Business Without Borders – International Business and Tax Planning Blog

Posts Tagged ‘privacy’

• 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.

Check out the Wall Street Journal‘s article from yesterday on the widespread practice of “scraping” consumer data from websites and mining it for direct marketing purposes: ‘Scrapers’ Dig Deep for Data on Web. New legislation on Internet privacy may make such practices unlawful and punishable by civil fine imposed by the FTC.  Look for more here on this topic in coming months.

The World Gathers In Brazil For The Congress On Electronic Crimes And Protection
An Interview with Brazilian Cyber Law Attorney Renato Opice Blum

BwoB had occasion recently to sit down with cyber law expert Renato Opice Blum to discuss some of the most pressing issues facing his international clients with regard to cybercrimes.  He shared with us some useful ways to address the growing proliferation of these tech crimes.

Renato chairs an international summit this month in São Paulo, Brazil sponsored by Fecomercio, a premier Brazilian business organization that represents over 600,000 companies in the trade, commerce, and tourism and hospitality sectors.  The summit will gather the world’s experts to address issues related to cyber crimes and security.

Q: Thank you, Renato, for sitting down with me to discuss the latest developments in tech crimes and what experts like you are doing to help businesses and individuals prevent these crimes and address them when they hit home.  Tell me a little bit about your background and the composition of your law practice.

A: My name is Renato Opice Blum and I am a Brazilian attorney and economist who specializes in high tech law. I am CEO of Opice Blum Attorneys at Law, one of the most respected South American firms.  Opice Blum Attorneys at Law has many years of solid experience in the main areas of law, and is recognized as a pioneer for its work in law as it relates to technology, electronic and digital law, information technology, computer law, and their variations.  We handle mediations, arbitrations, oral sustaining in Court, crisis management, cybercrimes, and corporate matters. Opice Blum Attorneys at Law handles matters throughout the Brazilian territories and maintains close relationships with international legal correspondents in main financial centers, such as in New York and Miami.  More detailed information can be found on the Opice Blum website.

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• U.S. Moves to Block New BP Oil Leases.  Following the BP Deepwater Horizon oil spill catastrophe in the Gulf of Mexico, U.S. lawmakers are pushing an amendment to ban the U.K. company from obtaining any further oil leases, due to safety concerns.  In addition to being under intense scrutiny in Congress, BP is under investigation by the U.S. Department of Justice and environmental regulators for ignoring safety failures and could face billions of dollars in fines.  Lawmakers may have to be more lenient than some of their constituents are demanding, as the amendment to the oil rig safety bill could harm both jobs and the country’s ability to access domestic resources. 
• Meanwhile, in other U.S./U.K. news, AMR Nears British Airways Alliance as EU Backs Deal.  With the European Union’s antitrust approval, British Airways Plc and AMR Corp’s American Airlines have moved one step closer to forming a trans-Atlantic alliance between the two airlines that will control nearly 50 percent of the flights at London’s Heathrow Airport.  The plan will give both carriers the equal footing and similar advantages that other airlines, such as Air France and Lufthansa, already possess.  BA and AMR have already agreed to relinquish 10 flight slots in the U.S. and U.K., but are still awaiting approval of the antitrust alliance from the U.S. Transportation Department.  The two have been attempting this alliance for years.  Critic and competitor Virgin Atlantic Airways Ltd. says this monster monopoly will only hurt consumers.
• A “success story” offers a case study on How Not to Run a Business in China.  Lessons can be learned from the broken business venture between American Olaf Kristoffer Bauer and Chinese Yuan Jie, “partners” in the Chinese pizza chain Kro’s Nest.  As a first rule, you need to be clear on ownership structure of the business, which plagued Bauer and Jie.  Second rule, as a foreigner, be fully aware of the rules and follow them accordingly.  You should not let the legal and political intricacies of the Chinese business world lead to disregard for the rules, for that will surely lead to government action.  Finally, foreign entrepreneurs should pay careful attention to establishing their guanxi, or trust network.  Building a solid and trusting guanxi takes years, but the pay off will undoubtedly make it easier to do business in China.
• Google Escapes with Apology in Australia- May Not Be So Lucky Elsewhere.  U.S. company Google’s apology to Australia gets them out of some hot water for violating privacy, namely inadvertently collecting personal data from unprotected wireless networks via its Street View cars, the device which captures real street views for GoogleMaps imagery.  However, an apology likely will not cut it for everyone or everywhere.  Google is still facing potential legal action in Australia, as well as the U.S. and various European countries.   Governments in these various jurisdictions are undertaking investigations that may result in criminal penalties and various government sanctions against the internet search-engine giant.

^{Compiled and summarized by Aylin S. Khor}

• Apple Under Fire Over Privacy in Germany.   American based company Apple has come under fierce scrutiny over its new plan to disclose user locations to geo-specific advertising companies.  The previously anti-Orwellian company, that once labeled IBM as the world controller of the computer industry, is now being accused of taking the very same “Big Brother” role.  Already considered invasive by some, the new terms and conditions that appear when purchasing from the Apple iTunes store (or App store) now state that Apple and its partner companies “may” anonymously disclose the “real-time geographic location” of that person’s Apple device, leading to an uproar by users and privacy groups in the United States and Germany.
• And in other Apple news … Apple Making New Push Into China.  Apple is getting ready to open its flagship store in Shanghai.  China is the world’s largest mobile phone market with the fastest growing consumer electronic product demand, that it is a wonder Apple has not already expanded fully into China.  Over the next two years Apple plans to open 25 new retail stores so consumers will have the convenience of purchasing Apple products directly from the store, as opposed to on the black market.  Though some say consumers will still choose the cheaper, smuggled phones, most analysts are convinced that Apple will highly benefit from the ever rising population of affluent Chinese and their booming economy. 
• And in other China news … Google Tries New Approach to China.  The government of China is requiring Google to change how users access its search engine, which now re-routes users to the Hong Kong based site (google.com.hk), to avoid censorship.  The strict censorship laws that pertain to the China based site (google.com.cn) are forcing Google to lose its place in the Chinese market.  Google says it tried this strategy to provide full-service results to its users, while still complying with Chinese law.  Though China encourages foreign corporations to do business in China, these companies must be aware of and operate accordingly with the regulations and requirements of Chinese law.
• Cadmium in “Shrek” Glasses Could Extend to Past Souvenirs.  McDonald’s has recalled approximately 12 million Shrek glasses after the Consumer Product Safety Commission (CPSC) found traces of cadmium in the glasses this month. However, activists and lawyers say the cadmium risks may be traced back to the previous Shrek movie glasses, among others. When tested, the glasses, made by Arc International, a French manufacturer in New Jersey, came up positive for cadmium, but still meet legal regulatory standards. Representatives of Arc International said the cadmium-based pigments are legal in all countries in which they do business. However, the CPSC wants to ensure that manufacturers in the United States, such as this company, and those abroad, such as in China or Germany, meet the required regulations in the safety of their products. 
• Coming to America … SMFG Looks for U.S. Acquisition.  The Japanese corporation Sumitomo Mitsui Financial Group, Inc. (SMFG) is looking to acquire a 20% share in a U.S. bank in an attempt to strengthen its place in the world economy, as growth stagnates in Japan. SMFG will list its shares on the New York Stock Exchange to make the acquisition process easier, but will also have to be aware of how to culturally and properly integrate with the U.S. bank, says Shinichi Ina, an analyst at Credit Suisse. Not only is SMFG focusing on a U.S. acquisition, but it is also looking to further increase its presence in fast growing Asian economies, particularly China, Indonesia, India, and Vietnam.

^{Compiled and summarized by Aylin S. Khor}