Category Archives: Companies

(CityAM) UK national security at risk over Huawei 5G plans, Trump officials warn

(CityAM)

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The US has warned its allies against using Huawei equipment in 5G networks (Source: Getty)

The UK’s plans for building a 5G mobile network are putting national security at risk, Trump officials have warned, as the US urges its allies not to partner with Huawei.

Senior US officials warned the UK’s system of testing Huawei equipment would not be enough to ensure the country’s 5G network is secure, the Financial Times reported.

Read moreGermany will set its own 5G security standards, says Merkel

The warnings come amid growing pressure from the US, which has told its allies any collaboration with the Chinese tech firm could compromise intelligence sharing agreements.

The National Cyber Security Centre (NCSC), which is part of GCHQ, is currently preparing its annual report into the safety of Huawei equipment.

While the findings of the report are yet to be published, the NCSC has previously indicated it has not seen any evidence of spying by the Chinese firm.

One US official told the Financial Times a significant risk of 5G is that it is based on software, meaning the network can be altered even after the equipment has undergone testing.

“One analogy that we can often use is, one minute you’re holding a 5G coffee cup that is transmitting back telemetric data on what the temperature is what the actual liquid is inside. And then the next moment that object can turn into something radically different,” the source said.

“While a huge opportunity, it is also deeply concerning to us from the perspective of national security.”

The official cast doubts over the UK’s programme for testing Huawei equipment, which is carried out at a dedicated NCSC facility in Banbury known as ‘The Cell’.

“The mandate that the UK and their Huawei oversight centre has is a purely technical mandate about looking at a piece of equipment that is sitting in front of you,” the person said.

“Ours is a much broader question about how trust is changing in the way in which 5G networks will work in the future. Right now, back doors exist by definition, that’s how the manufacturer runs the network.”

The NCSC declined to comment on the report. Earlier this year the spy organisation’s boss, Ciaran Martin, said the UK has “arguably the toughest and most rigorous oversight regime in the world for Huawei”.

“Huawei’s presence is subject to detailed, formal oversight, led by the NCSC,” he said at a cyber security conference in Brussels.

“We also have strict controls for how Huawei is deployed. It is not in any sensitive networks – including those of the government.”

Read moreUS threatens to cut intelligence sharing with Germany over Huawei

The Trump administration has launched a campaign urging its allies not to use the Chinese firm’s equipment. Secretary of State Mike Pompeo has previously warned that countries using Huawei technology in their 5G networks risk damaging their relationship with the US.

The Chinese firm has denied all allegations of spying and accused the US of operating a coordinated smear campaign. Earlier this month the company sued the US government, claiming a law limiting its US business was unconstitutional.

(SimpleFlying) What Plane Will Airbus Build Next?

(SimpleFlying)

Airbus and Boeing have been engaged in fierce competition over many different aircraft markets. From narrowbodies to very large aircraft, both manufacturers have shifted their strategies to what they think would be a successful product. With Boeing’s impending 777X entry into service and the launch of the 797, the question remains: what’s next for Airbus?

What is next for Airbus? Photo: Airbus

The A320 Family

Boeing has their 737, Airbus loves their A320. These single-aisle jets can be utilized for a whole host of flights. The A320 can span transcontinental flights, like from New York to Los Angeles or short-haul flights from London to Paris. A comfortable ride, the derivatives give a whole range of opportunities for airlines to expand. From the small 120-132 passenger A318 to the larger 200-passenger A321, one family can make up the entire fleet of some airlines.

Wizz Air only flies A320 family aircraft. Photo: Airbus

By operating one family, airlines can save a lot of money. Many low-cost carriers, like Wizz Air or Easyjet, will choose one aircraft family for their fleet. With common type ratings across the entire family, Wizz Air doesn’t have to worry about retraining pilots. In addition, significant cost savings can come in maintenance since staff only need to be aware of one family of aircraft. It also helps with substitutions since cabin crew can easily transfer from an A319 to an A320, as long as minimum staffing rules are followed.

Airbus, however, has a lot to learn from Boeing. The future seeks to make flying safer through a vast number of technological improvements. While Boeing attempted to do that, it seems, that from preliminary reports this turned out to be a disaster. Airbus will undoubtedly make improvements to the A320 and sell it as a brand new jet. With a focus on fuel efficiency and improved technology, a new aircraft line could propel Airbus ahead of the game as Boeing struggles to keep airlines confident in their 737 MAX. 

Countering the 797

The middle of the market is a coveted niche in the aircraft realm. Airbus is seeking to capture this market on both ends. Seating up to 244 in a single-class, high-density configuration, the A321LR is perfect for catching the thinner, long-haul routes currently operated by 757s.

The A321LR could replace medium or long-haul thin routes operated by 757s. Photo: Airbus

At the other end of the scale, Airbus is looking to take their A330neo to capture the higher end of the spectrum. Old and weary 767s and, in the future, A330s will need to be replaced with an aircraft that can seat 230-250 passengers in a 2-class (or 3-class) configuration. The A330-800 could fit that bill. Considering that Airbus is not developing a whole new aircraft like the 797, they could beat Boeing in the race to introduce an aircraft to fill the middle of the market. We’ll have to see what Airbus comes up with, but this could be a huge market for the manufacturer.

The A350

Airbus launched the A350 as a direct competitor to Boeing’s 787. Designed with the latest technology and comfort on a widebody, long-haul airliner, this aircraft is an airline favorite. Singapore Airlines, Delta Airlines, Qatar Airways, and many other airlines already operate the A350 and a whole host more have A350s on order.

Singapore Airlines operates the A350 on the world’s longest flight. Photo: Singapore Airlines

Airbus could seriously make a splash with an A350neo. If timed right, this aircraft could kick in for the replacement cycles of some 777 models, A330s, or even A380s! Twin-engine aircraft are the new standard in long-haul flying, and the A350 is almost unbeatable. Singapore Airlines operates a special version, the A350-900ULR, on the world’s longest flight from Singapore to Newark.

By tweaking design features, such as offering increased takeoff weight while lowering fuel burn without compromising range, a revamped A350neo could be the perfect fit for airlines like Qantas, who are looking to introduce economically viable ultra long-haul flights that can operate with significant capacity.

The A220

Airbus recently took over the A220 from Bombardier. This gave them access to a brand new market of narrowbody planes that are capable of conquering routes both long and short. Airbus attempted to reach into this market with the A318, however, the A318 came too soon when airlines weren’t looking for a jet that could seat 110-120 passengers with the same versatility as the A220.

Air Baltic is a huge A220 fan. Photo: Airbus

The A220 could last for a long time. Airlines have been versatile in how they use this aircraft. Air Baltic is looking to use these aircraft as their primary hub-and-spoke aircraft, while Delta Airlines is using these aircraft at first to replace regional jets on high demand and high competition routes such as between New York and Houston.

This kind of versatility is definitely prized by airlines. Startup “Moxy” Airlines singled out the A220 as the best aircraft for their operations. Founder David Neeleman touted the aircraft’s ability to do transcontinental and transatlantic flights as the reason Moxy selected the aircraft.

Overall

Overall, Airbus is in a solid position with their aircraft line. They’ve solidified some brand new aircraft that will keep them flying well into the future. Given the introductory timeline of these aircraft, it will be some time before Airbus really needs to design a brand new aircraft. Most likely, Airbus will seek to launch a new narrowbody plane before launching a new widebody.

After the A380, Airbus has learned a lot of lessons in aircraft development. Now, we wait and see for the next new plane from Airbus.

(BBG) Volkswagen CEO Apologizes for Phrase Similar to Nazi Slogan

(BBG)

  •  ‘Ebit macht frei’ comment was made at internal company event
  •  Diess is ‘deeply sorry’ for causing any unintentional pain
Herbert Diess
Herbert Diess Photographer: Andrew Harrer/Bloomberg

LISTEN TO ARTICLE 2:42SHARE THIS ARTICLEShareTweetPostEmailIn this articleVOWVOLKSWAGEN AG148.90EUR+2.10+1.43%NSUAUDI AG788.00EUR-10.00-1.25%

Volkswagen AG Chief Executive Officer Herbert Diess apologized for his use of a phrase that appeared to play on the slogan on the gates of the Auschwitz concentration camp, “Work sets you free.”

Diess said “Ebit macht frei” during an internal Volkswagen event, in a reference to the abbreviation for earnings before interest and taxes, evoking the Nazi slogan “Arbeit macht frei.” The misstep coincided with a notice that the U.S. Securities and Exchange Commission has sued VW over the diesel emissions cheating scandal.

“It was in fact, a very unfortunate choice of words and I am deeply sorry for any unintentional pain I may have caused,” Diess wrote in a post on his LinkedIn page. “For that I would like to fully and completely apologize.”

The comments are all the more unfortunate considering Volkswagen’s history. The automaker was founded by the German government in 1937 to mass-produce a low-priced car, and was originally operated by the German Labour Front, a Nazi organization. Volkswagen, whose factory was repurposed during World War II to build military equipment and vehicles, is today the world’s biggest automotive group with brands including Audi, Bugatti, and Porsche.

The expression ‘Ebit macht frei’ was made in an internal management presentation in connection with operating margins from various company brands, Diess said. Within Volkswagen, “brands with a higher margins have more freedom within the Group to make their own decisions. My comment was made within this context,” he said.

The CEO said it wasn’t his intention to make this expression in a way that could be misinterpreted, and he didn’t consider the possibility that it could be.

“Volkswagen has undertaken many activities over the last 30 years that have made the company, myself personally and our employees fully aware of the historical responsibility Volkswagen bears in connection with the Third Reich,” Diess wrote.

VW’s powerful works council welcomed Diess’s “swift clarification and unequivocal apology” for the remark, adding that remembrance and responsibility are part of the company’s DNA.

Read here for more on the SEC suit over VW misleading bondholders

Since Diess, 60, took over as CEO last April, he’s struggled to put the 3 1/2-year-old diesel cheating scandal in the past. In the latest twist, the SEC said Thursday it was suing the carmaker for failing to disclose to investors that its diesel vehicles violated emission standards.

“The investors did not know that VW was lying to consumers to fool them into buying its ‘clean diesel’ cars and lying to government authorities in order to sell cars in the U.S. that did not comply with U.S. emission standards,” the SEC alleged.

VW said the SEC complaint is “legally and factually flawed” and the company will “contest it vigorously.” It accused the SEC of “piling on to try to extract more from the company” more than two years after settlements with the Justice Department.

(BBG) Huawei Isn’t Trustworthy 5G Partner, German Spy Agency Says

(BBG)

  •  Official cites past security-related events as example
  •  Auctioning of 5G licenses in Germany starts next week

Huawei Technologies Co. isn’t a trustworthy partner to build Germany’s fifth-generation mobile networks, a representative of the country’s BND intelligence service told a committee of lawmakers.

Past “security-relevant incidents” involving the company are part of the reason, the representative told the committee in Berlin on Wednesday. An official from the Foreign Ministry, speaking at the same meeting, said it would be hard to work with a company that cooperates with its national secret service. The parliamentary press service reported the comments in a statement but didn’t name the officials.

“It’s above all a matter of trustworthiness and of the impact on our relationship with our allies,” the Foreign Ministry official told the committee, adding that Germany is in contact with partner nations on the issue.

German intelligence officials have been pushing the government to stop Huawei from playing a part in the building of 5G infrastructure in the country, people familiar with the matter told Bloomberg News this month. The officials are concerned that Huawei could help China steal German corporate secrets, the people said.

Huawei has repeatedly denied wrongdoing and long maintained it doesn’t provide back doors for the Chinese government, pointing out that no one has provided evidence to support such concerns.

An outright ban on Huawei is seen as legally impossible, but German officials are looking at tools that would have the same effect. The U.S. has been pressuring its allies in Europe to ban Chinese equipment in the ultrafast networks being rolled out over spying concerns.

Germany’s Bundesnetzagentur regulator said last week that it wants to limit equipment supply to “trustworthy” vendors that comply with national safety regulations as well as secrecy and privacy rules. Germany plans to start an auction of 5G airwaves on March 19, though legal challenges to its design by multiple carriers risk delaying the process.

(SkyNews) Boeing grounds entire global fleet of MAX 737 8s and 9s after Ethiopia crash

(SkyNews)

The move comes after Donald Trump ordered the jets to be barred from US airspace after other countries issued similar bans.

Thursday 14 March 2019 10:50, UK

The 737 MAX 8 has been banned for the time being from the EU
Image:The 737 MAX 8 has been banned for the time being from the EU

Boeing has grounded its entire global fleet of 737 MAX 8s and 9s following Sunday’s crash in Ethiopia.

In a statement, the company said “out of an abundance of caution and in order to reassure the flying public of the aircraft’s safety” it had decided to temporarily suspend its entire fleet of 371 MAX aircraft.

Boeing said it had taken the decision after consulting the US Federal Aviation Administration and the National Safety Board.

The statement said: “We are supporting this proactive step out of an abundance of caution. Safety is a core value at Boeing for as long as we have been building airplanes and it always will be.

“There is no greater priority for our company and our industry.

“We are doing everything we can to understand the cause of the accidents in partnership with the investigators, deploy safety enhancements and help ensure this does not happen again.”

It follows Donald Trump announcing on Wednesday that the US would be barring the aircraft from its airspace.

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Every chair was taken in the hall at the Airline Pilots’ Association of Ethiopia.
Mourners paid their respects to Captain Getecho, the 29-year-old pilot who died on Flight 302.

Mr Trump said: “We are going to be issuing an emergency order of prohibition to ground all flights of the 737 MAX 8 and the 737 MAX 9 and planes associated with that line.”

The President said any Boeing currently in the air will go to its destination and then be grounded.Ethiopia plane crash: Anguish and anger at funeral for young pilotEmotional tributes are paid to Captain Yared Getecho, as two pilots reveal the difficulties of controlling Boeing 737 MAX planes

He said pilots and airlines have been notified, adding that the safety of the American people is of “paramount concern”.

The President insisted the announcement was coordinated with aviation officials in Canada, US carriers and Boeing.

Wreckage from the scene of the crash
Image:Wreckage from the scene of the crash

Mr Trump said: “Boeing is an incredible company. They are working very, very hard right now and hopefully they’ll quickly come up with an answer.”

The move follows the crash in Ethiopia last weekend in which 157 people died.

A number of countries, including the UK, had already barred the Boeing 737 MAX 8 from its airspace.

Ethiopian Airlines has said flight recorders from the jet that crashed will be sent to Europe for analysis.

Some aviation experts have warned that finding answers in the crash could take months.

(NYT) Facebook’s Data Deals Are Under Criminal Investigation

(NYT) Facebook’s offices in Menlo Park, Calif. A federal grand jury is looking at partnerships that gave tech companies broad access to Facebook users’ information.CreditJason Henry for The New York Times

Facebook’s offices in Menlo Park, Calif. A federal grand jury is looking at partnerships that gave tech companies broad access to Facebook users’ information.CreditCreditJason Henry for The New York Times

By Michael LaForgiaMatthew Rosenberg and Gabriel J.X. DanceMarch 13, 2019

Federal prosecutors are conducting a criminal investigation into data deals Facebook struck with some of the world’s largest technology companies, intensifying scrutiny of the social media giant’s business practices as it seeks to rebound from a year of scandal and setbacks.

A grand jury in New York has subpoenaed records from at least two prominent makers of smartphones and other devices, according to two people who were familiar with the requests and who insisted on anonymity to discuss confidential legal matters. Both companies had entered into partnerships with Facebook, gaining broad access to the personal information of hundreds of millions of its users.

The companies were among more than 150, including Amazon, Apple, Microsoft and Sony, that had cut sharing deals with the world’s dominant social media platform. The agreements, previously reported in The New York Times, let the companies see users’ friends, contact information and other data, sometimes without consent. Facebook has phased out most of the partnerships over the past two years.

“We are cooperating with investigators and take those probes seriously,” a Facebook spokesman said in a statement. “We’ve provided public testimony, answered questions and pledged that we will continue to do so.”

It is not clear when the grand jury inquiry, overseen by prosecutors with the United States attorney’s office for the Eastern District of New York, began or exactly what it is focusing on. Facebook was already facing scrutiny by the Federal Trade Commission and the Securities and Exchange Commission. And the Justice Department’s securities fraud unit began investigating it after reports that Cambridge Analytica, a political consulting firm, had improperly obtained the Facebook data of 87 million people and used it to build tools that helped President Trump’s election campaign.

The Justice Department and the Eastern District declined to comment for this article.

The Cambridge investigation, still active, is being run by prosecutors from the Northern District of California. One former Cambridge employee said investigators questioned him as recently as late February. He and three other witnesses in the case, speaking on the condition of anonymity so they would not anger prosecutors, said a significant line of inquiry involved Facebook’s claims that it was misled by Cambridge.

Facebook’s chief executive, Mark Zuckerberg, testifying before Congress in April.CreditTom Brenner/The New York Times

[Read more on the 5 ways Facebook shared your data.]

In public statements, Facebook executives had said that Cambridge told the company it was gathering data only for academic purposes. But the fine print accompanying a quiz app that collected the information said it could also be used commercially. Selling user data would have violated Facebook’s rules at the time, yet the social network does not appear to have regularly checked that apps were complying. Facebook deleted the quiz app in December 2015.

The disclosures about Cambridge last year thrust Facebook into the worst crisis of its history. Then came news reports last June and December that Facebook had given business partners — including makers of smartphones, tablets and other devices — deep access to users’ personal information, letting some companies effectively override users’ privacy settings.

The sharing deals empowered Microsoft’s Bing search engine to map out the friends of virtually all Facebook users without their explicit consent, and allowed Amazon to obtain users’ names and contact information through their friends. Apple was able to hide from Facebook users all indicators that its devices were even asking for data.

Privacy advocates said the partnerships seemed to violate a 2011 consent agreement between Facebook and the F.T.C., stemming from allegations that the company had shared data in ways that deceived consumers. The deals also appeared to contradict statements by Mark Zuckerberg and other executives that Facebook had clamped down several years ago on sharing the data of users’ friends with outside developers.

F.T.C. officials, who spent the past year investigating whether Facebook violated the 2011 agreement, are now weighing the sharing deals as they negotiate a possible multibillion-dollar fine. That would be the largest such penalty ever imposed by the trade regulator.

Facebook has aggressively defended the partnerships, saying they were permitted under a provision in the F.T.C. agreement that covered service providers — companies that acted as extensions of the social network.

The company has taken steps in the past year to tackle data misuse and misinformation. Last week, Mr. Zuckerberg unveiled a plan that would begin to pivot Facebook away from being a platform for public sharing and put more emphasis on private communications.

(ZH) Pilots Complained About Boeing 737 Max 8 For Months Before Second Deadly Crash

(ZH)

Several Pilots repeatedly warned federal authorities of safety concerns over the now-grounded Boeing 737 Max 8 for months leading up to the second deadly disaster involving the plane, according to an investigation by the Dallas Morning NewsOne captain even called the Max 8’s flight manual “inadequate and almost criminally insufficient,” according to the report. 

The fact that this airplane requires such jury-rigging to fly is a red flag. Now we know the systems employed are error-prone — even if the pilots aren’t sure what those systems are, what redundancies are in place and failure modes. I am left to wonder: what else don’t I know?” wrote the captain. 

At least five complaints about the Boeing jet were found in a federal database which pilots routinely use to report aviation incidents without fear of repercussions. 

The complaints are about the safety mechanism cited in preliminary reports for an October plane crash in Indonesia that killed 189. 

The disclosures found by The News reference problems during flights of Boeing 737 Max 8s with an autopilot system during takeoff and nose-down situations while trying to gain altitude. While records show these flights occurred during October and November, information regarding which airlines the pilots were flying for at the time is redacted from the database. –Dallas Morning News

One captain who flies the Max 8 said in November that it was “unconscionable” that Boeing and federal authorities have allowed pilots to fly the plane without adequate training – including a failure to fully disclose how its systems were distinctly different from other planes. 

An FAA spokesman said the reporting system is directly filed to NASA, which serves as an neutral third party in the reporting of grievances. 

“The FAA analyzes these reports along with other safety data gathered through programs the FAA administers directly, including the Aviation Safety Action Program, which includes all of the major airlines including Southwest and American,” said FAA southwest regional spokesman Lynn Lunsford. 

Meanwhile, despite several airlines and foreign countries grounding the Max 8, US regulators have so far declined to follow suit. They have, however, mandated that Boeing upgrade the plane’s software by April. 

Sen. Ted Cruz (R-TX), who chairs a Senate subcommittee overseeing aviation, called for the grounding of the Max 8 in a Thursday statement. 

“Further investigation may reveal that mechanical issues were not the cause, but until that time, our first priority must be the safety of the flying public,” said Cruz. 

At least 18 carriers — including American Airlines and Southwest Airlines, the two largest U.S. carriers flying the 737 Max 8 — have also declined to ground planes, saying they are confident in the safety and “airworthiness” of their fleets. American and Southwest have 24 and 34 of the aircraft in their fleets, respectively. –Dallas Morning News

“The United States should be leading the world in aviation safety,” said Transport Workers Union president John Samuelsen. “And yet, because of the lust for profit in the American aviation, we’re still flying planes that dozens of other countries and airlines have now said need to grounded.”

(BBC) Boeing: UK joins wave of countries grounding the 737 Max

(BBC)

Norwegian 737 Max
Image captionNorwegian is among the airlines forced to ground its 737 Max fleet

The UK’s Civil Aviation Authority (CAA) has banned the Boeing 737 MAX from operating in or over UK airspace “as a precautionary measure”.

It comes after an Ethiopian Airlines plane crashed on Sunday, killing 157 people on board. It was the second fatal accident involving the 737 Max 8 model in less than five months.

Countries including China, France and Germany have also grounded the jets.

However, US officials say the aircraft are still safe to fly.

In a move that was welcomed by British pilots, the CAA said the directive would remain in place until further notice.

In a statement, it said it took the decision because it did not currently have “sufficient information” from the flight data recorder about the fatal crash.

Tui Airways and Norwegian both operate the Boeing Max 8 in the UK as part of their fleets.

One Turkish Airlines flight to Birmingham turned around and returned to Istanbul. And Norwegian Air plane from Stockholm to Tel Aviv turned back over Romania

A Tui statement confirmed their 737 Max 8 aircraft were grounded.

“Any customers due to fly home today on a 737 MAX 8 from their holiday will be flown back on another aircraft,” it read.

“Customers due to travel in the coming days will also travel on holiday as planned on other aircraft.”

Norwegian said it had also suspended flights of the aircraft and apologised for the inconvenience to passengers.

American and Southwest airlines continue to fly their 737 Max 8s in the US
Image captionAmerican and Southwest airlines continue to fly their 737 Max 8s in the US

Which other countries are affected?

The US Federal Aviation Administration (FAA) has declared the 737 Max 8 airworthy.

But the largest operator of 737 Max 8s in America, Southwest Airlines, is offering passengers scheduled to fly on one of the Boeing planes the chance to change their bookings.

Rival American Airlines said its “standard policies for changes still apply”.

Senator Elizabeth Warren, who is running to be the Democrats’ presidential candidate, called on the FAA “to get these planes out of the sky.”

Boeing has confirmed that for the past few months it has been developing a “flight control software enhancement” for the aircraft, but says it is confident they are safe to fly.

More than $27bn (£21bn) has been wiped off the company’s market value since the close of trading on Friday.

In the aftermath of the accident, Ethiopia, Singapore, China, France, Ireland, Germany, Australia, Indonesia and Malaysia have all temporarily suspended the 737 Max.

Singapore’s Changi Airport is the world’s sixth busiest and a major hub connecting Asia to Europe and the US, but only a handful of airlines operate the Max 8 aircraft in and out of the country.

No Australian airlines operate the Boeing 737 Max, and only two foreign airlines – SilkAir and Fiji Airways – fly the model into the country.

Media captionThe BBC’s Emmanuel Igunza, at the scene, said there was a huge crater at the site of the crash

What is a Boeing 737 Max aircraft?

The Boeing 737 Max fleet of aircraft are the latest in the company’s successful 737 line. The group includes the Max 7, 8, 9 and 10 models.

By the end of January, Boeing had delivered 350 of the Max 8 model out of 5,011 orders. A small number of Max 9s are also operating.

The Max 7 and 10 models, not yet delivered, are due for roll-out in the next few years.

The Max 8 that crashed on Sunday was one of 30 ordered as part of Ethiopian Airlines’ expansion. It underwent a “rigorous first check maintenance” on 4 February, the airline said.

Boeing 737 Max

Following last October’s Lion Air crash in Indonesia, investigators said the pilots had appeared to struggle with an automated system designed to keep the plane from stalling, a new feature of the jet.

It is not yet clear whether the anti-stall system was the cause of Sunday’s crash. Aviation experts say other technical issues or human error cannot be discounted.

Eyewitnesses say they saw a trail of smoke, sparks and debris as the plane nosedived.

(Reuters) Portugal’s EDP to sell Iberian power assets, invest $13.5 billion by 2022

(Reuters)

LONDON (Reuters) – Portuguese utility company EDP announced plans to sell 2 billion euros’ ($2.3 billion) worth of assets in Portugal and Spain, and raise another 4 billion euros via an asset rotation program until 2022 to fund its expansion in renewable energy.FILE PHOTO: The logo of Portuguese utility company EDP – Energias de Portugal is seen at the company’s offices in Oviedo, Spain, May 14, 2018. REUTERS/Eloy Alonso

EDP-Energias de Portugal is the target of a 9 billion euro takeover proposal by China Three Gorges (CTG), which the EDP board has rejected as too low and which is opposed by activist shareholder Elliott Advisors.

In a strategic update on Tuesday EDP also earmarked 12 billion euros for capital expenditure between 2019 and 2022, with 75 percent of that to be spent in North America and Europe, CEO Antonio Mexia told investors and analysts during a presentation in London.

“We will generate over 6 billion euros of sale proceeds to reinvest in renewables and strengthen our balance sheet,” EDP said.

“If the opportunity is there we can do more than the 2 billion euros” in asset sales, Mexia said.

The sale of the Portuguese assets reflects some of the demands by activist investor Elliott, which has launched a campaign to try to thwart CTG’s takeover proposal, but the “portfolio optimization” asset sale plan is somewhat below the 7.6 billion euros proposed by the shareholder.

The 12 billion euros EDP has earmarked for investment, however, appears to go beyond that proposed by Elliott as the utility hopes to add 7 gigawatts of renewable power capacity globally, as well as some transmission projects in Brazil, where it plans to retain its overall exposure and could even expand.

As well as calling for the sale of Iberian thermal holdings and minority stakes in Spanish and Portuguese networks, Elliott had urged EDP to sell its Brazilian operation.

“(We) Aim at superior execution of existing projects and continuous improvement of operations (in Brazil) … also open to consolidation and value accretive growth opportunities”, EDP’s Chief Financial Officer Miguel Stilwell said about Brazil.

EDP, which reported a 53 percent fall in 2018 net profit on Monday due to tax and regulatory impacts in Portugal, said its investment plan should help it achieve a 7 percent compound annual growth rate in net profit over 2019-2022, and 5 percent annual growth in earnings before interest, taxes, depreciation and amortization (EBITDA).

As a result, net profit should finish 2022 above 1 billion euros and EBITDA would end that year above 4 billion euros, it said.

EDP shares were up 0.3 percent at 3.28 euros at 1212 GMT, just above the 3.26 euros per share offer Chinese state-owned CTG made for EDP last May. The bid by CTG, which is already EDP’s largest shareholder with a 23 percent stake, still requires various regulatory approvals before it can be formally launched.

In its home market and neighboring Spain, EDP plans to downsize its thermal and merchant power business. EDP’s operations in Portugal account for 90 percent of electricity generation and distribution in the country.

Reuters reported exclusively last week that EDP was working on a plan to sell some of its assets in Portugal.

The utility has been running an asset rotation program – selling some assets to buy others that may offer potentially higher returns – for a few years, mainly focused on wind power projects.

It said it expects to reduce its debt by 2 billion euros from end-2018’s 13.5 billion by 2022, when its net debt to EBITDA ratio should be less than 3 times, down from 4 times currently.

Nvidia outbids Intel for Mellanox

Nearly all of the planned investment will be in regulated assets and long-term power contracts to keep a low risk profile, EDP said.

In another nod to shareholders it promised to maintain an “attractive dividend policy” with a minimum 0.19 euros per share to be distributed, while raising the payout ratio to 75-85 percent by 2022 from 65-75 percent now.

(Hill) Australia, Singapore join list of countries grounding newest 737s

(Hill)

Australia and Singapore announced Tuesday that they would ground all new Boeing 737 MAX airliners after a second deadly crash involving one of the passenger jets killed 157 people.

Reuters reported that aviation officials in Australia and Singapore joined their counterparts in China, Indonesia and other nations in halting flights of the aircraft in the wake of a fatal Ethiopian Airlines crash Sunday.ADVERTISEMENT

The U.S. has refused to join the list of countries so far, with the Federal Aviation Administration (FAA) reportedly issuing a  “continued airworthiness notification” on the aircraft that detailed Boeing’s response to a previous crash in Indonesia, which took place in October and resulted in 189 deaths.

Canada’s transportation minister, Marc Garneau, meanwhile warned that his country would take action once cause of Sunday’s crash was known.

The latest accident, which occurred on a flight between Addis Ababa, Ethiopia, to Nairobi, Kenya, occurred shortly after takeoff and is still under investigation.

“There are no survivors onboard the flight, which carried passengers from 33 countries,” an Ethiopian state news service reported.

“My prayers go to all the families and associates of those on board,” Kenya’s President Uhuru Kenyatta said in a statement Sunday.

A former FAA accident investigator told Reuters that it was premature for officials in other countries to ground the Boeing 737 based on the two fatal crashes.

“To me it’s almost surreal how quickly some of the regulators are just grounding the aircraft without any factual information yet as a result of the investigation,” Mike Daniel told the news service. 

(TCVnews) Boeing shares fall sharply after second deadly 737 MAX 8 crash

(TCVnews)

Image result for Boeing shares drop following second deadly crash















Boeing Company shares dropped badly on Monday, the worst in three years, after China, Indonesia and Ethiopia decided to ground their seven three seven MAX eight planes following the second deadly crash of one of the plane in just five months.

Lilian Eze mark reports that an Ethiopian Airlines B737 Max 8 bound for Nairobi crashed minutes after take-off, killing all 157 people on board.

It was the second crash of the B737 MAX, the latest version of Boeing’s workhorse narrowbody jet that first entered service in 2017.

In October, a 737 MAX flown by Indonesian budget carrier Lion Air flying from Jakarta on a domestic flight crashed 13 minutes after take-off, killing all 189 passengers and crew on board.

A source from Reuters said it was too early to say whether the accidents are related but added it would be a “very big issue for Boeing” if they are.

The drop – around 7 percent in late morning trade – wiped nearly $16 billion off Boeing’s market value, marking an abrupt reversal for a stock that had been the runaway top performer this year in the Dow Jones Industrial Average.

With a stock price near $400 a share, it was by far the largest drag on the price-weighted blue chip index on Monday.

Boeing said on Monday the investigation into the Ethiopian Airlines crash is in its early stages and there was no need to issue new guidance to operators of its 737 MAX 8 aircraft based on the information it has so far.

China has taken the unusual step today of telling its airlines to stop flying the 737 Max. But some have critisized that move because it’s not the lead regulator for the 737 which is built in the U.S. asking them to wait for the country where the aircraft is certified to take the lead.

(CNBC) US ambassador in Berlin urges Germany to cut ties with Huawei or risk losing access to intelligence: WSJ

(CNBC)

Germany risks losing access to intel

  • Ambassador Richard Grenell wrote a letter to Germany’s economics minister urging Berlin to not allow Huawei or other third parties from China to provide 5G infrastructure to the country, according to The Wall Street Journal.
  • The U.S. and Germany have been trying to repair a fragile intelligence sharing relationship following spy scandals in 2013 and 2014.

Kate FazziniPublished 21 Hours Ago  Updated 20 Hours AgoCNBC.com

A man walks past a Huawei shop in Beijing, China, March 7, 2019.

Thomas Peter | ReutersA man walks past a Huawei shop in Beijing, China, March 7, 2019.

Berlin should bar Huawei or other Chinese vendors from constructing Germany’s 5G network or risk losing access to U.S. intelligence, according to a letter from U.S. Ambassador Richard Grenell to the country’s economics minister, The Wall Street Journal reported Monday.

The two countries have been carefully rebuilding their intelligence sharing relationship since 2013 and 2014, when the U.S. and Germany were at odds over two spying scandals stemming from the revelations by Edward Snowden of NSA snooping. Last month, German officials said they “weren’t ready” to ban Huawei equipment and were unsure of the legality of such a request, according to a statement from the German Interior Ministry.

“A direct exclusion of a particular 5G manufacturer is currently not legally possible and not planned,” said a ministry spokesman, according to a CNBC translation. “The focus is on adapting the necessary security requirements so that the security of these networks will be guaranteed even if there are potentially untrustworthy manufacturers on the market.”

The letter was sent Friday, the Journal said. This would be the first time the U.S. has explicitly threatened consequences against a country for using the Huawei’s equipment, which has been the subject of heavy scrutiny from U.S. intelligence agencies that say the company is intimately connected to the Chinese government and intelligence agencies. Huawei continues to deny these claims, and has launched legal and marketing campaigns to defend itself.

A Huawei spokesperson and Grenell’s office were not immediately available to comment.

(Aljazeera) China, Ethiopia, Indonesia ground Boeing 737 MAX 8 after crash

(Aljazeera)

A number of other airlines across the world carrying out safety inspection on aircraft following Sunday’s crash.2 hours ago

ChinaEthiopia and Indonesia have grounded all Boeing 737 MAX 8 aircraft while a number of airlines across the world are carrying out safety measures on the jets following the Ethiopian Airlines crash on Sunday that killed all 157 people on board.

On Monday, China ordered its domestic airlines to suspend the commercial operation of nearly 100 of the jets in question. Ethiopian Airlines followed China’s announcement by grounding all of its Boeing 737 Max 8 aircraft as well, according to a spokesperson. 

The crash, that took place just outside Ethiopia’s capital Addis Ababa, comes just months after another deadly accident involving the same model in Indonesia when a Lion Air flight crashed after take-off from Jakarta in October, killing all 189 people on board.

Noting the “similarities” between the two accidents, China’s Civil Aviation Administration said domestic airlines have until 6pm local time (10:00 GMT) to ground all 737 MAX 8 aircraft.

It said operation of the model will only resume after “confirming the relevant measures to effectively ensure flight safety,” the administration said in a statement.

“Given that two accidents both involved newly delivered Boeing 737-8 planes and happened during take-off phase, they have some degree of similarity,” it said, adding the order was in line with its principle of zero-tolerance on safety hazards. The 737 MAX 8 is sometimes referred to as the 737-8.

Chinese airlines have 96 737 MAX jets in service, the state company regulator said on Weibo. The aviation authority will contact the US Federal Aviation Administration and Boeing for consultation, it said.

Chinese aviation data firm Variflight said at least 29 international and domestic flights on Monday were cancelled and that airlines swapped out the plane on 256 other flights that had been scheduled to use it.

Caijing, a Chinese state-run news outlet that covers finance and economics, said many flights scheduled to use 737 MAX planes would instead use the 737-800 models.

Cayman Airways said it had grounded both of its new 737 MAX 8 jets until it got more information.

On Monday, Ethiopian Airlines’ spokesperson Asrat Begashaw said although it was not yet known what caused the crash, the airline decided to ground its remaining four 737 Max 8 planes until further notice as “an extra safety precaution”.

Ethiopian Airlines was using five new 737 Max 8 planes and was awaiting delivery of 25 more.

Later on Monday, Indonesia decided to ground all Boeing 737 MAX 8 planes, according to its transportation Ministry.

South Korea was also conducting an emergency safety inspection on two Boeing 737 MAX 8 aircraft, according to its transport ministry.

India‘s aviation watchdog DGCA is likely to speak to Boeing and local airlines Jet Airways and SpiceJet about the use of the aircraft, NDTV reported citing a senior official. 

Boeing representatives did not immediately respond. The company tweeted that it was “deeply saddened to learn of the passing of the passengers and crew” on the Ethiopian Airlines plane.

“A Boeing technical team will be travelling to the crash site to provide technical assistance under the direction of the Ethiopia Accident Investigation Bureau and U.S. National Transportation Safety Board,” a statement on Boeing’s website read.

Fastest growing market

The company has delivered 76 Boeing 737 MAX aircraft to Chinese airlines, which have ordered another 104, according to data from the aircraft maker’s website updated in January.

Al Jazeera’s Adrian Brown, reporting from Beijing, said: “China became the first country to ground this aircraft.”

“Part of the 737 MAX is actually completed here in China,” he said. “China is where the seats are fitted, the final cosmetic work is carried out before the aircraft actually goes into the air.

“China is the world’s fastest growing aviation sector and by 2030, it’s estimated that it will become the world’s largest aviation market.”

Meanwhile, a US official, speaking on condition of anonymity because of the sensitivity of the matter, said there were no plans to follow suit given the 737 MAX had a stellar safety record in the United States and there was a lack of information about the cause of the Ethiopian crash. 

(BBG) Portugal’s Costa Opposes Strategy of Creating European Champions

(BBG)

Antonio Costa
Antonio Costa Photographer: Chris Ratcliffe/Bloomberg

Portuguese Prime Minister Antonio Costa said he opposes a strategy of creating large European corporate champions at the expense of competition within the region.

“We can’t accept it when some large member states say it’s essential to create big champions at the global scale, merging European companies, sacrificing competition in the internal market and sacrificing the development potential of companies from countries that need to make a greater potential development effort,” Costa said at a Portuguese Socialist Party meeting on Saturday, according to a party website.

German Chancellor Angela Merkel and French President Emmanuel Macron have argued that European companies need to bulk up in order to better compete with Chinese giants, and Merkel plans to raise the issue at a European Union summit next week. Margrethe Vestager, the EU antitrust chief who last month vetoed plans for a Franco-German trainmaker, has countered that you can’t build European champions by undermining competition or you remove the pressure to keep prices low and improve the quality of products and services.

Costa, who leads the Socialists and faces a general election in October, also spoke against European protectionism in the area of technological innovation and called for investment, according to the website.

“We don’t have to complain about the innovation that others do,” Costa said. “We have to complain about the innovation that Europe hasn’t done, and so it’s been losing the race in relation to other economic areas. We have to respond positively, investing in innovation.’’

Chinese investors are major shareholders in Portugal’s biggest energy companies as well as in financial firms. China Three Gorges Corp. and CNIC Co. Ltd. hold 28 percent of utility EDP-Energias de Portugal SA. State Grid International of China is the biggest shareholder in power and gas grid operator REN-Redes Energeticas Nacionais SA. Fosun Group is the biggest investor in Banco Comercial Portugues SA and controls insurer Fidelidade.

(CNBC) China’s Huawei sues the US, claiming it shouldn’t be blocked from selling to federal government

(CNBC) China’s Huawei sues the US, claiming it shouldn’t be blocked from selling to federal government

  • Huawei is suing the U.S. over a law that bans government agencies from buying the Chinese technology giant’s equipment, claiming the legislation is unconstitutional.
  • The lawsuit focuses on a provision in a law known as the National Defense Authorization Act (NDAA).
  • It comes after Meng Wanzhou, Huawei’s CFO, filed legal proceedings against Canadian authorities alleging they arrested, detained and searched her in violation of her constitutional rights.

Arjun Kharpal@ArjunKharpalPublished 10 Hours Ago  Updated 9 Hours AgoCNBC.com

Why Huawei is suing the US, and what it hopes to achieve  9 Hours Ago | 03:29

Huawei is suing the U.S. over a law that bans government agencies from buying the Chinese technology giant’s equipment, claiming the legislation is unconstitutional, as the company goes on the front foot following months of political pressure.

The lawsuit, which was filed on Thursday local time, focuses on a provision in a law known as the National Defense Authorization Act. Section 889 of that legislation prohibits executive government agencies from procuring telecommunications hardware made by Huawei and another Chinese firm, ZTE. Both companies are explicitly named in the act.

But lawyers for the world’s largest network equipment maker by revenue, argued that the provision in the NDAA is against the U.S. Constitution.

Huawei has faced intense pressure from President Donald Trump’sadministration, which claims the company’s equipment could be used for espionage by the Chinese government. The tech giant is also facing criminal charges from the Justice Department, which has accused it of stealing trade secrets and skirting U.S. sanctions on Iran. The U.S. government has also tried to persuade allies against using Huawei gear.

Top executives, including the company’s founder, have repeatedly denied the allegations that Huawei is a security risk, while the company has also been carrying out a major public relations push to change its image. The Chinese firm is now going on the legal offensive.

Huawei argues that the provision in the NDAA in which it is explicitly named is really a “bill of attainder” — wherein a legislative act pronounces a specific individual or group guilty of some offense and punishes them without due process. That’s forbidden by the U.S. Constitution. The company’s lawyers also argued that Section 889 is unlawful because it violates Huawei’s right to due process, meaning the firm cannot hear the evidence against it and fight that in court.

Huawei’s legal team is essentially arguing that, by including the provision in the legislation and banning the company’s sales to federal agencies in law, Congress is unconstitutionally acting as a judiciary.

The federal district court where the lawsuit is filed will make a decision on whether Huawei’s lawsuit will hold. Either side — Huawei or the U.S. government — can appeal that decision. A court has the power to invalidate a part of legislation without ripping apart the entire law. So, in theory, Huawei could get Section 889 thrown out.

Huawei will be hoping that by getting Section 889 of the NDAA scrapped, it could open the door for conversations with the U.S. government.

Glen Nager, lead counsel for Huawei and partner at Jones Day, claimed Thursday to CNBC that the American law is “hurting Huawei’s customers in the United States.”

Visitors pass in front of the Huawei's stand on the first day of the Mobile World Congress in Barcelonaon on February 27, 2017 in Barcelona.

Lluis Gene | AFP | Getty ImagesVisitors pass in front of the Huawei’s stand on the first day of the Mobile World Congress in Barcelonaon on February 27, 2017 in Barcelona.

“It’s damaging Huawei’s reputation and it’s limiting the ability of Huawei to provide its innovative products, including 5G, to consumers in the United States,” he added. “Huawei hopes that it can engage in a constructive conversation with the president and his administration over how to bring these innovative technologies and Huawei competition to the United States while providing full assurance of security for the United States of America.”

Huawei has long argued that its absence from the U.S. market will hamper competition in the next generation of mobile networking technology — a claim that experts have contested.

The technology firm is also fighting fires on other fronts. Huawei Chief Financial Officer Meng Wanzhou, the daughter of founder Ren Zhengfei, was arrested in Canada in December and was accused of breaking U.S. sanctions against Iran. She faces extradition to the U.S. But the CFO’s lawyers are now suing Canadian authorities, alleging they arrested, detained and searched her in violation of her constitutional rights.

What is 5G?

What is 5G?  7:01 AM ET Tue, 19 Feb 2019 | 05:03

Huawei’s lawsuit against the U.S. bears some similarities to a case in 2018 involving Russian cybersecurity firm Kaspersky Lab. In September 2017, the U.S. Department of Homeland Security ordered government agencies to stop using Kaspersky software, alleging it could be used for espionage by Russia. The ban was later ratified in law.

Kaspersky filed two lawsuits against the government with one claiming the move amounted to a bill of attainder. The two lawsuits were thrown out by a judge in May and Kaspersky also lost an appeal later in the year.

(JN) Ghosn libertado após pagar fiança de quase oito milhões de euros

(JN)

Carlos Goshn foi libertado da prisão, depois de ter pago cerca de oito milhões de euros de caução. O ex-líder da Renault e da Nissan garante que vai lutar contra as acusações sem mérito que lhe são dirigidas.

Carlos Ghosn foi libertado depois de ter pago uma fiança de mil milhões de ienes, o que corresponde a cerca de oito milhões de euros. O gestor estava detido desde 19 de novembro e conseguiu sair sob caução, depois de garantir que iria permanecer em Tóquio e que ficaria sob vigilância apertada.

Ghosn está acusado de quebra de confiança e de ter reportado ganhos inferiores auferidos na Nissan na última década em cerca de 82 milhões de dólares. Se for condenado, o ex-líder da Nissan enfrenta uma pena máxima de 15 anos de prisão.

“Estou inocente e totalmente comprometido em me defender vigorosamente num julgamento justo contra estas acusações sem mérito e infundadas”, afirmou Ghosn, através de um comunicado, citado pela Reuters.

As notícias sobre a libertação de Ghosn já circulavam desde ontem, mas a sua libertação foi travada por um recurso dos procuradores. Entretanto, esta quarta-feira o juiz pronunciou-se e rejeitou esse recurso, o que permitiu que o gestor fosse libertado.

Ghosn foi o responsável por unir a francesa Renault com a japonesa Nissan, criando com esta parceria o maior fabricante automóvel a nível mundial, o qual liderava antes de ter sido detido.

(CNBC) Huawei says it would never hand data to China’s government. Experts say it wouldn’t have a choice

(CNBC)

  • Huawei would be forced to hand over 5G data to the Chinese government if it was asked for it, because of national security laws, experts told CNBC.
  • China’s National Intelligence Law from 2017 requires organizations and citizens to “support, assist and cooperate with the state intelligence work.”
  • A government spokesperson said that intelligence work should be done “according to the law” and urged people to “not take anything out of context.”

Arjun Kharpal@ArjunKharpalPublished 11 Hours Ago  Updated 7 Hours AgoCNBC.com

Ren Zhengfei, founder and chief executive officer of Huawei Technologies, left, speaks during an interview at the company's headquarters in Shenzhen, China, in January.

Qilai Shen | Bloomberg | Getty ImagesRen Zhengfei, founder and chief executive officer of Huawei Technologies, left, speaks during an interview at the company’s headquarters in Shenzhen, China, in January.

Huawei would have no choice but to hand over network data to the Chinese government if Beijing asked for it, because of espionage and national security laws in the country, experts told CNBC.

Major governments including the United StatesJapan and Australiahave blocked the Chinese telecommunications equipment maker from providing hardware for next-generation mobile networks known as 5G. The U.S. has said Huawei equipment could provide backdoors for the Chinese government into American networks — a claim the company has repeatedly denied.

Australia did not cite specific countries or companies, but last year it gave guidance to domestic carriers saying that “the involvement of vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law, may risk failure by the carrier to adequately protect a 5G network from unauthorized access or interference.”

“There is no way Huawei can resist any order from the (People’s Republic of China) Government or the Chinese Communist Party to do its bidding in any context, commercial or otherwise.”-Jerome Cohen, NYU professor, adjunct senior fellow at Council on Foreign Relations

The Australian government is highlighting a concern on the top of minds of several governments — China’s wide-ranging internet laws, which require tech firms to help Beijing with vaguely-defined “intelligence work,” meaning companies could be forced to hand over network data whether they want to or not.

Two pieces of legislation are of particular concern to governments — the 2017 National Intelligence Law and the 2014 Counter-Espionage Law. Article 7 of the first law states that “any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law,” adding that the the state “protects” any individual and organization that aids it.

And it appears that organizations and individuals don’t have a choice when it comes to helping the government. The 2014 Counter-Espionage law says that “when the state security organ investigates and understands the situation of espionage and collects relevant evidence, the relevant organizations and individuals shall provide it truthfully and may not refuse.”

Huawei: We ‘will not build backdoors’

The company strenuously contends that it will not hand over customer data, and Huawei told CNBC that it has never been asked to do so.

Huawei’s billionaire founder Ren Zhengfei and other senior executives “have stated unambiguously that Huawei will not build backdoors or hand over customer data. It doesn’t get much clearer than that,” a Huawei spokesperson said. “We have never been required to do so, they have stated. We are not going to speculate on future possible scenarios beyond repeating the reassurances of Huawei’s most senior management.”

In an interview last month with CBS News, Huawei’s Ren said the company would never help China spy on the United States — even if required by law.

“We never participate in espionage, and we do not allow any of our employees to do any act like that. And we absolutely never install backdoors. Even if we were required by Chinese law, we would firmly reject that,” Ren told the American television network.

Sources within China contacted by CNBC declined to comment. But experts from outside the country suggested it would be near-impossible for Huawei to reject a request for data from Beijing.

“There is no way Huawei can resist any order from the [People’s Republic of China] Government or the Chinese Communist Party to do its bidding in any context, commercial or otherwise. Huawei would have to turn over all requested data and perform whatever other surveillance activities are required,” Jerome Cohen, a New York University law professor and Council on Foreign Relations adjunct senior fellow, told CNBC by email.

What is 5G?

What is 5G?  7:01 AM ET Tue, 19 Feb 2019 | 05:03

“Not only is this mandated by existing legislation but, more important, also by political reality and the organizational structure and operation of the Party-State’s economy. The Party is embedded in Huawei and controls it,” said Cohen, who as a practicing attorney represented corporate clients in China and elsewhere in Asia.

The relationship between Huawei and the government has been questioned because of Ren’s past as a former soldier in the People’s Liberation Army and a current Communist Party member. In a question and answer session with international media in January, Ren said that his relationship with China’s ruling party would not stop him from refusing any request from them for user data.

“I don’t see close connection between my personal political belief and our business actions we are going to take as a business entity,” Ren said.

In the same session, Ren said that he “would rather shut Huawei down than do anything that would damage the interests of our customers in order to seek our own gains.”

“The idea of fighting a request of this nature in the courts is not realistic. In truth the law only confirms what has long been true — that one must submit to the Party if called upon.”-Martin Thorley, University of Nottingham

The problem for Huawei is that there does not appear to be legal recourse if Beijing comes knocking.

“The idea of fighting a request of this nature in the courts is not realistic. In truth the law only confirms what has long been true — that one must submit to the Party if called upon. Added to this, a company of Huawei’s size, working in what is considered a sensitive sector, simply cannot succeed in China without extensive links to the Party,” Martin Thorley, an expert on international engagement with China at U.K.-based University of Nottingham, told CNBC by email.

“For anyone at Huawei to oppose a serious request from the Party would require bravery bordering on recklessness — what do you do when your adversary is the police, the media, the judiciary and the government?” he added.

China: Don’t ‘take anything out of context’

China’s government addressed the National Intelligence Law during a press conference on Monday.

“According to China’s National Intelligence Law, organizations and citizens have the obligation to support, assist and cooperate with national intelligence work. At the same time it also explicitly stipulates that intelligence work should be conducted according to law and in a way that respects and protects human rights and the lawful rights of individuals and organizations,” government spokesperson Zhang Yesui said, urging people to “not take anything out of context.”

“Some U.S. government officials have been playing up the so-called security risk associated with products of certain Chinese companies and linking it with Chinese national intelligence law. This kind of behavior is interference into economic activities by political means and it is against WTO rules.”-Zhang Yesui, China government spokesperson

Zhang was responding to reporters’ questions ahead of China’s National People’s Congress, a big annual event where Beijing formally announces major policy elements such as economic growth targets. The comments were made in Mandarin and translated into English by an official translator.

“Some U.S. government officials have been playing up the so-called security risk associated with products of certain Chinese companies and linking it with Chinese national intelligence law,” Zhang said. “This kind of behavior is interference into economic activities by political means and it is against WTO (World Trade Organization) rules. And it disrupts international market order that is built on fair competition. This is a typical double standards (sic). It is neither fair nor ethical.”

Many of China’s largest tech companies have flourished over the last decade within the country in the absence of foreign competition. China has for years blocked some of America’s largest internet giants — on claims that those U.S. companies pose national security risks.

China 5G dominance

The battle between the U.S. and Huawei is bigger than worries over national security risks, according to geopolitical analysts. It’s about who has control of the critical infrastructure that runs 5G. The new network will not only support super-fast mobile internet but it will be the backbone behind other technology like driverless cars.

“Huawei has indeed said that it would refuse any Chinese government request to facilitate espionage. But such a statement simply cannot be taken at face value.”-Nigel Inkster, senior adviser, International Institute for Strategic Studies

“Huawei involvement in the core backbone 5G infrastructure of developed western liberal democracies is a strategic game-changer because 5G is a game-changer,” Nigel Inkster, a senior adviser to the International Institute for Strategic Studies, told CNBC by email.

Inkster, a former senior British intelligence official, explained that China has “embarked on an ambitious strategy to reshape the planet in line with its interests” through its massive Belt and Road Initiative. Its “national telecoms champions” are a big part of that.

Because of that drive from China, Inkster said that Huawei is part of this “all-of-nation project.”

“Huawei has indeed said that it would refuse any Chinese government request to facilitate espionage. But such a statement simply cannot be taken at face value,” Inkster told CNBC.

“Huawei is a product and instrument of the Chinese state and has been co-opted to achievement of the state’s strategic objectives,” he said. “The proposition that it is just a telecommunications company has worn beyond thin.”

(CNET) California wants Silicon Valley to pay you a data dividend

(CNET)

The Golden State thinks tech companies should share the wealth.

An outline of the state of California is superimposed over a vast array of zeroes and ones.
Matt Anderson / Getty Images

It isn’t a secret that tech companies collect your personal data and use it to make a buck. If you don’t like it, stop using Facebook and Google. And the rest of the internet.

California Gov. Gavin Newsom thinks there might be a better relationship: Charge companies to use your information and give some of the benefit back to you. He calls it a “data dividend.”

“We recognize that your data has value,” Newsom said during his State of the State speech on Feb. 12.  “And it belongs to you.”

The idea of paying consumers for their data — either by letting them sell it or by taxing companies for the money made using personal data —  isn’t entirely new. Academics have kicked the idea around for decades, and Washington State tried to pass a similar plan in 2017.

Newsom’s suggestion, however, is eye-catching because it coincides with privacybecoming a front-and-center issue for many internet users. Calls for tech companies to get our consent to use our data have taken an increasingly urgent tone, putting those companies into damage control mode. Paying users for their data, as Newsom is suggesting, usually isn’t on the table. His talk of a data dividend might change the conversation.

Now playing: Stronger data privacy laws may be coming to the US 1:41

Another reason to pay attention to Newsom’s dividend talk: California, the home of Silicon Valley, has some of country’s most advanced data privacy laws. That includes the state’s recently passed data privacy protection law, which aims to give users much broader control over their data, as well as more specific laws that protect schoolchildren’s privacy and prevent employers from requiring workers to hand over passwords to their personal accounts.

CNET reached out to several major Silicon Valley companies for comment on Newsom’s remarks. The companies either declined to comment or didn’t respond.

Here comes legislation

While Newsom’s suggestion was open-ended, a bill is very near completion. Common Sense Media, the same organization that spearheaded California’s Student Online Personal Information Protection Act in 2014, has come up with a bill it plans to submit soon.

“While platforms are fast and loose with consumer data, they are not so willing to share what they are doing with the data or how much they are profiting,” said Jim Steyer, CEO of Common Sense Media, in a statement. “We fully support the Governor’s data dividend proposal and expect to introduce legislation that reflects that in the coming weeks.”

The details of the bill, drafted by Princeton economist Glen Weyl, aren’t public yet. Weyl said in an interview that the bill is unlikely to push for a straight tax on tech companies for using consumer data, nor will it try to create a specific wage companies must pay consumers directly. Instead, he hopes the bill will help groups of people bargain for a good return on the data they’re generating for tech companies.

That’s because data isn’t just helping companies sell ads. It’s helping them build the tool of the future: artificial intelligence. And once AI starts really taking off, it will earn tech companies a lot of money while putting some people out of a job, Weyl said.

“This is more of a big-picture answer to the questions about AI,” Weyl said, “rather than a huge check in the near future.”

Paying the price

The idea of paying consumers for their data first surfaced in the 1990s, when Kenneth Laudon, an economist at New York University, argued that access to consumer data was artificially cheap. Companies sent out junk mail, and consumers and the government paid with time wasted on unwanted letters and subsidized postal rates. Invasion of privacy also prompted feelings of helplessness and lost trust in companies.

“The cost of invading privacy is far lower than the true social cost,” Laudon wrote. And that was in 1993.

To fix that, he suggested consumers should be allowed sell their data.

More recently, virtual reality pioneer Jaron Lanier wrote a book called Who Owns the Future? that focuses on the idea of paying users for internet content. Since then, Facebook co-founder Chris Hughes as well as academics like Weyl have argued that companies such as Facebook and Google should pay users for time spent searching, clicking and liking, either with a tax or in wages. Finance expert Saadia Madsbjerg of the Rockefeller Foundation said the data brokers who buy and sell information about your internet usage from ISPs and other sources should be taxed for selling consumer data.This is more of a big-picture answer to the questions about AI, rather than a huge check in the near future.Economist Glen Weyl

California might be a powerful place to try the concept IRL. Laws passed in the Golden State tend to set things in motion nationally, like when the state legislators passed the strictest data privacy law in the country in June. That matters throughout the country.

In his book Click Here to Kill Everybody, cybersecurity expert Bruce Schneier points out that the toughest state law in the country becomes the de facto federal law for the tech industry, because every tech company has customers in all 50 states.

The only thing that can stop a law like California’s is a federal law that supersedes it. After California’s data privacy law passed, major tech companies including Facebook and Google asked federal lawmakers to pass a privacy law to create a national standard. Several bills have been introduced, but none has passed yet.

Some privacy advocates don’t love the idea of a data dividend. They say public policy shouldn’t create incentives for consumers to share data. Rather, it should help them keep their information private.

Marc Rotenberg, president and executive director of the Electronic Privacy Information Center, said a data dividend is more akin to a copyright law than a privacy law. Copyright law encourages people to publish their work.

“That’s not how we understand privacy.” Rotenberg said. “Typically, we want to restrict data or make available the least amount of data possible.”

Balancing a payday with privacy restrictions

Alessandro Acquisti, a professor of information technology and public policy at Carnegie Mellon University, said concerns a data dividend will simply encourage people to share their information are valid, up to a point.

A data dividend should be balanced with regulations that protect privacy, he said. Otherwise, a data dividend “may create perverse incentives without ultimately addressing consumers’ privacy concerns.”

Acquisti said there’s no reason Newsom’s soon-to-be-unveiled bill can’t strike that balance. What’s more, a law may be the only way to return the value of data back to internet users.

“I do not believe that such a significant change in the policy of consumer data will be implemented by the tech industry,” Acquisti said, “in absence of regulatory intervention.”

Facebook wants to show it’s a force for good amid scandals: The social network updates its tools for blood donations, nonprofits and mentorships.

Everything you need to know about the Qualcomm-FTC lawsuit: The antitrust case could decide how smartphones get made in the future — and what they cost.

(Reuters) The battle for Citgo: How Venezuela’s opposition leaders seized control

(Reuters)

(Reuters) – Asdrubal Chavez, chief executive of Houston-based Citgo Petroleum Corp, boarded the Venezuelan-owned firm’s corporate jet in Caracas on Jan. 30, after meeting with top officials of the embattled administration of socialist President Nicolas Maduro about the latest U.S. oil sanctions.FILE PHOTO: The corporate logos of the state oil company PDVSA and Citgo Petroleum Corp are seen in Caracas, Venezuela April 30, 2018. REUTERS/Marco Bello/File Photo

Upon landing in the Bahamas – where Chavez has worked for about a year after being denied a U.S. visa – he had received word from Houston that it would be his last trip on a company plane and that his Citgo email account had been shut off.

Day-to-day control of the company had passed to Citgo’s top U.S. executive, Rick Esser, who with the backing of Venezuela’s rising political opposition and the U.S. government would begin clearing the way for a new, anti-Maduro board of directors at Citgo. Esser oversaw the moves to isolate Chavez – a cousin of the late Venezuelan President Hugo Chavez – and would soon start ousting other Citgo executives close to the Maduro administration.

The house-cleaning at the prized U.S.-based subsidiary of Venezuela’s state-owned oil firm, Petroleos de Venezuela (PDVSA), marked a crucial early victory for the country’s rising opposition government – led by self-declared president Juan Guaido – as it struggles to remove Maduro from office and break his grip on the OPEC nation’s oil assets.

The account of the transition of power at Citgo is based on Reuters interviews with more than a dozen current and former Citgo and PDVSA executives, employees, and U.S. and Latin American advisors.

Guaido, head of the Venezuelan congress, announced he would seize the presidency on Jan. 23 because Maduro’s re-election last year was a sham, rendering the socialist leader illegitimate under Venezuela law. Guaido’s claim to interim leadership, until fair elections can be held, was quickly backed by the United States and dozens of other nations.

But Maduro remains in control of the military and PDVSA – making Citgo the obvious first target among national asset for Guaido’s opposition movement to claim, with the help of the U.S. government. The battle for Citgo could prove pivotal in the effort to unseat Maduro because full control of a major U.S. refiner would provide a crucial source of revenue to a post-Maduro administration.

Citgo, with more than $23 billion in annual sales and operations that supply about 4 percent of U.S. fuels, may be the last remaining asset owned by PDVSA with a healthy balance sheet. As PDVSA’s oil production and revenue have plummeted amid crippling debt, mismanagement and international political pressure, Citgo’s U.S. location and financial independence have shielded the firm from the worst of its parent company’s meltdown.

At the end of September, Citgo had net income of about $500 million, according to a creditor with access to financial statements that are not public. The company had almost $500 million in cash and an available credit line of $900 million.

(Graphic: An interactive look at Venezuela’s crude exports to the United States – tmsnrt.rs/2S4YIXB)

Inside Citgo’s Houston headquarters, many employees weary of operating under the control of a failing socialist state eagerly awaited an expected official announcement of the appointments of new company directors, who were chosen by Venezuela’s congress.

“We are not expecting any resistance” to the new board inside the company, said one manager who spoke on condition of anonymity. “On the contrary, we are waiting for directions to lay out the red carpet.”

The new board met together for the first time in Houston on Thursday and named executives to replace those who were ousted.

Board directors and a new executive team was confirmed by Citgo in a statement on Friday. Esser assumed responsibility for day-to-day strategic decisions and operations while a search for a new CEO has begun, it said, without mentioning former CEO Chavez.

“These officers were chosen not only for their experience and knowledge, but also because of their demonstrated commitment to the company over the years,” said Chairwoman Luisa Palacios in the statement.

PDVSA and the White House did not respond to requests for comment.

(Graphic: Citgo’s Louisiana refinery was 2018’s top U.S. consumer of Venezuela’s crude – tmsnrt.rs/2t4ullS.)

SHIFTING ALLEGIANCES

As U.S. sanctions on Jan. 28 shifted the balance of power to Citgo’s anti-Maduro faction of executives, Maduro loyalists scrambled to find their place in the emerging corporate structure.

Two of four senior executives appointed by Chavez openly pledged support for the incoming board of directors in meetings with employees, said two sources who attended the meetings.

But all four – Frank Gygax, Nepmar Escalona, Simon Suarez and Eladio Perez – were escorted out of the building on Monday, according to four people with knowledge of their departures. Gygax declined to comment and the others did not respond to requests.

It is unclear whether Chavez has yet been formally terminated, an action that can only be taken by company directors, but he has been effectively shut out of the firm, Citgo employees said. Chavez did not respond to a request for comment.

Esser has essentially run the company since Chavez’ ouster, in close consultation with U.S. government officials, according to three Citgo employees and two people close to the incoming company board.

A Jan. 30 meeting between White House National Security Advisor John Bolton and Citgo executives thrust the low-key Esser into the spotlight after Bolton tweeted a photo of the meeting, calling it “very productive.”

U.S. officials have voiced concern that Guaido and his supporters had been too slow in seizing control of Citgo and also have pushed for a say in choosing members of the refiner’s new board – a request Guaido’s team declined, according to two people familiar with the talks.

Since clearing Citgo’s upper ranks of Maduro allies, Esser has focused on securing alternatives to the Venezuelan oil that feeds its refineries. Recent U.S. sanctions prevent the firm from importing Venezuelan crude after April 28, which could cripple the company unless it can ensure it has the cash, credit and contracts for alternate supplies.

Advisors to the incoming Citgo board have separately urged U.S. officials to exempt Citgo from sanctions and protect its assets from creditors once it is officially controlled by Guaido’s team.

Esser saw this crisis coming two years ago and put together a group to find new suppliers and test their oils in the event Venezuelan crudes were restricted by sanctions, according to a person familiar with the effort.

The firm’s efforts to sustain operations face a threat from creditors owed money by Venezuela and PDVSA, who could try to use that leverage to hamstring Citgo’s finances, said Carlos Jorda, a former Citgo chairman and now a Houston business consultant. The U.S. government could help the company hold off that threat, he said.

“The U.S. Treasury could say, ‘Hold your horses, you’ll get paid – but not paid by Citgo, but by Venezuela – when the Maduro regime exits,’” Jorda said.

Esser and Citgo finance executive Curtis Rowe traveled to Washington this week to meet with U.S. government officials for at least the second time in three weeks, according to two Citgo employees.Slideshow (2 Images)

‘FROGS AND SNAKES’

Opposition leaders had difficulty recruiting candidates willing to join the new Citgo board, according to three people familiar with the recruitments.

“There are many risks,” one of the people said, “and if these people have family members in Venezuela, they could be putting them at risk, too.”

In late 2017, six Citgo executives were called to Caracas and jailed amid a graft probe over a failed debt refinancing. Their detention led to Chavez’s appointment as CEO and the arrival of several Maduro loyalists at Citgo’s Houston headquarters.

New Citgo Chairwoman Palacios has been huddling with newly appointed directors and legal advisers to guard against the threat of a potential U.S. court challenge by PDVSA to the new board’s legitimacy, according to two sources close to her team.

Palacios and other board members, which include former Citgo and PDVSA executives living in the United States, did not respond to requests for comment.

One of their priorities will be to audit the finances of a refinery project in Aruba, said the two people close to Palacios. PDVSA and Citgo agreed to a $685 million overhaul of the idled facility in 2016, causing some Citgo executives to resign in protest, arguing the deal made no business sense.

On Monday, Citgo Aruba Refining officially put the money-losing venture on hold and laid off workers, citing the impact of U.S. sanctions on PDVSA. The project has been clouded by corruption allegations, according to four former and current Citgo employees and two people close to the new Citgo board.

“There is also worry about the audits to come. We are expecting ‘frogs and snakes’ to come from there,” said a Citgo employee, using a Venezuelan figure of speech similar in meaning to the opening of a Pandora’s box.

REDECORATING

Since Esser took over Citgo operations, the company has sent clear signals of a return to its century-old American roots.

“We the people of Citgo have a story to tell you” read an advertisement in Tuesday’s Washington Post, borrowing language from the U.S. constitution. The text emphasized the firm’s 6,000 U.S. workers, fiscal strength and U.S. charity work.

Workers at the company’s Houston headquarters also have purged the company website and marketing materials of references to PDVSA and stripped the building of the symbols of Venezuela’s socialist government.

For years, the hallways have been decorated with renderings of a controversial painting of Latin American independence leader Simon Bolivar that had been commissioned by former president Hugo Chavez – and looked more like Chavez than any historical Bolivar painting.

The portraits began to disappear, Citgo employees said, soon after Venezuela’s congress appointed the company’s new board of directors.