Qualcomm Seeks iPhone Sales and Manufacturing Ban in China (Oct 13, 2017)
Qualcomm has announced that it’s filed lawsuits in China seeking a ban on iPhone sales and manufacturing in the country, the latest salvo in the ongoing dispute between the two over patent royalty payments. Qualcomm previously requested the International Trade Commission to ban the import of Intel-based iPhones into the US, and importantly the Chinese government earlier fined Qualcomm on antitrust grounds, so it’s not necessarily disposed to siding with it in this case. However, Qualcomm has been among a set of companies looking to curry favor with the Chinese government, so it’s possible that the Chinese government might look more favorably on such a request. On balance, though, I think it’s unlikely that Qualcomm will prevail here given its history not only in China but elsewhere around these antitrust issues, though of course a successful ban would be a huge blow to Apple in China, so it’s understandable why Qualcomm would seek it as a way to gain leverage in the case.
Reuters reports that Waymo had sought a billion dollars and a public apology from Uber in settlement talks over the lawsuit the companies are embroiled in. Uber apparently quickly dismissed those requests as unreasonable, which isn’t all that surprising, given that it’s still far from clear that Waymo has the evidence it needs against Uber as a company rather than merely against Anthony Levandowski around the stealing of LIDAR technology. It’s also a sign that Waymo is perfectly happy for the court case to continue and for it to continue to distract Uber at a time when the latter already has a lot on its plate including several legal actions and more.
Apple has announced that its long-standing general counsel, Bruce Sewell, is retiring and will be replaced in the role by Katherine Adams, who joins Apple from a similar role at Honeywell. Normally, the departure of the general counsel at a tech firm wouldn’t be something I’d cover, but this is noteworthy for two reasons. Firstly, Sewell enjoyed a rather higher profile than most general counsels do over the last couple of years because he was a key figure in Apple’s fight with the FBI, among other things, and of course Apple’s lawsuits against Samsung and more recently Qualcomm have also been fairly high profile. Few corporate lawyers get to implement company strategy quite as directly as Sewell did during his time at Apple, especially with regard to privacy. Adams will obviously take over the Qualcomm case and others Sewell was overseeing along with carrying the mantle of protecting privacy in the context of law enforcement. Secondly, the fact that a woman is replacing a man on Apple’s board means that it now has two out of eleven members who are women. As I noted a month ago, the next tier down of eight executives is evenly split, but until now Angela Ahrendts has been the lone woman on the board. It’s good to see that start to change, and I wonder whether other executives who move on from those senior ranks in the coming years will likewise be replaced by women.
Waymo has finally succeeded in getting the due diligence report on Otto which Uber commissioned as it planned to buy the company unsealed, allowing many details about what Uber knew and when to emerge. However, like earlier disclosures in the lawsuit, it mostly confirms that Anthony Levandowski, the executive at the center of the case who is nonetheless not named in the suit took documents and other information with him from Waymo, while not providing evidence that Uber benefited from that. Uber, meanwhile, continues to say that when it found out about the document haul Levandowski had, it ordered him to destroy it all and not bring it to Uber – proving that assertion false is Waymo’s biggest challenge. Of course, Levandowski as an individual might still have used that information in developing at least one version of LIDAR technology he worked on at Otto/Uber, but that would only cover some of the claims Waymo has made in the case.
Mark Zuckerberg has dropped plans to have Facebook create a new share class designed to allow him to retain voting control of the company even as he sells many of his shares to fund his philanthropic effort. The move had angered shareholders, who filed suit to prevent the change, and Zuckerberg appears to have caved rather than have to go to court to defend his actions (and potentially the broader issue of the special class of shares he already holds). His argument is that Facebook is doing so well that he can retain control while selling enough shares to fund his philanthropic efforts. The case would have been really awkward for Zuckerberg at a time when he’s been making significant changes and concessions to try to improve public perceptions of Facebook and him personally, so this was probably a smart move, and one which won’t have too many negative consequences for him (and none for Facebook as a company).
Apple Wins First Small Battles in Court Against Qualcomm (Sep 22, 2017)
I haven’t seen much coverage of this today, but it appears that Apple won a first couple of small battles in its various lawsuits with Qualcomm. A California judge ruled that Apple’s supply chain partners don’t have to pay the royalties they’re currently withholding until such a time as the proper amounts to be paid have been determined, and Qualcomm was also denied its request to end the litigation being pursued separately by Apple in other countries. These are initial steps in what’s going to be a potentially long and complex set of court cases between the companies, but it’s possible that the companies will end up settling once it becomes clearer which way the legal wind is blowing, and they would then likely drop all outstanding litigation. By themselves, these first decisions aren’t indicative of which way things are going to go, but they do put increased financial pressure on Qualcomm, which has seen reported revenues drop as Apple’s partners withhold royalties, which will likely push it to move to settlement sooner rather than later, something that’s probably good news for Apple.
via Apple Insider
Uber is suing ad agency Fetch over what it says is fraudulent reporting of ads placed and clicked on, and resulting downloads of its apps by those who never actually saw ads placed by Fetch. Uber is withholding some of the money it owes Fetch while pursuing the lawsuit for a rather larger sum of $40 million, a little over half of what it’s paid Fetch in total over the last three years. Presumably Uber feels it has decent evidence to support its claims, given that – as Bloomberg points out in the article linked below – it’s not a particularly litigious company despite being a target of others’ lawsuits frequently. Fetch, meanwhile, has spoken in the past about the issue of ad fraud and the challenge of identifying and reducing it, something that’s by no means unique to the company in the broader world of online advertising. Ad fraud continues to be one of several big issues facing ad-based companies and complicating their relationships with brands and buyers.
Update: On September 27, 2017, Phunware, one of the mobile ad firms Fetch used to place ads, is now suing Uber over non-payment, as the latter is withholding payment from Fetch during the lawsuit. Uber says it feels Phunware is one of the parties which engaged in the fraud and will present evidence of this in court.
★ Google Formally Appeals EU Ruling on Shopping Search (Sep 11, 2017)
Uber Wins Court Case Over Obscure Terms and Conditions (Aug 18, 2017)
Qualcomm reported its results for the June 2017 quarter today, and revenues and profits were both down, in large part because of the various antitrust and other disputes and legal proceedings in which it’s involved. Shortfalls in revenue from Apple, several of its suppliers, and a Chinese customer each caused problems, but it also had to pay out to both BlackBerry and the Korean government over separate disputes. It’s impossible to look at Qualcomm today without noticing the massive cloud of uncertainty and potential financial liability associated with these various cases. On a non-GAAP basis, the company’s results are holding up rather better, though still not stellar. As with Samsung, its semiconductor business was an area of strength, but its core MSM chip sales continue to decline over time as the smartphone market matures, while the broader opportunity it has in CDMA and related technologies continues to grow. Meanwhile, Apple, its suppliers, and Qualcomm all filed new suits over the last couple of days in relation to their dispute, even as Qualcomm’s CEO was quoted earlier this week as saying he expected the case eventually to end in a settlement.
via Financial Times
Vizio Files Suit Against LeEco Over Merger Termination Fee (Jul 12, 2017)
LeEco was to have acquired TV maker Vizio, but after months of delays the deal finally fell apart earlier this year, and now Vizio is suing LeEco over non-payment of part of the termination fee the companies agreed when they made the deal. The suit also alleges that LeEco never had the means to complete the deal, using it merely as a way to bolster its perceived financial stability at a time when there were lots of reports about its cash constraints. Given that those financial problems have only worsened since the deal closed, I’m not sure Vizio is getting the money it wants anytime soon, even if it wins the case. But LeEco is just getting clobbered at this point as a result of problems entirely of its own making, all of which stem from expanding overly aggressively from what had been a reasonably strong position in the Chinese market.