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In this articleAMZNWashington, DC Attorney General Karl Racine speaks after a news conference in front of the U.S. Supreme Court September 9, 2019 in Washington, DC.Alex WongWashington, D.C. Attorney General Karl Racine announced Tuesday he’s suing Amazon on antitrust grounds, claiming the company’s practices have unfairly raised prices for consumers and suppressed innovation.Racine is seeking to end Amazon’s allegedly illegal use of price agreements to edge out competition, recover damages and impose penalties to deter similar conduct.Shares of Amazon barely moved on the announcement, down 1% as of Tuesday morning.The lawsuit, filed in D.C. Superior Court, alleges Amazon illegally maintained monopoly power by using contract provisions to prevent third-party sellers on its platform from offering their products for lower prices on other platforms. The attorney general’s office claimed the contracts create a “an artificially high price floor across the online retail marketplace,” according to a press release. The AG claimed these agreements ultimately harm both consumers and third-party sellers by reducing competition, innovation and choice.Amazon requires third-party sellers who want to do business on the online marketplace to abide by its business solutions agreement. Until 2019, Amazon included a clause in that document, referred to as a “price parity provision,” which prohibited sellers from offering their products on a competitors’ online marketplace at a lower price than what their products sold for on Amazon. Amazon quietly removed that provision in March of 2019 amid growing antitrust scrutiny.According to the complaint, even after Amazon removed the pricing parity provision from its agreement with third-party sellers, it added a nearly identical clause, referred to as its “fair pricing policy.” The fair pricing policy enables Amazon to “impose sanctions” on a seller that offers their product for a lower price on a competing online marketplace.Amazon’s pricing agreements were also a topic of scrutiny in the House Judiciary subcommittee on antitrust’s sweeping 400-plus-page report, issued last fall. Lawmakers agreed that Amazon uses its dominant position in e-commerce as leverage with third-party sellers to require they adhere to most-favored-nation clauses.The lawsuit comes months after federal and state enforcers filed antitrust lawsuits against Google and Facebook.Both of those lawsuit involved large coalitions of states banding together to file the lawsuits, but Tuesday’s action comes from Racine’s office alone.Racine said on a call with reporters on Tuesday that the central focus of the lawsuit, the contracts known as “most favored nation” agreements, was a topic he felt his office could take on on its own. It’s common for states to work together or with federal enforcers on antitrust claims, especially on those involving well-resourced companies, due to the sheer amount of work involved in bringing such suits. But Racine said the MFN issue is “sufficiently discrete” that his office could take it on alone.Still, he didn’t rule out the possibility of other states or federal enforcers getting involved, saying it’s common for others to join or bring their own claims once one state files a lawsuit. But he did not indicate any knowledge of such plans.Amazon did not immediately respond to a request for comment.This story is developing. Check back for updates.Subscribe to CNBC on YouTube.WATCH: How US antitrust law works, and what it means for Big Tech

In this articleMSFTScott Guthrie, executive vice president of cloud and enterprise at Microsoft Corp., speaks during the Microsoft Developers Build Conference in Seattle, Washington, U.S., on Wednesday, May 10, 2017.David Ryder | Bloomberg | Getty ImagesThanks to its pending acquisition of Nuance Communications, Microsoft will soon have a suite of software tools that doctors use to automatically keep notes on meetings with patients. But Microsoft isn’t interested in automating everything doctors do, said Scott Guthrie, the software company’s executive vice president for cloud and artificial intelligence.The pending acquisition, worth $19.7 billion including debt, is an unusual case of a major technology company drawing from its cash pile to gain relationships in an individual industry. Microsoft’s rivals in the growing cloud computing market have not gone so far. If the move proves successful, Microsoft could convert Nuance customers into big users of Microsoft’s Azure cloud and strengthen its position relative to the market leader, Amazon.Headquartered in Burlington, Massachusetts, Nuance is widely known in the U.S. health-care space, but has room to grow overseas. On the day the deal was announced, Microsoft said that 55% of U.S. doctors and 77% of U.S. hospitals use Nuance, and 80% of its revenue came from the U.S. in its most recent fiscal year. That means Microsoft can introduce Nuance to its massive international customer base. Last fiscal year, 49% of Microsoft’s revenue came from outside the U.S.There are certain human medical processes that can be automated that Microsoft isn’t immediately interested in. For instance, in recent years, researchers have developed tools that ask patients questions to help diagnose diseases and detect cancer by analyzing medical images.”We’re not looking to compete with doctors or health-care providers,” Guthrie told CNBC in an interview last week. “We want to make them more successful.” Guthrie said that Microsoft and Nuance both want to partner and integrate with other software makers and developers. He said that Nuance has strong relationships with Cerner and Epic Systems, which offer electronic health records software.Nuance’s AI capabilities could enhance Microsoft’s Teams communication app and its Dynamics 365 enterprise software, Guthrie said in a call with analysts in April. Microsoft could also apply Nuance’s technology in other areas, such as conversations between financial advisors and their clients. And ultimately, a key metric of the success of the deal is greater adoption of Azure, said Amy Hood, Microsoft’s finance chief.Microsoft sees the acquisition expanding its total addressable market in health care to $500 billion.Health care will be among the fastest-growing industries over the next decade, Guthrie said. (Deloitte estimated that global health spending will have a 5% compound average growth rate from 2019 to 2023.) Last year Microsoft introduced cloud tools for health care, and soon it will also have software that understands conversations between doctors and patients, whether in person or held virtually.Other cloud providers, including Amazon, have sought to make inroads in health care. But while Amazon has emphasized its infrastructure, Microsoft and Nuance will bring a unique approach centered on doctors, said analysts at Jefferies, which has a buy rating on Microsoft stock, in a note to clients last month.”Having not just virtual machines or containers, but having things like Nuance, having things like GitHub, having things like Teams, having things like Power Platform — those are examples of unique cloud services that none of the other hyperscale cloud vendors have anything like,” Guthrie said.Adding Nuance to the lineup could make Microsoft more appealing to developers targeting the health-care industry, he said.The acquisition is expected to close later this year. When it’s complete, Nuance’s CEO, Mark Benjamin, will report to Guthrie.WATCH: Wheelhouse’s chief investment officer discusses Microsoft’s Nuance acquisition

Social audio app Clubhouse was growing at a feverish pace before it wasn’t. It looks to be growing pretty quickly again, and better prepared for it this time, according to co-founder and CEO Paul Davison.Earlier this year, the number of monthly app installs worldwide had declined by millions — from a peak of over 9 million in February — and in April, installs came in at 900,000. But since launching an Android version this month, Clubhouse has seen one million Android users join and Davison says that a “million more are on the waitlist.””We hope to be ready to let more in soon,” Davison told CNBC on Tuesday after the social media company ranked No. 33 on the 2021 CNBC Disruptor 50 list.Davison said when he and co-founder Ronan Seth started company the company in March 2020, they believed that a “measured approach to growth” was key.”If you grow too quickly, things can break and earlier this year we started growing faster than expected,” Davison said.Clubhouse had servers going down and notifications not going out, and the CEO said the company “really had to slow things down.”Clubhouse reports more than 10 million weekly active users and says more than 300,000 rooms are created each day, and that people are spending over an hour a day on the app. More coverage of the 2021 CNBC Disruptor 50Meet the 2021 CNBC Disruptor 50 companiesWhy Robinhood is the No. 1 companyA look back at the CNBC Disruptor 50: 9 years, 233 companiesWhen disruption becomes a force for good — and badHow we choose Disruptor companiesIn the virtual rooms, users can see a list of the people participating and if they click on the room, the audio switches on and they can hear the conversation.”Oftentimes these are people in small town America, and Japan, and Nigeria, who never had the chance to talk with people in these regions,” Davison said.One prominent example is the over 450,000 people that have come through its “Meet Palestinians and Israelis” room over the course of a little more than a week.”They are meeting people on the ground,” Davison stressed. “These aren’t political pundits, they’re talking with mothers and teachers and shopkeepers.”The invitation-only audio-chat social networking app Clubhouse is pictured on a smartphone on January 26, 2021 in Berlin, Germany.Thomas Trutschel | Photothek | Getty ImagesClubhouse is not just about taking part in, and listening in on, conversations.It sees money to be made in ticketing events, offering creators the ability to be tipped and charge for subscriptions, and those latter payments are ones which Clubhouse does not take any cut from — 100% goes to the creators on the platform.In April, Clubhouse started rolling out payments and currently all iOS users in the U.S. can send and receive payments. Payments are coming to more Android devices and other countries this summer.The company’s audio-only social app is somewhat similar to podcasts, but different in offering live, unfiltered content. Facebook, Twitter and Spotify have introduced similar audio products and are making strategic acquisitions within the space.Amid the concerns about slowing user growth and competition from big technology companies, Davison says, “Voice is the oldest medium. … We’ve been gathering with other people in small groups and talking since the beginning of civilization. … Voice is a durable medium.”Clubhouse was backed by well-known venture capital firm Andreessen Horowitz (whose co-founder also speaks on the app from time-to-time) in a January funding round that reportedly valued it at $1 billion. In March, Clubhouse raised a new round of venture capital valuing the company at $4 billion.SIGN UP for our weekly, original newsletter that goes beyond the list, offering a closer look at CNBC Disruptor 50 companies, and the founders who continue to innovate across every sector of the economy.

This illustration photo shows a person checking the three month GameStop stock graph on a smartphone on February 17, 2021 in Los Angeles as the Reddit, Citadel, Robinhood and Melvin Capital logos are seen on the background ahead of the virtual hearing involving GameStop stocks.Chris Delmas | AFP | Getty ImagesTech-driven disruption in business is rarely a force for good or bad alone. Robinhood is a good example of the rocky, disruptive force that sits between the absolutes.The brokerage industry disruptor exemplifies the way that technology can turn an industry with gatekeepers into a more open platform and force the established giants to innovate and expand. That is why Robinhood earned the top spot on this year’s CNBC Disruptor 50 list, pressing Wall Street and investment giants to lower trading costs — in many cases, to nothing — and consolidate to better withstand an accelerating digital threat.And this year, the company and its CEO, Vlad Tenev, were at the center of a stock market and cultural phenomenon. In January, conversation in Reddit’s WallStreetBets forum about squeezing hedge fund investors drove the seemingly irrational buying up of GameStop and AMC Entertainment shares. That trading happened largely on Robinhood — and it wasn’t the only volatile trade where Robinhood was a center of the action. Between January and February, the platform reported the addition of 6 million cryptocurrency accounts.Debate over ‘democratize finance for all’The Reddit uprising followed a year when millions of Americans stuck at home during the pandemic, many receiving stimulus checks, discovered Robinhood’s easy access to retail trading and became first-time investors. Tenev told CNBC late last year it was seeing deposits equal to, or multiples of, stimulus check amounts. Retail trading grew to 23% of total trading volume by the end of December 2020, up from 13% of trades a year earlier.Robinhood has stuck to one message throughout the growth and tumult, telling CNBC and others: “Our mission is to democratize finance for all.”Vlad Tenev, chief executive officer and co-founder of Robinhood Markets Inc., speaks virtually during a House Financial Services Committee hearing on a laptop computer in Tiskilwa, Illinois, U.S., on Thursday, Feb. 18, 2021.Daniel Acker | Bloomberg | Getty ImagesRobinhood has had some positive, and profound, implications for the market. The company has removed barriers to trading by making investing commission-free and mobile-first. It has simplified investing, and made it more accessible and personal.Robinhood says its tools are reaching a more diverse group of investors. Citing data from a survey it conducted in December among over 98,000 Americans, it says 16% of its customers come from the Hispanic community, compared with 7% at incumbent brokerages including Schwab, E-Trade, Fidelity, TD Ameritrade and Vanguard; and 9% are African American, compared with 3% at other brokers. And it is bringing in younger investors. The company says Gen Y and Gen Z comprise 70% of its users.However, its claims of making investing “less scary” and “easier to understand” are likely to raise eyebrows among its many critics, including the Securities and Exchange Commission, Capitol Hill and the billionaire investor Warren Buffett, who says it is catering to a “casino aspect” in the recent market.More coverage of the 2021 CNBC Disruptor 50Meet the 2021 CNBC Disruptor 50 companiesWhy Robinhood is the No. 1 companyA look back at the CNBC Disruptor 50: 9 years, 233 companiesWhen disruption becomes a force for good — and badHow we choose Disruptor companiesThe company has drawn criticism for gamifying the serious business of investing, which puts at stake individual life savings. Critics say the app is designed more like a video game than an investing tool, and until recently, it sprayed virtual celebratory confetti on the screen for new user accounts.In 2020, Massachusetts regulators filed a complaint against the company citing “aggressive tactics to attract inexperienced investors.”The company settled an SEC probe last December for $65 million, stemming from charges it misled investors about how it makes money, without admitting wrongdoing.When the free trade is the productRobinhood’s ability to offer free trading on the platform is enabled by a practice that continues to draw criticism after the SEC settlement, known as payment for order flow, in which brokers receive payments from dealers for routing trades to them. It is a practice used by many electronic brokers, but it has never been as closely scrutinized as during Robinhood’s rise.Internet giants like Facebook and Google have been dogged for years by criticism that their free services rely on users being “the product.”In Robinhood’s case, the free trade is the product, and that has sparked concern of a conflict of interest, with the broker incentivized to drive the highest number of trades possible.New SEC Chairman Gary Gensler is watching. “These new tools, about props and leaderboards and behavioral ways to get individuals to trade more … there is a bit of a conflict of interest. An app that says that they had zero commissions is earning revenue on your trading … somebody is paying them for that order flow and paying them for that data,” Gensler said in a recent CNBC interview, during which he noted that payment for order flow has been blocked in the U.K. and Canada.At one point during the Reddit WallStreetBets phenomenon, the opposite of too much trading occurred — Robinhood curtailed its customers’ ability to trade — but that resulted in another controversy for the company. Robinhood locked investors out of trading in some of the most contested stocks like GameStop and AMC and drew criticism for acting unfairly toward ordinary investors, including an uncommon alignment of talking points from Rep. Alexandria Ocasio-Cortez and Sen. Ted Cruz. And it led some of the app’s most fervent new investors to leave for brokerage competitors.Tenev later explained that Robinhood was forced to slow trading because it didn’t have enough cash to hedge against the risks. To keep the company operational, the company raised an emergency $1 billion from investors, followed by an additional $2.4 billion. In other words, at a peak of popularity and notoriety, Robinhood could have gone out of business. It was the confidence of its investors in its business model and potential that enabled the company — and its users — to trade another day.Robinhood also faces multiple class-action lawsuits related to trading outages that occurred during the volatile market conditions of March 2020, which locked some traders out of Robinhood’s platform during key movements in stock indexes.We kind of live in the intersection of capitalism, democracy and innovation. And I think that it’s a very interesting place to be.Vlad Tenev Robinhood CEOThe path to growth that Robinhood has experienced isn’t always straight, or benign. Former No. 1 CNBC Disruptor 50 companies have generated business models that have far-reaching consequences in the economy, and in people’s lives. Airbnb and Uber, in particular, have grown into giants with as much controversy as accolades. And the company that ignited the original idea for the CNBC Disruptor 50 list, Facebook, has been at the center of multiple cultural and political tugs-of-war for most of its still relatively short existence (i.e., is Facebook bringing people together or tearing them apart? Supporting democracy or undermining it?). All have benefited from laws and regulations that did not anticipate their disruptive innovations or were slow to react to it, and have ended up in prolonged battles with politicians and regulators.In Robinhood’s case, the past year’s story is not without tragedy. A 20-year-old who thought he owed hundreds of thousands of dollars in a risky bet died by suicide after not being able to reach customer support. His family sued. The company committed to hiring hundreds of registered financial representatives to ensure customer questions are addressed quickly.Its core model of commission-free trading is here to stay, and Robinhood continues to iterate and expand. The stocks, ETFs, options, and cryptocurrencies that its users are invested in are part of a new world where portfolios are checked on an iOS or Android device — sometimes without even opening the app.In the first quarter of 2021, 9.5 million customers traded crypto on Robinhood Crypto, compared with 1.7 million in the fourth quarter of 2020.During historic market volatility early in the pandemic, Robinhood added a Market Volatility page to its help center, and the company fully rolled out recurring investments and access to fractional shares.One thing is certain: Robinhood’s appeal to a new generation of investors has forced the traditional Wall Street banks, asset managers and brokerage firms to take note. Goldman Sachs has been investing in its retail arm, Marcus, and Fidelity just launched “youth accounts” for teens to trade and save, commission-free, on its platform. E-Trade was acquired by Morgan Stanley, and TD Ameritrade by Charles Schwab. Even the firm synonymous with long-term buy-and-hold investing, Vanguard, now offers commission-free trading on many products.Robinhood says it has 13 million users and its mission is “to unlock a source of wealth for a new generation.” That figure has not been updated since 2020. Some more recent industry estimates put the number closer to 20 million users, but that could include some accounts that are not funded, and the company has not confirmed it.Regulators remain wary of where its influence over the millions of new investors it has introduced to the market will end. The SEC’s Gensler told CNBC bringing more access to the capital markets for retail investors is a good thing, as long as the core principles of protecting investors are not upended by apps that encourage active trading through behavioral prompts.”Nobody really asks the question of, ‘Is it too easy to buy a flat screen TV with one click and get it delivered?’ But people are now asking the question of ‘Should it be this easy and low friction for people to invest in the markets?’ Tenev argued in a CNBC interview late last year.”Our belief is, the more we lower the barriers to entry, the more we level the playing field and allow people to invest their money at a younger age, the better off our economy will be and the better off society will be because we kind of live in the intersection of capitalism, democracy and innovation,” Tenev said. “And I think that it’s a very interesting place to be.”SIGN UP for our weekly, original newsletter that goes beyond the list, offering a closer look at CNBC Disruptor 50 companies, and the founders who continue to innovate across every sector of the economy.