Top 10 Stories of Last Week! 15/08/2022

The week’s news included; TikTok owner Bytedance and other internet giants provide algorithms to Chinese government, Apple identifies iPhone & Mac hacking vulnerabilities, P&O Ferries owner posts record profits.

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 – Is Britain headed for a summer recession?
  • Legal Cheek – What happened in UK law firm financial results season.
  • City A.M – As Bitcoin heads for the obituaries, cryptocurrencies can finally mature
  • BBC News – How to make movies without a huge carbon footprint

1. INTERNET COMPANIES GIVE ALGORITHMS TO CHINESE GOVERNMENT

A range of Chinese internet companies have disclosed details of their algorithms to the Chinese government for the first time. The Chinese government published descriptions of the algorithms, reportedly as a means to limit data abuse. Tech giants including Alibaba, Tencent and TikTok-owner ByteDance all disclosed data to the Chinese regulator. The description of 30 algorithms was published last week. The  published data is not detailed and provides a brief summary of how the algorithm works. For example, ByteDance’s Chinese version of TikTok, Douyin, the algorithm determines a user’s interests based on what they click, comment on and like or dislike. It is not clear how much, if any, of the platforms’ source code or business secrets was disclosed to the Chinese government. This news will however, undoubtedly ramp up Western concern about the access the Chinese government has to users’ data. 

This came as the UK government blocked a proposed takeover of a UK tech firm by a Hong Kong based company over national security concerns. Bristol based Pulsic designs was due to be bought by Super Orange HK. But given China’s ever-growing crackdown on Hong Kong, the UK government said there was potential for the technology to be exploited.

The National Security and Investment Act gives the UK government greater powers to block and limit business transactions in the interest of national security. So far, the government has been active in blocking business deals with Chinese firms over fears that they can be used for espionage (see previous top 10). 

2.  APPLE REVEALS DEVICE VULNERABILITY

Apple has revealed severe vulnerabilities in most of its devices including iPhones, iPads and Macs. The tech giant identified an issue that could allow hackers to take complete control of devices. Hackers could set up a webpage with malicious code that gained control of users’ phones when processing content on the page. Hackers aware of the vulnerability could simply send an infected web page to iPhone users and gain unrestricted access to the phone’s operating system. Users are strongly encouraged to update their devices to patch the vulnerability. This can be done via the Software Updates section in the phone’s Settings App. Apple did not disclose how many users are affected by the vulnerability. This comes ahead of the launch of its new iPhone 14 model which will be unveiled in September. 

3. P&O OWNER POSTS RECORD PROFIT

After sacking hundreds of workers earlier this year, the owner of P&O posted a record $721 million profit in the first half of the year. P&O Ferries unlawfully sacked 786 workers in March due to reported financial difficulties and replaced them with foreign agency workers. This sparked a huge backlash and the government cancelled its contracts with the company. This didn’t hinder the company’s owner, DP World, from securing a 51.8% spike in profits year on year. Increasing global shipping costs meant that the company was able to generate bumper profits. DP World owns a range of shipping companies as well as P&O Ferries. Check out our article exploring P&O’s conduct.

4. INFLATION HITS NEW HIGH

Inflation in the UK has hit a new high of 10.1% in July. This is an increase from 9.4% in June . Food prices continue to be the driving factor of inflation as they rose by 12.7% year of year in June. These are the highest inflation figures since 1982 and were 0.3% higher than expected. With winter approaching these figures will only get worse before they improve. Without drastic government intervention, households and businesses will bear the full brunt of inflation and this could have devastating effects. No government announcements are expected before 5 September when the new prime minister will enter office. With yet another energy price cap hike in October, inflation could reach a staggering 13.3%. 

The figures in the UK are in contrast to the latest US figures. Inflation in the US hit 8.5% in July, down from 9.1% in June. This decline was largely driven by petrol prices which have fallen by 7.7% since July.

5. CINEWORLD ON BRINK OF COLLAPSE 

The world’s second largest cinema chain, Cineworld, is facing bankruptcy as it struggles to recover from the pandemic. Cineworld has a huge $5 billion debt pile which it has warned it may not be able to service. A shortage of new cinema releases combined with lower than expected footfall has created severe financial difficulties for the company. A report last week explained that Cineworld was preparing for bankruptcy, sending its share price crashing 60%. Cineworld has 750 sites across 10 countries and employs 28,000 people. In 2021, the company posted a $708 million pre-tax loss which although lower than the $3 billion loss in 2020, is still unsustainable. 

6. CITIGROUP FINED £13M FOR MARKET ABUSE FAILINGS

Citigroup Global Markets has been fined by the UK Financial Conduct Authority for failing to adequately monitor its London-based traders. The bank failed to implement trade surveillance measures to identify and address potential market abuse. The regulator also found that it was too slow in assessing its business risk exposures and implementing surveillance. Citigroup’s offending conduct dated to before 2018 and the bank agreed to settle the case. The FCA issued Citigroup with a £13 million fine and has now closed the case. Citigroup has since implemented more robust systems and controls and has said it is pleased to resolve the matter.

7. ARAMCO PROFITS 

Saudi Arabia’s oil and gas giant, Aramco, posted a record $48.4 billion profit in the second quarter of 2022. Like all oil and gas producers Aramco is enjoying a bumper period sparked by rising wholesale prices due to the war in Ukraine. Furthermore, countries hostile to Russia are turning to other countries for their energy supply and Saudi Arabia has been a beneficiary of this shift. Saudi Arabia is the largest member of the Organisation for the Petroleum Exporting Countries (OPEC). OPEC consists of 13 core oil producing nations and 10 additional OPEC+ members. The cartel supplies 30% of the world’s oil. Two weeks ago, OPEC agreed to increase market supply by 100,000 per day to help temper prices. This however, is a modest increase considering OPEC members produce 28 million barrels per day. With no significant increase in supply or decrease in demand as winter approaches, high energy prices are undoubtedly here to stay.

8.  JUST EAT TAKEAWAY SELLS IFOOD STAKE

Food delivery giant Just Eat Takeaway.com is to sell its stake in Brazilian delivery firm iFood for €1.8 billion. Dutch investment company Prosus will buy iFood, putting up €1.5 billion in cash upfront and an additional €300 million depending on the performance of the company over the next year. This deal will help bolster Just Eat Takeaway.com’s books as the company battles with falling customer numbers. The cost of living crisis has seen a decline in the number of customers ordering takeaway. Furthermore, Just Eat Takeaway wrote down the value of its US subsidiary Grubhub, leading to a €3 billion impairment charge. 

9. HEATHROW AIRPORT EXTENDS PASSENGER CAP

Heathrow Airport has announced that it will extend its daily passenger cap until 29 October. The airport currently only allows 100,000 passengers to travel per day due to staff shortages. After travel mayhem throughout July, the cap was introduced to ensure that the airport can cope logistically with the number of passengers. This led to airlines having to cancel flights with BA suspending all short-haul flights from Heathrow. The staffing shortage at Heathrow was primarily caused by the pandemic. Thousands of jobs were cut when air travel ground to a halt but now that travel is returning to pre pandemic levels, recruiting staff is proving difficult. 

10. TRILLER SUED BY TIMBALAND AND SWIZZ BEATZ

Social media app, Triller, is being sued by music producers Timbaland and Swizz Beatz. They are claiming the Triller owes them $28 million in missing payments from the acquisition of the producers’ webcast series, Verzuz. Timbaland and Swizz Beatz launched Verzuz during lockdown in 2020 and became hugely popular. Verzuz brings two influential artists who go head to head with their discography. The series has amassed hundreds of millions of views. In July, Verzuz partnered with Apple Music and was bought by Triller in 2021. Now, Timbaland and Swizz Beatz claimed that Triller missed payments and failed to adhere to a settlement agreement. The pair now seek a full $28 million repayment. Triller recently filed to go public via a direct listing. The social media app has over 250 million downloads and was once a close competitor to TikTok. TikTok however, has since rocketed ahead of Triller, now obtaining over 2.6 billion downloads.

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