This week’s news includes; Johnson & Johnson multibillion dollar lawsuit, Uber posts $1 billion loss, JP Morgan settles record paternity leave case, US to request social media usernames and info for Visa applications
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:
- BBC News – European Elections: What they tell us about support for Brexit.
- Allaboutlaw – Implementation of the Climate Change Act – How effective has the landmark act really been?
- Business Insider – China could unleash a trump card in the tech cold war
1. JOHNSON & JOHNSON LAWSUIT
Pharmaceutical and consumer goods giant Johnson & Johnson is facing a multibillion dollar lawsuit over its involvement in Oklahoma’s opioid crisis. The firm allegedly deceptively marketed opioid painkillers, undermining the addiction risks which in turn, fuelled the current epidemic. In the US, 70,200 people died from a drug overdoses and 68% of deaths were due to prescriptions or illegal opioids. Oklahoma’s claims Johnson & Johnson was the “king-pin” of the crisis by pushing these prescription painkillers without proper warning. The state claims that this led to a public nuisance which will cost up to $17.5 billion to remedy over next 3 decades.
This follows a trend of 2000 lawsuits against big pharmaceutical companies in the US. Purdue Pharma and Teva Pharmaceuticals recently reached $270 million and $85 million settlements respectively, with Oklahoma over the same issue.
2. TRUMP MEXICO TARIFFS
Donald Trump has announced new tariffs on Mexico until its does more to curb illegal immigration into the US. The US will now impose 5% tariffs on all Mexican imports and this rate will gradually increase to 25% until the problem is remedied. Trump has committed to using national emergency powers to implement the tariffs if necessary.
Mexico is likely to retaliate with tariffs on US imports. Mexico is the US’ largest goods trading partner and analysts argue a trade war will undoubtedly harm US businesses. China has even expressed sympathy for Mexico, describing Trump’s tariffs as “trade bullying action”. The White House has claimed however, that the tariffs would not affect the ongoing negotiations of the North American Free Trade Agreement.
Unsurprisingly, the announcement of tariffs rattled financial markets, sending US stock index futures plummeting.
3. BORIS JOHNSON PROSECUTION
Boris Johnson has been ordered to appear in court for allegedly lying during the Brexit referendum campaign. According to the prosecution, Boris Johnson repeatedly made claims that the UK gave the EU £350 million a week and this would be reclaimed if we left the EU. The claims were infamously plastered across a Vote Leave bus. The repeated use of this figure has been branded as deliberately misleading. This is a private prosecution and the cause received £200,000 in crowdfunding to bring proceedings forward. The allegations are on grounds of misconduct in public office, covering the period he was campaigning in favour of Brexit. Boris Johnson’s lawyer dismissed the allegations as a “stunt”. Johnson is currently locked in a new campaign to become the next Prime Minister after Theresa May steps down. Many argue this prosecution is just a political motivated action.
Legal Cheek explains the next steps of the case.
4. UBER POSTS $1 BILLION LOSS
Uber reported a huge $1 billion loss in the first quarter of 2019, despite rising revenues. Uber’s revenue was up 20% to $3.1 billion year on year. The increased revenue was helped by increased taxi bookings, up 26% in North America. In addition, Uber Eats grew rapidly, posting an 89% increase in revenue. Uber has however, had to increase spending on promotions and driver incentives as competition in the taxi-haling industry heats up.
Uber launched its IPO last month and it was underwhelming to say the least. Uber’s share price fell beneath the initial $45 offer price and it continues to trade beneath this. These latest figures will certainly not help prices. Uber has even admitted that it may not ever turn a profit. These latest results simply affirm this outlook and further profitability concerns about Uber.
5. JP MORGAN PATERNITY LEAVE LAWSUIT
JP Morgan will pay out $5 million to settle a US paternity leave class action lawsuit. This is the largest parental leave discrimination settlement in US history. Derek Rotondo a former employee at the bank was denied parental leave benefit. The bank offers paternal leave to “primary caregivers” of infants. Rotondo sought to take 14 weeks of leave under this benefit to spend more time with his child. The bank rejected his request for leave on the basis that his wife had no medical or work-related limitations on her ability to provide care, therefore, he did not qualify as a primary caregiver.
Rotondo launched a lawsuit and the American Civil Liberties Union (ACLU) began a class action in 2017. JP Morgan did not admit liability in the settlement but set up a $5 million compensation fund. They have also agreed to maintain a neutral parental leave policy.
6. STREAMERS ON THE RISE
Netflix and Amazon are taking an increasing share in the UK streaming sector. Netflix has 10 million UK subscribers and brought in £693 million in revenue. Amazon made £400 million from its 7.7 million Amazon Prime Video offering. The streaming services of a traditional broadcasters only brought in a collective total of £530 million. This includes ITV Hub, All 4 , MY 5 and Sky’s Now TV. This disparity isn’t due to number subscribers, merely the monetization of viewers. For example, ITV Hub has over 8 million monthly users yet still falls far behind Amazon in terms of revenue. Netflix is no doubt the dominant force in the market. The company recently usurped Sky as the UK’s largest pay-TV service as it hit 10 million subscribers.
Traditional broadcasters are scrambling to improve their on-demand offerings to compete. As far back as 2007, BBC, ITV and Channel 4 sought to offer a joint video service, but this was blocked by the competition authority. Now, Netflix is steaming ahead in the sector and it recently usurped Sky as the UK’s largest pay-TV service.
Earlier this year, ITV and BBC unveiled BritBox, a paid joint streaming service, in an attempt to challenge the online streaming giants. It has launched in the US and has already attracted 500,000 subscribers. Whether these offerings will be sufficient to keep broadcasters competitive remains to be seen.
7. FIAT CHYRSLER RENAULT MERGER
Fiat Chrysler has proposed a $35 billion merger with Renault. The combined company would create automotive behemoth with combined revenue of over €160 billion and 8.7 million annual vehicles sales.
Under the deal, there would be no production plant closures. The deal would help the combined company become a market leader as the industry shifts towards electric and autonomous vehicles. The combined firms would make €5 billion in annual savings in development costs.
Shareholders of each company will own 50% each of the new company. This will provide the French government with a 7.5% stake in the company. The offer is now being considered by Renault. Shares in both companies jumped in response to the news. (BBC News)
8. UK CAR PRODUCTION SINKS
The UK’s car manufacturing has plummeted due to Brexit uncertainty. Car production in the past year has fallen by a staggering 44.5% according to the Society of Motor Manufacturers and Traders (SMMT). The number of cars produced in the year to date has sunk by over 20% compared to last year. Car manufacturers brought forward scheduled summer production stoppages in anticipation of the 31st March. Now that Brexit has been delayed until 31st October, car manufacturers will not be able to repeat this and would face the full impact of a disorderly Brexit. The car industry is facing a serious slow down, fuelled by weak demand in China and the escalation in the US and China trade war.
9. TRAILINE IPO
Trainline is set to launch its IPO in June and it hopes to raise £75 million. The ticket booking website will be seeking a valuation of roughly £1.5 billion when it lists on the LSE in a few weeks. A share price range has not been set yet. The company has been performing well, posting £147.6 million in 2018-19.
10. US TO REQUEST SOCIAL MEDIA USERNAMES FOR VISA APPLICATIONS
The US will now request all visa applicants to provide their social media usernames and details as part of their applications. This will apply to most visa applications, including temporary visitors. Applicants will be able to list all social media sites they use or state that they do not use social media. Lying about social media usage could however, have “serious immigration consequences”. Social media identifiers will now be included in background checks for Visa applications. This change is to implement Donald Trump’s executive order in March 2017. The order introduced “extreme vetting” to prevent foreign terrorists entering the country. This driving force behind this was the tragic San Bernardino terrorist attack in 2015. The attacker, Tashfeen Malik, expressed terrorist sympathies across social media before immigrating to the US soon before the attack.