Tag: fine

ZTE pays $900 million fine


Chinese telecom equipment maker ZTE has agreed to plead guilty and pay up in a US sanctions case, drawing a line under a damaging scandal that had threatened its cut off its supply chain.

While the fine was larger than expected, ZTE, also a major smartphone maker, reported robust underlying earnings for 2016 and was upbeat in estimates for the first quarter.

A five-year investigation found ZTE conspired to evade US embargoes by buying US components, incorporating them into ZTE equipment and illegally shipping them to Iran.

It also made 283 shipments of telecommunications equipment to North Korea.

US Attorney General Jeff Sessions said in a statement that ZTE Corporation not only violated export controls that keep sensitive American technology out of the hands of hostile regimes like Iran’s, they lied … about their illegal acts,”

But ZTE relies on US suppliers for 25 percent to 30 percent of its components, many of which are key to its goods. It buys about $2.6 billion worth of components a year from US firms. This includes  Qualcomm, Microsoft and Intel.

ZTE Chief Executive Zhao Xianming said in a statement that his outfit acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company.

The company agreed to a seven-year suspended denial of export privileges, which could be activated if there are further violations, as well as three years of probation, a compliance and ethics program, and a corporate monitor.

It also agreed to an additional penalty of $300 million that will be suspended during the seven-year term on the condition the company complies with requirements in the agreement.

ZTE has replaced executives allegedly involved, including naming a new president.

The company said it slid to a preliminary net loss of $342 million in 2016, its first loss in four years, due to the settlement.

Watchdog could fine Toshiba $60 million

Watchdog-Lele1Japan’s securities watchdog is likely to recommend a $60 million fine for scandal-hit Toshiba for its advanced books cookery over the past seven years

According to the Nikkei business daily, the Securities and Exchange Surveillance Commission will make the recommendation to the Financial Services Agency as early as this month.

Toshiba has expected the fine and apparently been putting its pennies aside in a big jar by the door. The fine will not harm its profits, although given the fact it is short of cash it would probably like to spend the money on something else.

Tosh inflated profits over roughly seven years, in what third-party investigators blamed on over-reaching and a culture that discouraged employees from questioning authority. The fine will be eight times the largest that watchdogs have issued in Japan.

The record was 1.6 billion yen paid by industrial conglomerate IHI Corp in 2008 for accounting-related violations, the Nikkei said.

Toshiba has since appointed more outsiders to its board of directors, which this month said it had sued five former executives over mismanagement.

e-commerce has its first antitrust case

ArrestThe US Department of Justice’s antitrust division has announced its first successful prosecution against an e-commerce outfit.

David Topkins was accused of conspiring with other poster sellers to manipulate prices on Amazon from September 2013 to Jan. 2014, according to papers filed in a San Francisco federal court.

The DoJ said Topkins had agreed to plead guilty to conspiring to illegally fix the prices of posters he sold online, pay a $20,000 criminal fine and cooperate with its probe. The deal requires court approval.

Topkins used algorithms, for which he wrote computer code, to coordinate price changes, and then share information about poster prices and sales.

The Justice Department said this activity violated the Sherman Act, a federal antitrust law, by causing posters to be sold at “collusive, non-competitive” prices.

Amazon was not charged in the case against Topkins. He might have got off lightly. The charge against Topkins carries a maximum 10-year prison term and $1 million fine, the Justice Department said.

Korean FTC rakes in record fines

Korea’s Fair Trade Commission collected a record number of fines against companies accused of price fixing, in the first 11 months of 2011.

Companies were made to pay back a total of $923 million (1 trillion won), exceeding the commissions’ expectations of $372.3 million (402.9 billion won). The sum was larger as a result of several large scale investigations.

Price fixing has increased in Korea as firms search for ways to make bigger profits. This year alone, Hitachi, HP and AUO have been fined for allegedly jumping into bed with their friends and manipulating LCD and other technology prices.  

As a result of such cases, the FTC made $179 million ($194 billion won) in fines from LCD panel makers and other technologies.

Other cases that raked in the cash were three local instant noodle makers who
were found to have cooked up plans for nine years to match product prices, while eight construction companies were fined after an investigation on collusion to win deals for the four rivers restoration project.

The Korean FTC’s record fine earnings comes months after it was criticised by parties who claimed it should not be given the exclusive right to decide if companies should face investigation for antitrust activities.

The watchdog was criticised after a series of lenient decisions made by the organisation, which saw its critics allege that it seemed more eager to protect businesses than victims of unfair treatment.

Korean FTC slaps LG with paltry fine

The Korean Fair Trade Commission has used its powers to fine billion dollar company LG  a huge fine of… $74,300 (85 million won).

The paltry penalty, for obstructing the FTC investigation into claims of unfair pricing practices in March,  is sure to make the billion dollar company quake in its boots.

LG has also been reprimanded for secretly moving its memory drives when investigators demanded that the door be opened.

Another manager at the company has also been accused of deleting files on his external drive after FTC agents ordered him not to do so, the Joongang Daily reported.

The watchdog began investigating the company after smaller retailers asked it to check if the company was providing its products at different prices.

However, many will be unimpressed at its lack of backbone issuing such a small fine.

Earlier this week critics hit out at the watchdog for being “too lenient”  and this latest incident isn’t compelling evidence to the contrary.

LG has somewhat become a favourite with the watchdog. In 2009 LG was let off the hook when it was investigated and found guilty of fixing the prices of home appliances between 2008 and 2009.

Critics claimed that the regulator’s leniency program meant that LG was exempted from the fine of $16 million (18.83 billion won).

Up until 2000, the FTC filed a complaint against two percent of the total cases detected.

However, this figure had dropped to 0.95 percent over the past 10 years even though the annual number of cases the agency handled had increased five- to six-fold during the same period.

Of the 3,505 cases the FTC detected in 2010, the agency filed a complaint in only 19 cases. In 1,763 cases, the agency ended up issuing a warning.

Intel fights to overthrow EU tyranny

Chip giant Intel is seeking to overthrow a $1.33 billion fine which the EU antitrust regulators forced upon it.

The Commission fined Intel three years ago for hindering arch-rival AMD, after an eight-year investigation.

Intel told the General Court in Luxembourg that commissioners relied on “profoundly inadequate” evidence in their case against Intel.

It wants a panel of five judges to over turn the fine, and is asking the General Court in Luxembourg, Europe’s second highest.

The Commission was legally allowed to take 10 percent of Intel’s 2008 turnover, and the fine, while huge, was only 4.15 percent.

Intel’s lawyer Nicholas Green told the court that the Commission did not have sufficient evidence of any wrongdoing by Intel and relied too much on comments by the company’s customers.

According to Reuters, he said that that the quality of evidence relied on by the Commission is profoundly inadequate and the analysis is “hopelessly and irretrievably defective”.

Dell, HP, NEC, Lenovo and German retail chain Media Saturn Holding received rebates from Intel during the period investigated by the regulator.

But the lawyers for the Commission said this was at the core of Intel’s illegal business practice.

Commission lawyer Nicholas Khan told judges that Intel’s rebates were designed to tie customers and put competitors in an unfavourable position.

Intel carefully camouflaged its anti-competitive practices with clever wording in its contracts, he said.

The European Ombudsman has censured the Commission for procedural errors in its investigation. He said that the regulator had failed to make a proper note of a meeting with Dell during its probe.

Intel was also backed by the Association for Competitive Technology which represents more than 3,000 small software developers and information technology firms.

However the French consumer organisation Que choisir is backing the Commission.

Once the General Court has ruled, the loser is expected appeal to the highest court, the EU Court of Justice. 

Yahoo e-mail encourages speeding

Yahoo has been given a slap on the wrist by the Adverting Standards Authority (ASA), which has condemned the company for encouraging speeding.

The watchdog took a chunk out of the company following complaints by just two people who
who said that the ad for the new BT Yahoo Mail Beta “was likely to cause harm” as it “condoned and encouraged excess speed and irresponsible driving.”

They took offence at the line: “Faster is funner. Introducing the 2x faster New BT Yahoo! Mail. Find out more about BT Yahoo! Mail Beta”.

The advert pictured two females in a convertible sports car, while the passing scenery was blurred. They were not checking their emails.

Of course, Yahoo issued a speedy reply to defend itself, claiming that the ad was not related to motoring. It said that it also did not believe that the advert encouraged speeding or driving irresponsibly.

In order to prevent a penalty it continued to cover its [car] tracks, explaining that the blurred scenery was only used to depict the car was travelling along a mountain path and that
“the car was not travelling over the speed limit”.

Yahoo’s “I didn’t know officer, honest” didn’t quite wash. The ASA ordered it to ensure the advert was banished from ever appearing again in its current form.

The ASA concluded that the headline and the image did portray speed “in a way that might encourage motorists to drive irresponsibly”. It could also be viewed as a green-light from Yahoo to act in an anti-social fashion and encourage irresponsible driving, but anyone who takes their cue from a Yahoo advert is probably a car-crash of a person anyway.

Just the ticket we say.

Meanwhile, plans for Talk Talk’s “Over the limit!” campaign have never existed. 

France slaps Google with record Street View fine

France has stood up, again, to the all encompassing Google. It has fined the company a record $142,000 (100,000) after finding it guilty of collecting private information while compiling its Street View service.

France is one of the few countries to follow through with making a stand, after the UK along with the Information Commissioner’s Office decided to clear the company of wrongdoing.

However, the National Commission for Information Freedom (CNIL) has slapped the company with a fine after it found that it had not kept its pledge to erase all private data.

It instead found that “Google had not refrained from using the data identifying Wi-Fi access points of individuals without their knowledge.”

This, it said, meant Google had to pay up because the methods had constituted “unfair collection” of information under French law. To top it off the CNIL also claimed Google had received economic benefits from the data.

“It is a record fine since we obtained the power in 2004 to impose financial sanctions,” the head of the CNIL regulator, Yann Padova said.

The fine has been welcomed by Big Brother Watch. Daniel Hamilton, Director at the privacy group, told TechEye that he was “delighted” that France had taken “such clear and unequivocal action against Google.”

However, he pointed out that “sadly,” the ICO over here “effectively abdicated responsibility for online privacy.”

This, Hamilton says, has been shown with the ICO “refusing to take what he calls “knee-jerk” action against Google for the illegal harvesting of personal data.”

Although Mr Hamilton said that this showed the ICO could not be taken seriously , it seems the watchdog’s hands could be tied.

Back in December we reported that the coalition was rather cosy with Google. Mr Cameron is being advised directly about the East London Tech city. We reported that Google has many friends here.  Not to mention interesting inter-personal ties.

Mr Hamilton said there was a great deal the central government could learn from “innovative companies like Google, particularly in terms of increasing the general public’s access to information and fostering better communications between the public and private sectors.”

However, he points out that he hoped the Coalition will learn from Google’s best practices and “scrupulously” avoid “any form of engagement with privacy-infringing programmes such as Street View and the monitoring of personal email accounts”

Google launched its Street View service in 2007 and has since been living in a row over spying and privacy concerns. In addition to concerns about photos taken, Google admitted in 2010 that its cars, which were meant to be taking pictures, were also picking up Wi-Fi data and had “inadvertently” captured unencrypted private data including passwords and e-mails. It was blamed on a rogue engineer.

First Twitter libel case lost by a Welshman

A former Welsh mayor became the first Briton to be ordered to pay libel damages over a Twitter entry.

Colin Elsbury, a former mayor of Caerphilly, had tweeted ahead of a council election that his challenger Eddie Talbot had been “forcibly removed” from a polling station by coppers.

According to the Times, he twigged that he had got the wrong bloke and the person chucked out of the polling station was not his rival after all.

Elsbury tried to correct the tweet, but Talbot was hugely miffed and sued for defamation anyway.

A judgehanded down a fine of £3,000 and ordered Elsbury to pay costs of around £50,000 as well as apologise publicly to Talbot on his Twitter feed.

Elsbury, a member of the Welsh nationalist Plaid Cymru party, said after the verdict that it was a case of mistaken identity which he had already said sorry for.

The case should act as a warning to people, including politicians, to be extremely careful when using Twitter and other social media such as blogs.”

Sueing over Tweets is quite common in the US, where they will sue if a cup of coffee is too hot.  But there has not been another case in the UK yet.

European Commission fined €12 million over Unix

The European Commission has been fined just over €12 million ($16 million) for software copyright infringement.

The fine of €12,001,000 was given after the General Court of the European Union ruled that the Commission infringed the copyright of software it employed by French firm Systran.

The dispute was over the EC-Systran Unix software, which Systran adapted from its machine translation software for the EC between 1997 and 2002. In 2003 the EC put out a call for tenders to maintain and linguistically enhance the system, which Systran informed the EC would infringe its copyright.

The EC failed to recognise these rights, saying that Systran did not provide probative documents to properly establish its claim.

Nearly a decade later, with four years spent in heated court battles, the General Court found the EC guilty of copyright infringement, a decision which Systran has called “historic”. Systran also said that this is the first time a European institution “has been condemned in such a manner and to such a degree.”

The damages to be paid to Systran include €7 million in fees Systran would have claimed between 2004 and 2010 if the EC had properly employed Systran in tendering for alterations to the EC-Systran Unix system. It also includes €5 million in compensation for the potential effect of the EC’s behaviour on Systran’s finances over the last six years. A final €1,000 is given as non-material compensation.

The Court warned the EC to respect Systran’s copyright. If not, Systran will be entitled to launch a new infringement case to seek further damages.

As a final measure the General Court ordered the publication of a press release detailing the situation as a form of non-pecuniary compensation for the reputational damage that Systran suffered due to the EC’s “unlawful conduct”.