The week’s news included; UK blocks Chinese licensing deal under new national security law, Apple sued over Apple Pay system, TSB facing £800m lawsuit over mortgage trap, Pfizer and Flynn fined £70m for hiking epilepsy drug price by 2000% .
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:
- City A.M. – Tax and spend? We can’t save public services without a unified tech policy
- BBC News – Why do companies get involved in social issues?
- CNBC – From Gap to GameStop, there’s a retail executive exodus underway — and more departures are coming
- The Guardian – I saw first-hand how US tech giants seduced the EU – and undermined democracy
1. RUSSIA AND UKRAINE EXPORT DEAL
Ukraine and Russia have signed a crucial deal to allow the export of grain from Black Sea ports. The UN has warned of an impending food crisis as essential grain and produce have been blockaded due to the war. Ukraine’s exports have plummeted by over 80% since the start of the war and silos of harvest are at risk of expiring. Around 47 million people are now facing “acute hunger” . A shortage of wheat and grain has pushed prices of bread and staple foods up by over 50% in many countries. This deal will provide some relief as exports are expected to resume in the next few days.
The parties signed two separate documents, as Ukraine did not want to sign the same document as Russia in protest to its invasion. The deal was agreed with both the UN and Turkey. Shipments will be scheduled and monitored at a control centre in Istanbul.
This comes as the EU has encouraged member states to reduce their reliance on Russian gas. There is concern that Russia could cut the supply of natural gas to EU countries in the winter. Russia supplies around 40% of Europe’s natural gas so a complete shut off could be devastating. The EU has urged members to cut their consumption by 15% and build up storage ahead of winter.
2. UK BLOCKS CHINESE LICENSING DEAL
The UK has blocked the University of Manchester’s deal to license vision-sensing technology to a Chinese company. This marks the first banning of a commercial deal under a new national security law. The University of Manchester had entered into a licence agreement with Beijing Infinite Vision Technology Company but voluntarily referred the agreement to the UK government for review. Beijing Infinite Vision is a semiconductor company that produces and sells “Scamp-5″and “Scamp-7” vision sensors. These are sensors that can analyse images captured by a camera and detect different characteristics. The UK government however, believes that the Chinese firm could use the technology in military drones or missiles.
The National Security and Investment Act came into force this year and gives the UK government greater powers to block commercial deals in 17 sensitive sectors on the grounds of national security. There are concerns that such decisions could become more common and could turn academia into a battle ground.
3. TSB FACING £800M MORTGAGE CLASS ACTION
TSB is facing a huge £800 million group action lawsuit for allegedly trapping customers in high interest rate mortgages. In 2016, TSB purchased a portfolio of Northern Rock mortgages. Northern Rock collapsed during the financial crisis in 2008. These mortgages were put under a new brand, “Whistletree”, which was in charge of 27000 mortgages. Last week, 200 customers lodged complaints that Whistletree charged them almost double the typical interest rates and denied them access to standard fixed-rate products. Consequently, claimants believe they have been overcharged and are claiming roughly £50,000 each in overpaid interest.
All Whistletree mortgage holders are eligible to claim and this could cost TSB up to £800 million. Some customers even received a “Together Mortgage” where they received lending of as much as 125% of the value of their home. Such customers may be entitled to additional compensation if the claim is successful.
TSB is no stranger to challenges. In 2018, a botched IT upgrade left 1.9 million customers locked out of their accounts and unable to perform transactions. This cost the company £330 million and 80,000 customers as well as its CEO, Paul Pester.
4. T-MOBILE SETTLES DATA BREACH CASE
T-Mobile has reached a $350 million settlement over its huge data breach last year. 77 million US customers of the mobile network provider were affected as their data was put up for sale on the dark web. T-Mobile has now reached a settlement worth $350 million to compensate customers. Another $150 million will be spent on upgrading data security technology. While the sum is a huge cost for T-Mobile, for most customers, after lawyer fees are subtracted, they can expect a measly $9 in compensation. T-Mobile merged with Sprint in 2020 in a huge $26 billion deal just before the data breach.
5. APPLE SUED OVER APPLE PAY
Apple is facing a class action lawsuit over its Apple Pay system over claims it stifles competition. Affinity Credit Union is launching the action claiming that Apple uses its market power to restrict competitors, in breach of competition law. They claim that iPhone users cannot use competing mobile wallets and can only use Apple Pay. This, according to Affinity, is an attempt to obtain a monopoly in the iOS mobile wallets field and is harming consumer choice as well as payment card issuers. Apple’s system is in contrast to Android phones where users can choose between Google Pay and Samsung Pay. The lawsuit was filed in a California court last week.
6. NORTHERN IRELAND LEGAL ACTION
The EU has sued the UK over the UK’s enforcement of the Northern Ireland customs rules. Boris Johnson agreed a protocol to apply customs and tax rules for goods travelling between the UK and the Republic of Ireland. The UK claims that the rules are too disruptive but the EU reiterates that this is the deal agreed to by the UK in 2019.
The EU accuses the UK of failing to apply customs and tax rules and being unwilling to engage in meaningful discussion. The UK is seeking to unilaterally override the protocol and the bill to action this has been approved by the House of Commons. EU officials have taken legal action to prevent the UK adopting the Northern Ireland Protocol Bill. Despite Brexit being purported as a “done deal”, the fallout from the exit agreement signed in 2019 is far from over. The relationship between the UK and EU is growing more acrimonious as the UK attempts to override the Brexit agreement. BBC News looks closer at the matter.
7. PFIZER AND FLYNN FINED
The Competition and Markets Authority (CMA) has fined Pfizer and Flynn Pharma for overcharging the NHS for life-saving epilepsy drugs. Pfizer and Flynn were the dominant suppliers of Phenytoin, the generic version of Epanutin. The companies hugely inflated the prices and the NHS was forced to pay these prices. Pfizer charged as much as 1600% more than the branded Epanutin. Flynn then bought the drug from Pfizer and resold the capsules at as much as 2600% higher than Pfizer’s previous prices. The NHS paid just £2 million for the drug in 2012 but ended up paying a whopping £50 million in 2013 due to the price hikes.
The CMA says that the companies exploited their dominant position. Pfizer was fined a record £63 million fine and UK based Flynn was fined £6.7 million. Both companies has said they will appeal the fines.
8. TESLA SELLS BITCOIN
Tesla has revealed that it has sold off 75% of its Bitcoin stake amid a downturn in crypto markets. The carmaker bought $1.5 billion worth of Bitcoin in February 2021. Bitcoin rose throughout 2021, boosting Tesla’s stake to $2 billion by year end. In 2022, cryptocurrency markets have suffered, with Bitcoin falling 50% this year alone. The wider tech sector has also experienced a severe downturn this year. Tesla’s shares are down 40% this year alone. The company is not alone as the US tech sector shed $3 trillion in market capitalisation in the first half of 2022.
Last year, Musk said that Tesla would not be selling Bitcoin but is now reneging on this commitment. With Musk also pulling out of the $44 billion Twitter take over deal, commentators are highlighting a potential pattern of broken commitments.
9. NETFLIX TRIALS ACCOUNT SHARING CHARGE
Netflix has announced that it will trial a new charge for users who share accounts across multiple locations. Users will be forced to scan their devices so Netflix can track where accounts are being used. If the account is active in other than the “home” location users will be charged $2.99 on top of their subscription fee. This comes as Netflix reported a loss of 970,000 users in Q2. Although the figure was lower than anticipated, this still marks two consecutive quarters of subscriber decline. Two weeks ago, Netflix partnered with Microsoft to help develop and run ads on its new cheaper subscription plan. Netflix’s share price has plunged nearly 70% in 2022 alone.
10. ROYAL MAIL STRIKES
Royal Mail is facing an existential crisis as it revealed it is losing £1 million a day. The organisation’s losses between April and June was £92m and revenue tanked by 11.5%. This comes despite cost cutting attempts and the use of temporary workers. It has warned that without huge operational change it could be forced to split up its business. The decline in postage of Covid-19 test kits has contributed heavily to the declining revenue. Royal Mail however, posted a £758 million profit last year.
This comes as 115,000 members of the Communication Workers Union (CWU) voted 96.7% in favour of strike action with a turnout of 77%. CWU said Royal Mail offered a 5.5% increase for workers, well below inflation. CWU accuses Royal Mail of “pleading poverty” to avoid paying staff better wages. This strike action could be the largest of the summer.