The daily business briefing: November 3, 2021

1. Facebook to shut down facial recognition system

Facebook executives said Tuesday the social media giant plans to shut down its facial recognition system this month. Jerome Pesenti, vice president of artificial intelligence at Facebook's newly named parent company Meta, said in a blog post that the change was sparked by "many concerns about the place of facial recognition technology in society." The company plans to delete the face scan data of more than one billion users. Facebook introduced the feature in December 2010 to save users time by using software to identify people who appeared in their photos, and suggested tagging them with a simple click. But the facial recognition function fueled privacy concerns and government investigations, as well as a class-action lawsuit.

Reuters The New York Times

2. Biden administration sues to block Penguin Random House and Simon & Schuster merger

The Biden administration on Tuesday filed a lawsuit seeking to block Penguin Random House's planned purchase of rival Simon & Schuster. The move marked the administration's first major antitrust action. Penguin Random House runs 300 imprints around the world that publish 15,000 new books annually, far more than its four main U.S. rivals. The proposed $2.18 billion acquisition of Simon & Schuster would make the already dominant company much bigger. The administration said the merger "would likely result in substantial harm to authors of anticipated top-selling books and ultimately, consumers." Penguin Random House and Simon & Schuster issued a joint statement saying the deal would not reduce the number of books published or the amount paid for them.

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Bloomberg The New York Times

3. Microsoft plans metaverse with file-sharing for offices

Microsoft on Tuesday unveiled a new version of its Teams chat and conferencing program that will offer a corporate-office version of the metaverse championed by Facebook CEO Mark Zuckerberg to let people live, work, and play within in an interconnected virtual world. Microsoft's foray into the space uses Microsoft software announced earlier this year called Mesh, which lets users share augmented reality and virtual reality experiences. The system, which the software giant hopes to make available in early to mid-2022, will allow customers to chat and share office files as digital avatars directly on the enhanced Teams messaging and conferencing program. The news came shortly after Facebook rebranded itself as "Meta," and announced it has similarly been working on virtual workplaces and spaces for companies and businesses.

Bloomberg Fast Company

4. U.S. stock indexes set fresh records ahead of Fed decision

U.S. stock indexes continued their march into record territory on Tuesday. The S&P 500 rose by 0.4 percent. The Dow Jones Industrial Average also gained 0.4 percent, closing above 36,000 for the first time. The tech-heavy Nasdaq rose by 0.3 percent. All three of the main U.S. averages set record highs. They also set records on Monday, the first trading day of November. Investors remained focused on corporate earnings reports and the Federal Reserve's two-day policy meeting, which ends Wednesday. The October jobs report due Friday also could drive markets. "The November [Fed] meeting, October payrolls ... and a host of earnings updates sets up a catalyst heavy week of trading ahead," Goldman Sachs' Chris Hussey said in a note. U.S. stock index futures were flat early Wednesday ahead of the Fed decision.

CNBC

5. Zillow to end home-flipping business, cut 2,000 jobs

Zillow said Tuesday that it was shutting down its home-flipping business, citing problems in its system for valuing properties for quick purchase and sale. The news came two weeks after the real-estate firm announced that it was halting new home purchases for the rest of 2021 because labor and supply shortages were hampering its ability to flip houses fast and make a profit. The end of Zillow's tech-enabled iBuying business will result in the cutting of about 2,000 jobs, or 25 percent of the company's staff. "We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility," said Rich Barton, Zillow's co-founder and CEO.

The Wall Street Journal CNN