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In Brief

Today's Top Story

US-Japan Trade Deal Allows for Antitrust Actions on Big Tech

Japan and the United States will reportedly agree not to require technology companies to divulge software secrets under their bilateral trade deal, except in cases of possible antitrust law violations, according to Nikkei Weekly (13 September, Tsuji). The in-principle ban on forced disclosures, part of the section of the draft agreement pertaining to digital trade, shows an attempt to strike a balance between high-tech competition and government's role in intervening to prevent data from becoming concentrated in the hands of a few companies. Japanese Prime Minister Shinzo Abe and US President Donald Trump are poised to sign the trade agreement on the sidelines of the United Nations General Assembly meeting in New York later this month. The rules on data, a key determiner of competitiveness for tech companies, are among the most closely watched parts of the trade deal's digital provisions. Japan's competition regulator recently published new enforcement guidelines meant to prevent abuses of consumer data by platform companies. The risk of government seizures of software source codes, proprietary algorithms, and other tech secrets poses a barrier to business expansion. Tokyo and Washington will leave room in their trade deal for exceptions to the ban on forced disclosures, according to the draft document. Companies could be required to hand over data in cases in which consumer safety is at risk or in possible violation of competition or privacy laws.

From "US-Japan Trade Deal Allows for Antitrust Actions on Big Tech"
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Legal Actions

New Lawsuit Against Uber Is Set to Test Its Classification of Workers

Uber has a legal opportunity to challenge a new California law that would require the ride-hailing company to reclassify its drivers as employees, reports the New York Times (12 September, Scheiber). Lawyer Shannon Liss-Riordan has filed a class-action lawsuit in federal court in California on behalf of Uber drivers, alleging that the company incorrectly classified drivers and therefore wrongfully denied them a minimum wage, overtime pay, and expense reimbursements. News of the lawsuit broke several hours after Uber said it may not be forced to reclassify its drivers despite the passage of a California law mandating that gig workers should be considered employees rather than independent contractors. Liss-Riordan dismissed Uber's argument as "grasping at straws." If she is successful in court, Uber may be on the hook for hundreds of millions of dollars as it shells out to drivers for lost compensation and reimbursements.

From "New Lawsuit Against Uber Is Set to Test Its Classification of Workers"
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Regulatory Developments

EU's Vestager Targets Big Tech by Floating Potential Data Rules

Margrethe Vestager, the antitrust chief of the European Union (EU), has called for more rules on data collection in a move that signals her intentions to target big technology firms, reports Bloomberg (13 September, White). Vestager said that the EU's celebrated data-protection legislation does not go far enough to cover how data is used to target specific individuals or, in extreme cases, "to undermine democracy." She pointed out that when a few companies contain and control significant data on individual consumers, they are able to tailor content to those people or target them for a particular purpose that may impact the decisions consumers make. Vestager, set to begin her second term as antitrust chief on 1 November, clearly signaled her intentions to go after big tech firms when she said that action is needed "to make sure that the way companies collect and use data doesn’t harm the fundamental values of our society." In her first term, Vestager went after tech giants, handing out significant fines to Google and spearheading a tax crackdown on Apple. She is also in the midst of an investigation on how Amazon handles data on rival sellers in its marketplace.

From "EU’s Vestager Targets Big Tech by Floating Potential Data Rules"
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China Prods State Firms to Boost Investment in Crisis-Hit Hong Kong

A Reuters (12 September, Zhai) report reveals that China has asked its biggest state firms to become more active in Hong Kong through increasing investment there and asserting more control over companies in the turbulent city. Chinese government officials met with business leaders from almost 100 of China's largest state-run companies earlier this week, with the officials requesting that the executives step in to help calm tensions after several months of protests in Hong Kong. Specifically, the executives were asked to take active control over Hong Kong companies and assert their authority to influence or control decision-making. Two of the executives revealed that the business leaders agreed to invest more in key industries for Hong Kong, including real estate and tourism, in an attempt to create new jobs and stabilize the financial markets there. The meeting was organized by the State-Owned Assets Supervision and Administration Commission (SASAC), which oversees China's large state sector.

From "China Prods State Firms to Boost Investment in Crisis-Hit Hong Kong"
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Mergers and Acquisitions

Yahoo Japan Takes on Amazon, Rakuten With US$3.7 Billion Deal

Yahoo Japan is shifting away from its original business model of selling advertising against news and sports stories and increasingly turning towards ecommerce, reports the Wall Street Journal (12 September, Fujikawa). The company, which originally began as a corporate cousin of the US Yahoo site, is now a totally separate entity under the control of SoftBank Group Corp. Yahoo Japan's latest move to break into the ecommerce game is its US$3.7 billion plan to take a 50.1 percent stake of Japanese online fashion retailer Zozo Inc. Yahoo Japan executives hope that the Zozo deal will attract young, fashion-conscious consumers and chip away at the ecommerce dominance of Amazon and Japan's homegrown option, Rakuten. Zozotown, Zozo's online platform, is popular with young people, including women in their 20s and 30s. Yahoo Japan's CEO, Kentaro Kawabe, said he hopes they will overtake their two competitors to become No. 1 in domestic sales volume in the next five years or so.

From "Yahoo Japan Takes on Amazon, Rakuten With US$3.7 Billion Deal"
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Board/Management Relations

Oracle Co-CEO Taking Medical Leave

Oracle announced that Mark Hurd, one of its two CEOs, will take a medical leave of absence, reports the Wall Street Journal (11 September, Needleman). Hurd's decision removes the technology giant's top executive for sales and strategy at a time of intensifying competition in the business-software market. The absence means Safra Catz will be Oracle's sole CEO.

From "Oracle Co-CEO Taking Medical Leave"
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Meggitt Hires Andrew Garard as Group General Counsel, Director of Corporate Affairs

Meggitt Plc, an engineering firm with a focus on aerospace equipment, has announced that it hired Andrew Garard to be its group general counsel and director of corporate affairs. Garard is set to begin his role on 16 September, according to (13 September). Garard said in a statement that he is "delighted" to join Meggitt, adding that he is especially excited to come on board as Meggitt "looks to build upon its position as a leading international company specializing in high-performance components and sub-systems for the aerospace, defense and selected energy markets." Garard said he would work closely with his predecessor, Philip Green, who is scheduled to retire at the end of the year, to ensure a smooth transition of all job responsibilities. Garard spent more than a decade in his previous job, working for ITV Plc as group legal director and company secretary.

From "Meggitt Hires Andrew Garard as Group General Counsel, Director of Corporate Affairs"
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Labor and Employment

Macron Faces Major Transport Strike Over Pension Reforms

Transport workers caused severe disruptions in Paris Friday as they protested French President Emmanuel Macron's proposed pension reform, reports the Financial Times (13 September, Keohane). Workers at Régie Autonome des Transports Parisiens (RATP), the city's public transport operator, set down their tools to express their extreme opposition to Macron's plan, which would include a slow transition from 43 separate pension schemes to one universal system. But that universal system would encourage French workers to delay retirement, prompting fears among workers that their retirement rights are in jeopardy. The strike shut down 10 of Paris's 16 metro lines, with some stations closed altogether. Regional trains ran a reduced service, while buses and tram service in the city also experienced significant disruptions. Accordingly, many Parisien workers opted to stay home or ride bicycles to work on Friday. The strike is expected to be RATP's biggest since 2007, and further delays, disruptions, and stoppages are expected. The strike is the latest example of public pushback against Macron, who has dealt with gilets jaunes protests, otherwise known as yellow vests protests, intermittently for almost a year.

From "Macron Faces Major Transport Strike Over Pension Reforms"
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Brazil Senate Passes Telecoms Modernization Bill

The Brazilian Senate approved a bill Wednesday that will modernize the country's telecommunications law and lift restrictions on assets sales, according to Reuters (11 September). The bill, called PLC 79, has already passed through the lower house of Brazil's Congress. It will head to President Jair Bolsonaro next, who is expected to sign it into law. PLC 79 encourages investment in broadband in remote areas of Brazil through allowing companies to fully own telecom assets. This means that a service provider can construct assets cellphone towers or buy valuable real estate and sell it at will instead of handing it to the government when the provider's contract period expires. The bill further modernizes the telecoms industry in Brazil by removing requirements that providers invest in outdated or aging technology. Experts predict that there will be a boom in asset sales when Bolsonaro signs the bill into law, adding that it is likely PLC 79 will be beneficial across the board in Brazil. The telecoms regulator Anatel will be tasked with implementing the changes, a process that could take as long as 18 months.

From "Brazil Senate Passes Telecoms Modernization Bill"
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Google to Pay US$1 Billion in France to Settle Fiscal Fraud Probe

To settle a fiscal fraud probe that began in 2015, Reuters (12 September, Carraud, Rosemain) reports, Google has agreed to pay US$1.1 billion to French authorities. The deal may create a legal precedent for other large tech companies present in the country. French investigators have been seeking to establish whether Google, whose European headquarters is based in Dublin, Ireland, failed to pay its dues to the state by avoiding to declare parts of its activities in the country.

From "Google to Pay US$1 Billion in France to Settle Fiscal Fraud Probe"
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Sainsbury's to Halve Plastic Packaging After Consumer Pressure

Sainsbury's, the second-biggest supermarket chain in the United Kingdom, has pledged to halve the plastic packaging it uses by 2025, reports the Financial Times (12 September, Abboud). Consumers in the United Kingdom have become increasingly concerned about plastic use, and many have put pressure on Sainsbury's and its rivals, like food retailers Tesco and Iceland, to cut down on plastic use. Sainsbury's plastic pledge includes food packaging as well as plastics used in other operations, like wrapping pallets for transportation. The supermarket chain said it would use more alternative materials, lighter-weight plastics, and refillable packaging in order to meet its target. Sainsbury's said an analysis of its products showed that the areas of biggest impact would be plastic milk bottles, carbonated drinks, water, fruit juice, and packaged fruits and vegetables. Sainsbury's CEO Mike Coupe said in a statement that the company would look to its partners and customers for help and collaboration to achieve the ambitious goal. Sainsbury's must also navigate hurdles as it attempts to embrace a greener policy—namely, how to cut out plastic packaging without reducing shelf life, endangering food safety, or contributing to food waste.

From "Sainsbury's to Halve Plastic Packaging After Consumer Pressure"
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Corporate Social Responsibility

CEOs Call On US Lawmakers to Pass Gun Laws

The CEOs of 145 companies issued a new call for gun safety Thursday, reports National Public Radio (12 September, Chappell), sending a letter to members of the US Senate stating that it is "simply unacceptable" to do nothing about gun violence and mass shootings in the US. The chief executives say new laws that would require background checks on all firearm sales represent "a common-sense solution with overwhelming public support and are a critical step toward stemming the gun violence epidemic in this country." Along with stronger background checks, the executives are calling for a red flag law, which could prevent shootings in cases where relatives or law enforcement report concerns about someone who may be at risk of harming themselves or others.

From "CEOs Call On US Lawmakers to Pass Gun Laws"
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