Connect with us

Business

The British homeware designers heading to the US for Tupperware-style trunk shows

Published

on

A table set with brown glasses and ceramic plates, which are brown with an off-white splatter pattern. A jug in the same design is filled with white hydrangeas. There is a pale brown embroidered tablecloth, and a blue embroidered napkin sits folded on one of the plates.

In a small boutique in Dallas in spring, British homeware designer Louise Roe stacked her handmade splatterware plates high on tables laid with hand-embroidered linens, surrounded by rattan plant pots, ceramics and ornaments. She was creating “a market atmosphere” for her one-day trunk show — a kind of upmarket Tupperware party. As customers came in, she offered a glass of champagne, a sandwich and a scone, and explained the design and making process behind her business, Sharland England. Many bought 16-piece dinner sets. “Texans love to host,” says Roe. “One man I talked to for about an hour ended up buying so much, I had to call the factory to ask them to restart production to fulfil his order.”

Trunk shows have a long history; American fashion houses such as Bill Blass, retailers including Saks Fifth Avenue, and the luxury ecommerce site Moda Operandi have all used them to engage with harder-to-reach customers who are eager for a slice of private glamour. But recently, British homeware designers have started tapping into the trend, packing up their wares and setting up around the States to connect with a new audience. 

This year Roe did three trunk shows, travelling to Dallas, Montecito, in California and San Francisco, with another coming up in early November in Brooklyn. The ceramicist Deborah Brett has held trunk shows in Los Angeles, with a trio planned for the Hamptons next year including two dinners in private homes. The designer Henry Holland is currently in the US with his new fabric range, and the designer Flora Soames has held trunk shows in Dallas and Southampton, with more trips planned to Palm Beach, Dallas and Atlanta early next year. “It’s good old-fashioned peddling your goods,” she says. “It’s a lot of work, it’s exhausting, and I feel like a travelling circus at times with my huge bag of fabric swatches, but it’s very rewarding.” 

A table set with brown glasses and ceramic plates, which are brown with an off-white splatter pattern. A jug in the same design is filled with white hydrangeas. There is a pale brown embroidered tablecloth, and a blue embroidered napkin sits folded on one of the plates.
Splatterware from Sharland England: as customers came in, they were offered a glass of champagne, a sandwich and a scone © Mackenzie Hunkin/Sharland England
Four upholstered stools with striped fabric on the sides and plain fabric on the seat. Behind them hang some fabric swatches in a range of colours, behind which a floral wallpaper can be seen.
Fabric and stools by Flora Soames: ‘I feel like a travelling circus with my huge bag of fabric swatches, but it’s very rewarding’ © Anna Stathaki

The business opportunity is golden. “Trunk shows are a low-risk, high-reward model,” says interiors consultant Alice Warwick. She adds that post-Brexit, “many UK interiors businesses lost a significant portion of their European customer base, but the US market offers a strong opportunity with its greater disposable income compared to the UK.” Indeed, the UK interiors design industry was worth £1.6bn in 2023, according to a market report by IbisWorld, a figure that has declined 0.3 per cent per year on average between 2018 and 2023. In comparison, the US market size was $25.1bn and has grown 2.9 per cent per year over the same period. 

“The volumes are so much larger,” Soames says of the buying power of her top-end clients. Along with bigger homes and multiple properties, Soames says there’s an exuberance to the way certain tribes of Americans like to decorate. “They really go for it: they might buy fabric for the walling, the curtains, the sofas and the armchairs. There’s also a tendency to redecorate, often. My own tatty old sofa wouldn’t cut it in many of these houses.” 

Advertisement

Alice Sykes, a fashion and interiors PR, has organised six trunk shows in the US, taking 10 independent British designers including the Cotswolds-based rattan furniture makers, Hadeda. The last was a garden party at her sister Lucy Sykes’ house in Bridgehampton in Long Island, “a charming, old-fashioned whaling cottage that exudes a timeless elegance reminiscent of an English countryside retreat,” according to Alice, where 80 customers came across two days. Part of the appeal to an American audience is a nostalgic English aesthetic. “American audiences seem particularly excited to experience the innovation and craftsmanship,” Sykes says. “These trunk shows offer a chance to discover and connect with English brands.”

brightly coloured sun loungers and matching parasols in a mature garden next to a swimming pool
A Colours of Arley display at the Hamptons trunk show

Christina Juarez, a New York-based communications and strategist for the design industry, agrees. “There’s definitely an increasing appetite,” she says, noting that her own apartment in New York veers towards the look. “We’ve had that pared-back, beige, Californian look trending for so long now, and I think people want to stand out. The British aesthetic does a good job of pulling together different things with heritage, meaning, colour and pattern in a loose, unstructured way.”

Holland sees himself as a beneficiary: “The market here is evolving from the minimalist modern look and palette.” Customers also, he adds, crave the niche; something that makes them seem original: “People are excited to see smaller, independent and younger brands.” 

Juarez adds that younger Americans are more interested in artisanal products, such as Soames’ fabrics, printed and woven in British mills, and Brett’s ceramics designed in her London studio and made by her or craftspeople in Stoke-on-Trent. Storytelling is key. “Explaining the different firing processes and temperatures, and how I make the pieces, gets people really interested,” Brett says. 

Despite having a whole world of shopping at our fingertips, Juarez says consumers want to see the product in real life, and mourn the loss of the numerous “amazing homeware stores in New York in the late 1990s and early 2000s”. She feels that customers miss being able to see and hold an item. “Consumers love to meet a seller, hear about how maybe they changed careers, or made this in their backyard.” In a digital world, “it’s a connection.” 

Advertisement
A woman wearing a blue boiler suit and a blue and white scarf in her hair stands in a studio, smiling at the camera. She is holding an irregular shaped ceramic bowl with fluted edges and a blue and white pattern
Deborah Brett says storytelling is key: ‘explaining the firing processes gets people really interested’ © Sarah Blake for dbCeramic
A man stands leaning against a fabric covered wall. He is wearing white trousers and white tanktop, with a green patterned shirt. The fabric has a geometric pattern in brown, pink and white
Henry Holland is currently in the US, showing his fabric at trunk shows

Then there is the charm of sellers themselves. Louisa Tratalos, founder of fabric brand Colours of Arley, says that customers at Sykes’ Hamptons trunk show in July loved hearing her story. The daughter of a Cheshire fabric mill owner, she created a business selling striped fabric made from recycled plastic bottles, which customers can create in custom colourways. Her fabric has been used by interior designers for stores, including several RIXO shops, and hotel chains, along with private clients. She brought a fabric colour chart and enjoyed snipping off samples to show her trunk show clients how to combine stripe colours. “They loved the theatre of it,” she says.  

Her 64-year-old father, Adrian, was equally fascinated with his daughter’s sales tactics. “His mind was slightly blown. When he started his business, if you wanted to sell in the US, you had to communicate by fax or an expensive call, shipping would take ages, and so it just wasn’t a consideration for him.” In comparison, Louisa already has an interested American audience thanks to her 61,400-strong Instagram page; 30 per cent of her customers are now from the US, she says. “A few people who had seen I was doing a trunk show jumped in their cars and drove for two hours just to come and meet me.” 

A woman stands behind a stall full of homeware, including brightly coloured plates and bags, jewellery and blankets. A sign reads ‘Hidden Gem’, the name of the brand
A vendor at the inaugural Ticking Tent trunk show © Matt Prussin

The costs of trips can mount up. “I’m envious of those who just have fabrics to take over,” say Brett. “What costs money is the shipping, and my stuff weighs a tonne.” She says that she takes over enough stock to sell there and then — small pieces like bud vases and her ceramic match boxes — as well as pieces that customers can then order online. Roe has a US-based warehouse but says: “What really works well is negotiating with a store that will take and sell the stock after a trunk show; often people do want to pop back and buy more.” 

While it might all sound a bit tinpot — a bit “fete at a village hall” — the brands say the trunk shows are an important revenue stream. Roe’s have directly led to 10 per cent of Sharland England’s total sales, but also a “halo effect, where we saw an increase in website sales, US press interest and trade inquiries” directly afterwards that has led to a 186 per cent increase in US business for the brand, Roe says. Now 66 per cent of sales are in the US. 

Trunk shows can make a significant difference for these small brands. In spring, Juarez co-organised her first show, The Ticking Tent, with Benjamin Reynaert, bringing together 30 personally vetted sellers to set up stall in Valley Rock Inn & Mountain Club owned by 1stdibs founder Michael Bruno in New York state. She had ticking fabric donated by Schumacher to create a bespoke entrance tent and sold tickets from $25 — many bought by interior designers. Each vendor made between $10,000 and $40,000 that day, she says, and the second Ticking Tent event which took place last weekend went very well too, with early bird tickets costing $150, and with 57 vendors. “I saw loads of industry contacts that I hadn’t seen in years, who were saying, “Can’t talk; have to shop.”

Find out about our latest stories first — follow @ft_houseandhome on Instagram

Source link

Advertisement
Continue Reading
Advertisement
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Business

Live from Kilkenomics: anger and economics

Published

on

Live from Kilkenomics: anger and economics

Unlock the Editor’s Digest for free

Angry eruptions in elections around the world are changing leaders. And many of those leaders are coming in with radical offers to the voters. But can anger change an economic outcome for the better? And will it? Today on the show, Katie Martin hosts a live forum at the Kilkenomics Festival in Kilkenny, Ireland and discusses the topic with Leah Downey, a political theorist, and Eric Lonergan, a money manager. Also, we go long turkeys and short orange politicians.

For a free 30-day trial to the Unhedged newsletter go to: https://www.ft.com/unhedgedoffer

Advertisement

You can email Robert Armstrong at robert.armstrong@ft.com and Katie Martin at katie.martin@ft.com.

View our accessibility guide.

Source link

Advertisement
Continue Reading

Money

Royal Mail to make a major change to fees in days as shoppers could face Christmas surcharge

Published

on

Royal Mail to make a major change to fees in days as shoppers could face Christmas surcharge

ROYAL Mail is to make a major change to fees within days as shoppers face a surcharge this Christmas.

The service has revealed that business account customers will be asked to pay an additional peak surcharge of 5p for letters and 10p for parcels.

Royal Mail is to make a major change to fees within days

1

Royal Mail is to make a major change to fees within daysCredit: Getty

This will come into force on November 18 and end on January 10, 2025 – the peak time for Christmas deliveries.

Advertisement

While the surcharge won’t be charged to directly to consumers, there are concerns that they will end up footing the bill anyway as businesses look to up their prices to cover the extra cost.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “At a time when rising prices have eaten into profits, some companies will feel they have no alternative but to pass the costs on.

“It means shoppers being clobbered with extra delivery charges at a horribly expensive time of year.”

The same surcharge was added to letters and parcels for the first time last year.

Advertisement

The 5p peak surcharge is applied to Royal Mail 24 and Royal Mail 48 large letters, Royal Mail Tracked 24 and Royal Mail Tracked 48 letterboxable products sent by business account holders.

While the following products will be hit with a 10p peak surcharge:

  • Royal Mail 24
  • Royal Mail 48 Parcels
  • Royal Mail Tracked 24
  • Royal Mail Tracked 48 Parcels
  • Royal Mail Tracked Returns
  • Royal Mail Special Delivery Guaranteed by 9am, 1pm and end of the day Sunday
  • Special Delivery Guaranteed Returns

A Royal Mail spokesperson said: “The peak surcharge only applies to business customers for the Christmas period and was introduced last year.

“It applies an additional charge to certain business parcel products for a limited period to reflect the increased demand and capacity needed to handle increased volumes.

eBay Parcel Surprise: Rare Stamps Galore!

“Other parcel carriers apply a similar surcharge. Christmas is our busiest time of the year and we invest in around 16,000 additional staff, more vehicles and temporary sites to increase our capacity to handle double the normal volumes of parcels.”

Advertisement

It comes after Royal Mail upped the price of first-class stamps by 30p to £1.65 at the start of October.

First class stamp prices increased by 10p to £1.35 in April and by 10p to 85p for second class.

Royal Mail said it had tried to keep price increases as low as possible in the face of declining letter volumes, and inflationary pressures.

More Royal Mail changes

In October, Postal regulator Ofcom said that Royal Mail could be allowed to drop Saturday deliveries for second class letters under an overhaul of the service.

Advertisement

Regulator Ofcom, which has been consulting on the future of the universal postal service since January, said it is now focusing efforts on changes to the second class service while keeping first class deliveries six days a week.

Under the plans being considered, second class deliveries would not be made on Saturdays and would only be on alternate weekdays, but delivery times would remain unchanged at up to three working days.

Ofcom said no decision had been made and it continues to review the changes, with aims to publish a consultation in early 2025 and make a decision in the summer of next year.

Royal Mail said letter volumes have fallen from 20billion in 2004/5 to around 6.7billion a year in 2023/4, so the average household now receives four letters a week, compared to 14 a decade ago.

Advertisement

Royal Mail also ousted old-style stamps and replaced them with barcoded ones last July.

The business said the move would make letters more secure.

Anyone who still has these old-style stamps and uses them may have to pay a surcharge.

How to save money on Christmas deliveries

Advertisement

CHRISTMAS is all about giving, but unfortunately, it does come at a price – especially if you prefer to shop online.

Senior Consumer Reporter Olivia Marshall shares five ways you can save money on Christmas deliveries to help you protect the pennies this festive season.

Order early

Many retailers offer discounts on shipping costs if you place your orders well in advance.

Advertisement

This can also help you avoid the higher costs associated with last-minute express deliveries.

Free shipping offers

Look out for retailers that offer free shipping promotions, especially during the festive season.

Some stores provide free delivery if you meet a minimum purchase amount.

Advertisement

Click and collect

Opt for click and collect services where you can pick up your purchases from a local store or designated collection point.

This can often be a free service and can save you on delivery fees.

Combine orders

Advertisement

If you are buying from the same retailer, try to combine your purchases into a single order.

This can help you meet free shipping thresholds or reduce the number of delivery charges you need to pay.

Use discount codes

Search for discount codes or vouchers that can be applied to your delivery costs.

Advertisement

Websites and browser extensions dedicated to finding and applying discounts can be particularly helpful.

By planning ahead and taking advantage of these strategies, you can reduce the cost of your Christmas deliveries.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

Advertisement

Source link

Continue Reading

Business

Donald Trump picks Robert Kennedy Jr to run US health department

Published

on

Robert Kennedy Jr

Unlock the White House Watch newsletter for free

Donald Trump has nominated vocal vaccine sceptic and former Democrat Robert F Kennedy Jr as head of the US Department of Health and Human Services, the latest in a series of controversial picks for top cabinet jobs.

The appointment will put Kennedy, who sowed doubts about Covid-19 vaccines and has been critical of the pharmaceutical industry, in charge of a department with a $1.8tn budget with wide-ranging influence over drug regulation and public health.

Advertisement

Trump said in a statement on Thursday that he was “thrilled” to appoint Kennedy to the role. “For too long, Americans have been crushed by the industrial food complex and drug companies who have engaged in deception, misinformation, and disinformation when it comes to Public Health,” the president-elect wrote in social media post.

As head of HHS, with oversight of agencies such as the Food and Drug Administration and the Centers for Disease Control and Protection, Trump said Kennedy would “restore these Agencies to the traditions of Gold Standard Scientific Research, and beacons of Transparency, to end the Chronic Disease epidemic, and to Make America Great and Healthy Again!”

This is a developing story

Source link

Advertisement
Continue Reading

Money

State pensioners can claim £350 free cash payment to help with energy bills after winter fuel payments cut

Published

on

Eight reasons your PIP benefit payments could be stopped by the DWP

STATE pensioners are eligible to claim up to £350 in cash to help cover the cost of energy bills this winter.

The Suffolk Community Foundation has launched the 14th year of its annual Surviving Winter appeal, which is in response to winter fuel payments being slashed.

A charity that helps vulnerable older people to "survive winter" said its grants and advice were needed more than ever

1

A charity that helps vulnerable older people to “survive winter” said its grants and advice were needed more than everCredit: Alamy

Previously, the winter fuel payment was paid to all pensioners to help with energy bills.

Advertisement

However, in July, the government said it would only be made to those on low incomes who received certain benefits.

Chancellor Rachel Reeve’s decision to means-test the up to £300 cash boost has meant around 10million elderly people can no longer get the support. 

Now only those receiving pension credit will receive the handout.

The Suffolk charity said it’s campaign has become even more relevant this year because ninety per cent of pensioners are estimated to lose the winter fuel payment.

Advertisement

It added that the government’s policy change also means the organisation cannot rely on those who do not need the payment to consider donating it to help others.

According to the appeal’s website, the campaign has raised more than £1.5 million so far, and the charity is appealing to anyone who feels able to donate to consider doing so.

£175 could be used to help someone pay for gas or electricity, whereas £350 could provide 500 litres of heating oil.

Cabinet Minister grilled on Winter Fuel Payments

It adds that the fund has provided a lifeline for many thousands of people by helping them to stay safe and healthy in their own homes as the weather turns colder.

Advertisement

How can I apply for the scheme?

You may apply for support if you are over the age of 66 and are not on pension credit.

You must also live in Suffolk, have maximum savings of £5,000 and a maximum income of £20,000, or £24,000 if you’re a couple.

Three charity partners are working with Suffolk Community Foundation to manage the applications and payments; East Suffolk Citizens Advice, Sudbury and South Suffolk Citizens Advice and Gatehouse Caring.

Individuals wishing to apply should get in contact with the office of the district or borough they live in.

Advertisement

What other cost of living payments are available?

Plenty of councils across the country are offering extra support to pensioners in light of the missing Winter Fuel Payment.

For example, Salford City Council has £2.7million of cash to give to struggling people this winter.

Salford City Mayor Paul Dennett said the funding will help the most vulnerable and anyone who is struggling financially should get in touch.

It will not be paid in cash but in vouchers which residents can use for food or fuel.

Advertisement

Residents do not need to be in receipt of benefits to apply. You can apply by visiting: https://contactus.salford.gov.uk/?formtype=HSF.

You can also call the helpline 0800 011 3998.

The current economic climate is seeing more charities step in to fill the gap left by a lack of support from the Government and statutory services. 

For those living with cancer, Macmillan’s Financial Grants Scheme was established to help support those who are struggling to cover essential living costs.

Advertisement

So anyone living with cancer and who needs help with bills and other essentials can apply for the grant.

It’s worth up to £350 and is a one-off payment and can be used to help with things like:

  • Energy bills
  • Home adaptions
  • The cost of travel to and from hospital
  • Any extra costs you might have because of cancer

It is means-tested, so you must have no more than £6,000 in savings for a household of one person or no more than £8,000 for a household of two or more people.

You must have a weekly income of no more than £323 per week for a household of one person or no more than £442 per week for a household of two or more people.

Benefits like personal independence payments (PIP)disability living allowance (DLA) or attendance allowance (AA) do not count towards income for this.

Advertisement

To apply you can call 0808 808 00 00 or you can speak to one of your healthcare team, like a district nurse or Macmillan nurse, care professional or benefits adviser who can fill in the form with you online.

The British Legion has also set up a Cost of Living grant, which can be applied for here using the Lightning Reach portal.

You can also find out what grants may be available to you using Turn2Us’s grant search on the charity website.

There is a huge range of grants available for different people – including those who are bereaved, disabled, unemployed, redundant, ill, a carer, veteran, young person or old person.

Advertisement

How has the Household Support Fund evolved?

The Household Support Fund was first launched in October 2021 to help Brits pay their way through winter amid the cost of living crisis.

Councils up and down the country got a slice of the £421million funding available to dish out to Brits in need.

It was then extended in the 2022 Spring Budget and for a second time in October 2022 to help those on the lowest incomes with the rising cost of living.

The DWP then confirmed a third extension of the scheme through to March 31, 2024.

Advertisement

Former chancellor Jeremy Hunt extended the HSF for the fourth time while delivering his Spring Budget on March 6, 2024.

In September 2024, the Government announced a fifth extension.

What is the Household Support Fund?

You may also be eligible for up to £500 worth of cost of living payments from the government’s Household Support Fund (HSF) which is worth £421 million in total.

It’s available to support those who are struggling to afford household basics including food, energy, wider essentials, and exceptional costs.

Advertisement

The fund has been split up between councils in England who are in charge of distributing their allocation.

It was set up in 2021, however, it has been extended by the UK government a number of times. 

How much you are eligible for is usually based on what benefits you already receive and your financial circumstances. 

To be eligible for help, you usually have to be in receipt of a council tax reduction or show proof of being in financial difficulty.

Advertisement

Each council has a different application process – so you’ll have to ask your local authority or find out via your council’s website.

To find out how to contact your local authority, use the gov.uk authority tool checker.

In the last round of funding, some residents received their share automatically, while others had to apply.

For example, Haringey London Council is issuing automatic payments to eligible residents, as well as a support fund which can be applied to.

Advertisement

It is also issuing payments to schools, which means they can distribute free school vouchers.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

Source link

Advertisement
Continue Reading

Travel

World’s tallest rollercoaster closes for GOOD after 19 years

Published

on

The world's tallest rollercoaster is closing for good

THE tallest rollercoaster in the world has confirmed it will be closing down.

Kingda Ka, at Six Flags Great Adventure in New Jersey, is the world’s tallest at 456 feet tall.

The world's tallest rollercoaster is closing for good

3

The world’s tallest rollercoaster is closing for goodCredit: AFP
Kinga Ka first opened in 2005

3

Advertisement
Kinga Ka first opened in 2005Credit: AFP – Getty

However, the theme park has confirmed that the ride would be closing as it “has been surpassed by modern advancements”.

Having opened in 2005, it was also the fastest rollercoaster with top speeds of 128mph although this has since been beaten.

Park spokesperson Mark Villari Jr. told Theme Park Tribune: “What was cutting-edge roller coaster technology 20 years ago has been surpassed by more modern advancements.

“This has challenged operations and contributed to an inconsistent guest experience.”

Advertisement

In its place, the park said a new ride will replace it which will be a “multi-world-record-breaking launch roller coaster”.

Also replacing the Green Lantern rollercoaster, it will open in 2026.

The park’s president Brian Bacica said in a statement: “We understand that saying goodbye to beloved rides can be difficult, and we appreciate our guests’ passion.

“These changes are an important part of our growth and dedication to delivering exceptional new experiences.

Advertisement

“We look forward to sharing more details next summer.”

Also opening at the park is The Flash: Vertical Velocity, which will be “North America’s first super boomerang coaster” when it opens next year.

I tried the UK’s newest, tallest and fastest rollercoaster – it’s unlike anything else in the the country

Last year, Kingda Ka was forced to temporarily close because of a cable snap mid ride.

While no one was hurt, the ride was evacuated and shut down.

Advertisement

Despite its top speeds, it dropped to the second fastest rollercoaster in the world after Formula Rossa opened in Abu Dhabi in 2010.

However, Kingda Ka is only one of two stratacoasters in the world – a ride that has drops of at least 400 feet.

Passengers endure a steep 90 degree climb before plummeting down the other side.

A much-loved UK theme park has also been forced to close.

Advertisement

Flambards Theme Park in Cornwall confirmed earlier this month that it would be shutting permanently.

Use these tips on your next theme park trip

Next time you visit a theme park, you may want to use our top tips to make the most of your adrenaline-inducing day out.

  1. Go to the back of the theme park first. Rides at the front will have the longest queues as soon as it opens.
  2. Go on water rides in the middle of the day in the summer – this will cool you off when the sun is at its hottest.
  3. Download the park’s app to track which rides have the shortest queues.
  4. Visit on your birthday, as some parks give out “birthday badges” that can get you freebies.
  5. If it rains, contact the park. Depending on how much it rained, you may get a free ticket to return.

The park cited “rising costs and a steady decline in visitor numbers”.

We’ve also rounded up videos of the other fastest rollercoasters in the world.

A new rollercoaster will replace it in 2026

3

Advertisement
A new rollercoaster will replace it in 2026Credit: Alamy

Source link

Continue Reading

Business

US regulators plan to investigate Microsoft’s cloud business

Published

on

Unlock the Editor’s Digest for free

The Federal Trade Commission is preparing to launch an investigation into anti-competitive practices at Microsoft’s cloud computing business, as the US regulator continues to pursue Big Tech in the final weeks of Joe Biden’s presidency.

The FTC is examining allegations that Microsoft is abusing its market power in productivity software by imposing punitive licensing terms to prevent customers from moving their data from its Azure cloud service to competitors’ platforms, according to people with direct knowledge of the matter.

Advertisement

Tactics being examined include substantially increasing subscription fees for those that leave, charging steep exit fees and allegedly making its Office 365 products incompatible with rival clouds, they added.

The FTC is yet to formally request documents or other information from Microsoft as part of the inquiry, the people said.

A move to challenge Microsoft’s cloud business practices would mark the latest broadside against Big Tech by the FTC’s chair Lina Khan, who has centred her tenure on aggressively curbing the monopolistic powers of the likes of Meta and Amazon.

Khan, who has become the public enemy for most of Wall Street’s dealmaking community, is set to be replaced after president-elect Donald Trump enters the White House next year.

Advertisement

While any successor to Khan may not adopt as tough a stance, potential contenders are expected to continue targeting Big Tech companies which have attracted bipartisan ire in Washington. The Republican party has accused online platforms of allegedly censoring conservative voices.

The decision to launch a formal probe would come after the FTC sought feedback from industry participants and the public on cloud computing providers’ business practices. The results in November last year revealed that most responses raised concerns around competition, the agency said at the time, including software licensing practices that curb the ability to use some software in other cloud providers’ ecosystems.

The FTC also highlighted fees charged on users transferring data out of certain cloud systems and minimum spend contracts, which offer discounts to companies in return for a set level of spending.  

Advertisement

Microsoft has also attracted scrutiny from international regulators over similar matters. The UK’s Competition and Markets Authority is investigating Microsoft and Amazon after its fellow watchdog Ofcom found that customers complained about being “locked in” to a single provider, which offers discounts for exclusivity and charge high “egress fees” to leave. 

In the EU, Microsoft has avoided a formal probe into its cloud business after agreeing a multimillion-dollar deal with a group of rival cloud providers in July.

The FTC in 2022 sued to block Microsoft’s $75bn acquisition of video game maker Activision Blizzard over concerns the deal would harm competitors to its Xbox consoles and cloud-gaming business. A federal court shot down an attempt by the FTC to block it, which is being appealed. A revised version of the deal in the meantime closed last year following its clearance by the UK’s CMA.

Since its inception 20 years ago, cloud infrastructure and services has grown to become one of the most lucrative business lines for Big Tech as companies outsource their data storage and computing online. More recently, this has been turbocharged by demand for processing power to train and run artificial intelligence models.

Advertisement

Spending on cloud services soared to $561bn in 2023 with market researcher Gartner forecasting it will grow to $675bn this year and $825bn in 2025. Microsoft has about a 20 per cent market share over the global cloud market, trailing leader Amazon Web Services that has 31 per cent, but almost double the size of Google Cloud at 12 per cent.

There is fierce rivalry between the trio and smaller providers. Last month, Microsoft accused Google of running “shadow campaigns” seeking to undermine its position with regulators by secretly bankrolling hostile lobbying groups.

Microsoft also alleged that Google tried to derail its settlement with EU cloud providers by offering them $500mn in cash and credit to reject its deal and continue pursuing litigation.

The FTC and Microsoft declined to comment.

Advertisement

Source link

Continue Reading

Trending

Copyright © 2024 WordupNews.com