Archive for the ‘REWIND’ Category
This week in international business news, we cover Japan’s Sony possible divestiture of its consumer electronics division, the European Commission’s potential investigation of Chinese network-equipment makers, and the fallout from the discovery that Bloomberg reporters had access to sensitive information of financial service companies.
We missed a week, but we’re back. This week in international business, we cover news on German/French relationship, President Obama’s upcoming visit to Mexico and Costa Rica, and on a lighter note, international baby name registries.
This week in international business, we cover news on the World Trade Organization’s forecast for projected trade growth in 2013, China’s new currency trade partner, Luxembourg’s bank secrecy rules, and U.S. Federal Reserve plans for stimulus-related policy of purchasing of U.S. bonds.
This week in international business, we have an update on relations between Apple and China. We also cover news on efforts in Japan to achieve 2% inflation rate, impact of Puerto Rican bonds on the U.S., and revelations on who is taking advantage of offshore tax shelters.
- Prime Minister Sinzo Abe is pushing Japan to enter negotiations to join the Trans-Pacific Partnership, which is a free-trade pact that includes the U.S. and other Pacific nations. Viewing the move as a “last chance” to prevent Japan from being “left out,” Abe is facing strong opposition from Japan’s agricultural sector, which has historically been adverse to trade liberalization. Some of the effects of free trade would be the elimination of tariffs, and the lessening of governmental regulations and subsidiaries. Proponents argue that the move would result in an expansion of “Japan’s economy by at least 3.2 trillion Yen, or $33 billion – about 0.66 percent”, while others, such as the agricultural cooperatives, are concerned about the effect free trade would have on the Japanese lifestyle, and in particular Japan’s universal insurance system.
- India is again being criticized by a member of the business community for the country’s efforts to bolster its generic drug industry. The complaint, which was levied by Chief Intellectual Property Counsel of Pfizer, reflects the view that India has created a “‘protectionist intellectual property regime’ that is deterring U.S. investment in the South Asian nation.” Citing last year’s patent revocation for a Pfizer cancer medication, and the nation’s use of compulsory licensing, the Pfizer representative contended that these moves by the country reflect efforts to further the interests of domestic generic drug manufacturers and intimated that such efforts are being done at the expense of multinational drug companies. India’s “new patent law still sets a high bar for drug companies to receive patents on new innovations, and allows generics companies – not just the government – to apply for compulsory licenses to override them.” The resulting tension between market participants may be a contributing factor to the uptick in filed disputes at the WTO arising out of U.S.-India trade relations.
- Deal news: SoftLayer Technologies. Reports have privately held database web hosting company SoftLayer Technologies Inc. being considered as a target for acquisition. Among the potential suitors are IBM and EMC, although neither company (nor Softlayer) has commented. Based on other purchases that involved similar businesses, including CentruyLink’s purchase of Savvis for $2.5 billion and Verizon Communications’ purchase of Terremark Worldwide for $1.4 billion, some are anticipating that the purchase price for any deal involving SoftLayer could reach the $2 billion level. Hostess Brands. McKee Foods Corp. is set to acquire Hostess’ Drake’s snack cake business for approximately $27.5 million. The transaction is part of the ongoing liquidation of Hostess, which has already seen a sale to Apollo Global Management of its snack cake business, a sale to Flower Foods Inc. of most of its bread business, and will next see an auction of other Hostess brands in the coming days.
- Anti-trust regulators in the European Union fined Microsoft $732 million for failing to comply with the terms of the 2009 settlement agreement between the EU and the technology giant. Per the terms of the agreement, Microsoft agreed to alter its Windows products such that new European customers would be offered a screen that would allow them to download one of 11 internet browsers, including Microsoft’s Internet Explorer, and to easily turn off Internet Explorer as the default option. Microsoft pledged to monitor its compliance with this term, but failed to notice the absence of the “ballot screen” between February 2011 and July 2012. Microsoft blamed the absence on a technical error following the implementation of the security update. In addition to being noteworthy due to the hefty fine involved, the news attracted additional attention as reports indicated that the European Union was notified of the breach by Microsoft rivals Google and Opera. Google, which is no stranger to anti-trust investigations by the EU, is one of Microsoft’s largest competitors in the browser market as its Chrome browser gains in popularity. Finally, for its part, EU competition commissioner, Jose Almunia, indicated that the commission might be more inclined to rely on trustees to police companies’ compliance on future settlement agreements.
- Continuing the trend of increased foreign companies in India, Malaysian-based AirAsia has announced that it will launch a budget airline in the country. Under Indian regulatory rules that allow foreign companies to own up to 49% of a local airline, AirAsia has entered into a joint partnership with Indian conglomerate Tata Group and with Arun Bhatia, the owner of investment firm Telestra Tradesplace, whereby it would retain a 49% ownership stake, Tata would have a 30% stake and Bhatia would own the remaining 21% stake. AirAsia is currently the largest budget airline in Asia, and despite an increase in consumer demand for flights, may still face difficulty in India as most domestic airlines have reported losses.
- New Jersey drug-maker, Par Pharmaceuticals, pled guilty to charges of illegal marketing and agreed to pay $45 million fine. Par CEO Paul Campanelli admitted that the company improperly marketed its Megace ES drug by targeting doctors and nursing homes caring for non-AIDS infected geriatrics even though the drug was only federally approved to treat AIDS patients suffering from weight loss and wasting. According to U.S. Attorney for the District of New Jersey, Paul J. Fishman, as HIV treatment in the U.S. has improved over the years, and fewer HIV and AIDS patients needed assistance in maintaining or gaining weight, Par sought to continue profiting from the drug by aggressively marketing the drug for off-label, or non-approved, uses. The government’s case was aided by whistleblowers, mainly Par sales representatives who had familiarity with the company’s marketing campaign. The $45 million fine comprised of an $18 million charge for criminal charges, $4.5 million in criminal forfeiture, and $22.5 million to resolve civil claims.
- A federal court judge has ordered that Apple Inc. must detail how it is complying with his order to produce certain documents in Apple’s privacy law suit. The lawsuit alleges that Apple has collected data on customer location through its iPhone and iPad products even after customers have disabled the geo-location feature. Plaintiffs complained that Apple had not complied with the judge’s order to produce documents, including documents between Steve Jobs and other company executives. Despite claims by the company that the failure to include such documents was a mistake, Judge Paul Grewal demanded that Apple provide details on the parameters of how it collected and produced relevant documents.