Google Maps Leads us to yet Another Fine

Google has had their fair share of fines over the past two years. The issue stems from the fact that “only 6% of clicks from Google’s shopping results went to competitors in July 2018.” The European Union fined Google in June 2017 for steering consumers’ search engines towards Google products. In July 2018 a fine of $4.9 billion was issued for unfairly promoting their apps over others. Most recently, the European Commission hit Google with a $1.7 billion antirust fine for abusing their position in the online market, an ongoing problematic feature of Google’s domination. However, statistically speaking, the fines have led to favourable results for competitors as now 40% of clicks from Google’s shopping results go to them.

With the introduction of stringent controls under the General Data Protection Regulation (GDPR), Google has been under criticism for their lack of transparency and inadequate consent from their consumers on personalized advertisements and unwanted links.

Coming up next in lawsuits on tech companies is the European Parliament’s copyright law in the making that can potentially hold content sharing platforms, such as YouTube, liable for copyright infringements on behalf of their users.

Merger Talks: Deutsche Bank & Commerzbank

If there is one thing commercial lawyers like to hear it is big merger and acquisition news. Lucky for us in these despairing times it was announced that Deutsche Bank and Commerzbank have begun merger talks.

The announcement was made after months of speculation and with the backing of the German government. It is believed thatGerman Finance Minister Olaf Scholz has endorsed the two banks to engage in merger talks so as to create a German national champion in the banking sector. Analysts see this announcement as a last-ditch effort to create an entity strong enough to compete with the giant American investment banks. For the Germans, the two combined could support the country’s enormous export industry as well as compete for international business.

The combined banks “would have $2 trillion in assets and be the third-largest lender in Europe, behind HSBC Holdings in Britain and BNP Paribas of France.” Additionally, they would have about “one-fifth of the private customers in Germany…giving them enough critical mass to be profitable in the country’s overcrowded retail banking market.”

The deal, however, is faced with opposition and has many critics. Two factors that critics outline are the difficulties to restore revenue growth after cuts to their investment banking units as well as an economic slowdown that has pushed back expectation for higher interest rates. Many believe that combining the two banks would simply aggravate these issues and just create one bank with a larger problem. In addition, the deals faces strong opposition from unions who are afraid that “more than 10,000 jobs could be cut.”

Target’s target is no longer visionary but calculated

Big retailers and department stores – such as Walmart, Ikea, and Target – are focusing on a new approach to maintain and increase sales. It involves downsizing on their square footage per store and establishing more demographic specific stores that are smaller in scale but tailored in choice of goods and services.

For instance, Target announced that it will be opening up 30 smaller storesin various cities, specifically on college campuses, which will be one-third the size of a standard Target store. Having a collection of smaller stores in a college town, resolves the previous problem Target had of its unreachability and reduces costs associated with online shoppers. Additionally, part of this renovation involves tailoring each store with different goods – school related items in college towns and tourist merchandise in New York stores.

This is a difficult equation to master as it involves accurate demographic research, an intuitive ability to understand wants, and a stringent supply chain mechanism. The increased rate of real estate in the aforementioned towns are countered by the level of sales per square foot as reported by Target.

Ikea is following this trend with small pop up stores in select places, they have had to come to terms with consumers wanting to visit their stores but without the funds of owning their own cars.

It will be interesting to witness the shift in the traditional approach that retailers and department stores take – that is, involving a large space of select stores with unlimited goods. How will this strategy differ and compare to rural areas?  How might it compare between different countries?

Moody’s Investor Services Upgrade Greece

Brexit is the never-ending headline grabber when it comes to commercial news in Europe. However, in a time long forgotten it wasn’t the United Kingdom which held that crown but Greece. It seems like centuries away with all that has happened but there was a time when Europe was fixated on the Hellenic.  That’s right…not Trump and not Brexit…I repeat…not Trump and not Brexit. Instead, everyone was fixated on debt, loads of it. The Greek debt crisis was, in large part, ignited due to the 2008 financial crisis, causing a small humanitarian emergency as austerity measures were unleashed with full force. In fact, it got so bad that there was the danger of Greece leaving the European Union and the Euro. Grexit.

Greece, however, is now recovering and has had its sovereign credit rating upgraded by Moody’s Investor Services. Moody has changed the nation’s sovereign outlook from “stable” to “positive”. In financial jargon this is the equivalent of moving from B1 to B3. However, the ranking still remains four levels below investment grade. Moody has stated that “while progress has been halting at times, with targets delayed or missed, the reform momentum appears to be increasingly entrenched, with good prospects for further progress and low risk of reversal.” It seems to be that the implementation of reforms has been working, allowing for strong fiscal performance. Evidence of this can be seen with the rise of the country’s stocks and bonds, the Athens Stock Exchange index is up around 16 percent since the start of the year.

This upgrade is good news for Greece and will help further its plans to rebuild. The government plans to tap markets once again, having successfully sold five-year bonds in January, it is now ready for more. Having exited its international bailout last summer, it will be interesting to see how the country continues to progress. Will an impeding recession throw everything into jeopardy? Let us hope not. We’ve already got so much going on.

 

 

 

Apps & the Flow of Data

For the most part, applications are based on the “freemium” business model of revenue making. In this model the main source of revenue stems from advertisements within the apps. Therefore, data transferring is fundamental to the existence of such applications.

Many are unaware, when mindlessly accepting the terms and conditions while downloading apps, of the extent to which data is sold and modified from apps to third-party tracker companies.

An empirical studythat was recently published by the University of Oxford analyzed approximately one million Google Play Store apps in relation to third-party distribution trackers.

It concluded that the average amount of third party apps that received data from the parent application was ten, that of which one in five were able to transfer the data to twenty more parties. The study shows that smartphone data flows primarily to third parties owned by Alphabetat 88%, followed by 43% of data transferred toFacebook. As such, this creates a monopoly of data concentrated in the hands of specific businesses who would be able to deduce further information.

Interestingly, games and entertainment apps, specifically those targeting children, transferred the most data to third parties. There are, however, many regulations that limit the scope of such data transfers, including the EU’s General Data Protection Regulation, which places stringent controls on companies and their risk management approach to data collection and protection.

With the rise of cyber security and data protection, it will be increasingly important to keep an eye on the development of smartphone data regulation as it becomes progressively more difficult to manage due to its exponential growth.

The Belt and Road Initiative & The Mercenary King

Erik Prince is a notorious and enigmatic character in the business world. Founder of Blackwater, a well-known and controversial private security company, he is the 21stcentury’s most recognised ‘mercenary’. Prince, however, sold Blackwater in 2010 and has since become involved with Hong Kong based Frontier Services Group Ltd. Unlike Blackwater which focused on paramilitary operations and “became infamous after killing 14 Iraqi civilians in a Baghdad square, FSG focuses on logistics and security.” Nonetheless, this hasn’t stopped a budding controversy from emerging.

FSG’s birth is closely linked with the unveiling of China’s Belt and Road Initiative, an initiative that seeks to expand Chinese reach by connecting Europe, Asia and Africa through power grids and other strategic infrastructure. A large-scale project that fits perfectly with FSG’s business model. Since then the company has “engaged in a variety of ventures, from providing security in a Somalian free zone to running air ambulances out of Kenya.” However, what has drawn international scrutiny is a “signing ceremony to build a training centre in far western China, where the Chinese government has detained as many as a million Uighur Muslims in political camps.” In fact, “the region is a major plank in Beijing’s massive…global infrastructure push, acting as China’s western gateway to central Asia and beyond.” Despite this and a post on FSG’s website, “a spokesman said Prince – a minority shareholder and deputy chairman of FSG – was unaware of the deal, which was preliminary and would need to be signed off by all board members before final approval.”

Critics, however, are having none of Prince’s plausible deniability story. Instead, they are directly accusing FSG of potentially helping the repression of ethnic Uighurs and Muslims in Xinjiang. Furthermore, they are also criticizing Prince for helping the geopolitical agenda of a key U.S competitor. Prince has since responded by stating, “I am a businessman, not a politician, but I am also a proud American who would never do anything against my country’s national interest.” In any case, the dark prince has cloaked himself in controversy once more, bringing to light a number of potentially interesting legal issues.

 

 

Asda & Equal Pay

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Don’t forget to check out BPP’s upcoming events.
i-Opening Webinar “How to Land a Training Contract” – 18 Feb
i-Opening Webinar “Advocacy Star? Let’s go to the Bar!” – 25 Feb

It has been a successful week for Asda’s shop workers (approximately 15,000 workers) who have won the long running landmark case over fair pay. The crux of the dispute was about female claimants that are working in retail stores earning “between £1 and £3 an hour less than staff at Asda’s distribution centres”.

Asda has argued that the discrepancy in rates is due to a number of legitimate reasons. They said that the hourly wage rates differ from stores to distribution centres because they are (a) different jobs and (b) have different market rates. They agreed that rates are different between retail jobs and distribution centre jobs, however, the wage rates of women and men within each respective job is equal. This will be further argued and proved in the next step post-victory.

The victory is still in its early stages as with employment tribunal claims there are more steps to be dealt with. Thursday’s success proved that the jobs arecomparable in nature. Now they must further determine the merits of the contested roles and their value. In addition, it will be questioned whether there is any reason, other than that of gender discrimination, for the unequal pay.

The potential success of this case will open a floodgate of pay claims not just from Asda’s previous and current workers, but also from other supermarkets like Sainsbury’s, Tesco, and Morrisons.  According to Leigh Day, “the total pay-out, if the supermarkets lose, could be more than £8bn.”

BPP Law School: Getting Ahead Programme

Three Steps to Improve your Commercial Awareness – BPP Holborn 22 Jan

i-Opening Webinar “How to Land a Training Contract” – 18 Feb

i-Opening Webinar “Advocacy Star? Let’s go to the Bar!” – 25 Feb

Pro Bono Event – BPP Holborn 26 Feb

ACE (Assessment Centre Experience) – BPP Holborn 6 March

ACE (Assessment Centre Experience) – BPP Holborn 20 March

LPC Virtual Open Evening – Online 25 March

i-Opening Webinar “Want to be sure you’re right for the law?” – 1 April

GDL Virtual Open Evening – Online 2 April

i-Opening Webinar “What does the SQE mean for me?” – 8 April

LPC Virtual Open Evening – Online 17 June

GDL Virtual Open Evening – Online 24 June

Law Career Workshop – BPP Holborn 10 July

LPC Virtual Open Evening – Online 15 July

GDL Virtual Open Evening – Online 16 July

LPC Virtual Open Evening – Online 5 August

GDL Virtual Open Evening – Online 2 September

Turmoil in the London Housing Market

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London is notorious for being one of the most expensive cities in the world. However, its housing market seems to be under siege by a variety of forces, notably a disorderly Brexit. In fact, “London property prices have fallen for the fifth month in a row, wiping more than £15,600 off the value of the average home since the market peaked 18 months ago.” This drop-in value shows no sign of waning. The Royal Institution of Chartered Surveyors stated that this decline is happening at the “fastest rate in six years, and that the outlook for sales was the weakest in two decades.”

According to the Bank of England prices are taking a blow due to regulatory and tax changes as well as lower migration from the EU due to Brexit uncertainty. Lucy Pendleton, director of estate agents James Pendleton, is placing most of the blame on Brexit saying that “the Brexit horror show could easily be the straw that breaks its back and increase the capital’s rate of descent.” In addition, the government may issue a new stamp-duty tax for international buyers leading to a further decrease in demand. This has been the case with demand from Asia as a succession of tax hikes curtailsappetite.

The most affected areas seem to be the wealthiest ones, some seeing “up to 25% wiped off their value in 12 months…[meaning] typical price falls in some cases of almost £500,000.” Kensington and Chelsea have seen the average price of a home “[drop] by more than a fifth (21.2%), during the last 12 months, from £2.25m to £1.77m.” This may prove to be an opportunity for savvy buyers. In any case, if ever there was a time to buy that London mansion, this could very well be it.

Netflix and the War of Streaming

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Netflix’s numbers have been looking suspiciously good during the last quarter of 2018. They have doubled their operations profit from “$245m (£189m) in the last three months of 2017 to $447m” while their revenue rose to $3.7bn.

Netflix’s annual profit has grown and so has its confidence given plans to increase subscription rate for its 58 million U.S. based customers.

 Competition is fierce and entertainment giants are bound to retaliate, as evidenced by a record year at the box office. For instance, 50 percent of the top ten films of the year are Disney led productions. So, Netflix amongst otherstreaming services are yet to kill the movie industry. In addition to that, 2019 is the year that two new streaming services are launching from Disney and Warner Media. Although Netflix is leading the streaming war for now, much of its popular shows are licensed. This poses a threat to Netflix’s charm when new streaming services are launching, specifically those from which Netflix licenses its shows from. This explains why Netflix simultaneously spent approximately $13 billion on production of Netflix Original shows. Netflix is also planning to invest in other markets globally, for instance, it spent $1 billion on European content and is planning on investing content in India.

 Netflix’s CEO is confident Netflix will be able to withstand competition as there are “about 1 billion hours of TV content being consumed in the U.S. per day”, and he notes that the involvement of a new competitor will “only make a difference on the margin.”