DealBook Briefing: There’s No Right to Be Forgotten Globally
Europe's highest court ruled that the privacy law can't extend beyond the E.U. It's a victory for Google and other global tech companies.
September 24, 2019
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The European Court of Justice in Luxembourg. Francois Lenoir/Reuters
Google scores a big victory in Europe
The European Court of Justice ruled this morning that a sweeping privacy law that lets people control what information about them is available on the internet cannot be applied outside the E.U. It’s a win for Google and for other global internet companies, Adam Satariano of the NYT writes.
The decision limits the scope of the so-called right to be forgotten, which can be used to force search engines to delete links to websites, news articles and databases that include personal information considered old, no longer relevant or not in the public interest.
The court’s decision most likely heads off international disputes over the breadth of European laws outside the 28-nation bloc. The Trump administration and Silicon Valley tech giants have complained that the E.U. has often appeared to be trying to set global tech policies.
Google praised the decision. “Since 2014, we’ve worked hard to implement the right to be forgotten in Europe, and to strike a sensible balance between people’s rights of access to information and privacy,” Peter Fleischer, Google’s senior privacy counsel, said in a statement. “It’s good to see that the Court agreed with our arguments.”
The case can’t be appealed, and national courts across the E.U. must abide by the decision.
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Today’s DealBook Briefing was written by Andrew Ross Sorkin, Michael J. de la Merced, Lindsey Underwood and Stephen Grocer.
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Issei Kato/Reuters
WeWork mess casts glare on SoftBank and banks
The turmoil at the co-working company has raised questions about some of its biggest backers: SoftBank, one of its largest investors, and banks like JPMorgan Chase and Goldman Sachs that have been advisers for years.
SoftBank may be forced to take a write-down on the value of its WeWork stake, the WSJ notes. If WeWork’s valuation falls below $25 billion, the Japanese tech giant may suffer an accounting hit.
The WeWork drama shows the risks of SoftBank’s strategy, which involves making big bets on companies that it believes will become home runs. SoftBank has already seen the value of its investments in Uber and Slack fall.
Meanwhile, banks’ eagerness to cater to WeWork has also come into question, the FT notes. JPMorgan courted the company for years, hoping to become one of the lead underwriters in any I.P.O. and its leading lender.
The reputations of JPMorgan, Goldman and other advisers risk “being tainted by the unfolding crisis,” the FT writes. The troubles have grown so serious that Jamie Dimon of JPMorgan has met with WeWork’s C.E.O., Adam Neumann, to discuss strategic options.
Carlos Ghosn Ren Onuma/Kyodo News, via Associated Press
Nissan settles with the S.E.C. over Carlos Ghosn
The Japanese carmaker agreed to pay $15 million to settle civil fraud allegations that it concealed from investors a plan to pay more than $140 million to Mr. Ghosn, its former chairman.
The settlement is the latest fallout from the arrest of Mr. Ghosn, who has been accused of trying to hide some of his compensation from investors and regulators. He faces four charges of financial wrongdoing in Tokyo.
Mr. Ghosn and other Nissan executives concealed more than $90 million in future payouts and taken steps to increase his retirement compensation by over $50 million, the S.E.C. found.
He will pay $1 million to settle the S.E.C. charges, while another former Nissan director, Greg Kelly, will pay $100,000. Lawyers for Mr. Ghosn said the settlement would help him focus on his criminal trial in Japan.
But Nissan is facing pressure on a new front. Lawyers inside the company have reportedly suggested that the carmaker’s investigation into Mr. Ghosn faces a conflict of interest. A Nissan executive overseeing its legal department also participated in some of the arrangements with Mr. Ghosn that are under scrutiny by the government authorities and shouldn’t be involved in the internal inquiry, the company’s general counsel said, according to the WSJ.
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Supreme Court will weigh in on gay rights in the workplace
The high court will take up a high-profile case on L.G.B.T. rights in its new term, which could determine whether protection from workplace discrimination for gay and transgender people extends nationwide, Adam Liptak of the NYT writes.
The Supreme Court will consider whether an existing federal law, Title VII of the Civil Rights Act of 1964, offers protection even in states that currently offer no shield for L.G.B.T. people.
It will be the court’s first case on gay rights since the retirement of Justice Anthony Kennedy, who wrote the majority opinions in all of the court’s major rulings on that issue. Without him, workers seeking protection from discrimination face an uphill battle, according to legal experts.
“The question for the justices is whether the landmark 1964 law’s prohibition of sex discrimination encompasses discrimination based on sexual orientation or gender identity,” Mr. Liptak writes. “Lawyers for the gay and transgender plaintiffs say it does. Lawyers for the defendants and the Trump administration, which has filed briefs supporting the employers, say it does not.”
Seth Wenig/Associated Press
Feds zero in on Juul
Federal prosecutors in California have reportedly opened an investigation into the vaping company, the WSJ reports, citing unnamed sources.
• “The investigation by the U.S. attorney’s office of the Northern District of California is in its early stages,” according to the WSJ. Its focus isn’t yet clear.
• A number of states have opened investigations as vaping-related illnesses increase. “In May, North Carolina officials filed a civil lawsuit accusing the company of targeting teenagers and misrepresenting the nicotine strength and addictiveness of its products.”
• “Meanwhile, a Massachusetts probe has examined internal Juul records documenting the company’s social-media marketing and an anti-vaping program it conducted in elementary and high schools.”
The legal team for Snapchat’s parent company kept records for years of all the ways Facebook has tried to thwart competition, the WSJ reports. The code name: “Project Voldemort.”
The documents outline what Snap executives say were efforts to undermine them, such as discouraging influencers from referencing Snap on Instagram, and preventing content from Snap from trending. The name references the antagonist in the Harry Potter books.
“A number of Facebook’s current and former competitors are talking about the company’s hardball tactics to investigators from the Federal Trade Commission, as part of its broader antitrust investigation into the social-media giant’s business practices, the WSJ reports, citing unnamed sources.
“Inside Facebook, senior leaders are concerned about the possibility of rivals divulging damaging information to federal officials and have discussed ways to improve the company’s relationships around Silicon Valley, according to a person familiar with the discussions.”
Revolving door
The Rhône Group, a private equity firm, has rehiredJohn Bolton, President Trump’s former national security adviser, as a senior adviser.
Goldman Sachs has promoted Kim Posnett and Tammy Kiely to senior roles in its technology, media and telecom investment banking unit. (Bloomberg)
Catherine Powell will step down as the head of Walt Disney’s theme parks after 15 years at the company. (Bloomberg)
The speed read
Deals
• A deep dive into why Kraft Heinz, the product of a mega-merger, has become a mega-mess. (NYT)
• Some SoftBank executives have reportedly balked at a company program that encourages them to take on personal loans to invest in the tech giant’s Vision Fund. (FT)
• Anheuser-Busch InBev priced the I.P.O. of its Asian beverage division at the low end of its expected range, raising $5 billion. (Reuters)
• Silicon Valley deal makers are increasingly encouraging start-ups to consider going public in ways other than through traditional I.P.O.s. (FT)
• Facebook agreed to buy CTRL-Labs, a start-up that guides computers with brain signals. (NYT)
Politics and policy
• President Trump ordered his staff to freeze more than $391 million in aid to Ukraine days before he pressed the new Ukrainian president to investigate Joe Biden. (NYT)
• Has the Fed shrunk its balance sheet too much? (NYT)
• Here’s how the Trump administration is preparing for possible impeachment proceedings. (Politico)
• The U.N. Climate Summit resulted in few commitments on environmental improvements, disappointing advocates and diplomats (NYT)
• Don’t expect a White House press briefing anytime soon. (Politico)
Brexit
• Prime Minister Boris Johnson of Britain illegally suspended Parliament, the country’s top court ruled. (NYT)
• Mr. Johnson is trying to stay close — but not too close — to President Trump, to preserve the countries’ trade relationships as Brexit looms. (Politico)
• But Mr. Johnson now faces accusations that he directed public money to businesses run by a fledgling entrepreneur and close friend whose apartment he often visited during working hours. (NYT)
Trade
• A limited trade deal between the U.S. and Japan may be delayed because of President Trump’s threat to impose tariffs on Japanese car imports. (NYT)
• Apple will continue to make its Mac Pro computer in Texas, after the company received a tariff waiver from the Trump administration for some Chinese-made parts. (NYT)
Tech
• A Russian man pleaded guilty in a hacking scheme that targeted a dozen American companies, including JPMorgan Chase, in an effort to use stolen information to manipulate stocks. (NYT)
• The messaging company Kik is shutting down its app amid a battle with the S.E.C. over its cryptocurrency (Betakit)
• Netflix shares entered the red yesterday, giving up gains this year as the streaming wars heat up. (CNBC)
• Amazon is working on an Alexa-enabled competitor to Apple’s wireless earbuds. (CNBC)
Best of the rest
• With people traveling more than ever, how could an established travel brand like Thomas Cook implode? Also: who’s to blame for the company’s collapse? (NYT, FT)
• Safety inspectors who worked on training requirements for the Boeing 737 Max were “underqualified,” and the F.A.A. didn’t properly inform lawmakers about the issue, federal investigators concluded. (WaPo)
• Credit Suisse has begun an investigation into why a former star banker was followed by detectives. (Bloomberg)
• Michael Edwardes, “a famously pugnacious industrial turnaround artist in Britain who rescued the Jaguar, Mini and Land Rover automotive brands in the late 1970s,” has died. He was 88. (NYT)
• How spiked seltzer might save Sam Adams. (Bloomberg)
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