The Fed’s chairman touts US strength, Facebook makes an acquisition, concerns rasied at TikTok and privacy, plus Google reportedly facing more investigations. Here’s the latest.

From the fed

The US economy is going through an unprecedented recession and a recovery will take time. Even so, you don’t want to bet against America’s economy, said Federal Reserve Chairman Jerome Powell on CBS’ News ’60 Minutes’ Sunday night.

Business ground to a halt this spring as people stayed home and companies shut down to stop the spread of Covid-19. Mass layoffs forced 36.5 million Americans to file first-time claims for jobless benefits since mid-March. The unemployment rate shot up to 14.7% in April — the highest number since the Bureau of Labor Statistics began collecting this data in 1948 — and is expected to climb even higher in May.

Recovering from this will take some time.

“But I would just say this. In the long run, and even in the medium run, you wouldn’t want to bet against the American economy,” Powell said in a prime-time interview.

“This economy will recover. And that means people will go back to work. Unemployment will get back down. We’ll get through this,” he said.

The current, second quarter of the year, which ends on June 30, is going to be ugly in terms of economic data. Expectations for GDP drops are as steep as 40% on an annualized basis. After that, the economy should recover in the second half of the year, even though consumers will likely remain careful in their behavior for a while, Powell said.

But that’s assuming the virus doesn’t resurface for a second wave later on in the year.

Going back to prevention measures would slow the economy down again. “That would be quite damaging to the economy and also to public confidence,” Powell told 60 Minutes.

Facebook buys Giphy

Facebook has bought Giphy, a popular tool for creating the animated images known as GIFs that pepper conversations around the internet.

The companies did not disclose financial terms. Citing unnamed people familiar with the matter, Axios said the deal is valued around $400 million.

Facebook said in a blog post Friday that it plans to integrate Giphy into Instagram but added that Giphy will still work outside of Facebook’s properties.

The company said about half of Giphy’s traffic comes from Facebook’s apps — Instagram, Facebook, Messenger and WhatsApp. Giphy is also widely used on Twitter and in messaging apps.

TikTok concerns

Privacy watchdogs say that the popular TikTok video app is violating a children’s privacy law and putting kids at risk.

A coalition of 20 groups, including Campaign for a Commercial-Free Childhood and the Center for Digital Democracy, filed a complaint Thursday with the Federal Trade Commission saying that TikTok is collecting personal information of kids under 13 without their parents’ consent.

TikTok, owned by Chinese company ByteDance, has exploded in popularity with young people thanks to its goofy, lighthearted feel and ease of use.

At the same time, it’s drawn scrutiny from U.S. officials concerned about national-security risks due to its Chinese ownership and its popularity with kids.

TikTok paid a $5.7 million fine to the FTC in 2019 over collecting personal information from kids under 13, a violation of the federal Children’s Online Privacy Protection Act. It revamped its app with a restricted mode for younger users.

But the privacy groups say it’s easy for kids to use TikTok without parental consent. Kids can sign up with a fake birth date to use the full, adult version of the app, “putting them at risk for both TikTok’s commercial data uses and inappropriate contact from adults,” the groups said in a joint news release.

TikTok uses the data it collects from users, like their location, what’s in their messages and what videos they watch, to figure out what new videos to show them and for targeted advertising.

Feds probing Google

Federal and state regulators in the U.S. are preparing to file antitrust lawsuits alleging Google has abused its dominance of online search and advertising to stifle competition and and boost its profits, according to a report published Friday.

The Wall Street Journal cited unidentified people familiar with the probes in a story about the upcoming offensive by the U.S. Justice Department and the attorneys general from several states.

The Justice Department may file its case as early as this summer while Texas Attorney General Ken Paxton may take action in the fall, along with his peers in other states, according to the Journal.

U.S. Attorney General William Barr has previously said he hoped to decide whether to pursue an antitrust case against Google by the summer. Texas and other states announced they were looking into Google’s business practices last September.

Google acknowledged it has ongoing discussions with the Justice Department and Paxton without elaborating on the nature of the talks. “Our focus is firmly on providing services that help consumers, support thousands of businesses, and enable increased choice and competition,” the company said in a statement.

This isn’t the first time Google has been thrust under the microscope of antitrust in the U.S. The Federal Trade Commission closed an extensive investigation into Google’s alleged abuses in 2013 without taking any action because it concluded the Mountain View, California, company wasn’t hurting consumers.