The week’s news included; EU and AstraZeneca settle vaccine spat, WhatsApp fined €225m for GDPR breaches, CMA could unwind £90m JD – Footasylum merger, SQE comes into force.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram 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:
Opinion articles of the week:
- The Grocery Gazette – Tesco ‘most attractive’ grocer for private equity takeover
- City A.M – Return to work: The most pressing legal questions answered.
- Legal Cheek– Why Environmental, Social, and Governance (ESG) is rising to the top of the agenda for City law firms.
1. EU AND ASTRAZENECA SETTLE VACCINE SPAT
The EU and AstraZeneca have ended their legal dispute over vaccine deliveries. AstraZeneca had agreed to deliver 200 million doses of its vaccine by March 2022. At the start of 2021, however, AstraZeneca was falling far behind schedule and would not be able to meet agreed targets in time. The EU sued for millions to compensate for the missing doses. Last week however, both sides agreed to end their dispute. The EU has double vaccinated 70% of adults hence the need for more supply is not urgent. AstraZeneca has now agreed to partially refund the EU for any delays. The pharmaceutical giant will give a 10% rebate for a one-month delay, 25% for two months and 40% for three months.
2. WHATSAPP FINED €225M FOR GDPR BREACH
WhatsApp has been slapped with a €225m fine for breaches of EU data protection law. Ireland’s data protection regulator investigated and found WhatsApp failed to tell users about how their data was shared with its parent company, Facebook. The messaging app’s policies were inadequately drafted to inform users of how data was used, and this constituted a serious breach of GDPR. The €225 million fine is the largest issued by Ireland’s data protection regulator and the second largest ever under GDPR. The largest fine was the €746 million issued against Amazon in July. GDPR allows fines of up to 4% of global annual turnover for serious breaches. The action was taken by Ireland’s regulator as Facebook’s EU HQ is in Ireland. WhatsApp denies any wrongdoing, rejects the Irish regulator’s decision and will appeal.
3. CMA MAY UNWIND JD FOOTASYLUM MERGER
The Competition and Markets Authority (CMA) has found that JD’s takeover of Footasylum would harm consumers, despite a shift to online shopping during the pandemic. JD bought Footasylum in 2019 for £90 million. The retailer has faced numerous obstacles from the regulator who sought to block the deal. JD had fought back and the competition appeal tribunal found in favour of JD last year. The CMA had failed to consider changes in customer shopping habits. In its latest provisional findings however, it said competition on price, quality and range on footwear and clothing could still be affected by the deal. The CMA will release its final report in October and JD will have one further opportunity to appeal. If the CMA is successful, JD may have to sell Footasylum.
4. SOUTH KOREA BANS IN-APP PAYMENT RESTRICTIONS
South Korea has banned app store operators from disallowing app developers to circumvent their in-app payment systems. This comes as Fortnite maker Epic Games battles Apple in court over this very issue. Currently, app developers on App Store and Playstore who generate money from digital in-app purchases must use Apple or Google systems respectively, both of which can incur a 30% commission charge. Epic claims the practice breaches antitrust law and has sued Apple and Google in multiple jurisdictions. They argue that developers should be free to offer their own alternative in-app payment systems.
South Korea will now prohibit app operators from preventing alternative in-app payment systems and becomes the first nation to ban the practice. The ban will come into force once it has been signed off by the South Korean President.
5. OLA IPO
Ride hailing platform Ola is reportedly planning to launch an IPO. The Indian based firm is hoping to raise up to $1bn. Ola is currently consulting with investment banks to decide who will advise on the IPO. The company has swept up a large market share in India, holding over 50%. Uber is its closest rival in the region. Ola also operates in the UK , Australia and New Zealand.
Ola is currently backed by Japanese giant Softbank.
6. KRAFT HEINZ SETTLES SEC CHARGES FOR $62M
Kraft Heinz has settled SEC charges over false accounting for $62 million. Between 2015 and 2018, Kraft provided misleading reports about nearly 300 contracts and falsely reported about cost savings. In total, $208 million in cost savings were improperly reported. Although this was corrected by Kraft in 2019, the SEC launched its investigation. Kraft did not admit or deny the SEC’s findings but agreed to pay a penalty and to avoid future offences. Kraft Heinz was formed in 2015 from the merger between Kraft Foods and Heinz.
7. ZOOM’S BILLION-DOLLAR QUARTER
Zoom has posted its first billion-dollar quarter after forecasting revenue of up to $1.02 billion for the third quarter. This revenue is up nearly a third since last year. Despite the positive news, demand for Zoom’s services will begin to wane as businesses return to the office. Even Zoom itself recently announced that staff would return to the office on a rota basis. Zoom’s platform provided a lifeline for both business and social needs throughout lockdown. The video conferencing platform will need to adapt to better monetise a shrinking user base as life returns to normality.
8. SQE COMES INTO FORCE
The Solicitors Qualifying Exam (SQE) came into force last week, setting the new standard path to qualify as a solicitor in England and Wales. The SQE will be split into two parts, part one (SQE1) is centred on legal knowledge and understanding and is assessed in two multiple choice exams. Part two (SQE2) focuses on practical legal skills. Furthermore, two years of legal work experience must be completed but this can be completed in a wider range of roles and can be split across a maximum of four organisations. Qualifying work experience now includes paralegal work, law clinic volunteering and even placements as part of university law degree. The SQE phases out the Legal Practice Course (LPC) and the training contract as the route to qualification as a solicitor. The total cost to sit both exams will be £3980.
9. ASDA TO OPEN 230 CONVENIENCE STORES
Asda will open over 200 convenience stores at petrol stations owned by the Issa Brothers’ EG Group. It will open 28 Asda on the Move stores later this year and a further 200 next year. The stores have already been trialled at five petrol stations earlier this year. Shops will stock up to 2500 products and Asda will supply goods to EG Group on a wholesale basis.
10. RETAILERS SHUT DOWN BANKING ARMS
Retailers across the UK are beginning to move out of banking as low demand and low interest rates pinch profits. Last week, M&S closed all customer current accounts. Customers were told in March to switch or close their accounts. M&S said the shift towards online banking was behind the decision to close 29 in store branches and shut down the service.
Sainsbury’s is exploring a sale of its entire banking arm, including its insurance and credit card departments. It has 2 million customers and is seeking £200 million from the sale. An agreement is anticipated to be completed within the next few weeks. Last month, Tesco also told its current account holders that it would be closing down the service. The supermarket found that very few customers used their Tesco current account as their main account and many accounts were inactive.