The week’s news included; Elon Musk’s $55bn pay deal cancelled by US court, Universal pulls music catalogue from TikTok, HSBC fined £57m for failing to protect deposits, UK bans disposable vapes.

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. – EU AI Act will set the global standard, so British businesses must keep up
  • BBC News – AI will not be mass destroyer of jobs – Bank chief
  • City A.M. – Housing is a business issue, and nowhere more so than in London
  • CNBC – Apple’s sales plunged in China — these are the iPhone giant’s 5 biggest problems right now

1. NEW BREXIT CHECKS COME INTO FORCE 

New checks on EU imports to Britain have now come into force after a series of delays. Food, plants and animal imports will now be required to obtain health certificates and these will be checked at the borders. UK food industry organisations have warned these new requirements will push up costs for suppliers, increase prices for consumers and slow down supply from the EU. These checks are mandated by the Brexit deal signed with the EU but the implementation was delayed five times to give businesses more time to adapt to the changes. Even products like flowers will also face these extra checks. Physical inspections on imported food, animals and plants will begin on 30 April. There is particular concern in the meat industry given that Britain imports a fifth of its beef and sheep meat, predominantly from the EU. BBC News explores the changes in more detail. 

2. MUSK’S $55BN PAY DEAL ANNULLED 

Elon Musk has seen his $55.8 billion Tesla pay packet cancelled by a court. The billionaire was awarded the 10-year pay deal by Tesla’s directors in 2018. Musk doesn’t receive a salary from Tesla, so the deal gave Musk various tranches of Tesla stock options provided he met certain performance targets. These options allowed Musk to buy Tesla shares at a huge discount.. Musk however, met those performance goals faster than anticipated. Shareholders then launched legal action to cancel the pay deal, arguing they weren’t properly informed about how easily the targets could be met. The directors argued the large sum was to ensure Musk kept his focus on Tesla, considering the plethora of other businesses he runs.

A Delaware judge however, considered the pay packet “unfathomable”. She asserted that the directors offered the huge package because they were “starstruck” by Musk’s celebrity status. Furthermore, many members of the compensation committee had close personal relationships with Musk. Consequently the judge felt the package was not justifiable and annulled it.

Tesla is headquartered in Delaware, like many other US companies due to the low tax rates. Musk has said he may relocate the company to Texas following this ruling by the Delaware court. Musk is currently CEO and owns 13% of Tesla. He is the second richest person on the planet worth roughly $210 billion. This may drop significantly after this ruling. Musk may however, appeal to the Delaware Supreme Court.

3. UMG PULLS CATALOGUE FROM TIKTOK

Universal Music Group has pulled millions of its songs from TikTok. Discussions over payments for Universal’s catalogue of music broke down. TikTok will now lose the rights to host music from artists like Taylor Swift, Drake and the Weeknd on its platform. Universal criticised TikTok claiming that they sought to pay a “fraction” of the fair value in royalties. TikTok rejects these allegations and claims Universal has put their greed above the interests of artists. Universal Music is the largest label in the industry and boasts roughly 30% of the world’s music under its group. TikTok has over 1 billion users and has become an important means for music to go viral and for artists to be discovered. 

4. CHATGPT FACING ITALIAN GDPR INQUIRY

The Italian data regulator has found that ChatGPT may breach GDPR regulations. ChatGPT is trained on data pulled from the internet but this could constitute unlawful collection of personal data in some instances, according to the Italian Data Protection Authority (DPA). The DPA also found breaches regarding potential exposure of young people to inappropriate material. The DPA has now given Open AI, the maker of ChatGPT, 30 days to respond to its findings. Last year, Italy blocked ChatGPT from operating due to privacy concerns but reversed the decision after their concerns were addressed. OpenAI will hope for the same result with this latest inquiry.

5. SHEIN FIGHTS COPYCAT ACCUSATIONS

Shein has been accused of breaching a legal settlement over trademark infringements. The retailer had promised to stop selling copycat products but has allegedly failed to do so. Over 93 designers have sued Shein in the US for trademark infringements since 2018. Shein denies the allegations but it has long faced criticism for its copycat designs of popular clothes and products. It says it invests in infringement detection technology and constantly reviews its suppliers.

Shein is positioning itself for an IPO in the US but this could prove difficult given the potential scale of legal action it faces. It also faces staunch criticism over its environmental record largely due to the huge turnover of new styles. The Chinese giant releases around 10,000 new styles every day while most competitors don’t release 10,000 new styles per year. Shein is the largest clothes retailer on the planet and was valued at $100 billion last year. Shein also bought Missguided last year from Frasers Group. 

6. HSBC FINED £57M FOR FAILING TO PROTECT DEPOSITS

HSBC has been hit with a £57 million fine for failing to protect consumer deposits. The Prudential Regulation Authority (PRA) found that the bank did not grant customer deposits the correct protections, as required by regulation. Under the Financial Services Compensation Scheme (FSCS), customers are compensated fully for deposits of up to £85,000 if their bank collapses. Most current accounts are eligible for this protection but some are not. HSBC had wrongly marked 99% of eligible deposits as ineligible. This meant that customers would not have immediately been entitled to compensation had the bank collapse. This was a serious breach and HSBC initially faced a huge £96 million fine but saw this reduced by 45% for cooperating with the investigation and agreeing to settle. The £57 million fine is the second largest fine issued by the PRA after the £87 million fine levied against Credit Suisse in 2023. 

7. EBAY SETTLES PILL MAKER SALE CASE FOR $59M

eBay is paying $59 million to settle claims it sold pill press equipment used to manufacture illegal drugs . This case shows how companies like eBay are held liable for what is sold on their platforms. These pill presses and encapsulating equipment can produce thousands of pills every hour and were allegedly used to produce counterfeit drugs laced with fentanyl. Thousands of these machines were sold and some individuals who bought them were later convicted of drug-related offences. The US Department of Justice found that eBay did not comply with the Controlled Substances Act (CSA) which would require them to keep sales records of this equipment and report them to the US Drug Enforcement Administration. eBay denied the allegations but settled the case with the DOJ and agreed to improve its controls around the CSA. 

8. JOB CUT SEASON

The start of 2024 has marked a series of job cuts across a range of businesses. Last week, there were a number of big lay off announcements. 

In the finance sector, Deutsche Bank is slashing 3500 jobs globally after profits fell 14%. This is expected to bring €1.4 billion in savings. PayPal also announced that it would cut 2500 jobs. In tech, Sky is cutting 4% of its workforce, roughly 1,000 jobs as it moves away from its satellite TV business. The company will require fewer engineers than it previously did as it shifts its focus towards digital services. TV broadcaster Channel 4 will cut 18% of its workforce or 200 jobs. It will also seek to move its headquarters to a smaller space in order to reduce costs. Zoom also announced it would cut roughly 150 jobs. 

This comes against a backdrop of a record number of insolvencies in the UK. The total number of insolvencies hit 25,000 in 2023, its highest level since 1993. There were also 20,577 voluntary liquidations, the highest number since records began. In the US however, despite 82,300 jobs cuts in January, the economy added 353,000 jobs overall in the month. 

9. UK BANS DISPOSABLE VAPES 

The UK government has announced a new ban on disposable vapes. This forms part of a government strategy to prevent young people from taking up tobacco products. Plans to ban all people born after 2008 from buying tobacco have also been pitched. Disposable vapes use appealing flavours and colours to attract children and manufacturers have been criticised for this. The long term impacts of vapes are unknown and they are highly addictive like other tobacco products.There is also an environmental argument as 5 million disposable vapes are thrown out every week. As they are made of various plastics they are difficult to recycle. They also often cause fires in waste trucks. Under the proposals illegal sales of vapes will result in sanctions from trading standards and fines of up to £2500.

10. LLOYDS PHARMACY GOES INTO LIQUIDATION

Lloyd’s Pharmacy has gone into liquidation as its life on the high street has ended. Last year, the pharmacy chain began selling off branches. It had 1054 pharmacies but these have now been sold off to independent pharmacy owners. Lloyd’s 6500 staff members were also transferred across as part of the sale process. Now liquidators have been called in to issue what remains of the business to creditors. Lloyd’s owes its 514 creditors a huge £293 million but only £9 million of assets can be recovered. Preferential creditors will receive the lion share, £8.2 million of the £9 million.