More substance and detail are needed in guidelines the Interagency Labor Committee intends to follow for enforcing the U.S.-Mexico-Canada Agreement's free-trade labor rules, commented retail, manufacturing and business groups as posted Monday in docket USTR-2020-0028. The treaty took effect July 1, giving Mexican workers collective bargaining rights for the first time, plus protecting them against retaliation for joining unions or refusing to join.
Administrative Law Judge Dee Lord at the International Trade Commission ordered Google, Lenovo and Nokia to file briefs by Aug. 26 showing cause why the Tariff Act Section 337 investigation into allegations that Lenovo computers, tablets and parts infringe five Nokia patents (see 2008050008) shouldn't be “severed” into two separate probes. “Substantial interests” drove Google last week to intervene in the investigation (see 2008130032) because the Lenovo devices accused of infringing U.S. patent 8,583,706 on user interfaces “infringe by way of their incorporation of the Google Assistant functionality.” The patent is alone among the five in Nokia's July 2 complaint not involving H.264 video compression. The “disparate issues” between the '706 patent and the standard-essential H.264 patents “make this investigation a candidate for severance” under ITC rules, said Lord’s order (login required), posted Friday in docket 337-TA-1208. Severing the investigation would promote "more efficient adjudication of issues” specific to the H.264 patents, she said. A separate probe limited to the ’706 patent “could likely be completed on a shorter timeline” than the H.264 investigation “because only a single patent would be at issue,” she said. Lord invited Google attorneys to participate in a Sept. 3 teleconference, "where the parties should be prepared to discuss Google’s intervention and the severance of the investigation."
Nearly three-quarters of U.S. consumers shopped more online during the pandemic, a healthinsurance.com survey found. The healthcare shopping website canvassed 1,600 online Aug. 6-7, finding 76% of millennials and 73% of Gen Xers used e-commerce more during lockdown. The prevalence of increased online shopping was lowest among baby boomers at 67%. The vast majority of consumers spend more time on their phones and computers. Increased tech use is higher among Gen Xers (75%) and millennials (74%) than boomers (65%). Americans 61%-39% say they need a “digital detox." The sentiment was strongest among boomers (78%), less so with millennials (51%). Gen Xers alone shunned the idea. Apple Watch is the wearable of choice among 25% of consumers, Fitbit at 23%. Consumers are evenly split between those who used telemedicine services during COVID-19 and those who didn’t. Americans by a 60% majority feel “more comfortable” about using telemedicine now than they were six months ago, and 54% plan to continue using it after the pandemic. Twenty-eight percent of consumers who binge-watch content prefer doing so on a nondescript smart TV over a Roku or Amazon Fire TV.
Q2 smartphone imports to the U.S. increased by double digits sequentially from Q1, amid China's supply chain recovery to pre-COVID-19 levels after the pandemic brought factories to a halt in much of February into March. The quarter-to-quarter increase masked subdued smartphone demand attributable to the decline in consumer spending. Year-over-year smartphone imports fell by double digits in Q2, consistent with IDC reporting a 12.6% decrease in second-quarter U.S. handset shipments.
IQiyi said it’s cooperating with the SEC Enforcement Division as it seeks financial records dating to January 2018, after short-seller firm Wolfpack Research alleged April 7 the company, known as the Netflix of China, was “committing fraud well before” its initial public offering two years ago. IQiyi hired “professional advisers to conduct an internal review” into the allegations, it said Thursday. IQiyi parent Baidu has “zero tolerance for fraud,” said CEO Robin Li on a quarterly call. “When there is a short-seller for an issue against our subsidiary, especially one that's quite autonomous, it is important to get an independent opinion.” This “is part of good corporate governance, and we think this validation process is important to earn investors' trust,” he said. Li isn't involved in the review, he said: “With COVID-19 in the backdrop, one should expect this process to be longer than normal. In past cases without a pandemic, we have seen investigations lasting months and sometimes beyond a year.” IQiyi shares closed 11.2% lower Friday at $19.26. Baidu was down 6.3% at $116.74.
The “digital world” of telework and remote learning is more important during the pandemic, but 98% of websites have “critical accessibility barriers,” said AudioEye Executive Chairman Carr Bettis on a quarterly call Thursday. The company markets website accessibility tools for the vision-impaired. Though demand “remains very strong,” COVID-19 is impacting customers and prospects “across all our channels,” said Bettis. New business deals are being “delayed a little,” and AudioEye imposed “more flexible pricing and other options," he said. The “marginal” decrease in renewals is from factors “out of our control, such as bankruptcy proceedings or outright business closures,” he said. The pandemic is impacting businesses worldwide, “even more so” in Q2, Bettis said. “It's going to be reasonable to expect some impact on AudioEye's financial and operating performance.” The company also reshuffled management (see personals section, this issue).
All Applied Materials factories and R&D labs “are running smoothly at pre-COVID levels of productivity,” said CEO Gary Dickerson on a fiscal Q3 call Thursday. “We remain mindful of global economic concerns and that consumer spending is a potential headwind for many sectors, including the electronics industry.” The company supplies vapor-deposition equipment and services to Chinese panel makers and can be a bellwether of display industry health.
Apple engages in “unfair and anti-competitive actions” to “unlawfully maintain” its monopolies in the multibillion dollar markets of iOS app distribution and in-app payment processing, alleged Epic Games Thursday in a 173-page complaint (in Pacer) in U.S. District Court in San Francisco. Epic isn’t seeking “monetary compensation” for the “injuries it has suffered,” nor is it seeking “favorable treatment for itself,” it said. It’s instead seeking “injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers,” it said. Through its control over iOS, and using a “variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store,” said Epic. Epic added a direct payment system to its Fortnite franchise Thursday morning, giving players the option to continue making purchases using Apple’s payment processor or use Epic’s, said the complaint. Fortnite users on iOS, for the first time, “had a competitive alternative to Apple’s payment solution,” it said. “Rather than tolerate this healthy competition and compete on the merits of its offering, Apple responded by removing Fortnite from sale on the App Store.” Apple didn’t comment. Sony agreed last month to make a $250 million "strategic investment" for a minority interest in Epic (see 2007090044).
Tencent Holdings is “in the process of seeking further clarification from relevant parties in the U.S.” about President Donald Trump’s Aug. 6 executive order banning U.S. transactions with the WeChat parent company after Sept. 20 on national security grounds (see 2008070032), said Chief Financial Officer John Lo Wednesday on a quarterly investor call. “Based on our initial reading and subsequent press reports, the executive order is focused on WeChat in the United States and not our other businesses in the U.S.,” said Lo. The White House didn’t comment Thursday.
In Webex, Cisco has “the most trusted secure platform for remote collaboration for the enterprise,” said CEO Chuck Robbins on a fiscal Q4 investor call Wednesday. Webex had double-digit growth in the quarter, “as businesses, governments, educators and front-line workers everywhere have embraced remote work,” he said. “We expect this momentum to continue, as we have begun to see the conversion of free trials into paid subscriptions.” Many Cisco customers are delaying their purchasing decisions in certain areas, “while increasing spend in others until they have greater visibility and clarity on the timing and shape of the global economic recovery,” said Robbins. The COVID-19 pandemic has “triggered a massive and rapid shift to remote operations and automation to maximize personal safety.” The stock closed 11.2% lower Thursday at $42.72.