This week’s news includes; Brexit negotiations proceed, Ireland collects Apple back tax, Hammerson acquires Intu, Amazon launches in Australia
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week;
- CNN explores what’s driving the Bitcoin frenzy
- Investopedia looks at the US treasury’s claim that US banks are as risky today is in 2007
- BBC News asks are we seeing the end of mega-cheap personal loans?
The EU has agreed to allow Brexit talks to proceed to the next stages. Last Friday, EU Commission President Jean-Claude Juncker announced that sufficient progress had been made in the negotiations to move forward to trade talks. Interestingly, he personally singled out Theresa May and praised her for her efforts. The UK will pay up to £39 billion for the divorce bill covering our outstanding EU liabilities. This bill will be paid over a number of years. The rights of UK citizens in the EU will be protected and vice versa, furthermore, there will be no “hard border” with Ireland.
After an exceptionally tumultuous week for Theresa May this is a notable step forward. The initial proposals for the Irish border were rejected earlier in the week, as they weren’t agreeable to the Northern Irish DUP. This prevented talks from progressing and was hugely embarrassing for the UK government. Theresa May struck a deal of “confidence and supply” worth £1 billion with the DUP to give her a working majority in UK parliament. It was huge oversight not to consult the DUP before proposals for the Irish border were put forward. The Telegraph looks closer at this blunder.
The divorce bill has been deemed “the easy part” of the negotiations by the EU. Considering the numerous hurdles faced thus far, it doesn’t necessarily bode well for the success of the “difficult” parts ahead. With barely 15 months until our departure from the European Union, the Brexit negotiations are now entering their most crucial stage.
2. IRELAND AGREES TO COLLECT APPLE BACK TAXES
Ireland has agreed to collect 13 billion euros in back taxes from Apple. This came after the European Commission ruled year that Ireland’s tax regime gave Apple an unfair tax advantage. Ireland allowed Apple to pay less tax than other companies and were ordered to collect the taxes back but failed to do so. They were then referred to the European Court of Justice 2 months ago for this failure. Both Apple and Ireland have appealed, so the amount payable must be stored until the appeal process is complete.
Ireland has corporation tax of 12.5%, one of the lowest in the EU. Consequently, it’s a ideal location for multinational companies seeking single access to the EU to domicile. As of 2015 there were over 700 US companies domiciled in Ireland.
The Guardian looks at reactions to the move.
3. ECJ RULES ON DISTRIBUTORS
The European Court of Justice has ruled that brands can restrict distributors like Amazon & Ebay from selling their products. The ECJ claimed that this move wouldn’t breach competition rules and serves solely to protect the “luxury image” of goods.
Regulators throughout Europe in the past have been reluctant to accept designers to do this. In Germany for example, they ruled that limiting sales of certain goods on Amazon & Ebay would harm competition. Designers have constantly criticised Amazon for failing to prevent counterfeit goods being sold on their platform and have been seeking redress.
Check out BBC News’ report for an in-depth look at this decision.
4. HAMMERSON BUYS INTU FOR £3 BILLION
Shopping centre owner Hammerson has a struck a £3.4 billion to acquire Intu, creating the UK’s largest property company. Hammerson and Intu boast huge portfolios with household names. Hammerson owns Birmingham’s Bullring & Bicester Village, while Intu owns Lakeside shopping centre.
The combined company will be worth £21 billion have a stake in 60% of the UK’s super-malls. They are primarily seeking to target key growth markets in Spain and Ireland.
Check out BBC New’s report for further analysis on the deal.
Herbert Smith Freehills and Linklaters will be advising on Hammerson on the bid. (The Lawyer)
5. APPLE WINS TRADEMARK CASE
Apple has won a significant trademark lawsuit against smartphone maker Xioami. The European General Court deemed that Xioami’s “Mi Pad” tablet could not be registered as a trademark as it was too similar to Apple’s iPad.
Xioami’s initial request for trademark registration was in 2014 and Apple appealed to the EUIPO in 2016. The EUIPO also ruled that the Mi Pad was too closely similar. Xioami can still appeal the decision to the European Court of Justice.
Reuters looks further at decision.
Check out our recent insight article exploring the smartphone market.
6. AMAZON LAUNCHES IN AUSTRALIA
Amazon has officially launched its service in Australia. The arrival of Amazon has not been welcomed by local retailers whose businesses are likely to suffer. Amazon is notorious for killing independent local business due to their low prices.
The Australian market however, is a very challenging one for a number of reasons. Large swathes of the Australian population do not have internet access which makes it challenging. Another key challenge is simply the size of the country. Logistically, it’s very challenging to reach particular areas and to strategically place distribution centres. Read the Guardian’s report for more reactions.
As Amazon launches in Australia CNN asks Will Amazon’s magic work in its newest market?
7. CINEWORLD ACQUISITION
Cineworld is to acquire US cinema chain Regal for £2.7 billion. This acquisition creates the world’s second largest cinema chain with over 9500 screens in the US and Europe.
This is a huge gamble considering the decline in the cinema industry. Footfall at cinemas has declined due to substantial ticket prices hikes and easily online streaming. Box office figures in the US are at their lowest levels since the 1990’s.
Check out BBC News’ report for further analysis of the market.
8. UBER LOSES LICENSE IN SHEFFIELD
Uber has suffered another blow as it loses its operating license in Sheffield. The decision to suspend the taxi-hailing firm’s license was taken by Sheffield council. Sheffield Council claims Uber didn’t respond to important requests made regarding its management. Uber blamed this decision on an “administrative error” by council and expects the issue to be resolved soon. Uber can operate as normal until 18 December but if it does not appeal the suspension then the suspension will come into effect.
Uber is facing numerous issues worldwide. It is still appealing TfL’s decision not to renew its hire license in London. More significantly, it covered up a cyber hack in 2016 and the ramifications from this are still yet to be seen. In addition, Uber sought to appeal to the Supreme Court over the employee status. Last week the Supreme Court rejected the request. Check out The Independent’s report for more.
BBC News explores Uber’s woes in Sheffield.
South African retailer Steinhoff is fighting for survival. The company revealed that accounting irregularities had occurred and an independent investigation was under way. The CEO has resigned and the release of its annual report has postponed. The share price had plummeted by 90% by the end of the week.
Steinhoff owns 40 brands boasting 6500 outlets and acquired the UK’s Poundland last year. It was also close to buying Argos last year but was beaten by Sainsbury’s.
Reuters looks closer at Steinhoff’s turmoil.
10. GENERAL ELECTRIC CUTS 12000 JOBS
GE has announced that it will cut nearly 20% of its global workforce in its power division. 12,000 jobs will be lost in GE Power, to make over $1 billion in savings. This is primarily due to a steep decline in demand for traditional fossil fuel power plants.
Over 1,000 UK jobs will be lost. GE Power has over 55,000 employees worldwide.
BBC News looks closer at GE’s cuts.