The week’s news included; Google faces €220 million fine in France, Volkswagen gets €288m insurance payout from emissions scandal, Oatly launches trademark lawsuit against Cambridgeshire farm, Sun newspapers’ value written down to zero.
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:
- City A.M – More countries line up to make Bitcoin legal tender – which one will be next?
- FT – Why Europe’s banks want to end US dominance in payments.
- City A.M. – UK remains Europe’s leading financial hub but Asian hubs are on the march.
- Retail Gazette – Are British shopping centres at death’s door?
1. GOOGLE MARKET ABUSE
Google has been fined €220 million by the French competition regulator for abusing its market position. France’s Autorité de la concurrence found that Google’s Ad Manager favoured Google’s own ad marketplace, AdX, to the detriment of competitors. Ad Manager provided AdX with key data which was not available to competitors. Google accepted the fine and will adapt its business practices to ensure compliance.
In addition to the fine, ad publishers may now seek damages from Google. Business in Europe has been a costly affair for the tech giant. Over the past 4 years, Google has racked up nearly €9 billion in fines over its practices in Europe alone. The headaches are certainly far from over for the tech giant.
2. AMAZON FACING €350M FINE
Amazon is facing a huge €350 million fine for breaching GDPR. The EU’s data protection commission, the CNPD, has circulated the proposal among other EU member state regulators for approval. The regulators will need to unanimously agree upon the fine and any agreement will likely take months of negotiations. Amazon has allegedly breached GDPR over its use and collection of personal data. Alongside the privacy breach fines, Amazon is also facing antitrust investigations in Europe over its commercial practices and whether it stifles competition.
3. SUPER LEAGUE CLUBS PUNISHED
The six English football clubs who attempted to play in a breakaway European Super League have collectively been fined £22 million by the Premier League. Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur all attempted to form part of the league but faced furious backlash.
The 12 founding members, AC Milan, Arsenal, Atletico Madrid, Barcelona, Chelsea, Inter Milan, Juventus, Liverpool, Manchester City, Manchester United, Real Madrid, and Spurs would have become permanent participants, with no chance of relegation. 3 teams were considering joining while a further 5 spots would have been available to other clubs based on merit. Each of the founding members would have pocketed a huge £3.5 billion each. This sparked criticism over the league’s rejection of meritocracy and wanton greed. For fans, this would provide a stale competition, removing the risk or reward of performances. The prospective member clubs quickly began withdrawing from the proposed league following the backlash.
Each English club has now been fined roughly £3.7 million each and the funds will go towards investments in grassroots football and other programmes. The European football governing body, UEFA, also recently issued a similar fine to clubs.
The Premier League has now warned that any future attempts to form a breakaway league will see participating English clubs face a 30-point league deduction and a £25 million fine per club.
4. VOLKSWAGEN GETS SETTLEMENT CASH
Volkswagen will receive €288 million in compensation, settling claims against four former executives who were at the helm during the dieselgate scandal. The dieselgate scandal broke in 2015 where VW was found to intentionally install cheat devices in cars. These devices produced artificially low emissions under test conditions. On the road, emissions were around 40 times higher than under test conditions. Some 11 million vehicles worldwide were affected.
Volkswagen announced earlier this year that they would seeking damages from its former executives due to their breaches of duty of care. This pay-out to Volkswagen largely derives from the company’s directors and officers liability insurance. Four former directors will also collectively pay €18 million in damages for breaches of their fiduciary duty.
Last week, former CEO Martin Winterkorn was also charged with giving false testimony in Parliament. Volkswagen, under his watch, blamed the emissions scandal on a handful of rogue engineers. This was proven to be a lie and the management of Volkswagen were found to be complicit in the placement of emission cheat devices.
The money recouped will do little to cover the €30 billion in fines and compensation Volkswagen has paid out to date. Volkswagen is still facing legal action from regulators across the globe so the saga is far from over.
Another headache for Volkswagen also came last week. Over 3.3 million customers had their data exposed by a vendor. The data included personal information including addresses and even loan eligibility and Social Security numbers in some cases. There is no evidence yet if the data was misused.
5. US GOVERNMENT TECH SPENDING
US law makers have authorised $250 billion in spending to counter China’s drive for technological supremacy. The money will go towards research, subsidies for tech companies and funding for semiconductor production.
The bill also has specific provisions targeting Chinese tech and tech firms. It will be illegal for TikTok to be downloaded on government devices. US persons will also be banned from the purchase of drones produced or sold by Chinese government entities.
As discussed last month, there is a global computer chip shortage that is pinching businesses across the globe. The shortage is expected to last two years and has caused world powers to review their policies and spending with regards to technologies. Both the US and China are now ramping up efforts to produce components domestically.
6. OATLY TRADEMARK DISPUTE
Alternative milk maker, Oatly, is suing a Cambridgeshire farm over an alleged trademark infringement. Glebe Farm Foods sells oat milk under the brand PureOaty. Oatly claims the name and packaging is too similar to their own and could cause confusion. Last year, Oatly requested that Glebe Farm desist from using this branding and change. After receiving no “constructive response”, Oatly has now taken legal action. The High Court will make its decision this week. Oatly recently launched a successful IPO and has the backing of high-profile celebrities like Oprah and Natalie Portman. The company turned over $420 million last year and recently achieved a $10bn valuation.
7. JBS PAYS RANSOM
The world’s largest meat processing company, JBS, has paid $11 million to end a major cyber-attack. Hackers shut down JBS’ computer networks across Australia, Canada and the US. They threatened to continue disruption or begin deleting files if the payment was not made. JBS was forced to stop slaughtering cattle in all its US plants. The sophistication of the attack led JBS to ultimately pay the ransom. The ransom was paid in Bitcoin once the systems had come back online.
8. DEUTSCHE BANK LOSES COURT CASE
Deutsche Bank is bracing for a €100 million revenue hit after losing a court case. The court ruled that clients of its Postbank retail business could challenge Deutsche Bank for charging high fees. The court held that Deutsche Bank afforded itself too much power in its terms and paved the way for clients to claim back previous price increases.
This ruling applies not only to Deutsche Bank but may affect other banks too. This is undoubtedly unwelcome as most banks are still reeling from the effects of the pandemic. Deutsche Bank, however, has bucked the trend. It posted a profit of €908 million in quarter one, its best performance since 2014. This comes in spite of exposure to the Archegos collapse to the tune of €3.4 billion. Check out our article on the collapse here. It now expects to take a €100 million hit in both the second and third quarter, due to this latest court case.
9. THE SUN WRITTEN DOWN TO £0
The value of the Sun newspapers has been written down to zero after taking a heavy hit from the pandemic. Rupert Murdoch’s newspapers posted a £200 million loss and saw its turnover tumble by 23%. The losses were primarily driven by charges totalling £164 million from its historical phone hacking lawsuit. The Sun and the Sun on Sunday have seen shrinking advertising revenues and their operators do not believe they will ever return to profitability. To help mitigate the losses, nearly 60 jobs were cut while sales and marketing spending were slashed by 40%. Last year, the Sun lost the crown of bestselling UK paper and was usurped by the Daily Mail.
10. EA GAMES HACKED
Video game publisher, Electronic Arts (EA), has been hacked and 780GB of data including game source codes was stolen. Source codes for games including FIFA 21, the Battlefield series and the Star Wars series have been stolen. Furthermore, the source code for the Frostbite gaming engine was stolen.
These source codes can be used to create illegal copies of games or create cheat codes. With the value of intellectual property in gaming on the rise, gaming companies are increasingly being targeted by hackers. While no personal data was stolen, this is a blow for one of the world’s largest game makers. Fortunately for EA, they do not anticipate any impact on its business or games. It has also improved security and informed authorities.