Tag Archives: competitive Behaviour / Price Fixing

UK watchdog to clamp down on insurance loyalty penalties

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LONDON, Feb 18 (Reuters) – Britain’s Financial Conduct Authority said on Tuesday it was finalising “remedies” to stop home and car insurance companies penalising loyal customers.

The watchdog said the “loyalty penalty” cost longstanding customers an extra 1.2 billion pounds ($1.56 billion) in 2018.

More than four in five adults in Britain have one or more insurance products, and consumers who stay with their existing insurer at renewal almost always pay higher premiums than those who switch or negotiate, the FCA said in Sector Views, its annual review of key concerns for the year ahead.

The FCA also said high-risk retail investment products were exposing consumers to more risk than they can absorb, the FCA said.

“Some of the highest-risk products are often marketed directly to retail consumers with poor communication of the risks involved and implications that the investments are regulated, when this is not the case,” it added.

Many new payments firms had been able to enter the market and grow quickly, and some of their products had offered no protection for consumers.

Sector Views are used by the FCA to shape its business plan for the coming financial year and determine whether to open new market investigations and use its powers to intervene.

$1 = 0.7696 pounds
Reporting by Huw Jones; editing by John Stonestreet

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U.S. judge expected to rule in favor of merger of Sprint, T-Mobile: sources

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(Reuters) – A U.S. district judge is expected to rule in favor of allowing Sprint and T-Mobile to merge over the objections of a group of state attorneys general, according to two sources familiar with the matter.

A smartphones with Sprint logo are seen in front of a screen projection of T-mobile logo, in this picture illustration taken April 30, 2018. REUTERS/Dado Ruvic/Illustration

Shares of Sprint surged 69% in after hours trade and T-Mobile stock rose 8%.

U.S. District Court Judge Victor Marrero is expected to make his decision public on Tuesday, one source said.

Approval of the deal would be a high profile defeat for state attorneys general, led by New York and California, who had argued that a merger of the No. 3 and No. 4 U.S. wireless carriers would lead to higher prices, especially for customers who use prepaid plans popular with people with poorer credit.

The deal has already been approved by federal regulators.

The companies had said the deal was needed to help them build out next generation of wireless, called 5G, and better compete with sector leaders Verizon Communications Inc and AT&T Inc.

Executives from the companies, including outspoken T-Mobile Chief Executive John Legere, testified during the trial that Sprint’s business was deteriorating and would not survive if it did not merge with T-Mobile.

The two companies are expected to start talks on renegotiating the terms of their $26.5 billion merger in the next few days, two sources said.

T-Mobile parent Deutsche Telekom is keen to cut the price of the deal, arguing that Sprint’s fortunes have deteriorated since they inked their agreement, the sources added.

However, Sprint, in which Japan’s Softbank Group has a major stake, is expected to argue that T-Mobile needs Sprint in order to grow its cashflow and to boost its capacity using its spectrum, according to the sources.

There is no certainty that there will be a renegotiated deal, the sources cautioned.

The Court did not immediately respond to a request for comment. Sprint and T-Mobile both declined to comment.

One merger opponent, Gigi Sohn, a former telecoms regulator now at Georgetown Law, tweeted her displeasure with reports of the decision. “If #antitrust law doesn’t even block a 4-3 merger like this, we need to start from scratch,” she tweeted, referring to the market shrinking to three from four competitors. “I’ll have more to say tomorrow after I read the judge’s decision (through my tears).”

While a group of states decided to fight the deal in court, the federal government approved it with conditions, a decision which remain in effect.

The U.S. Justice Department approved the deal in July after the carriers agreed to sell some assets to satellite provider Dish Network Corp, which would create its own cellular network to ensure that there would still be four competitors in the market. The Federal Communications Commission signed off on the deal in October. Dish shares rose 2% after hours.

The states maintained that Dish was ill-equipped to become a competitive fourth wireless carrier.

The Wall Street Journal earlier reported that the court was expected to approve the deal on Tuesday.

Reporting by Diane Bartz in Washington and Greg Roumeliotis in New York, David Shepardson in DC and Arundhati Sarkar in Bengaluru; Editing by Shailesh Kuber, Uttaresh.V and Lincoln Feast.

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Exclusive: iPhone app makers questioned in U.S. antitrust probe of Apple – sources

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WASHINGTON (Reuters) – The U.S. Justice Department has reached out to app developers as part of its investigation into Apple Inc (AAPL.O), one of the four big tech companies being probed for alleged anti-competitive behavior, according one of the developers and another person familiar with the investigation.

FILE PHOTO: An Apple logo hangs above the entrance to the Apple store on 5th Avenue in the Manhattan borough of New York City, July 21, 2015. REUTERS/Mike Segar/File Photo

The chief executive of developer Mobicip, Suren Ramasubbu, told Reuters he was interviewed in November by a U.S. investigator who asked about the company’s interactions with Apple. The app, which has nearly a million users worldwide, allows parents to control what their children see on their iPhones.

Ramasubbu said the Mobicip app was temporarily removed from the iPhone app store last year for a failure to meet requirements imposed by Apple.

A source familiar with the Justice Department’s investigation said a handful of app developers had been contacted in what is the first indication of what officials are pursuing involving Apple since the investigation was revealed by Reuters in June.

U.S. President Donald Trump has criticized Apple’s Silicon Valley neighbors for other reasons, calling for closer scrutiny of social media companies and Google and accusing them of suppressing conservative voices online, without presenting any evidence.

U.S. Attorney General William Barr said in December that he hoped to have the Justice Department investigations into the big tech platforms – Facebook Inc (FB.O), Alphabet Inc’s (GOOGL.O) Google, Amazon.com Inc (AMZN.O) and Apple – wrapped up this year.

Apple declined comment, but pointed to a statement on its website that says its app store was designed to hold apps “to a high standard for privacy, security and content.”

“Since 2016, we have removed over 1.4 million apps from the App Store because they have not been updated or don’t work on our most current operating systems,” the site says.

Apple’s ability to do just that has been a point of contention in the courtroom. The company was accused in lawsuits last year of abusing its clout in the app market. In one case, the U.S. Supreme Court gave the go-ahead last May to an antitrust lawsuit that accused Apple of forcing consumers to overpay for iPhone software applications.

SCREEN TIME CONTROL

Apple introduced its Screen Time app, which includes parental controls, in June 2018. At the start of 2019, Ramasubbu told Reuters, his company was contacted by Apple and warned that Mobicip’s app violated the iPhone-maker’s rules relating to technical elements that had previously been acceptable.

The app was removed from the app store for about six months, during which time it was updated to be compliant with Apple rules, Ramasubbu said. It was reinstated in October 2019, but he estimates his company’s business has shrunk by half.

Six executives of parental control app companies interviewed by Reuters said they had a comfortable relationship with Apple until mid-2018. That is when Apple introduced its own, similar software giving parents oversight of their children’s phone screen time and searches.

Apple has said that it had been concerned about parental control apps using technology which gave developers access to sensitive data, and that they declined to approve apps that used the technology if they did not also commit to not sharing data on children.

As the arbiter of who is allowed to sell in the app store, Apple says it has the power to ensure that only the highest quality apps are sold there.

But some developers say it also allows Apple to push out apps that compete with its own products, thus strengthening its profits at a time with its device sales have stagnated and it is seeking new sources of revenue.

Reporting by Diane Bartz; Editing by Chris Sanders and Edward Tobin

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U.S. states launch antitrust probe of Google, advertising in focus

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WASHINGTON (Reuters) – Attorneys general from 48 U.S. states, the District of Columbia and Puerto Rico formally opened an antitrust probe on Monday into Alphabet’s Google (GOOGL.O), in a sign of growing government scrutiny of U.S. technology giants.

Texas Attorney General Ken Paxton, who is leading the probe, said it will focus on Google’s “overarching control of online advertising markets and search traffic that may have led to anticompetitive behavior that harms consumers.”

California and Alabama declined to be part of the probe.

Participating states on Monday asked Google to provide documents on its advertising business, Paxton said at the announcement in Washington. Several attorneys general present described the investigation as “preliminary” and said they expected it would expand to cover other issues, including data privacy.

A separate group of eight state attorneys general, led by New York, joined by the District of Columbia, announced on Friday it was investigating Facebook Inc (FB.O). On Monday, attorneys general declined to say if they planned to expand scrutiny to other large tech firms.

Arkansas Attorney General Leslie Rutledge called Google’s search engine a “juggernaut” and argued that a free search sometimes came at the cost of the freedom to choose the best products from the best companies.

“When a company becomes a verb, it may seem as though the states are David taking on Goliath but I am proud to stand tall with my fellow attorneys general,” Rutledge said.

Utah Attorney General Sean Reyes said the probe was “for the benefit of the tech ecosystem to help level the playing field.”

A spokesman for California Attorney General Xavier Becerra said the state was committed to fighting anticompetitive behavior but declined to comment further “to protect the integrity of potential and ongoing investigations.”

ONCE PRAISED

Tech giants that were once praised as engines of economic growth have increasingly come under fire for allegedly misusing their clout and for lapses such as privacy breaches.

U.S. President Donald Trump has also accused social media firms and Google of suppressing conservative voices online, but has not presented any evidence for his views.

Specifically, Google faces accusations that its web search leads consumers to its products to the detriment of rivals’. There have also been complaints of potentially anti-competitive behavior in how it runs the advertising side of its business.

In 2013, the Federal Trade Commission ended an investigation into Google declaring it did not manipulate its search results to hurt rivals. At the same time, the FTC said Google agreed to end the practice of “scraping”, or misappropriating competitors’ content such as user-generated reviews of restaurants.

Senator Josh Hawley, who as Missouri attorney general opened a probe into Google in 2017, lauded Monday’s announcement as “a very big day for the folks who care about antitrust enforcement.”

Amy Ray, an antitrust lawyer at Orrick Herrington & Sutcliffe LLP, said that the states had a big task ahead of them.

“Any enforcer or litigant will need to navigate U.S. monopolization law as it stands, which has rarely been done successfully since the Microsoft antitrust case,” she said.

The world’s largest social media platform Facebook, which owns Instagram and WhatsApp and has more than 1.5 billion daily users, has been criticized for allowing misleading posts and “fake news” to be distributed on its service.

One criticism of Facebook is that it has been slow to clamp down on hate speech. The company recently paid a $5 billion settlement for sharing 87 million users’ data with the now-defunct British political consulting firm Cambridge Analytica, whose clients included Trump’s 2016 election campaign.

Will Castleberry, Facebook’s vice president for state and local policy, said last week that the company would cooperate with state attorneys general.

On the federal level, the Justice Department and FTC are also probing Facebook, Google, Apple (AAPL.O) and Amazon (AMZN.O) for potential violations of antitrust law.

Alphabet said on Friday the Department of Justice in late August requested information and documents related to prior antitrust probes of the company. It said it was cooperating with federal regulators and with the expected probe from the states.

It had no further comment on Monday, when its shares were down 0.6 percent in late trading.

Amazon, the world’s biggest online retailer, has been accused of using unfair tactics with third-party sellers, who must pay for advertising on Amazon to compete against its own first-party and private label sales.

Missouri Attorney General Eric Schmitt speaks to Reuters after a news conference to announce an antitrust probe into big tech companies that focuses on Alphabet’s Google, outside the U.S. Supreme Court in Washington, U.S., September 9, 2019. REUTERS/Bryan Pietsch

Apple has come under fire from app developers over practices like making only iPhone apps available through its official App Store. The music-streaming app Spotify (SPOT.N) has alleged that App Store policies make it difficult to compete against Apple Music for paid subscribers.

State attorneys general have fewer resources than federal agencies but have been known to team up to take on giant firms.

Most recently, 43 states and Puerto Rico sued Teva Pharmaceutical Industries Ltd (TEVA.N) and 19 other drugmakers in May, accusing them of scheming to inflate prices and reduce competition for more than 100 generic drugs.

Reporting by Diane Bartz, David Shepardson and Bryan Pietsch; Editing by Nick Zieminski and Sonya Hepinstall

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Apple faces investigation for suspected unfair competitors in Russia

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The emblem of Apple firm is seen outdoors an Apple retailer in Bordeaux, France, March 22, 2019. REUTERS/Regis Duvignau

MOSCOW (Reuters) – Apple (AAPL.O) is beneath investigation in Russia following a criticism from cybersecurity firm Kaspersky Lab and could also be abusing its dominant market place, Russia’s anti-monopoly watchdog stated on Thursday.

Watchdog FAS stated it was investigating why a brand new model of Kaspersky Lab’s Protected Youngsters utility had been declined by Apple’s working system, leading to a major loss in performance for the parental management app.

It stated Apple had launched model 12 of its personal parental management app, Display Time, which had related features to the Kaspersky program. Parental management apps enable dad and mom to regulate their kids’s cellphone and pill utilization.

Requested in regards to the Russian investigation, Apple referred Reuters to an April 28 assertion during which it stated it had not too long ago eliminated a number of parental management apps from its App Retailer as a result of they “put customers’ privateness and safety in danger.”

It stated a number of of those apps had been utilizing a “extremely invasive” expertise referred to as Cell Machine Administration (MDM) and that its use in a consumer-focused app was a violation of App Retailer insurance policies.

Kaspersky stated Apple’s App Retailer pointers allowed for a restricted use of MDM, however that it was not clear methods to get hold of Apple’s permission to take action. It additionally stated the necessities diminished the competitiveness of third social gathering builders.

Reporting by Maria Kiselyova, Nadezhda Tsydenova; writing by Tom Balmforth; modifying by Jason Neely/Keith Weir

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Samsung in hot water over splashy Australian phone ads

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SYDNEY (Reuters) – Australia’s consumer watchdog has sued Samsung Electronics Co Ltd’s (005930.KS) Australian unit for allegedly misleading consumers by promoting water-resistant Galaxy smartphones as suitable to use in swimming pools and the surf.

FILE PHOTO: A model demonstrates the waterproof function of Samsung Electronics’ new smartphone, Galaxy S7 Edge, during its launch ceremony in Seoul, South Korea, March 10, 2016. REUTERS/Kim Hong-Ji/File Photo

The world’s largest smartphone maker did not know or sufficiently test the effects of pool or saltwater exposure on its phones when ads showed them fully submerged, the Australian Competition and Consumer Commission (ACCC) lawsuit says.

The case is the first filed by a major regulator and could result in multi-million dollar fines. It centers on more than 300 advertisements in which Samsung showed its Galaxy phones being used at the bottom of swimming pools and in the ocean.

“The ACCC alleges Samsung’s advertisements falsely and misleadingly represented Galaxy phones would be suitable for use in, or for exposure to, all types of water … when this was not the case,” ACCC Chairman Rod Sims said in a statement on Thursday.

Samsung said it stood by its advertising, complied with Australian law and would defend the case.

The South Korean electronics giant has spent heavily on advertising to rebuild public faith in its premium smartphones following the costly recall of its fire-prone Galaxy Note 7 devices in 2016.

It is due to announce preliminary quarterly earnings on Friday, when it is widely expected to flag a profit plunge due to falls in chip prices.

HOT WATER

Samsung’s water resistance claims came under heavy scrutiny as early as 2016 when influential U.S. magazine Consumer Reports said the Galaxy S7 phone – which appears dunked in a fish tank in commercials – had failed an immersion test.

The company attributed that to a manufacturing defect, affecting a small number of phones, which it soon fixed. But customers online continued reporting problems, forum comments show.

Some consumers damaged their phones when exposing them to water and Samsung had refused to honor warranty claims, the ACCC said in the lawsuit, though Samsung said it complied with all of its warranty obligations under Australian law.

The regulator also said Samsung’s advice to some Galaxy model users that the phones were not suitable for beach or pool use suggested the firm considered water could cause damage.

“Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers,” Sims said.

“Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage.”

The ACCC alleges law breaches occurred in more than 300 advertisements. If proven, each breach after 1 Sept. 2018 can attract a fine of up to A$10 million ($7 million), triple the benefit of the conduct or as much as 10% of annual turnover.

Breaches prior to 1 Sept. 2018 can attract penalties as high as A$1.1 million. Rival Sony settled a U.S. class action over similar claims for its Xperia smartphone range in 2017, promising refunds where the phones had failed.

Reporting by Tom Westbrook in SYDNEY. Additional reporting by Ju-min Park in SEOUL; Editing by Christopher Cushing and Stephen Coates

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