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Here’s what could happen with a deal



Still, large employers are pushing for new models to reign in health costs and improve care. Amazon, Berkshire Hathaway and J.P. Morgan have joined together to create a firm, which will try to reduce costs and improve care for their combined workforces of 1 million people.

Three years ago, when four of the major health insurers rushed to partner on large-scale mergers, the deals were blocked by the Department of Justice, and ultimately rejected by the courts on anti-trust grounds.

Analysts say the CVS-Aetna and Cigna-Express Scripts deals are different, because they are not mergers of rivals but rather vertical deals which would not result in fewer competitors in the medical or pharmacy benefit markets.

“On the anti-trust side I don’t see huge issues… with any of these three vertical mergers,” said Garthwaite, though he added that integrated medical pharmacy benefits firms could make it harder for new standalone entrants.

“If the barrier to entry is that everyone really likes having their insurer and their provider integrated together that it creates a much more attractive insurance class, then we should allow that activity to happen and we should regulate it,” he explained.

“It shouldn’t be that we say we’re not going to allow a good product to emerge because we’re afraid,” Garthwaite added.

Last month, the department of justice asked CVS and Aetna extended its review of the merger, asking the companies for more information. The firms still expect the deal to be approved in the second half of the year.

Even if regulators sign off on the deals, there are risks to execution for both Walmart and CVS, as they try to integrate health insurance, pharmacy and primary care services at such a large scale.

But Mercer’s Watts says even if the deals aren’t realized, health care firms are clearly searching for a model that will provide more value and better care for consumers.

“The fact that people gravitate to how much better something could be in some of these partnerships – I think that’s good. I think that in the long term that’s good for health care delivery,” Watts said.

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ByteDance says it will not transfer algorithm to Oracle



The logos of the Chinese video portal TikTok and the US software and hardware manufacturer Oracle Corporation can be seen on a smartphone and screen on September 14, 2020 in Berlin, Germany.

Thomas Trutschel | Photothek | Getty Images

GUANGZHOU, China — ByteDance will not transfer algorithms and technologies to Oracle as part of a deal announced over the weekend to keep social media app TikTok operating in the U.S.

President Donald Trump said he approved a deal on Saturday that will see the creation of a U.S.-headquartered firm called TikTok Global with Oracle and Walmart taking minority stakes. Oracle will become TikTok’s secure cloud provider and host U.S. user data. 

But the deal does not entail any transfer of algorithms and technologies, according to a statement from ByteDance on Monday. The company said Oracle can instead check the source code. 

“The current plan does not involve the transfer of any algorithms and technologies. Oracle has the authority to check the source code of TikTok USA,” ByteDance’s statement said, according to a CNBC translation. 

Source code forms the basis for applications and software. Allowing inspections of source code is common practice to address local data security concerns. 

TikTok’s recommendation algorithm has been a key driver behind its growth, helping to suggest other videos to users and keep them hooked within the app. 

ByteDance also confirmed that it would do a small round of pre-IPO (initial public offering) financing. TikTok Global will become an 80% holding subsidiary of ByteDance as a result, giving it majority control. As part of the Oracle and Walmart deal, the companies said they would work toward a public listing in the U.S. within a year. 

Over the weekend, Trump said the new TikTok Global will “have nothing to do with any outside land, any outside country, it will have nothing to do with China. It’ll be totally secure. That’ll be part of the deal.” 

Beijing-based ByteDance’s majority ownership of TikTok appears to contradict that. But ByteDance is 40% owned by U.S. venture capital firms, so the Trump administration can technically claim TikTok Global is now majority owned by U.S. money.

Last month, as the TikTok deal appeared to be coming to a conclusion, China threw a spanner in the works by updating its list of technologies subject to export restrictions. One of the technologies on the list related to recommendation algorithms. After Beijing made this move, ByteDance said it would comply with the rules

Washington claimed that TikTok represents a national security threat because it collects American users’ data which could be accessed by Beijing. TikTok has repeatedly denied this and says it stores the data of Americans in the U.S. with a backup in Singapore. 

In August, Trump issued an executive order that would have banned transactions with ByteDance and effectively shut down TikTok in the U.S. That was set to come into effect on September 20. But the Department of Commerce said in a statement that it has delayed that by a week. 

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More restrictions likely in the coming days



Pedestrians wear protective face masks while passing stores and cafes on Rue Montorgueil in Paris, France, on Wednesday, Aug. 26, 2020.

Bloomberg | Bloomberg | Getty Images

European countries are likely to impose more restrictions on public life in the coming days, analysts have said, as the number of daily coronavirus infections continues to rise rapidly.

“Expect lots more restrictions over the days and weeks ahead, especially in Europe,” Deutsche Bank analysts said in a note Monday. “The fact that the virus is already spreading quite rapidly is a big worry.”

France reported 10,569 new cases Sunday (down from more than 13,000 new cases reported the day before), Reuters reported, while the U.K., reported almost 4,000 new cases on Sunday. Italy saw close to 1,000 new infections and Germany reported 1,345 new cases Sunday, and a further 922 cases Monday. Spain is yet to post its weekend case tallies, but reported almost 4,700 new cases Friday.

On Monday, German Health Minister Jens Spahn said rising coronavirus infection numbers in countries like France, Austria and the Netherlands were “worrying” and that Germany would sooner or later import cases from there, Reuters reported. He added that countries like Spain had infection dynamics “that are likely out of control.”

Coronavirus cases are rising so rapidly in Europe that the World Health Organisation warned last week that there was a “very serious situation” unfolding in the region, calling the resurgence in infections a “wake up call.”  Local restrictions have been imposed in various parts of Europe to quell outbreaks of infection, with parts of northern England in lockdown, for example, as well as areas of Spain’s capital Madrid. 

As cases rise, however, more drastic measures are being considered, with the U.K. among those mulling whether to introduce a second, “mini” national lockdown to act as what has been described as a “circuit breaker” to stop the virus spreading. The country’s government is also considering more restrictive measures such as a 10.00 p.m. curfew that would force cafes, bars and restaurants to close early.

Economic hopes fading

Thankfully, the tally of fatalities caused by the virus are lower so far, and there is hope that a second wave of the virus will not see as large a spike in deaths as the first outbreak in spring, Deutsche Bank analysts led by Jim Reid noted. However, hopes that Europe’s economy could bounce back, with the recovery taking a “V” form, are looking increasingly unlikely.

“It doesn’t feel like fatalities are going to be as big as an issue as they were in the first wave but it really is hard to understand what the strategies of (European) governments are at the moment,” the analysts noted.

“They pretty much all don’t want a further wide scale lockdown but they also don’t want the virus to spread. Its not going to be easy to solve for both and as such it’s going to be a pretty difficult few months ahead if September is seeing numbers as high as they are already.”

The coronavirus developments have impacted European markets, with the pan-European Stoxx 600 index down 2% in early trade Monday. Rabobank strategists agreed that hopes of an economic bounceback were fading fast.

“With Coronavirus cases having surpassed the 31 million mark and almost 1 million deaths globally, the possibility that ‘second waves’ or indeed, first waves that were never actually brought under control will continue to weigh on the economic and policy outlook is all but certain, while earlier optimistic hopes for a ‘V’ (or perhaps even ‘W’) shaped recovery will continue to fade,” they said in a note Monday.

Economists at Capital Economics said they do not expect full, national lockdowns, and government ministers certainly appear reluctant to restrict economic activity as severely as before. But they warned that consumer confidence could take another hit as the public in Europe could be forced to curtail social activity and work from home again.

“While we do not expect the current second wave of coronavirus infections to lead to new national lockdowns, it will deal a blow to business and consumer confidence,” they noted Monday.

“Output looks set to remain below its pre-crisis level at least until the end of 2022, although there will be significant discrepancies between countries, with Germany set to fare substantially better than Italy or Spain.”

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ByteDance says it will own 80% of TikTok US, refutes $5 billion taxes claim



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