The week’s news included; Google files counterclaim against Epic Games, Amazon drivers seek over £100m in compensation over workers’ rights, Deutsche Bank sued for €500m, FIFA demands $1bn from EA.
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:
- City A.M. – How challenger banks are revolutionising the sector.
- This is Money – Cryptocurrency crash could spark the next market meltdown, warns Bank of England deputy.
- Lawcareers.net – What do clients want and need from their law firms? Lawyers? Business advisers?
- BBC News – Can African tech giant Jumia deliver on its promise?
- Retail Gazette – How does Tesco maintain its lead in grocery?
1. UK GOVERNMENT TO RELAX LORRY DELIVERY RULES
The government plans to lift some restrictions on the number of deliveries EU lorry drivers can make within the UK. Under current “cabotage” rules, EU lorry drivers can only make two pick-ups or drop-offs every 7 days. The proposals will enable drivers to make unlimited pick-ups or drop-offs every 14 days. If the plans are approved this coming week, the rules will come into force later this year and will last for up to six months. It is hoped that this will help ease the shortage of lorry drivers which has created shortages at supermarkets and petrol stations. Supermarket industry chiefs have warned of shortages at Christmas unless immediate action is taken.
This comes after the government’s plan to issue 5,000 temporary visas for foreign lorry drivers has been poorly received. Only 20 applications have been processed so far and applications take around 3 weeks to process. This has forced the government to seek new ways to combat the lorry driver shortage. Check out our article exploring the lorry driver shortage.
2. AMAZON APPEALS €746M FINE
Amazon has officially launched its appeal against its €746 million EU fine for breaching GDPR. The tech giant failed to meet data protection rules regarding its processing of personal data. Luxembourg’s data protection regulator then slapped Amazon with the record fine in June. Amazon claims it collects data to improve customer experience and has employee guidelines for the use of collected data. Since the introduction of GDPR in 2018, EU regulators are entitled to charge up to 4% of global annual turnover for breaches of the regulation. Check out our article explaining GDPR.
3. DEUTSCHE BANK SUED FOR €500M
Palladium Hotel Group is suing Deutsche Bank for a huge €500 million for misselling complex and risky foreign exchange (FX) derivatives. Deutsche Bank allegedly pitched these derivatives as stable and claimed they would hold value where exchange rates and interest rates fluctuate. Palladium, one of Spain’s largest hotel chains and executed 259 derivative transactions using Deutsche Bank 2019, worth a peak of €5.6 billion. The contracts then crashed in value leaving Palladium with crippling losses and fees which they had to borrow additional money to cover. Deutsche Bank then restructured the investments, but this led to even greater losses, and the bank charged more fees every step of the way. Furthermore, a broker at Deutsche Bank had a good personal relationship with Palladium’s founder and the deals were fixed by this broker. Palladium accuses the German bank of exploiting this relationship and is now seeking compensation for its losses.
Alongside this case, Deutsche Bank stands accused of misselling these risky derivatives to up to 100 small to medium sized companies. Deutsche Bank denies the other cases but says it will defend itself “vigorously” against Palladium’s claim.
4. GOOGLE FILES COUNTERCLAIM AGAINST EPIC
Google has filed a counterclaim against Fortnite maker, Epic Games, in its ongoing lawsuit over app store fees and restrictions. The tech giant claims its due financial relief from Epic Games as Epic breaches its Google Play Developer Distribution Agreement (DDA). The DDA prohibits app developers from offering users who download from Google Play alternative payment systems for in-app purchases. Once Epic launched its own in-app payment service, Google swiftly pulled down Fortnite from the Google Play Store.
As with Apple, Epic claims Google’s restriction on independent in-app purchase systems is a breach of antitrust law and its fees are uncompetitive. The lawsuits are currently ongoing against Google. A California court recently ruled that Apple could not prohibit alternative payment systems but stopped short of ruling that the tech giant had a monopoly.
Google is counterclaiming as although Fortnite was removed from the Play Store, users who already downloaded could still use the app. Crucially, they could also still use Epic’s own internal payment system for in-app purchases. Google claims that Epic unlawfully evaded Google’s system and breached its contractual obligations. In its counterclaim, Google said it will seek compensation for loss of fees, damages and legal fees.
You can view the counterclaim here.
5. AMAZON DRIVERS SUE FOR COMPENSATION
Amazon drivers have launched legal action against the tech giant over their employment rights and benefits. Drivers are currently classified as self-employed meaning they do not receive holiday pay or minimum wage. They claim however, that Amazon holds a level of control over drivers that would prohibit them from being classed as self-employed. This means would and should have been classed as workers and therefore, would be entitled to employment rights and benefits. The drivers, represented by law firm Leigh Day, will be seeking compensation of roughly £10,500 for each driver for each year they have worked for Amazon. With an estimated 3000 drivers eligible for the claim, this could cost Amazon roughly £140 million. Amazon UK generated £128 million in profit on £4.85 billion in revenue last year.
Leigh Day were the lawyers behind the recent successful claim against Uber which saw drivers reclassified as workers instead of self-employed contractors. This case bears many similarities to Uber’s so there is a good chance the claim may be successful.
6. FIFA DEMANDS $1 BILLION FROM EA
The world football body, FIFA, is reportedly seeking up to $1 billion in rights payments from the makers of the FIFA video game series, EA. This would see EA’s payments to FIFA double. EA has exclusive rights to use the FIFA name and FIFA’s professional football license. Its latest release, FIFA 22, is covered under a previous 4-year agreement but negotiations are underway for future titles from 31 December 2022 onwards. Alongside higher payments, FIFA also wants to limit EA’s exclusivity deal, allowing FIFA to utilise its license for other revenue streams such as NFTs. Given the steep increase in costs, EA Sports is reportedly set to ditch the FIFA brand and is now exploring rebranding the series. This could see an end to over 25 years of FIFA football games.
7. RING DOORBELL BREACHES PRIVACY
A UK court has held that a person’s use of a Ring doorbell alongside security cameras on his property unlawfully invaded the privacy of their neighbour. A man in Oxfordshire set up the camera systems during renovations allegedly to deter burglars. The Ring doorbell captured front door activity while a camera on his shed covered other areas. He subsequently showed the renovations and the security system to his neighbour. The neighbour noted however, that the cameras captured both her house, almost her whole garden and her parking space. All the images and even audio data were sent directly to his smartphone. Audio data can be picked up by the Ring doorbell from over 40 feet (12m) away.
The judge ruled that this was an unlawful invasion of the neighbour’s privacy and found the capturing of audio data even more problematic than the video footage. Personal information and conversations could be captured from people unaware they are being recorded. This breached the GDPR and Data Protection Act. The man is likely to be subject to a hefty fine and an order to remove the cameras.
8. APPLE WARNS OF IPHONE 13 PRODUCTION CUT
Apple launched its new iPhone 13 range last month, but the dark cloud of the semiconductor shortage hangs overhead. The tech giant has warned that it may cut production targets by up to 10 million units in Q4 of 2021 due to the global lack of microchips. Its latest models: iPhone 13, iPhone 13 mini, iPhone 13 Pro and iPhone 13 Pro Max were released 24 September. The tech industry is reeling from the lack of microchips as a wider range of products now need them such as cars, consoles and even fridges. Apple’s share price dipped 1.2% in response to the news.
We explore the causes of the semiconductor shortage in more detail in our article.
9. LINKEDIN TO SHUT DOWN IN CHINA
LinkedIn is being shut down in China due to difficulties in complying with Chinese state regulations. The site was the latest major Western social media site operating in China. LinkedIn launched in China in 2014, affirming it was against censorship but agreeing to comply with Chinese government regulations.
The Chinese government has since introduced increasingly challenging requirements. LinkedIn has been obliged to censor political content and to blacklist several journalists critical of the Chinese government. The US government has been highly critical of LinkedIn’s “appeasement” of the Chinese government and US senator Rick Scott wrote directly to both Microsoft and LinkedIn’s CEOs, Satya Nadella and Ryan Roslansky. Microsoft bought LinkedIn in 2016 for $26 billion.
LinkedIn will now launch a recruitment-only site called InJobs. The site will have no media feed and users will be unable to write posts or share articles.
10. ASOS BOSS DEPARTS
Asos CEO Nick Beighton has left the company after six years at the helm. The fashion retailer enjoyed a bumper period in the height of the pandemic, with profits soaring 329% to £142 million for the year to 31 August 2020. Profits rose an additional 36% to £193 million for the following year. Since then, however, customers have been returning more products and the company faces increased import costs due to Brexit and this is eating at profit margins. Asos has warned that profits could fall by up to 40% next year. Investors responded negatively to the news, with Asos’ share price falling by as much as 15%. Asos’ share is currently down over 40% since the beginning of the year.
Nick Beighton had been at Asos for 12 years, 6 of those as CEO, and has seen sales skyrocket from £220 million to £4 billion. Analysts credit Beighton for being “instrumental” to Asos’ recent success and mark his departure as a great loss.