The FTC announced settlements with five companies Tuesday over allegations they falsely claimed EU-U.S. Privacy Shield certification. The agency had non-monetary settlements with software company DCR Workforce; cloud-based file transfer software company Thru; mobile data analysis company LotaData; facial recognition software company 214 Technologies; and statistical analysis company EmpiriStat. 214 Technologies, Thru, LotaData and DCR Workforce claimed certification but failed to complete their applications, the FTC said, and alleged EmpiriStat allowed certification to lapse in 2018.
The State Department removed certain “lower performing radars” from the U.S. munitions list, effective Friday, said that day's Federal Register. The radars are used in self-driving cars and in “detect and avoid systems for autonomous aerial systems,” it said. The radars and radar components will now be subject to the export administration regulations.
Despite President Donald Trump’s remarks earlier this month that he delayed the List 4B tariffs on Chinese goods to Dec. 15 so that they wouldn’t hurt consumers (see 1908130004), “a large portion of holiday merchandise will still be hit by September and October tariff increases at an even higher rate than was initially anticipated,” the Americans for Free Trade Coalition wrote the president Wednesday. The coalition urged Trump to delay putting the 15 percent List 4A tariffs into effect Sunday and avoid hiking the previous three rounds of tariffs by 5 percentage points on Oct. 1. “With some products facing tariffs as high as 30 percent, many businesses will have no choice but to pass along those costs to consumers,” said the multi-industry coalition of dozens of trade groups. They include BSA|The Software Alliance, the Computer & Communications Industry Association, CTA, Information Technology Industry Council, Internet Association, Software & Information Industry Association and TechNet. “Because these tariffs were announced with little warning, it is impossible for U.S. importers to share the burden with supply chain partners in China or shift their production to other countries. The full adverse impact of these tariff increases will be felt entirely in the United States and could represent one of the largest tax increases in American history.”
Samsung Q2 global smartphone sales rose 17 percent to 75.1 million units due to the Galaxy A series, Gartner reported Tuesday. It was 20.4 percent of the industry, which itself fell 1.7 percent to 367.9 million. “Demand for high-end smartphones has slowed at a greater rate than demand for midrange and low-end smartphones,” said analyst Anshul Gupta. IPhones sales fell 14 percent to 38.5 million. Services were 21 percent of Apple Q1 total revenue. Among the top five countries in smartphones sales, China held the top position with 101 million in Q2, up 0.5 percent. Global smartphone 2019 sales are forecast to fall 2.5 percent to 1.5 billion, falling 4.4 percent in North America to around 167 million.
CTIA CEO Meredith Baker noted the FCC and State Department convinced the Inter-American Telecommunication Commission (CITEL) last week to support the U.S. position on emissions limits on the 24 GHz band at the upcoming 2019 World Radiocommunication Conference. These protection limits could safeguard passive sensors on science satellites and maximize 5G use of the 24 GHz band (see 1907030063). Lawmakers worry infighting between the FCC and Commerce Department could undermine the U.S. WRC negotiating position (see 1907180044). At least 16 CITEL-member nations now support the position, Baker wrote Secretary of State Mike Pompeo Monday: “Pursuit of an aggressive but balanced spectrum policy is critical.”
President Emmanuel Macron said that the U.S. and France agreed to work together to reach an agreement in 2020 on modernizing the international tax rules. Macron told reporters Monday his nation's 3 percent digital services tax isn't designed to punish large companies. Rather, he said, "it's to fix the problem. And there are also plenty of French companies that will be touched." The U.S. is treating the tax as thinly disguised protectionism, and has opened an investigation (see 1908190043). Macron said that the French tax will be in place until an international pact. He said that if collections under the tax are higher than are eventually agreed to, the excess will be refunded. Senate Finance Committee ranking member Ron Wyden, D-Ore., in a statement said the "Trump administration should reject any deal that allows France and other countries to move ahead with discriminatory taxes on U.S. technology companies, in exchange for vague promises." President Donald Trump, also at the G-7 conference, didn't provide more specifics, and the French Embassy in Washington had no further comment.
A Huawai executive said the effect of U.S. trade sanctions on its business will likely be less than what it initially feared. Huawei said in June the blacklisting would hit revenue by $30 billion, with no topline growth in 2019 (see 1906190018). “It seems it is going to be a little less than that. But you have to wait till our results in March,” Deputy Chairman Eric Xu said, Reuters reported. Huawei announced Friday what it bills as the world's “most powerful AI processor,” the Ascend 910, and an all-scenario artificial intelligence computing framework, MindSpore. “We have been making steady progress since we announced our AI strategy in October last year,” Xu said Friday. “Everything is moving forward according to plan.”
China will impose tariffs on about $75 billion worth of U.S. goods in retaliation for the coming 10 percent U.S. duties on $300 billion in Chinese goods, said China’s State Council Friday. China said it will impose either 10 percent or 5 percent tariffs on more than 5,000 U.S. products. The tariffs will be imposed in two separate batches on Sept. 1 and Dec. 15, China said. Thursday, China’s Ministry of Commerce criticized the U.S. decision to add 46 new Huawei affiliates to the Commerce Department’s entity list, Gao Feng told a news conference. China “resolutely opposes the U.S. side’s practice of using state power to suppress Chinese enterprises for no reason.” The spokesperson said the U.S. move will hurt global supply chains and the country would retaliate with “countermeasures” if President Donald Trump follows through on his 10 percent tariff threat scheduled for December (see 1908150013). “Nobody wins a trade war,” said Myron Brilliant, U.S. Chamber of Commerce head-international affairs, in a statement. It’s time for an agreement on “the thorny issues” of technologies transfer, intellectual property enforcement, market access and “the damaging global impact of subsidies,” he said.
World leaders should commit to pursuing a multilateral approach on tax policy for digital services and avoid unilateral measures (see 1908190043), a tech industry coalition told member countries attending the G7 Leaders’ Summit, which begins Saturday. The Internet Association, Information Technology Industry Council, ACT|The App Association, BSA|The Software Alliance, Computer & Communications Industry Association and various Japanese trade groups signed. They recommended leaders oppose forced disclosure of source code, algorithms, encryption keys or other sensitive data as a “condition of doing business.” They recommend leaders quickly agree on the World Trade Organization joint statement initiative on e-commerce and permanently implement a WTO moratorium on customs duties on electronic transmissions. The group seeks “open format and machine-readable data sets to foster innovation and competitiveness” in artificial intelligence technologies and to “enhance and generate business opportunities for small and medium-sized enterprises.” France's new digital sales tax, retroactive to Jan. 1, has attracted much skepticism from U.S. tech; the country's embassy hasn't commented.
Customs and Border Protection should provide more information through its automated commercial environment (ACE) system to importers about detention and seizures involving intellectual property rights, said the Commercial Customs Operations Advisory Committee IP Rights Working Group in draft recommendations released before COAC’s Wednesday meeting. The agency should improve intelligence sharing with industry on violations. The working group suggested CBP improve its e-recordation system to help keep track of trademarks and copyrights. Meanwhile, the next test of blockchain technology involving IPR is "anticipated to occur September," followed by an assessment, CBP said in an issue paper on emerging technologies.