The week’s news included; Amazon and Visa settle dispute, HMRC seize NFTs for the first time, JD & Footasylum fined, BNPL firms change potentially unfair terms.
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 Fashion Law – Are NFT Marketplaces Doing Enough to Address Alleged Infringements?
- City A.M. – Law firms now more willing to hire less skilled candidates in face of nationwide skills shortage
- Business Insider – The S&P 500 will surge 20% by year-end and recession fears are overblown, BMO strategy chief says
1. UKRAINE TENSIONS
Rising tensions between Russia and the West over a potential invasion of Ukraine are hitting financial markets. US President Joe Biden is convinced that Putin will invade Ukraine in a matter of days. Russia denies these allegations. Global stock markets have tumbled and last week marked a second week of losses for US markets. UK stocks also declined last week over these concerns. European markets also saw losses of around 1%. Last week, the UK has scrapped the golden visa scheme, allowing foreign investors who invest at least £2 million in the UK to receive quick visas which ultimately lead to residency. There was concern that the scheme is being abused by Russian oligarchs for corrupt purposes. It was also scrapped to prevent Putin’s allies from benefiting from the UK economy.
2. AMAZON AND VISA SETTLE DISPUTE
Amazon has agreed a deal with Visa, meaning UK users can continue to use Visa credit cards on the site. The tech giant previously planned to block Visa credit cards in the UK due to high fees. In October 2021, Visa began to charge fees of 1.5% of the value of transactions for credit card payments, a substantial increase from its previous rate of 0.3%. Amazon announced the ban last year, but negotiations to prevent this began last month. Now the two companies have reached a deal. There will also be additional collaboration on new products and initiatives as part of the deal.
3. GOOGLE TO CHANGE AD TRACKER SETTINGS
Google is following Apple’s lead and introducing new changes which allow users to choose which apps track their behaviour. In April, Apple brought in the new privacy changes to prevent cross-app tracking. Users were given the option to opt out this tracking and reports showed 95% of iPhone users opted out following the introduction of the policy. This had a significant impact on ad-based businesses like Meta. Meta relies on tracking user data for its ads business. The company says it will lose a huge $10 billion this year due to the changes. Although Google will not implement its own plans for at least two years, the impact on revenue for ads businesses will be significant. Globally, Android holds around 70% of the smartphone market so the pool of available data for ads businesses could soon shrink dramatically.
4. HMRC SEIZES NFTS
HMRC has made its first ever seizure of non-fungible tokens (NFTs) as part of a tax fraud investigation. Suspects allegedly used sophisticated methods to conceal their identities, set up 250 fake businesses and create fake invoices to give the impression that they were engaged in legitimate business. This was all part of a plan to defraud HMRC of £1.4 million. Three people were arrested, three NFTs were seized and £5000 worth of crypto assets were seized. The growth of NFT markets has been exponential. The market is now worth a huge $40 billion. Check out our article exploring NFTs.
5. UK AGREES DEAL WITH CPTPP
The UK has struck a deal with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade partnership of 11 countries. The economies in the partnership are worth a huge £8.4 trillion and represent 13% of global GDP. Now, the agreement will see the UK enter negotiations with the partnership to discuss market access. The 11 countries who have joined the CPTPP are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. The UK will soon meet with countries to gain full access to the CPTPP and free trade benefits. This deal will undoubtedly be an important step to help the UK reap the potential benefits of Brexit.
6. JD & FOOTASYLUM FINED
JD and Footasylum have been fined £4.7 million by the Competition and Markets Authority (CMA) for breaching merger rules. The two sportswear retailers attempted a £90 million merger in 2019 which was later blocked by the regulator due to competition concerns. They were required not to share sensitive information while the CMA’s investigation was ongoing. Following a CMA review, it transpired that records were deleted and there was a “black hole” in the records about meetings between the firms. Two meetings in 2021 saw commercially sensitive information exchanged regarding planned store closures, stock allocation issues, financial performance and other details. These meetings were not reported to the CMA nor were there any written or phone records of the meetings.
JD accepted that it had “inadvertently” breached the rules and failed to have proper safeguards to prevent information not being shared. JD was fined £2.5 million for failing to have proper safeguards and a further £1.8 million for sharing commercially sensitive information without notifying the CMA. Footasylum was fined £200,000 and £180,000 respectively over the same issues.
7. BNPL FIRMS CHANGE TERMS
Major buy now pay later (BNPL) firms have agreed to change their “potentially unfair and unclear” terms and conditions. The Financial Conduct Authority obliged the companies to change their terms on cancellations and payments to make them clearer and fairer. Clearpay, Laybuy, Klarna and Openpay all agreed to change their terms. Furthermore, Clearpay, Laybuy and Openpay agreed to refund late fees that had been wrongly charged. As BNPL firms are typically not regulated, the FCA used consumer law to enforce the changes.
The BNPL market is worth an estimated £6.4 billion in the UK and there are concerns over consumer safety in the unregulated market. Although BNPL lenders do not typically charge interest, there are concerns that people may build up debt they can’t afford. New legislation may be introduced in the near future to regulate the sector but further details have not yet been announced.
8. APPLE FACES NEW FINE FROM DUTCH REGULATOR
Apple has been hit by another €5 million by the Dutch competition regulator over failing to let app makers use alternative payment methods for their dating apps. The tech giant was required to make the allowance but failed to meet the deadline. Apple has been fined four times by the Dutch regulator over this issue. The order was imposed in August and Apple will continue to receive weekly fines of €5 million up to a maximum of €50 million for non-compliance with the order. Apple is no stranger to hefty fines as they also faced a £113 million antitrust fine in Italy last November. The company also faced €1.6 billion in fines in 2020.
9. NATWEST CUTS LENDING TO OIL AND GAS FIRMS
Natwest slashed lending to the oil and gas sector by 21% as part of a drive towards a greener loan book. Lending to oil and gas firms fell from £4.2 billion to £3.3 billion and makes up just 0.7% of its total loan book. In 2020, the bank announced that it would suspend funding for oil and gas firms if they failed to have a credible plan to reach net-zero.
From the record lows of the pandemic, the oil and gas sector has rebounded exponentially. Oil prices are nearing $100 a barrel. Underinvestment in oil and gas along with the under-adoption of renewables has contributed to supply issues which has caused the huge spike in prices.
10. SHORTAGE OF CRIMINAL LAWYERS
The Law Society has warned that the UK is facing a shortage of criminal duty solicitors. Between 2018 and 2021, the number of duty solicitors fell by 7% and there is a chronic recruitment crisis in the sector. Legal aid fees paid to criminal lawyers have not been increased for over 20 years. This has contributed to a decline in new recruits and has pushed out existing solicitors. Worryingly, now only 4% of duty solicitors are aged under 35. A lack of incoming criminal duty lawyers will have a huge impact on the criminal justice system. Anyone who is arrested in the UK has the right to a duty solicitor, who provides free advice. Without more solicitors, an unsustainable workload will be placed on the current solicitors, which could lead to a decline in the quality of advice.
