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Recode Daily: Inside Walmart’s civil war as it chases down Amazon

Plus: The debate over Nike’s “Betsy Ross flag” shoes, explained. 

A Walmart sign with an American flag flying above it. Joe Raedle/Getty Images

Note: Recode Daily will take a publishing break for the Fourth of July holiday. We will be back for our regularly scheduled morning update on Monday, July 8. Happy Independence Day from all of us at Recode!

Inside the conflict at Walmart that’s threatening its high-stakes race with Amazon. Almost three years after Walmart acquired Jet.com in an attempt to compete with Amazon’s e-commerce prowess, Walmart is still miles behind. Walmart has seen growth since the acquisition, but Recode’s Jason Del Rey reports that it is projecting losses of more than $1 billion for its US e-commerce division this year, and tensions are rising among company leadership.

Walmart’s CEO and board of directors are pressuring Marc Lore, Jet.com’s founder and current head of Walmart’s e-commerce division, to cut losses. Sources tell Recode the company plans to sell at least one of its new digital acquisitions and delaying more ambitious e-commerce investments. So what is Walmart’s plan to catch up? Some inside Walmart would like it to lean more aggressively into its grocery business. “People in this camp believe that Walmart doesn’t need to match Amazon blow for blow online, as long as Walmart builds a larger online grocery business than Amazon does,” Del Rey reports.
[Jason Del Rey / Recode]

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The debate over Nike’s “Betsy Ross flag” shoes, explained. Nike has canceled plans to sell a limited-edition Air Max 1 sneaker featuring a Revolutionary War-era US flag at the request of Colin Kaepernick, a Nike spokesperson and former NFL player. Kaepernick took issue with the choice to use the early version of the flag (sometimes known as the Betsy Ross flag), arguing that it “is pulled from the era of slavery and doesn’t warrant celebration.”

After Nike pulled the shoes, Arizona Gov. Doug Ducey tweeted on Tuesday morning that the state was retracting its offer to waive $2 million in incentives to encourage Nike to build a factory in its borders. Critics of Nike’s decision have launched online campaigns against the brand, including Ted Cruz and Laura Ingraham. Yet, as Fast Company’s Jeff Beer noted, Nike’s decision to follow Kaepernick’s lead “is an action consistent with those values it purports to believe in” as a brand that claims to be a tool for empowerment.
[Kaitlyn Tiffany / Vox]

Platforms like Facebook and YouTube are being overrun by fake cancer treatments. After a Wall Street Journal examination, Facebook and YouTube announced they are taking steps to limit the reach of accounts that share alternative and unproven cancer treatments on their platforms. People on these platforms sometimes view posts from such pages millions of times, according to the Journal’s own examination. Facebook has said it will change its News Feed algorithm to suppress promoting posts about miracle cures (like ones that suggest “baking soda injections” as a treatment for cancer). And YouTube has decided to stop advertising on channels that promote fake treatments; the company will consult medical doctors’ expertise to identify unproven claims. The Journal reports that policing health-related content on social media platforms “is becoming as thorny an issue for the industry as its efforts to tackle hate speech.”
[Daniela Hernandez and Robert McMillan / The Wall Street Journal]

Senate Republicans are annoyed over President Trump’s Huawei concessions. As reported on Monday, Trump has made it possible for the telecom behemoth Huawei to buy US products again, despite his administration’s previous warnings “that the telecom company, which has close ties to the Chinese government, is a national security risk.” Republican lawmakers are upset about the president’s decision because they think it suggests that the US is not taking national security seriously, and because they don’t want US trade restrictions to be used as a bargaining chip.

Sen. Marco Rubio, for example, raised concerns and said that he would “introduce legislation aimed at codifying the restrictions against Huawei.” And one of the president’s closest congressional allies, Sen. Lindsey Graham, said “there’ll be a lot of pushback” if the concessions Trump is offering Huawei are significant. These lawmakers see backing off on Huawei as a questionable compromise Trump is willing to make to reach a trade agreement.[Li Zhou / Vox]

Bonus BBQ read: Recode’s Kara Swisher scoots around Europe. Swisher notes in her latest column for the New York Times that the popularity of e-scooters in Paris is a widespread trend, but “as we see with all change, there is rancor.” Swisher writes that the mayor of Paris recently called the scooter craze “anarchic,” (or a big mess). One e-scooter company, Lime, has been trying to soothe the Parisian ire by offering free helmets and “launch[ing] a cheeky ad campaign to face the issue head-on.” But as Lime and other companies try to expand with e-scooters and bikes in Europe, they face challenges “brought on by tech-driven change that started years ago with other startups.”
[Kara Swisher / The New York Times]

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