get. A clap is akin to a "like" button.

This post has already gotten 185,000 claps.

But alas, to qualify for payment, a writer has to join the partner program and has to put the post behind the paywall, where people pay to see it.

"Mr. Bezos is not in the Medium Partner Program and the story is not behind the metered paywall, so he does not earn any money from his post," a spokesperson confirmed to Business Insider.

Medium has a complicated way of determining how much money each popular article earns but it says the highest amount paid for a story last month was $4,290.43. 

But even if Bezos breaks viewership and clap records, he's not owed a dime.

With a net worth of $131.5 billion, Bezos, the world's richest person, probably won't mind. 

SEE ALSO: Amazon CEO Jeff Bezos accuses National Enquirer publisher of 'extortion' over naked photos in extraordinary blog post

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Read all the emails Jeff Bezos says the National Enquirer sent to 'blackmail' him (AMZN)

• Amazon CEO Jeff Bezos wrote a blog post on Thursday accusing National Enquirer publisher AMI of trying to extort him over naked photos of him.
• AMI allegedly sent Bezos emails describing the photos they obtained of him and former news anchor Lauren Sanchez, who he was having an affair with.
• These are the emails that Bezos says were sent to "blackmail" him.

On Thursday, Amazon CEO Jeff Bezos wrote a Medium blog post revealing the emails that he alleges were sent to blackmail him.

In the email, AMI, the publisher of the National Enquirer, threatened to publish personal photos of Bezos and former news anchor Lauren Sanchez, including a naked selfie of Bezos.

In January, the National Enquirer, a long-time ally of President Donald Trump, had published an exposé on the affair between Bezos and Sanchez. After that, Bezos hired investigators to look into who leaked his personal photos and texts.

AMI threatened to publish these photos unless Bezos and Gavin De Becker, Bezos' security boss leading that investigation into the exposé, make a public statement that they “have no knowledge or basis for suggesting that AMI’s coverage was politically motivated or influenced by political forces.” AMI also said it would keep those photos.

"Of course I don’t want personal photos published, but I also won’t participate in their well-known practice of blackmail, political favors, political attacks, and corruption. I prefer to stand up, roll this log over, and see what crawls out," Bezos wrote.

Here is the email that Bezos says he received from AMI, describing the photos it had obtained.

From: Howard, Dylan [dhoward@amilink.com] (Chief Content Officer, AMI)
Sent: Tuesday, February 5, 2019 3:33 PM
To: Martin Singer (litigation counsel for Mr. de Becker)
Subject:. Jeff Bezos & Ms. Lauren Sanchez Photos

 

CONFIDENTIAL & NOT FOR DISTRIBIUTION

 

Marty:

 

I am leaving the office for the night. I will be available on my cell — 917 XXX-XXXX.

 

However, in the interests of expediating this situation, and with The Washington Post poised to publish unsubstantiated rumors of The National Enquirer’s initial report, I wanted to describe to you the photos obtained during our newsgathering.

 

In addition to the “below the belt selfie — otherwise colloquially known as a ‘d*ck pick’” — The Enquirer obtained a further nine images. These include:

 

· Mr. Bezos face selfie at what appears to be a business meeting.

 

· Ms. Sanchez response — a photograph of her smoking a cigar in what appears to be a simulated oral sex scene.

 

· A shirtless Mr. Bezos holding his phone in his left hand — while wearing his wedding ring. He’s wearing either tight black cargo pants or shorts — and his semi-erect manhood is penetrating the zipper of said garment.

 

· A full-length body selfie of Mr. Bezos wearing just a pair of tight black boxer-briefs or trunks, with his phone in his left hand — while wearing his wedding ring.

 

· A selfie of Mr. Bezos fully clothed.

 

· A full-length scantily-clad body shot with short trunks.

 

· A naked selfie in a bathroom — while wearing his wedding ring. Mr. Bezos is wearing nothing but a white towel — and the top of his pubic region can be seen.

 

· Ms. Sanchez wearing a plunging red neckline dress revealing her cleavage and a glimpse of her nether region.

 

· Ms. Sanchez wearing a two-piece red bikini with gold detail dress revealing her cleavage.

 

It would give no editor pleasure to send this email. I hope common sense can prevail — and quickly.

 

Dylan.

And here are emails Bezos says he received from the National Enquirer publisher, laying out the terms for witholding publication of the photos:

 

From: Fine, Jon [jfine@amilink.com] (Deputy General Counsel, AMI)
Sent: Wednesday, February 6, 2019 5:57 PM
To: Martin Singer (Mr de Becker’s attorney)
Subject: Re: EXTERNAL* RE: Bezos et al / American Media et al

Marty -

Here are our proposed terms:

1. A full and complete mutual release of all claims that American Media, on the one hand, and Jeff Bezos and Gavin de Becker (the “Bezos Parties”), on the other, may have against each other.

2. A public, mutually-agreed upon acknowledgment from the Bezos Parties, released through a mutually-agreeable news outlet, affirming that they have no knowledge or basis for suggesting that AM’s coverage was politically motivated or influenced by political forces, and an agreement that they will cease referring to such a possibility.

3. AM agrees not to publish, distribute, share, or describe unpublished texts and photos (the “Unpublished Materials”).

4. AM affirms that it undertook no electronic eavesdropping in connection with its reporting and has no knowledge of such conduct.

5. The agreement is completely confidential.

6. In the case of a breach of the agreement by one or more of the Bezos Parties, AM is released from its obligations under the agreement, and may publish the Unpublished Materials.

7. Any other disputes arising out of this agreement shall first be submitted to JAMS mediation in California

Thank you,

Jon

Deputy General Counsel, Media

American Media, LLC

Jon P. Fine

Deputy General Counsel, Media

O: (212) 743–6513 C: (347) 920–6541

jfine@amilink.com

February 5, 2019

Via email:

mdsinger@lavelysinger.com

Martin D. Singer

Laveley & Singer

Re: Jeff Bezos / American Media, LLC, et al.

 

 

Dear Mr. Singer:

I write in response to your February 4, 2019, letter to Dylan Howard, and to address serious concerns we have regarding the continuing defamatory activities of your client and his representatives regarding American Media’s motivations in its recent reporting about your client.

As a primary matter, please be advised that our newsgathering and reporting on matters involving your client, including any use of your client’s “private photographs,” has been, and will continue to be, consistent with applicable laws. As you know, “the fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, comment, news reporting . . . is not an infringement of copyright.” 17 USC Sec. 107. With millions of Americans having a vested interest in the success of Amazon, of which your client remains founder, chairman, CEO, and president, an exploration of Mr. Bezos’ judgment as reflected by his texts and photos is indeed newsworthy and in the public interest.

Beyond the copyright issues you raise, we also find it necessary to address various unsubstantiated defamatory statements and scurrilous rumors attributed to your client’s representatives in the press suggesting that “strong leads point to political motives”1 in the publication of The National Enquirer story. Indeed, you yourself declared the “politically motivated underpinnings” of our reporting to be “self-evident” in your correspondence on Mr. de Becker’s behalf to Mr. Howard dated January 31, 2019.

Once again, as I advised you in my February 1 response to your January 31 correspondence, American Media emphatically rejects any assertion that its reporting was instigated, dictated or influenced in any manner by external forces, political or otherwise. Simply put, this was and is a news story.

Yet, it is our understanding that your client’s representatives, including the Washington Post, continue to pursue and to disseminate these false and spurious allegations in a manner that is injurious to American Media and its executives.

Accordingly, we hereby demand that you cease and desist such defamatory conduct immediately. Any further dissemination of these false, vicious, speculative and unsubstantiated statements is done at your client’s peril. Absent the immediate cessation of the defamatory conduct, we will have no choice but to pursue all remedies available under applicable law.

As I advised previously, we stand by the legality of our newsgathering and reporting on this matter of public interest and concern. Moreover, American Media is undeterred from continuing its reporting on a story that is unambiguously in the public interest — a position Mr. Bezos clearly appreciates as reflected in Boies Schiller January 9 letter to American Media stating that your client “does not intend to discourage reporting about him” and “supports journalistic efforts.”

That said, if your client agrees to cease and desist such defamatory behavior, we are willing to engage in constructive conversations regarding the texts and photos which we have in our possession. Dylan Howard stands ready to discuss the matter at your convenience.

All other rights, claims, counterclaims and defenses are specifically reserved and not waived.

Sincerely,

 

SEE ALSO: Amazon CEO Jeff Bezos accuses National Enquirer publisher of 'extortion' over naked photos in extraordinary blog post

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source https://www.businessinsider.com/read-emails-jeff-bezos-naked-photos-national-enquirer-2019-2