This week’s news includes; Trump’s China tariffs, Comcast makes $65 billion bid for Fox, Pimlico Plumbers legal case, Tesla job cuts
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:
- Lawcareers.net Is the legal landscape “hand built by robots” or being “rebuilt by humans”?
- Sky News Why food firms have growing appetite for pet sector.
- Legal Cheek Your favourite law memes could be banned under EU copyright directive.
1. TRUMP’S TRADE WAR
Donald Trump has announced new tariffs on $50 billion worth of Chinese goods. The US will now impose 25% tariffs on over 1100 exports, largely on products from the manufacturing, robotics and aerospace sectors. The US claim that this measure is in response to the theft of American trade secrets.
The Chinese have stated that the US has started a trade war and affirmed that they will retaliate immediately. Trump has threatened tariffs on $100 billion worth of imports if China does retaliate. This comes only a week after the imposition of tarrifs on the EU, Canada and Mexico. The impact of these tariffs on businesses could be severe. Ultimately however, the consumers lose as the costs will be passed onto them. Nearly 20% of all US imports come from China. Some American companies may apply for exemptions although this process has not yet been set out. The tariffs will be imposed from July 6th.
The IMF has criticised the tariffs claiming that they would hurt the US economy and undermine the world trade system. (BBC News)
2. AT&T – TIME WARNER DEAL GETS GO AHEAD
AT&T’s planned $85 billion of Time Warner has been cleared by a US federal judge. The deal went under the microscope during a six week anti-trust trial. Regulators argued that the deal would give AT&T excessive leverage against its rivals such as Netflix, to whom Time Warner supplies content. The judge however, rejected this claim and deemed the deal would not be likely to “lessen competition substantially”. This deal has been fashioned to help Time Warner compete with Netflix, Amazon and Google. They aim to make Time Warner a larger player in the internet streaming business. Time Warner owns HBO, Turner and Warner Brothers. (Sky News)
3.COMCAST LAUNCHES $65 BILLION FOX BID
Comcast has entered the race with Disney to acquire 21st Century Fox with a $65 billion bid. Comcast’s bid is over $13 billion higher in value than Disney’s. In addition, Comcast is offering to pay cash whereas Disney is offering stock.
Comcast has also challenged Fox with a $22 billion bid to acquire Sky. Fox have been attempting to acquire the 61% of Sky it does not already own. Two weeks ago, UK regulators gave the deal the greenlight. Fox hopes to acquire Sky with the intention of selling the full company to Disney. Sky has however, announced that it was open to Comcast’s bid and will be reviewing it. There are a number of interconnected deals it will be interesting to see how they conclude. Comcast is the largest TV cable supplier in the US. (Sky News)
4. DIXON CARPHONE CYBER BREACH
Dixon Carphone has revealed it suffered a huge data breach last July. 1.2 million personal data records and 5.9 million payment cards have been affected. Hackers attempted to breach the processing systems of Currys PC World and Dixons Travel stores. Only 105,000 of the cards compromised however, did not have chip and pin protection. The company claims that there is no evidence that any cards had been used fraudulently. The investigation into the breach is still ongoing.
Dixon’s is fortunate that the breach occurred before the introduction of GDPR. GDPR would have seen them incur significantly higher fines. Dixon Carphone could have faced a maximum fine of £420 million under the new regulation. In 2015, Carphone Warehouse was fined £400,000 for a data breach. The investigation will look into whether the 2015 breach is connected to the latest attack. (BBC news)
5.PIMLICO PLUMBERS CASE
The Supreme Court has ruled a plumber, Gary Smith, was entitled to employment rights despite being VAT-registered and paying self-employed taxes. The highest court in the UK deemed that the plumber who worked for Pimlico Plumbers for 6 years could be classified as a “worker”. Pimlico Plumbers were “disgusted” by the decision. This could have huge implications for the company and the sector as a whole. Based on this ruling, former contractors were entitled to holiday pay so could claim payment from the company in lieu of this holiday pay.
The case derives from an employment tribunal trial where Mr Smith claimed he was unfairly dismissed. The key legal question was whether Mr Smith could be classified as a worker and therefore, entitled to unfair dismissal redress.
This ruling may have huge implications on freelance workers. Many argue this will open the floodgates for freelance workers to claim they deserve employment rights. Although the ruling is important, future cases will always turn on the nature of the relationship between worker and company. It will be interesting to see the impact of this ruling.
BBC News analyses the case further.
6.LOUBOUTIN RED SOLE LEGAL BATTLE
Christian Louboutin has won an important EU trademark case over its red bottoms. The European Court of Justice ruled that the designer shoe maker was entitled to trademark protection for its red soled shoes. This ruling now prevents a Dutch designer, Van Haren, from selling its own red bottomed shoes.
The ECJ did not follow the advice of their top legal advisor. Earlier this year, the Advocate General judged that Louboutin could not trademark its red bottoms. He deemed that the red bottoms formed the shape of the soles but shapes cannot be trademarked under EU law. The ECJ however, found that the red bottoms do “not relate to a specific shape of sole” so therefore it was capable of being trademarked. (Sky News)
Volkswagen has been fined €1.2 billion over the emissions scandal. Regulators in Germany claimed that Volkswagen failed to properly oversee its engine development.
In 2015, Volkswagen was found to have fitted devices on engines allowing it to cheat on emission tests. The devices would recognise when the vehicle was in test conditions and misleadingly lowered emissions to help pass the test. Over 10.7 million models with illegal software were sold.
So far, the scandal has cost the car maker $4.3 billion in fines in the US alone. It has also spent $7.4 billion in buying back these models so far. The firm has until June 2019 to buy back or fix 85% of models fitted with this software or face further fines. Volkswagen is the largest car manufacturer in the world. It also owns brand such as Audi and BMW. It hopes paying the fines will help restore trust with consumers. (Sky News)
8.YAHOO FINED OVER DATA BREACH
Yahoo has been fined £250, 000 for a data breach in 2014. The ICO deemed that the company had failed to take appropriate measures to protect its customers. Over 500 million people were affected by the breach. 8 million of those were in the UK. Names, emails and security question answers were all stolen by hackers. The Information Commissioners Office stated that Yahoo had failed to take appropriate measures to protect consumers.
Yahoo is somewhat fortunate that the breach took place before the implementation of GDPR. Under GDPR Yahoo could have faced a fine of up to $200 million. (BBC News)
9.TESLA JOB CUTS
Tesla will slash 3,000 jobs in a drive to cut costs. This amounts to roughly 9% of its 37,000 strong workforce. The cuts won’t affect those producing cars, mainly management and support staff with be affected. Musk had already announced his intention to flatten the management structure last month.
Despite turning over $15 billion last year, Tesla has not made a profit in its entire existence. In the last quarter It posted a huge loss of $2 billion. It does however, have a highly loyal support base and has produced the best selling electric vehicle ever. How long the company can sustain such heavy losses remains to be seen.
To learn more about Tesla read their page on our company watch section!
10. ROLLS ROYCE JOB CUTS
Rolls Royce has revealed that it will cut 4,600 jobs as part of a restructuring. Most of the jobs will be lost in middle management and back office positions. The cuts will save £400 million a year by 2020, despite costing £500 million to implement.
The British car manufacturer has been struggling back to profitability. It recently issued 5 consecutive profit warnings. In 2016 it posted a £4.6 billion loss. Fortunes changed with the new management and by 2017 it posted a pre-tax profit of £4.9 billion. Despite, this overall Rolls-Royce is somewhat underperforming. The company is now seeking to improve its long term profitability.(BBC News)