Displaying items by tag: Ruling

US chipmaker sees shares plunge after antitrust ruling

Written on Thursday, 23 May 2019 07:59

The US manufacturer of superchips that powers our smartphones has seen its shares plummet following an antitrust ruling.

Published in Finance

Head of Samsung sentenced to five years in jail for bribery

Written on Sunday, 03 September 2017 09:31

South Korean conglomerate Samsung has been rocked following the decision by Seoul Central District Court to sentence its leader to five years in jail for bribery. Billionaire, Jay Y. Lee, was the head of Samsung Group but his career is now in turmoil as it faces up to the prospect of spending the next five years in prison.

The ruling by the court in South Korea brings to an end a six-month scandal that shocked the nation - the revelations of bribery and corruption that was uncovered also forced the then President Park Geun-hye to stepdown. The decision by the judiciary is seen as a ‘watershed’ moment in South Korean affairs, and ends the decade long economic order which was dominated by family-run conglomerates.

It emerged that a court found Lee guilty of paying bribes in anticipation of favors from the South Korean president. In addition to this, the court also found Lee guilty on charges of concealing assets overseas, embezzlement and perjury.

The head of Samsung is the heir to one of the world’s biggest corporate empires – and the 49-year-old has been in custody since February following allegations that he bribed Park in order to help him secure control of a conglomerate that owns Samsung Electronics, which is the world’s largest smartphone manufacturer and chipmaker.

The judge who passed down sentence on Lee said that as the group’s heir apparent it was obvious who stood to benefit from any ‘political favors’ for Samsung. However, Lee has vehemently denied any wrongdoing since the outset, and maintains his innocence. A representative of Lee’s legal team, Song Wu-cheol confirmed they would appeal the decision and said the guilty verdict is ‘unacceptable. He said, “The entire guilty verdict is unacceptable, we’re confident that our client’s innocence will be affirmed by a higher court.”

It has emerged that the case is expected to be appealed all the way up to the Supreme Court - and the appeal is likely to take place next year. Legal commentators have claimed that the sentence is quite severe and is one of the longest ever given to a prominent South Korean businessman, adding that the decision was a landmark ruling for family-run conglomerates that are revered in the country for transforming the war-torn country into a global economic superpower.

However, recently the family-run conglomerates have drawn criticism for stifling start-ups and being responsible for the economy to stall and stagnate. Samsung was seen as a shining example of the country’s rise from poverty during the Korean War which lasted from 1950-1953. In recent times though, the South Korean colossus has epitomized the sometimes ‘corrupt’ ties that exist between politicians and the chaebols.

Published in Telecom Vendors

US technology colossus and global search engine giant Google has avoided paying a whopping €1.1 billion tax bill in France after a Parisian court ruled in its favour. The court’s decision was a welcome reprieve for the Californian based entity, as the ruling comes just weeks after Google was fined by the European Commission (EC).

Google’s legal row in relation to this tax bill has dragged on for six years, but a Parisian administrative tribunal ruled that Google was not liable to pay five years worth of back taxes which was being sought by France’s tax authorities. The tribunal found that Google’s advertising saes business had no taxable presence in the country.

The Wall Street has claimed that the French court’s decision could have implications for the other tax battles that Google are currently embroiled in Europe and other parts of the world. In its summary of its findings, the Parisian court concluded that Google did not illegally evade French tax by routing sales in the country through the Republic of Ireland. Google’s European headquarters is in Ireland - and they ruled that Google could not be taxed if it also has a permanent base in France.

Google reiterated its commitment to France by vowing to support the growth of its digital economy. In a statement issued by the US firm, which employs 700 people in France – they suggested that the decision by the court confirms that it abides by French tax law and international standards. The statement read, “We remain committed to France and the growth of its digital economy.”

However, France’s Minister of Public Action and Accounts, Gerald Darmanin, claimed that the tax authority may yet appeal the decision made by the administrative panel. In the meantime, the court’s decisions eased recent pressure on Google across Europe. The European Commission fined the organization €2.4 billion a fortnight ago, it said it abused its market dominance as a search engine, and illegally promoted its own shopping comparison website.

In addition to this, reports have circulated that the EU may fine Google over its Android operating system, which last year was accused of stifling innovation and market competition by the EU competition commissioner.

A number of other European countries have also attempted to claim back taxes from Google. In Spain, authorities raided Google’s offices in 2016, while the company also agreed to pay €306 million in Italian back taxes earlier this year.

Published in Finance

US government is set to intervene into the long-running saga between technology giants Apple, the EU and the Irish government. The EU ordered the iPhone maker to pay back €13 billion in taxes it claimed it owed Ireland.

However, in a bizarre turn of the events the Irish government rejected the EU’s ruling that it was owed €13 billion in back taxes and said that Apple hadn’t breached any tax laws in Ireland. The EU insisted that Apple had secured favorable tax incentives from the Irish government which amounted to illegal subsidies and issued the record tax demand against the US tech leaders.

Apple decided to take its case to Luxembourg-based General Court, which is Europe’s second highest in December in light of the ruling by the EU. The decision by the EU was heavily criticized by the Obama administration which alleged that the EU was attempting to help itself to cash that should have ended up in the US.

The Trump administration has subsequently proposed a tax break on $2.6 trillion in corporate profits being held offshore as part of its own tax reform, although it has not stated anything in public in relation to Apple’s tax row with the EU.

A source close to the case that who wishes to remain anonymous confirmed that the US had filed an application with the EU in relation to the long-running saga between Apple and EU decision-makers. The source said, “I can confirm the United States filed an application with the European Union General Court to intervene in the case involving the retroactive application of state aid rules to Apple.”

It has also been reported that The General Court will deal with the case in late 2018, although that has not been officially confirmed. Apple firmly believes that it is a convenient target for the EU and that EU competition enforcer used an ‘absurd theory in coming with the punitive figure. Other companies currently embroiled with the EU in relation to tax issues in Luxembourg are Amazon and McDonalds.

Ireland, the Netherlands, Luxembourg, Starbucks, Fiat Chrysler Automobiles and several other companies that were also ordered to pay back taxes to other EU countries have similarly challenged their EU rulings.

Published in Government

Social networking giant Facebook has been ordered by an Austrian court that it must control the issue of ‘trolling’ on its platform following a case which was brought forward by a political party in the country. Austria’s Green party where outraged at the vitriol directed at its leader – and demanded that Facebook take responsibility for the platform being used to spread hate. However, the ruling is now set to have international ramifications as the ruling said that ‘hate postings’ must be deleted all across the social network platform – and not just in Austria.

The court comes on the back of a movement by legislators currently attempting to find ways of forcing companies such as Facebook, Google, Twitter and others to remove hate speech or incitement to violence in a much more rapid way. Germany’s cabinet recently approved an initiative to fine social networks up to €50m if they fail to react quickly enough to such negative postings posted online – and the European Union is considering new EU-wide rules.

Facebook’s legal representatives in Vienna have thus far declined to comment on the ruling by the Austrian court which was announced publicly the Green party, which was subsequently confirmed by a court spokesman. The Viennese appeals court ruled that Facebook must remove the hate postings which have been aimed at Eva Glawischnig, and said that merely removing them in Austria without them being deleted abroad would not suffice.

The court claimed that Facebook has the capabilities available to them to automate this process. It did concede that the social media colossus could not be expected to trawl through content to find posts that are similar, rather than identical to posts already identified as hate speech. The Greens have indicated that they intend to have the ruling strengthened at Austria’s highest court. One of their demands is to identify holders of bogus accounts. In addition to this, the political party has also requested that Facebook pay damages, which would make it easier for individuals in similar cases to take the financial risk of taking legal action.

"Facebook must put up with the accusation that it is the world's biggest platform for hate and that it is doing nothing against this," said Green parliamentarian Dieter Brosz. Chief Executive Mark Zuckerberg has said hate speech has no place on the platform and the company has published a policy paper on how it wants to work against false news.

Published in Apps

US tech giants Apple have seen a ban prohibiting the company from selling its iPhone 6 phones in China overturned following a legal hearing. A Chinese court ruled in its favor in a patent dispute between the Californian based company and a domestic phone-maker. The legal row began in May last year, when a Beijing based patent regulator took the decision to order Apple’s Chinese subsidiary and local retailer Zoom-Flight to immediately stop selling iPhones after Shenzhen Baili Marketing Services lodged an official complaint with the regulatory authority.

The company claimed that the patent for the design of its mobile phone 100c was being infringed by the iPhone sales. Apple strongly objected to both the claims and subsequent decision to ban the sale of iPhone 6 devices by the regulatory authorities. Management at Apple and Zoom-Flight launched legal proceedings and took the Beijing Intellectual Property Office’s ban to courts.

At the hearing, the court decided to revoke the ban imposed on Apple and Zoom-Flight and declared that both organizations did not violate Shenzhen Baili’s design patent for 100c phones. The court said that the regulator did not follow due procedures in ordering the ban. In addition to this, the court said there was a distinct lack of sufficient proof to claim the designs constituted a violation of intellectual property rights.

It has not yet been disclosed whether or not representatives of Beijing Intellectual Property Office and Shenzhen Baili will appeal the decision by the court, and a spokesman representing both organizations said they would take time before making a decision in relation to the legal ruling. In addition to this, the same court denied Apple’s demand to strip Shenzhen Baili of its design patent for 100c phone.

Apple first filed the request to the Patent Reexamination Board of State Intellectual Property Office. The board rejected the request, but Apple lodged a lawsuit against the rejection. The Beijing Intellectual Property Court on Friday ruled to maintain the board's decision. It is unclear if Apple will appeal.

Published in Government

Facebook has been ordered by a US court to pay a whopping $500m to a gaming software company in a lawsuit which claimed virtual reality technology was stolen. In documents shown to the court, Facebook’s virtual reality arm Oculus Rift stood accused of basing its Rift headset products on technology stolen from ZeniMax’s VR software

The court heard how it was alleged that Oculus founder Palmer Luckey had developed its Rift headsets courtesy of source code which was illegally obtained from ZeniMax. The jury at the courthouse in Texas dismissed charges against Oculus in relation that they stole or misappropriated trade secrets – but did find Facebook’s VR unit liable for copyright infringement and other violations.

The Oculus founder was ordered to pay $50m – and his executive Brendan Iribe was told by the court that he had to pay $150m. The two executives had allegedly violated a non-disclosure agreement with ZeniMax and copied source code and other documents on a USB storage device.

ZeniMax had sought damages for $4 billion in the case, and during the trial Facebook chief Mark Zuckerberg testified to defend his company.

ZeniMax had sought $4 billion in damages in a case which seen Facebook CEO Mark Zuckerberg take the stand to defend his company. Following the court ruling the gaming software firm expressed their happiness at the decision handed down by jury, and for ruling that a violation had occurred in relation to their non-disclosure agreement with Oculus.

Chairman and chief executive of ZeniMax, Robert Altman said, “Technology is the foundation of our business and we consider the theft of our intellectual property to be a serious matter.”

Oculus released a statement in which they confirmed they planned to appeal the verdict, and that this would not deter them from bringing VR technology to customers.

The statement read, “The heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor. Our commitment to the long-term success of VR remains the same, and the entire team will continue the work they've done since day one -developing VR technology that will transform the way people interact and communicate. We look forward to filing our appeal and eventually putting this litigation behind us."

Oculus was acquired by Facebook almost three years ago for more than $2 billion – and last year began trading Rift headsets as part of the social network giants push into the world of virtual reality. Facebook released its earnings for the fourth quarter, and in a statement to analysts confirmed that it would still keep ‘making big investments in VR content’ and was excited about what is coming in 2017 from games to immersive experiences.

Published in Finance

The Irish Government have presented its argument that Apple does not owe 13 billion in back-taxes to Dublin, and claimed that the EU breached state sovereignty in relation to its interference in this issue. In August, the EU ruled that tech giants Apple should pay billions in back-taxes to Dublin because Ireland had granted Apple undue tax benefits.

Ireland’s Department of Finance, presented a three-page submission in which it outlined its arguments. The submission read, “The Commission has exceeded its powers and interfered with national tax sovereignty. The Commission has no competence, under State aid rules, unilaterally to substitute its own view of the geographic scope and extent of the Member State's tax jurisdiction for those of the Member State itself.”

The EU commission said the Irish Government allowed Apple to pay a tax rate of 1% of its European profits in 2003, which subsequently dropped to 0.005% by 2014. Following its calculations the commission then ordered the US tech company to repay 13.5 billion euros to Ireland in back-taxes.

Ireland immediately said it would appeal the ruling, which was formally lodged in November.

The Department of Finance's release provided further detail of Dublin's line of argument, claiming the Commission "has misapplied State Aid law" and is wrong in claiming Apple was granted an advantage. "The Commission attempts to re-write the Irish corporation tax rules." 

Dublin additionally claimed procedural errors in the Commission's investigation, which was launched in 2014, arguing Ireland was not contacted to comment on findings contained in the ruling.  "The Commission breached the duty of good administration by failing to act impartially and in accordance with its duty of care," said the submission.

Apple is a valued employer in Ireland, with 6,000 staff in its Cork city campus. Although claiming the tax windfall would boost state coffers, Dublin fears it would ultimately damage the economy by making Ireland less attractive to foreign investors. The case has divided opinion in Ireland with the general public appalled at the decision by the government to refuse the tax windfall which would go a long way towards improving services and infrastructure in a country which is still recovering from the 2008 global recession. However, high-profile business people like Ryanair CEO Michael O’Leary has backed the Irish Government, and said the EU should stay out of Irish tax affairs.

Published in Finance

US tech company Uber is fighting a legal battle following a decision by a Spanish judge in 2015 to ban the company from operating in the country. He referred the case to the European Court of Justice at the time to decide how to define Uber’s service. At the core of the European Court case is whether or not Uber can be defined as a transportation company or a digital platform. The American company, which has its HQ in San Francisco - was founded in 2009 and recognizes itself as a digital platform.

However, that assessment has been disputed by those who believe Uber are using labels so they don’t have to comply with national laws if it is defined as a transportation company - that would ultimately impact Uber’s growth in Europe. A lawyer for the Spanish Taxi association who initially filed the complaint against Uber argued that they can’t allow a business model to develop in Europe that could undermine the rights of consumers.

The American company has been accused of aggressively pushing itself into overseas markets, and has often in the past clashed heads with law makers and taxi associations who say Uber flouts transportation and competition rules. That is what occurred in Spain which subsequently led to this long-awaited trial in the European Court of Justice which will go a long way in determining the future of the US firm in Europe.

Uber has expanded its operations into more than 300 countries and is worth an estimated $68 billion.However, Europe’s legal challenge is a direct attack on how Uber operates in the region, one of its most important markets – but it also raises questions regarding the company’s future growth plans as it looks to expand beyond the transportation of people to food delivery and other online services.

At the hearing the company defended itself by framing an argument that it was a new player in Europe’s often lacklustre digital economy, which was offering users and drivers new ways to connect which would also support cities’ existing transportation networks.“Uber’s services can’t be reduced to merely a transport service,” Cani Fernández, Uber’s lawyer, told the Court of Justice during a lengthy session here that also included arguments from the European Commission, the executive arm of the European Union, and several European countries.

“The reduction of unnecessary barriers to information society services is critical in the development of the digital single market,” Ms. Fernández said, in reference to the commission’s goal to reduce national barriers that prevent Europeans from gaining access to e-commerce platforms, streamed television content and other online services.

One of the critical aspects of the legal dispute is actually not whether or not Uber can be defined as a transportation service or digital platform – instead it could well be its blurry stance on consumer rights. At the hearing yesterday afternoon, several of the European judges questioned Uber in relation to its relationship with drivers and about who should be held responsible if a passenger was hurt?

Such consumer protection issues were not part of the original case referred from the Spanish judge but it is now clear that it could form part of the final decision when it is made next year and could be a central topic for the prosecution in this case. “What liability does the platform have?” asked Daniel Svaby, one of the European judges. “The customer doesn’t know the driver who will pick her up. What can a user do to protect herself from harm?”

The trial continues at the European Court of Justice in Luxembourg today.

 

Published in Government