The week’s news included; Binance CEO steps down over money laundering violations, Premier League clubs block ban on related-club loan deal, Nvidia sued after employee shares screen on Teams and accidently shows stolen data.
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. – Will Jeremy Hunt’s ‘back to work’ make a difference?
- BBC News – Could airports make hydrogen work as a fuel?
- City A.M. – From Big Four contracts and partner bonuses, why everyone hates consultants
- CNBC – How airlines are shaving minutes off flight times to save millions
1. AUTUMN STATEMENT
Chancellor Jeremy Hunt unveiled his Autumn Statement last week. Here are some of the key announcements:
- The main rate of national insurance contribution will drop 2% to10% from 6 January 2024. An individual on a £35000 salary will save around £450.
- People claiming benefits will face mandatory work experience if they do not find a job within 18 months.
- Benefits will be increased by 6.7%, and there will be tougher requirements for those who claim them to look for work.
- “Full expensing” will become permanent. This will allow businesses to offset investment in items such as new IT equipment and factory machinery against tax.
- There will be a £4.3 billion business rate discount for hospitality, retail and leisure.
- The National Living Wage rises from £10.42 an hour to £11.44 an hour. 21 and 22 are now also entitled to the National Living Wage, not just over 23’s.
You can read the full statement here.
2. BINANCE CEO STEPS DOWN
Binance’s CEO has agreed to step down and plead guilty to criminal charges following a money laundering investigation into the crypto exchange. The US Department of Justice charged Changpeng Zhao and other individuals with violations of the Bank Secrecy Act. Binance failed to implement adequate anti-money laundering controls and violated US sanctions. This allegedly included the provision of services to Iran, breaching US sanctions law. Binance has no single headquarters and its holding company is based in the Cayman Islands.
Binance will pay a huge $4.3 billion to settle the Department of Justice case. The crypto exchange will be forced to implement a new compliance program in line with US standards. Zhao will however, plead personally guilty to the violations, step down as CEO and could face a $50 million fine. CNBC looks closer at this landmark case.
3. PREM CLUBS VOTE AGAINST SAME OWNERSHIP LOAN BAN
Premier League clubs have voted against a ban on player loans from clubs within the same ownership structure. The controversy started when Newcastle United, owned by Saudi Arabia, sought to loan a player from Saudi Pro League club Al Hilal. There was concern that such a deal with a related-party posed a conflict of interest. Transactions could be made between the clubs at cheap or over-inflated prices, depending on the commercial or regulatory needs of each club. Newcastle was temporarily blocked from completing the loan agreement while the Premier League mulled and set up a vote regarding such deals. 13 of the Premier League’s 20 clubs voted in favour of the block. The ban needed 14 to pass so now Newcastle will have the green light to complete the deal. Check out our insight article exploring the issue around related-party deals in the Premier League.
4. UNIVERSAL BLOCKS $750M ROYALTIES LAWSUIT
Universal Music Group (UMG) has won a court battle alleging that it underpaid artists by $750 million. UMG allegedly breached its contract with Andrus Titus and William McLean, members of the 1990s rap duo Black Sheep, along with many other artists. UMG accepted lower royalty payments for their music in return for Spotify stock in 2008. The artists filing the lawsuit claimed that they should have received Spotify stock or its cash equivalent. This is because they are entitled to “50% of “net receipts with respect to… any use(s) or exploitation(s)” of their master recordings.
Last week however, a US court rejected the proposed lawsuit. The judge ruled that UMG’s stake in Spotify does not constitute the “net receipts” stipulated in their contracts. Furthermore, the claimants took too long to file the lawsuit. New York law has a six year time limit to sue for breach of contract and their UMG contract had a reduced two year limit on legal action for breach of contract. UMG took a 5% stake in Spotify in 2008 and its current holding is now 3.3%. This stake is currently worth $1.16 billion.
This news comes as Spotify announces it will be changing its royalty payments from 2024. Artists will now need a minimum of 1000 listens per year to receive royalties. There will also be a crackdown on those generating fake streams.
5. BIG TECH FIRMS SUED
Families in the US are suing big social media firms for harming children by intentionally making their platforms as addictive as possible. Meta, TikTok, Google and Snap are being sued on this basis in a class action lawsuit. The lawsuit cites the UK case of Molly Russell who committed suicide after harmful content on social media drove her to depression. They claim platforms are addictive by design and the apps don’t do enough to protect children from dangerous content.
Last week, a US judge rejected the apps’ attempt to block the class action. The judge ruled that neither the First Amendment nor S230 of the Communications Decency Act protects the firms from legal action here. The apps rejected the allegations and have said they will defend themselves. Meta, Snap and Google all expressed their commitments to protecting children.
6. ALDI SUED BY THATCHERS
Aldi has been sued by Somerset brewer Thatchers for allegedly copying its trademark cider. The discount retailer sells cloudy lemon cider which Thatchers claims copies its own Taurus cider “in both taste and appearance”. Thatchers has requested a blind test to highlight the similarity between the two drinks. The trial began last week in the High Court. Thatchers highlighted its own substantial spending on testing and production compared to Aldi. They claim Aldi is riding on the “coat tails of its success.” Aldi denies the allegations.
This is not the first time Aldi has been in court over alleged trademark infringements. Aldi lost a court battle with Marks and Spencer in February this year, after being accused of copying its light-up Christmas gin bottles. It also settled a similar lawsuit against Marks and Spencer over its Cuthbert the Caterpillar cake (see previous article).
7. NVIDIA SUED FOR TRADE SECRET THEFT
Tech giant Nvidia is being sued after an employee accidently shared his screen on a Teams call that showed that it possessed stolen data. The employee worked at car technology firm Valeo before moving to Nvidia in 2021. Nvidia later entered a joint project with Valeo and in 2022 the employee had a Teams call with Valeo as part of this project. The employee shared his screen but he had left a window open showing Valeo’s source code which he stole before leaving. The source code was behind parking and driving assistance software. Nvidia has been working to expand into this area.
In September 2023, the employee was convicted in Germany for theft of the data. Now, Nvidia is being sued by Valeo over this employee’s theft. Valeo claims that Nvidia has financially benefited from these stolen trade secrets and saved millions in research and development costs.
8. AMAZON STAFF STRIKE
Amazon’s staff went on strike last Friday. Strikes took place both in the UK but also in Europe and the US. Black Friday is always one of the busiest days of the year but this marks the largest industrial action of Amazon’s history. Around 1000 UK based workers of the GMB Union went on strike on Friday. The dispute is primarily due to pay and working conditions. Amazon offered workers a minimum starting pay up to £13 per hour maximum but workers are calling for a minimum rate of £15 per hour. Amazon says it’s offer represents a 20% increase since 2021 and a 50% increase since 2018.
9. ALTMAN BACK AT OPENAI
There was a mutiny at Open AI, the maker of ChatGPT. Staff called the board to resign over their decision to sack ex-CEO Sam Altman and called for his reinstatement. They even threatened mass resignations. Altman was temporarily replaced by the former CEO of streaming site Twitch, Emmett Shear. Staff were questioning the board’s competence as Altman, who founded OpenAI, is an industry pioneer. 743 of OpenAI’s 770 workers co-signed the letter against the board. Late last-week however, Altman was put back in place in response to this pressure. The board that dismissed him is being reconstituted as a result.
Altman was swiftly scooped up by Microsoft after he was initially sacked. Microsoft is OpenAI’s single largest investor and has a 49% stake. It even offered disgruntled OpenAI staff a job at Microsoft. Although Altman is now back at OpenAI but the wider fallout from this saga will take its toll over the coming months.
10. NISSAN UK ELECTRIC INVESTMENT
Nissan has unveiled a new £2 billion UK investment in electric cars. Three new electric models, namely its Qashqai, Juke and Leaf, will be built at its Sunderland plant. The investment will help retain 6000 workers at this plant. Along with this hefty investment, a new battery factory will also need to be built. The project will also receive £100 million in government funding for both the car plant and the gigafactory respectively.
From January 2024, new rules will see cars with 45% non-UK or non-EU parts face a 10% tariff. Given that this percentage is calculated by parts value, electric cars will be hardest hit. Electric vehicles’ value derives largely from the batteries and these batteries are mainly sourced from the far east. Many manufacturers, including Nissan, have asked for more time to change their supply chains to comply with the new rules otherwise production will become unviable.