Apple facing trillion dollar lawsuit for reducing processing speed of aging iPhones

Apple facing trillion dollar lawsuit for reducing processing speed of aging iPhones
A US woman is suing Apple for nearly one trillion dollars after the company acknowledged it had deliberately slowed down iPhones as they get older. The US tech giant now faces nine suits over the issue.

Violetta Mailyan is reportedly seeking compensation, demanding Apple pay her $999,999,999,000.

At least eight other class action lawsuits have been filed in the US District Courts in California, New York, and Illinois over how Apple handles power management of batteries in older iPhones.

The plaintiffs seek unspecified damages from Apple, in addition to reimbursement for the phone’s purchase with two of the plaintiffs asking the court to ban the company from reducing the speed of devices or, at least to oblige Apple to inform users before it does so.

Last week, the corporation admitted it had slowed down older iPhones. Apple said it has algorithms in place to help keep an iPhone running at optimal performance if there is an older battery inside that can’t keep up with the required power. Apple said it aimed to stop unexpected shutdowns of older iPhone models and keep them running to the best possible standard.

A similar case was filed in an Israeli court on Monday after Los Angeles residents Stefan Bogdanovich and Dakota Speas took Apple to court shortly after the company announcement.

READ MORE: Israelis take Apple to court for slowing iPhones in $125mn lawsuit as number of cases snowball

“If it turns out consumers would have replaced their battery instead of buying new iPhones had they known the true nature of Apple’s upgrades, you might start to have a better case for some sort of misrepresentation or fraud,” said Rory Van Loo, a Boston University professor specializing in consumer technology law, as quoted by Reuters.

Courtesy: RT

Apple sued for deliberately slowing down older iPhones

Apple sued for deliberately slowing down older iPhones
A lawsuit has been filed in California against US technology giant Apple after the company admitted to slowing down older iPhone models to keep them running longer.

According to the plaintiffs, Los Angeles residents Stefan Bogdanovich and Dakota Speas, Apple never requested consent from them to “slow down their iPhones.” The owners of an iPhone 7 and several older iPhone models, both claim they “suffered interferences to their iPhone usage due to the intentional slowdowns.”

The plaintiffs have noticed their “older iPhone models slow down when new models come out.” They are claiming damages from Apple because as they said the company’s actions caused them to suffer “economic damages and other harm for which they are entitled to compensation.”

Bogdanovich and Speas are trying to get the case certified to cover all people in the United States who own Apple models older than the iPhone 8.

On Wednesday, Apple acknowledged it had slowed down older phones. It said it has algorithms in place to help keep an iPhone running at optimal performance if there is an older battery inside that can’t keep up with the required power.

The company said it aimed to stop unexpected shutdowns of older iPhone models and keep them running to the best possible standard.

Above forecast: Apple could become world’s first trillion-dollar company 

It also explained why users could notice some older iPhone models slowing down, saying “Our goal is to deliver the best experience for customers, which includes overall performance and prolonging the life of their devices.”

“Lithium-ion batteries become less capable of supplying peak current demands when in cold conditions, have a low battery charge or as they age over time, which can result in the device unexpectedly shutting down to protect its electronic components,” Apple told CNBC.

For more stories on economy & finance visit RT’s business section

Courtesy: RT

US tax reform breaks global rules, EU says

European finance ministers are worried. They say the US’s big tax reform bill contains measures that would unfairly disadvantage European business and contravene global fair-taxation rules. Are they right?

US Treasury Secretary Steven Mnuchin (Getty Images/A. Wong)

Last week, the finance ministers of Europe’s five biggest economies — Germany, France, the UK, Spain and Italy — wrote an anxious letter to their American colleague, US Treasury Secretary Stephen Mnuchin, and copied it to all senior Republican politicians in the Congress and Senate.

The letter’s thrust: The draft US tax bill, if passed as written a week ago, would represent a break with global fair-taxation rules as applied to corporations, and represent a thinly disguised form of trade war.

“The United States is Europe’s single most important trade and investment partner,” the finance ministers wrote. “It is important that the U.S. government’s rights over domestic tax policy be exercised in a way that adheres with international obligations to which it has signed-up. The inclusion of certain less conventional international tax provisions could contravene the US’s double taxation treaties and may risk having a major distortive impact on international trade.”

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A day later, a similar letter was sent to Mnuchin by the European Commission’s four most senior economic officials and made many of the same points.

Keeping mum

The two letters didn’t get much of an answer — at least not a public one, though quiet edits to the bills taking European concerns into account may be happening behind the scenes.

Draft federal legislation in the US always exists in at least two separate versions: one drafted in the Senate, and the other in the House of Congress. The “conference process” is the negotiation that reconciles the differing House and Senate versions of a draft bill. It’s due to come to a close this week.

Read more: Ireland to finally start reclaiming Apple back taxes

Three specific measures were brought up in the European letters.

Excise tax

First, the House bill proposed a new “excise tax” of 20 percent, levied on payments made when an American company buys goods or services from a foreign subsidiary or “affiliate” — unless the subsidiary elects to treat the payments as income in the US.

The European finance ministers argued that this measure would break WTO rules because it levies a tax only on foreign goods and services, not on the equivalent domestically produced goods and services. They said it also amounts to “double taxation,” because it would effectively tax the profits of non-US-resident companies — after they already paid taxes on those same profits in their home countries.

Read moreParadise Papers: Apple shifted billions offshore to avoid tax

“Bearing in mind that almost half of transatlantic trade is intra-company trade, this risks seriously hampering genuine trade and investment flows between our two economies,” they wrote.

Watch video01:43

EU ministers tackle tax havens

Base erosion tax

Second, the Senate bill featured a “base erosion and anti-abuse tax” (BEAT) provision. “Base erosion,” or more properly “base erosion and profit shifting” (BEPS), is a technical term referring to various accounting schemes corporations use to legally shift profits from where they’re earned, to ultra-low tax jurisdictions.

To take a common example: Multi-national corporations often establish their formal headquarters in a tax haven, assign their intellectual property to that headquarters, and then establish contracts requiring all the company’s foreign subsidiaries to pay an exorbitant “licensing fee” for the use of the corporate logo or other corporate intellectual property.

The licensing fee is set at a rate that cancels out the net revenues of the subsidiary corporations, leaving them paying no taxes in the countries where they actually produce or sell goods or services. The net effect of this “profit shifting” scheme is the erosion of the tax base of these countries — hence “base erosion.”

Base erosion  or protectionism?

The EU finance ministers said that: “Preventing base erosion is an important goal,” but “the provision appears to have the potential of being extremely harmful for the international banking and insurance business, as cross-border intra-group financial transactions would be treated as non-deductible and subject to a 10 percent tax. This may … harmfully distort international financial markets.”

The finance ministers concluded that “some of the proposed measures could constitute unfair trade practice and may discourage non-US financial institutions from operating in the US.”

Lower taxes on income from intangibles

Finally, the Europeans criticized a proposal in the Senate bill for a preferential tax regime for “foreign-derived intangible income.”

Read more: US broadside leaves WTO meeting in tatters

In essence, when US companies earn income outside the US via licensing fees, those fees would be taxed at a reduced corporate tax rate of 12.5 percent (compared to a proposed 21 percent federal tax rate for other corporate profits).

The Europeans wrote that this would subsidize exports compared with domestic consumption, and could face challenges as an illegal export subsidy under WTO rules.

Moreover, “the design of the [proposed] regime is notably different from accepted IP [intellectual property] regimes by providing a deduction for income derived from intangible assets other than patents and copyright software, such as branding, market power, and market-related intangibles.”

Legitimate concerns

Are the criticisms from Europe justified? In a word: Yes, according to the experts DW consulted.

Apple (dapd)In the future US corporate taxes would be about 25 percent. As a result, companies may decide to invest more in the US instead of Germany or France

Clemens Fuest, the president of the Ifo Institute for Economic Research in Munich, said: “The European Commission’s criticism of the US tax plans is justified. The proposed measures would disrupt international trade and lead to double taxation.”

Tobias Hentze, an economist at the German Economic Institute in Cologne, told DW that he was worried the tax reforms could be the spark for the next round of a “race-to-the-bottom” of jurisdictions competing to offer corporations ever-lower tax rates.

If the reforms go through, Hentze said, the US will go from being a high-tax to a low-tax country. Until now, the tax burden on companies has been significantly higher in the US, with a tax rate of 39 percent, compared to 30 in Germany or 34 in France.

America First, again

The US also proposes to play unfairly by taxing profits that have already been taxed in Europe, Hentze said, concluding: “The underlying message to multinational companies is: If you produce here in the US, you will be spared the double taxation.”

Read more: Opinion: Donald Trump’s policies have fed China’s rise as world power

The reform package provides further incentives for companies, too. With the creation of a so-called patent box, US legislators want to incentivize companies like Apple to register their patents and trademarks in the US, by means of a preferential tax rate on profits generated (12.5 percent). A fair tax regime, in Hentze’s view, should not offer tax rebates for certain types of profits.

“However, countries like Ireland or the Netherlands already do that too,” Hentze pointed out. “Therefore, the indignation of EU finance ministers is not very credible on this particular point.”


Paradise Papers: Apple shifted billions offshore to avoid tax

New relevations about Apple’s tax avoidance strategy are making headlines as the Paradise Papers scandal unfolds further. EU finance ministers are due to discuss the issue during talks in Brussels on Tuesday.

Apple iPhone X

Apple has denied accusations in the Paradise Papers investigation that it moved its operations from Ireland to an offshore center to avoid tax.

Documents cited by German newspaper Süddeutsche Zeitung on Monday suggested that offshore law firm Appleby, which is based in multiple tax havens, helped the iPhone maker move billions of dollars in revenues collected in Ireland to the Channel Islands to head off increased European Union scrutiny of its tax affairs in Dublin.

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‘Paradise Papers’ leak – Q&A with Robin Hodess, Transparency International

The revelations, which were also published by the BBC and New York Times, suggested that Apple had transferred funds to the island of Jersey, near the coast of Normandy, which is largely exempt from European Union tax regulations and where no corporate income tax is levied.

The Paradise Papers are the result of a year-long investigation by the International Consortium of Investigative Journalists, which studied some 13.4 million leaked documents revealing the scale of offshore tax avoidance schemes employed by large multinationals and the rich and famous.

Read more:U2 frontman Bono named in Paradise Papers tax evasion leak

The iPhone maker insisted the new report contained several “inaccuracies” and said it made changes to its corporate structure in 2015, which were designed to preserve tax payments to the US, not to reduce taxes elsewhere.

Apple said in a statement that it pays taxes at the statutory US rate of 35 percent on investment income from its overseas cash. It added that it follows the law in each country where it operates. The EU and US were informed of the reorganization at the time, it added.

Irland Apple Campus in Cork (Getty Images/AFP/P. Faith)Apple’s European headquarters are in an unlikely location, on a hill overlooking the Irish city of Cork

The Cupertino, California-based company said it was the largest taxpayer in the world, paying $35 billion (€30 billion) in corporate income tax over the last three years, including $1.5 billion in Ireland.

Both the US and EU have been scrutinizing Apple for its use of tax avoidance schemes using offshore finance centers. In 2013, a US Senate subcommittee found the tech giant had eluded tens of billions of dollars and that some $128 billion in profits had not been taxed by US authorities.

The company is also facing an EU demand for about $14.5 billion in taxes based on a ruling that its tax structure in Ireland amounted to illegal state aid.

Watch video01:47

Transparency advocates see opportunity as outrage over leaks grows

This week’s revelations could see Brussels step up efforts to force EU member states to close tax loopholes. France has recommended taxing multinationals on revenues generated in EU countries rather than profits, as they are more difficult to hide.

Read more: Offshore: The legal and the not so legal

EU competition commissioner Margrethe Vestager on Monday singled out Apple, Google and Facebook for censure in response to the Paradise Papers revelations.

She said “greed” and “power” were a very “poisonous cocktail” used by big multinationals to drive out competition.

Speaking at the Web Summit in Lisbon, Vestager also highlighted the difference in policy between the EU and US over free markets.

“We want free markets, but we understand the paradox of free markets, which is that sometimes we have to intervene. We have to believe that it’s not the law of the jungle, but the law of democracy that works.”

mm/aos (AFP, AP, Reuters)

Courtesy: DW

Apple unveils new iPhone 8, iPhone X

Apple unveiled several new products today, including the iPhone 8 and the heavily-anticipated iPhone X.

“Apple has always believed that technology infused with humanity can change the world,” CEO Tim Cook said, while introducing the new iPhone 8 and 8 Plus. It comes in silver, space grey and a new gold finish, made from aluminum and glass in an all-new design.

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Apple senior vice president of marketing Phil Schiller added that the new phones will have a new Retina HD display, highlighting the color display on the screen.

The new iPhone 8 and 8 Plus will use the new 64-bit A11 Bionic chip, Schiller added.


The new iPhones are getting big camera upgrades as well. The iPhone 8 and 8 Plus will have a 12 MP camera, with deeper pixels and a new color filter. Schiller said the iPhone 8 is the first smartphone designed for augmented reality, highlighted by new chips inside the phone, including the A11 Bionic and ARKit, Apple’s AR platform.

The iPhone 8 will also have wireless charging, something that consumers have cried for for years. It will utilize Qi wireless charging standard, the leading open wireless charging standard.

The new iPhone 8 starts at $699, while the 8 Plus starts at $799, a price bump from the iPhone 7 and 7 Plus. Pre-orders start on Sept. 15, with the devices available Sept. 22.

Apple also introduced its long-awaited iPhone X at the event. Cook described the device as “a product that will set the path for technology for the next decade.”


The iPhone X is slated to go on pre-sale on Oct. 27, shipping on Nov. 3. It will start at $999. There was significant speculation that the high-end iPhone X would start at a cost of $1,000 or more.

Despite its high cost, analysts expect the iPhone X to sell well, considering all of its new design and new features.

“That’s going to be the object of desire for many users and the challenge for Apple will be whether they’re done enough to make the iPhone 8 range compelling for the majority who won’t be wiling or able to spend the additional money to get the iPhone X,” Jackdaw Research chief analyst Jan Dawson said.

Dawson added that Apple’s financial guidance “suggests that it’s very confident both in strong demand for the iPhone 8 and 8 Plus and its ability to produce considerably more in the first couple of weeks on sale than it did last year.”


It will have a 5.8-inch super retina display and Face ID facial recognition technology, which can be used to unlock the phone and for Apple Pay.

“Face ID learns your face. It learns who you are,” said Schiller, who noted the the system will account for changes in users’ appearances such as facial hair.

Along with the new iPhone, Apple updated its apple Watch lineup with with the Apple Watch Series 3.

The Apple Watch Series 3 has cellular capabilities built in, allowing you to take and place calls directly from your wrist. Though initially seen as a fad, consumers have continued to adopt the product, Cook said. “I’m thrilled to tell you today Apple Watch is the number one watch in the world,” Cook noted during the presentation.


Apple COO Jeff Williams said the Apple Watch will get better heart rate app with data on the watch face and new metrics. Apple Watch Series 3 will have the availability to stream Apple Music on your wrist, Williams said.

New watch bands were also announced, including a sport loop, new Nike+ colors and some updates to the Hermes partnership. A grey ceramic finish was added to last year’s white ceramic finish.

Apple Watch Series 3 will start at $329, without cellular and with cellular will cost $399. Apple Watch Series 2 received a price drop to $249. The new version of the operating system, WatchOS 4, will be available on Sept. 19.

Apple TV also received an update, getting 4K resolution to the new set-top box, known as Apple TV 4K. “This will bring cinematic quality to virtually everything that you watch,” Cook said.

The new Apple TV is powered by the A10X Fusion chip, the same chip that powers the iPad Pro, said Eddy Cue, Apple’s senior vice president of Internet Software and Services.

The new Apple TV 4K starts at $179 and pre-orders start Sept. 15, with the product shipping on Sept. 22.

Courtesy, Fox News

As Washington Tries to Protect Tech, China Could Fight Back


The Ford Motor plant in Hangzhou, China. China could penalize American companies operating there if a trade dispute broke out. CreditGiulia Marchi for The New York Times

WASHINGTON — As the Trump administration moves to take on China over intellectual property, Washington will find it has limited firepower. Beijing has a strong grip on American technology companies, and global trade rules could favor China.

Technology is proving a major battleground for China and the United States, as both sides vie to protect their economic and national security interests.

Beijing has forced a long list of American companies to enter joint ventures or share research with Chinese players, part of a broader push to create its own technology giants. From makers of smartphones to chips to electric cars, American businesses have reluctantly agreed, fearful of losing access to China, which has the second-largest economy in the world.

China’s ambitions have set off alarms in Washington, with concerns on both sides of the aisle. Robert E. Lighthizer, the United States trade representative, is now preparing a trade case accusing China of extensive violations of intellectual property, according to people with detailed knowledge of the case.

But China can play a strong defense. The country has broad latitude, under special rules it negotiated with the World Trade Organization, to maintain restrictions within its market.

Continue reading the main story

“The problem is that U.S. trade negotiators agreed to provisions allowing China to limit market access for U.S. companies unless they engaged in joint ventures,” said Michael R. Wessel, a member of the U.S.-China Economic and Security Review Commission, which Congress created to monitor the relationship between the two countries.

“Potential Chinese partners demand the family jewels,” he said. “Companies can say no, but too many give in to Chinese pressure to make a quick buck.”

The current trade frictions trace back to the Clinton administration.

When China was entering the W.T.O. in 1999 and 2000, American negotiators gave Beijing some leeway, a position later supported by the administration of George W. Bush. As a developing country, China was allowed extra protections, such as requirements that companies in critical industries work with Chinese partners. China, in return, promised to shed the extra rules gradually as its economy matured.

But Beijing did not open up, even as China evolved into an economic powerhouse. Quite the opposite has happened under President Xi Jinping, who has pursued a more nationalistic agenda than his reform-minded predecessors.

China now sees the technology sector as a critical piece of its industrial policy — a policy that Beijing is aggressively enlisting American tech giants to support and that the leadership will most likely go all out to protect.

Beijing’s demands have been partly driven by security concerns, particularly after disclosures by Edward J. Snowden, the former National Security Agency contractor, of electronic spying by the United States on China’s rapid military buildup.

China has also been explicit about its economic motives, seeking to dominate fast-growing global industries that could create millions of well-paid jobs for a generation of increasingly well-educated young Chinese.


Building Trade Walls

The Trump administration faces the problem that China’s high trade barriers are allowed by the World Trade Organization, because China entered the group as a developing country and insists it still is one.


In several cases, China’s strategy to control technology approaches the kind of oversight most countries reserve for industries serving the military or government.

New Chinese rules often force foreign tech companies into partnerships with local companies — in part to gain expertise, in part to assert control. Other guidance from the government has indicated that companies must invest more in China to continue to have access to the market. Apple has opened research and development centers in the country as part of a new charm campaign.

In the chip sector, a major initiative intended to lift Chinese capabilities has drafted America’s biggest makers of the electronic brains that run everything from smartphones to driverless cars. Over the past four years, America’s largest chip companies have entered into a dizzying network of partnerships unlike anything they have anywhere else.

Qualcomm works with a company in southwest China to develop server chips. In 2014, Intel signed agreements with two Chinese chip makers, Spreadtrum and Rockchip, to give it a leg up in the market for China’s smartphones and tablets. Last year, Intel agreed to a partnership with the influential Tsinghua University in China as part of a bid to make server chips that match local specifications.

IBM and Advanced Micro Devices have both licensed chip technology to Chinese partners with ties to China’s military. GlobalFoundries, a California-based company, joined forces with a local government in central China to build a $10 billion chip manufacturing plant there.

American technology companies can find themselves at a serious disadvantage in China unless they agree to cooperate with government-linked Chinese businesses.

Take cloud computing, the fast-growing business of leasing computer power to companies. Chinese laws require foreign companies to join with local partners and allow them only a minority stake. International businesses are also blocked from branding such services under their own names.

Both Microsoft and Amazon, dominant forces in cloud computing in the United States, have local partnerships in China. By contrast, China’s e-commerce giant Alibaba operates two data centers in the United States without any partner.

Another rule calls for data about Chinese consumers or business operations to be stored in China. Apple and Amazon recently set up data centers in China, again with local partners, to store more customer information in the country.

Against that backdrop, the call for trade action is attracting bipartisan support.

Senator Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee, which handles trade issues, met with Mr. Lighthizer Wednesday morning and gave him a letter supporting a challenge to Chinese policies. “China’s forced technology transfer policies are among the key challenges facing U.S. innovators operating in China or otherwise competing with Chinese firms,” Senator Wyden wrote.

China can make its own play under global trade rules. Beijing can quickly demand binding arbitration — and could have a good chance of winning. China was allowed into the W.T.O. with very few limits on its ability to regulate services or foreign investment, two categories in which China was fairly weak when it entered the organization in 2001.

If China did win a W.T.O. case, it would then have the right to restrict American exports to the same extent that the United States restricts Chinese imports.

China consistently exports four times as much to the United States as it imports. Even so, China could penalize American companies like Apple and Starbucks that have very large operations that produce and sell in China with minimal imports from the United States.

“U.S. negotiators, I think, basically dropped the ball,” said Nicholas R. Lardy, a longtime trade expert at the Peterson Institute for International Economics, referring to the rules on services that were negotiated when China entered the W.T.O. “They didn’t think China was very important.”

The world’s most valuable brands in 2017

Charli Crosby, 5, points to a doll in the window of an American Girl store at The Grove mall in Los Angeles November 26, 2013. This year, Black Friday starts earlier than ever, with some retailers opening early on Thanksgiving evening. About 140 million people were expected to shop over the four-day weekend, according to the National Retail Federation. REUTERS/Lucy Nicholson (UNITED STATES - Tags: BUSINESS) - RTX15UG2

Mapped … eight of the top 10 brands on Brand Finance’s 2017 list are from the United States
Image: REUTERS/Lucy Nicholson
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For the last five years, Apple held on to the title of the world’s most valuable brand. Then this year, the iPhone maker lost the top spot to Google, according to consultancy Brand Finance’s Global 500 rankings.

As Apple’s brand value tumbled 27% to $107.1 billion in 2016, Google’s increased to $109.5 billion. Amazon, with 53% brand value growth, was close behind at $106.4 billion.

Image: Brand Finance Global 500 2017

Eight of the top 10 brands on Brand Finance’s 2017 list are American, reflecting the global dominance of US brands.

So where does this leave the rest of the world?

Visualizing brands as countries

Using Brand Finance’s ranking, cost information website has taken the most valuable brands in selected countries and turned them into a map. Each country is sized to reflect the global value of its biggest brand.

After Google, the next most valuable national brand is South Korea’s Samsung, which is in sixth place on the Global 500 list at $66.2 billion. Then it’s Chinese bank ICBC, ranked 10th, with a brand value of $47.8 billion.


Car-makers Toyota (Japan) and BMW (Germany) are next, with brand values of $46.3 billion and $37.1 billion, respectively. Shell, the multinational oil and gas company based in the Netherlands, also features prominently, at $36.8 billion.

The top brands of most countries, however, are worth less than $25 billion. Across Latin America, the most valuable brand is Mexican energy company Pemex, at $8.5 billion. In Asia, it’s India’s Tata conglomerate, at $12.9 billion. No African brands appear on the map.

The world’s most powerful brands

Lego may have a relatively modest $7.6 billion brand value, but when it comes to sheer power Denmark’s biggest brand punches well above its weight.

Brand Finance’s Brand Strength Index (BSI) awards brands a mark out of 100. Lego gets high scores across a range of metrics such as familiarity, loyalty, promotion, marketing investment, staff satisfaction and corporate reputation.

Image: REUTERS/Fabian Bimmer

The colour-coding on the map indicates brand strength, with Lego and Google (the most powerful brands) in dark blue. Many well-known brands including Samsung, BMW, Shell, Ikea and Nestle are on the next rung down, in light blue.

With marks ranging between 70 and 80, market-leading brands including Santander, Tata and Vodafone, are in pink. Only two top national brands, Taiwan Semiconductor and Thailand’s PTT, coloured red, have scores of less than 70.

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