The week’s news included; UK Supreme Court reverses contract law reinterpretation, EU halts its big tech tax plans, Google fined half a billion in France, TikTok opens physical space in London.
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:
- FT – How used cars became the next big ecommerce battleground.
- Law Careers.net – How can one establish ownership in a piece of digital art?
- City A.M – Should we have ID verification for social media?
1. SUPREME COURT REVERSES CONTRACT LAW REINTERPRETATION
The UK Supreme Court has reversed a controversial judgement which held that termination of a contract exempts contractors from liquidated damage payments. The Court of Appeal had previously held that a company who terminated a contract, having only partially completed the project, did not have to pay damages for its failure to complete the work. US-based contractor Triple Point Technology faced technical difficulties and cancelled the contract to provide software services to PTT Public Company, a Thai government oil and gas firm. Last week, the Supreme Court disagreed with the Court of Appeal’s judgement. Instead, they ruled Triple Point was not exempt from damages and was ordered to pay $14.5 million.
2. EU HALTS TAX PLANS
The EU has halted plans to increase taxes on tech firms following recent efforts to introduce a global minimum corporation tax rate. Over 130 countries agreed to a minimum tax rate of 15% among other measures designed to limit tax avoidance by large corporations. Often corporations channel profits through lower tax jurisdictions, meaning they pay minimal amounts of tax where most of their revenue is generated.
All of the G20 have agreed to the plans and the EU is urging all EU 27 member states to support them. Notably however, Ireland has rejected the tax plans as they stand. Ireland is a popular tax base of Big tech firms including Apple, Google and Amazon all placing their EU headquarters here. Ireland has a corporation tax rate of 12.5% and has no intention of increasing this. Officials argue their low tax rate generates higher tax revenues. Other EU opponents include Hungary and Estonia.
3. GOOGLE FINED HALF A BILLION EUROS IN FRANCE
France’s competition regulator has fined Google €500 million over abusing its market position in relation to news publishers. The tech giant had been ordered to speak with news publishers to provide adequate compensation for content. Google has not followed these instructions and France is clamping down. In addition, France’s regulator has threatened a further fine of €900,000 per day if Google does not issue proposals within two months. Google has said it was disappointed with the decision and is currently negotiating a deal with publishers.
4. INTEL TO BUY CHIPMAKER
Intel is on track to buy Global Foundries for $30 billion. The US tech giant is splashing out amidst a global semiconductor shortage. Vehicles, gadgets, and household appliances all rely on semiconductor chips and demand has far outstripped supply. Automakers have slashed products and phone makers have delayed releases due to the shortage. Intel, like many other firms, is feeling the pinch. It had already stated it would invest $20 billion to boost its manufacturing capacity. This deal would certainly provide Intel with a welcome boost. Global Foundries has, however, denied that the talks are occurring at this time. Check out our insight article exploring the reasons for the shortage.
5. CELEBS SUED FOR POSTING THEIR PHOTOS
Singer Dua Lipa and model Emily Ratajkowski have both been sued for copyright infringements after posting pictures of themselves. Integral Images sued Dua Lipa for posting a picture of herself without the licensing agency’s permission. Furthermore, Integral claims Dua Lipa knew this photo was copyrighted but posted it for monetary gain. They are seeking $150,000 in statutory damages alongside injunctive relief. Emily Ratajkowski is facing the same claims of copyright infringement from an American photographer. Ratajkowski has faced similar cases in the past and has been successful against a photographer who, according to her counsel, was seeking an “unsubstantiated payday”. The Fashion Law looks at these cases in more detail.
Check out our article exploring the copyright minefield for celebrities posting photos of themselves.
6. SAUDI TO BUY STAKE IN MCLAREN
Saudi Arabia’s sovereign wealth fund is close to buying a stake in McClaren Group. The British supercar maker and F1 team-owner is getting £550 million in fresh capital. The Saudi Public Investment Fund (PIF) will make the investment alongside investment firm Ares Management. The investment will provide welcome windfall as McClaren was hit heavily by the pandemic. McClaren restructured last year and slashed 1,200 jobs due to a dip in demand. While demand for its luxury vehicles and F1 racing has resumed, the outlook is still tentative.
7. TIKTOK OPENS PHYSICAL SPACE
TikTok is to open its first physical space this summer. The social media giant is teaming up with Westfield London to create an interactive experience called “For You”. There will be workshops run by TikTok’s largest influencers and content makers. These workshops will help visitors create and share their own content. Visitors can also use themed rooms to create their own content.
TikTok’s house will have five large spaces focusing on different themes. The living room will have video editing, the kitchen will host cooking and baking videos, the garden will host sports and dance routines while the dressing room will showcase fashion. The “For You” house will be available between July 22 and August 8.
8. REVOLUT REACHES £24BN
Digital banking company Revolut reached a £24billion valuation and has become the UK’S most valuable fin-tech firm ever. Revolut raised $800 million from investors, SoftBank and Tiger Global Management. Each of the investors gained a 5% stake, respectively.
Revolut was founded in 2015 and has gained popularity particularly among young people. It offers current account, currency exchange and cryptocurrency services across 35 countries. Despite this, the company posted a £207 million loss last year and £261 million in revenue.
9. APPLE TO LAUNCH BUY NOW PAY LATER
Apple is reportedly teaming up with Goldman Sachs to offer a “buy now, pay later” service. Goldman Sachs will be the lender for the service and customers will be able to pay for products in instalments. The service will be added to Apple Pay, so for larger transactions where Apple Pay is accepted, customers can pay using Apple Pay Later. Apple then receives a percentage of each transaction. PayPal offers the same service to its own customers. This service diverts customers away from the use of credit cards and instead provides short-term loans. Often these loans can be interest-free for three to four months. Goldman Sachs has been Apple’s partner of choice in its moves into finance. Goldman is also Apple’s partner for the Apple Card credit card offering.
10. JOHN LEWIS CUTS JOBS
John Lewis Partnership has announced that it will slash 1000 jobs in store management. This adds to the 3000 job cuts announced over the past year. The cuts are designed to simplify management structures and save costs. John Lewis says that savings will be reinvested in customer service and experience. They will aim to minimise compulsory redundancies and will try to relocate staff into other roles. It is hoped that this shake up will help alleviate the financial pressure John Lewis is facing after a £517 million loss last year. This news follows the announcement that John Lewis would be building and renting out residential properties.