💬 Facebook's big privacy fine

GDP-R-you-ready-to-rumble… EU regulators slapped Facebook’s WhatsApp with a $270M fine this week for violating GDPR. Europe’s General Data Protection Regulation, aka: the world’s toughest data privacy law, forces companies to get permission to collect and share users’ data, protect that data, and report any breaches. That makes it harder for companies to monetize valuable user info (think: Facebook and ad targeting). According to regulators, WhatsApp shared data with FB and Insta without users’ permission.

Cue the GDPR yellow cards… But instead of a warning, companies are now getting fat fines. When GDPR went into effect three years ago, enforcement was minimal: European regulators had only issued around $86M worth of GDPR fines by the start of 2020. Since then, that figure has skyrocketed to $1.5B. Privacy activists have praised recent fines, but some say they’re still not big enough: For context: GDPR allows fines of up to 4% of a company’s global revenue, which means fines for Amazon could hit $15.4B. Some of the heftiest GDPR fines since 2019:

• France fined Google $57M for illegal data processing.
• Germany dinged H&M $42M for secretly collecting employee data.
• The UK docked Marriott $24M and British Airways $26M.
• Luxembourg fined Amazon a whopping $886M for a data breach.

Cutoff shorts summer... follows bralette spring. Mall icon American Eagle reported all-time high second-quarter sales yesterday. But sales still missed expectations, and the stock dropped 10% (womp). Mid-pandemic, AE's core brand sales fell while its loungewear sub-brand Aerie thrived. Aerie sells comfy basics, from hoodies to flared leggings — and makes up more than a fourth of AE's total sales. Pandemic-friendly Aerie is still #thriving, but AE's jeans and blouses bounced back last quarter, and are growing faster.

• Jegging fit: AE's sales surged 35%, while Aerie's grew 34%. It's Aerie's 27th straight quarter of double-digit sales growth.
• IRL fit: AE's online sales fell as shoppers returned to its 1K+ (non-clickable) stores. Meanwhile, Gap and Macy’s have seen ecomm growth taper.
• School fit: Another retail trend that AE noted: back-to-school shopping is happening later than usual. Abercrombie suffered the consequences last quarter.

Not a horror movie... Last quarter, AE did a stellar job avoiding "The Discount Spiral of Death" by reducing discounts and avoiding overstock. That lack of 70% off tags led to a $121M profit, up from a $14M loss last year. AE also optimized costs by closing 18 core brand stores last quarter — but it opened 23 new Aerie stores.

• Recovering: Jobless claims fell to 340K last week, their lowest levels since March 2020. All eyes are on the August unemployment rate, which drops today.
• Yikes: Current and former execs of hedge fund Renaissance Technologies will personally pay up to $7B to settle an IRS dispute.
• Mustang: Ford's August sales of new US vehicles plunged 33% from last year, as the global chip shortage continues to ravage the car industry.
• Raise: Walmart increased hourly wages by at least $1 for 560K of its workers as it plans to staff up for the holidays in a tight labor market.
• Exchange: China announced plans to launch a new Beijing Stock Exchange that caters to small businesses by making it easier for entrepreneurs to raise capital.
• Prosper: E-comm giant Alibaba is the latest company to contribute to the Chinese government's "common prosperity" push with a $15.5B pledge, amid China's tech crackdown.

• August unemployment rate drops

Authors of this Snacks own shares of: Walmart, Google, Ford, and Amazon

ID: 1825431