Three current and former Volkswagen executives have been criminally charged with market manipulation in connection with a diesel emissions scandal.
CEO Herbert Diess, chairman Hans Dieter Poetsch and ex-CEO Martin Winterkorn did not inform investors early enough about the financial fallout, German prosecutors said.
The firm admitted in 2015 using illegal software to cheat on emissions tests.
VW said it was confident the allegations would prove groundless.
LONDON — One day after the British tour operator and airline Thomas Cook abruptly collapsed, leaving hundreds of thousands of travelers scrambling to make arrangements, the head of Britain’s Civil Aviation Authority promised that “nobody” from her country would be stranded and subsidiaries in several countries were working to bring people home.
Thomas Cook said on Friday that about 600,000 people were traveling abroad on its services, raising the prospect of hundreds of thousands of travelers stranded overseas after the company collapsed in spectacular fashion, but initial reports suggested that governments and private companies were moving to bring people home were underway.
In addition to the vast repatriation effort in Britain, several companies that are either subsidiaries of Thomas Cook or use the name while running independently of it were still operating and in a position to help passengers home from China, France, Germany, India and the Netherlands.
The repatriation of British travelers was being described as the largest such peacetime effort in the country’s history, and Deidre Hutton, the chairwoman of the Civil Aviation Authority, speaking to the BBC on Tuesday morning, said that around 15,000 people had already been flown back to Britain.
Image
Thomas Cook passengers being assisted at the airport in Palma, Spain.CreditCati Cladera/EPA, via Shutterstock
“Nobody is stranded, everybody will get their holiday and they will be brought back at the time they would have come back anyway,” she said. “I’m conscious that we’ve got a huge job to do still, because that’s about 8 percent of the total, but a reasonable start.”
An additional 74 flights were scheduled to bring back another 16,500 people back to Britain on Tuesday, and over the next two weeks, an additional 135,000 passengers will be repatriated, with the effort continuing until Oct. 6. Passengers who are traveling after that date will have to make their own arrangements.
Around 60 percent of the cost for the flights was funded by a government insurance program called the Air Travel Organizer’s License, which means that Thomas Cook customers who booked package travel — generally, some combination of flights, hotels and car rental — are assured of refunds for future canceled trips and for repatriation free of charge.
Customers who bought only flights from Thomas Cook do not have the same protections and may need to rely more on personal travel insurance, if they have it.
Prime Minister Boris Johnson of Britain said the government should look into how such situations could be avoided in the future, and seemed to back rules that would turn over responsibility for repatriation to travel companies rather than the government.
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Passengers boarding an Airbus A380 airliner being used for transporting Thomas Cook customers at Dalaman Airport in Turkey.CreditUmit Bektas/Reuters
“How can we make sure that tour operators take proper precautions with their business models where you don’t end up with a situation where the taxpayer, the state, is having to step in and bring people home?” Mr. Johnson said, according to Reuters.
He voiced his criticism of the company from New York, where he is attending the United Nations General Assembly this week. Speaking at a climate summit on Monday, he asked how business leaders managed to pay themselves large sums as the company went “down the tubes.”
“I think it is a bit bewildering that you can have 160,000 people stranded,” Mr. Johnson said, according to Reuters. “It’s not possible for me to know exactly what happened with the directors of the board of Thomas Cook and how it came about when they paid themselves x, y or z.”
He later tweeted on Monday night that he had met with British Consulate employees in New York who were working to repatriate travelers and thanked the consular workers for their efforts. “It’s a tough time for those who have had holidays disrupted but team hard at work to support them,” he wrote.
The travel company had struggled financially for some time and announced its closing after negotiations to obtain at least 200 million pounds, or $250 million, in additional emergency financing failed over the weekend.
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A Thomas Cook banner at Dalaman Airport in Turkey on Monday.CreditUmit Bektas/Reuters
Thomas Cook India posted a statement on its website on Tuesday reassuring customers that it was not part of the British company after being acquired in 2012. The Dutch Thomas Cook subsidiary said it had not yet declared bankruptcy and so was open for business as usual.
A Chinese subsidiary of Thomas Cook, which caters largely to Chinese tourists traveling abroad, said on Monday that its operations would not be affected by the bankruptcy of the parent company.
The subsidiary, Thomas Cook China, said online that it “regretted” the bankruptcy of the British company, and added that Thomas Cook China “has healthy finances, has not been affected by this matter, and all its operations continue as normal.”
The Chinese unit is a Shanghai-based joint venture between the Thomas Cook parent company and a Chinese majority shareholder, Fosun, a corporation that has invested heavily in tourism. Earlier reports said Fosun owned 51 percent of the joint venture, with the other 49 percent in the hands of the Thomas Cook parent company.
As well as operating the joint venture with Thomas Cook, the Fosun Group has been a major shareholder in the now bankrupt British company. In previous months Fosun had proposed a rescue deal that would have given it a 75 percent stake in the tour division of Thomas Cook, but the plan failed to gain enough support from other stakeholders in the company.
Fosun said in a statement to Agence France-Presse that it was “disappointed.” Shares of units of Fosun listed in Hong Kong, Fosun Tourism and Fosun International, have fallen this week, reflecting investor disquiet about damage to the Chinese group’s international ambitions and financial health.
Google's headquarters in Mountain View, California.
David Paul Morris | Getty Images News | Getty Images
Google does not have to apply the right to be forgotten globally, the European Court of Justice ruled Tuesday.
Europe's top court had been looking at two separate cases involving the search engine: whether it must remove sensitive personal data worldwide or just in Europe; as well as whether it must automatically delete search results with sensitive information.
The ECJ's ruling states that Google's delisting of search results that concerned EU citizens only applies in the bloc's 28 member states.
"The Court concludes that, currently, there is no obligation under EU law, for a search engine operator who grants a request for de-referencing made by a data subject, as the case may be,... to carry out such a de-referencing on all the versions of its search engine," the ECJ said in a statement Tuesday.
This follows on an earlier decision on the so-called "right to be forgotten" — a ruling made five years ago that grants European citizens the right to ask search engines, such as Google, to remove sensitive information about them, such as past crimes.
"Since 2014, we've worked hard to implement the right to be forgotten in Europe, and to strike a sensible balance between people's rights of access to information and privacy," Peter Fleischer, senior privacy counsel at Google, told CNBC in an emailed statement.
"It's good to see that the Court agreed with our arguments, and we're grateful to the independent human rights organisations, media associations and many others around the world who also presented their views to the Court," he added.
In 2016, France's privacy watchdog CNIL fined Google 100,000 euros (109,889) for refusing to remove sensitive information from search results on the internet upon request under "right to be forgotten."
During a hearing at the Luxembourg-based institution last year, lawyers defending Google argued that applying the right to be forgotten worldwide could restrict people's access to information in certain countries, Politico reported.
At the same time, Tuesday's decision delivers a setback to the European Union and its prospects of extending its own privacy standards globally.
Tension between global tech and national rules
"Google will be happy with the decision, and I think the broader question is who has jurisdiction when it comes to tech, which is global in its nature," Dexter Thillien, senior industry analyst at Fitch Solutions, told CNBC via email.
"As we're unlikely to see global rules, that tension between global tech and national rules will continue, and this means that some jurisdictions will still try to implement rules which will have a global impact," he added.
Tuesday's ruling comes amid increasing scrutiny of the tech giant from European regulators, with the EU's antitrust authority cracking down on the company in recent years.
In March, the European Commission fined Google $1.7 billion for abusing its dominance over the digital advertising market, marking the third consecutive year of EU antitrust rulings on the U.S. firm. Among those rulings was a record $5.1 billion fine for anti-competitive practices on Google's Android devices.
But when it comes to privacy, Google is also facing intensifying pressure from authorities in the United States.
Earlier this month, it was announced that Google-owned YouTube would pay $170 million to settle allegations by the U.S. Federal Trade Commission and the New York attorney general that it earned millions by illegally collecting data from children without their parents' consent.
Representatives for the company were also questioned by lawmakers at a Senate hearing on data privacy last year.
Amid the rising scrutiny, the tech giant has been attempting to overhaul its reputation. Back in June, the company unveiled several measures aimed at safeguarding its users' privacy and data, such as new extensions to allow users better control over their privacy settings and restricting third-party data collection.
Earlier, the company announced it would set up a European hub to handle data privacy. CEO Sundar Pichai said Google planned to have more than 200 privacy engineers working in Munich, Germany, by the end of the year.
— CNBC's Elizabeth Schulze contributed to this article.
NEW YORK/LONDON (Reuters) - After the collapse of Thomas Cook left hundreds of thousands of passengers reliant on the British state to repatriate them, Prime Minister Boris Johnson questioned whether bosses should have paid themselves so much ahead of its demise.
A passenger hauls his luggage past a sign of the collapsed travel firm Thomas Cook at Jerez de la Frontera Airport, Spain September 23, 2019. REUTERS/Jon Nazca
Running hotels, resorts and airlines for 19 million people a year, it currently has around 600,000 people abroad and will need the help of governments and insurance firms to bring them home from places as far afield as Cancun, Cuba and Cyprus.
Speaking in New York, Johnson questioned why the state should be left responsible for the actions of handsomely paid directors and said tour operators should have some sort of insurance against such debacles.
“I have questions for one about whether it’s right that the directors, or whoever, the board, should pay themselves large sums when businesses can go down the tubes like that,” Johnson said.
“You need to have some system by which tour operators properly insure themselves against this kind of eventuality,” he said.
Thomas Cook was brought down by a $2.1 billion debt pile, built up by a series of ill-fated deals, that hobbled its response to nimble online rivals. It had to sell three million holidays a year just to cover interest payments.
With the business draining cash, Chief Executive Peter Fankhauser found its lenders were no longer willing to step in. Fankhauser has earned 8.3 million pounds, including 4.3 million pounds in 2015.
The British government decided Thomas Cook was a bet it did not want to take.
Thomas Cook’s demise, announced in the early hours of Monday after failing to secure a deal with creditors or a government bailout, sparked alarm at hotels where some customers have been asked to pay their bills again by out-of-pocket resort owners.
“I think the questions we’ve got to ask ourselves now: how can this thing be stopped from happening in the future?” Johnson said.
“How can we make sure that tour operators take proper precautions with their business models where you don’t end up with a situation where the taxpayer, the state, is having to step in and bring people home?”
Emergency flights brought 14,700 people back to the United Kingdom on 64 flights on Monday, and around 135,300 more are expected to be returned over the next 13 days, Britain’s aviation regulator said.
Seventy-four flights were scheduled on Tuesday, to bring back 16,500 people. More than 1,000 flights are planned.
“A repatriation of this scale and nature is unprecedented and unfortunately there will be some inconvenience and disruption for customers. We will do everything we can to minimize this as the operation continues,” Richard Moriarty, Chief Executive at the Civil Aviation Authority, said.
“We want people to continue to enjoy their holiday, so we will bring them back to the UK on their original departure day, or very soon thereafter.”
Writing by Guy Faulconbridge, Editing by Paul Sandle
The strike by UAW workers against General Motors is now having an effect on workers at GM facilities that aren't involved in the walkout.
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As the strike heads into a ninth day, facilities in the U.S. and Canada have had to temporarily layoff thousands of workers according to The Wall Street Journal.
In Ohio and Canada, GM has furloughed more than 1,200 employees at engine plants.
Last week, 2,000 workers at GM’s assembly plant in Oshawa, Canada were also furloughed.
Nearly 50,000 full-time factory workers hit the picket lines more than a week ago, making this the longest nationwide walkout against GM since 1970.
The walkout is also affecting auto-parts suppliers in the U.S. that produce components for the company’s cars and trucks.
The issues that the UAW is fighting for include better new-hire pay, fewer temp workers and the preservation of existing health-care plans.
UAW members may reportedly remain on the picket line against General Motors until they OK a tentative agreement, which could add at least another week to the work stoppage.
When it called the strike, the UAW GM council voted that employees would not work until the group of local leaders voted to end the work stoppage, according to the Detroit Free Press, citing three people familiar with the union’s thinking. However, two UAW local leaders who are on the council told the Free Press that even after the vote, workers could stay on strike until membership ratification.
Facebook Inc.
FB -0.11%
for most of the past decade was Silicon Valley’s 800-pound gorilla, squashing rivals, ripping off their best ideas or buying them outright as it cemented its dominance of social media.
Now the knives are coming out.
A number of Facebook’s current and former competitors are talking about the company’s hardball tactics to investigators from the Federal Trade Commission, as part of its broader antitrust investigation into the social-media giant’s business practices, according to people familiar with the matter.
One of them is
Snap Inc.,
SNAP 0.95%
where the legal team for years kept a dossier of the ways Facebook was trying to thwart competition from the buzzy upstart, according to people familiar with the matter. The title of the documents: Project Voldemort.
The files in Voldemort, a reference to the fictional antagonist in the popular Harry Potter children’s books, chronicled Facebook’s moves that threatened to undermine Snap’s business, including discouraging popular account holders, or influencers, from referencing Snap on their Instagram accounts, according to people familiar with the project. Executives also suspected Instagram was preventing Snap content from trending on its app, the people said.
In recent months, the FTC has made contact with dozens of tech executives and app developers, people familiar with the outreach said. The agency’s investigators are also talking to executives from startups that became defunct after losing access to Facebook’s platform in addition to founders who sold their companies to Facebook, according to people familiar with the conversations.
Facebook’s Mark Zuckerberg in Washington on Sept. 19.
Photo:
Samuel Corum/Getty Images
The discussions have focused on the growth-at-all-costs tactics that propelled Facebook from a social network for college students 15 years ago to a collection of services now used by more than one in four people in the world every day.
The talks show that the FTC is “putting together a picture of what might be a pattern of behavior to prevent competition to the core Facebook business,” said Gene Kimmelman, a senior adviser at Public Knowledge, a consumer group that focuses on tech issues who was a Justice Department antitrust official in the Obama administration. Discussions with rivals are typical in antitrust probes, he said.
Inside Facebook, senior leaders are concerned about the possibility of rivals divulging damaging information to federal officials and have discussed ways to improve the company’s relationships around Silicon Valley, according to a person familiar with the discussions.
The FTC investigation is one of several antitrust probes into Facebook and major tech giants in the U.S. and around the world. Earlier this month, the House Judiciary Committee requested Facebook executive communications about the company’s decisions to buy the photo- and video-sharing network Instagram in 2012 and the messaging app WhatsApp in 2014. Lawmakers have contacted several of those companies’ rivals as part of that probe, the Journal reported previously.
The House panel can’t take enforcement actions against the companies. The FTC, however, can.
Related: How the Microsoft Antitrust Case Paved the Way for Big Tech
The Department of Justice is investigating the largest American tech firms for alleged monopolistic behavior. Roughly 20 years ago, a similar case threatened to destabilize Microsoft. WSJ explains.
One area of focus for the FTC is Onavo, an Israeli mobile-analytics startup that Facebook purchased in 2013. Onavo offered a free mobile app that described itself as a way to “keep you and your data safe” by creating a virtual private network. To do this, the company redirected internet traffic on Onavo to Facebook’s servers, which allowed it to log every action in a central database.
That enabled Facebook to quietly track what users did on their phones, including which apps they used and for how long, the Journal reported in 2017. Onavo data was frequently cited in internal research and strategy decks, according to former employees and internal documents, and helped inform Facebook’s acquisition of WhatsApp for $22 billion in 2014. Facebook shut down the Onavo app earlier this year amid growing scrutiny of its data-collection practices.
Snap was founded in 2011, when Facebook was already the dominant player in social media. It quickly became a social-media hit after its Snapchat messaging app took off among young people. At one point, Facebook—through Onavo—was able to see Snap data as specific as the number of messages a user sent or how much time those users spent in specific Snapchat features, the former employees said. Facebook couldn’t see the content of the messages or images. The visibility into Snap usage lessened considerably after Snap encrypted its app traffic.
A Facebook spokeswoman said the app was similar to other industry market research tools.
Another focus of the investigation is whether Facebook Chairman and CEO
Mark Zuckerberg
acquired or tried to buy startups that he feared would later become competitors, according to people familiar with the investigation. In some cases, after Facebook’s overtures were spurned, the social-media giant copied features of the former targets.
For example, when Mr. Zuckerberg met with the founders of startups, including Evan Spiegel, chief executive of Snap, and
Dennis Crowley,
co-founder of Foursquare Inc., he presented them with two scenarios: either they accept the price he was offering for their companies, or face Facebook’s efforts to copy their products and make operating more difficult, according to people familiar with the matter. In both cases, after the companies rejected the overtures, Facebook soon after released features that mimicked the products from Snap and Foursquare.
Foursquare in 2014 started shifting from a consumer-focused app to providing location-based tech and data to businesses.
Facebook rolled out a string of products similar to Snap’s most popular features, including stories, filters and stickers. Snap’s growth waned at times, in part due to competition from Instagram, and it now has around 200 million daily users, less than 15% of Facebook’s total. After a rocky patch in 2018 due in part to a botched redesign, Snap is once again adding users and its stock has rebounded. Snap has also managed to attract more young users between the ages of 13 and 34 in the U.S. than Facebook and Instagram.
The Facebook spokeswoman said consumers gain more choices when two companies offer similar services and features.
“This is competition at work and one of the longtime hallmarks of the tech sector,” she said. “Businesses continually build and iterate on concepts and ideas in the marketplace—making them better or taking them in different directions. This is good for consumers.”
Externally, Snap has often addressed the tension with humor. After Snap launched filters tied to specific regions, in 2014, it created one that only appeared for Snap users at Facebook’s headquarters. The filter showed an image of Snap’s ghost logo laughing, pointing at the user, presumably an employee of Facebook.
A major point of frustration for Snap executives was the belief that Facebook was preventing Snap’s most popular content from trending on Instagram, which they considered to be an abuse of monopoly power. When users uploaded to Instagram videos and images of Snap’s most popular lenses—such as people vomiting rainbows and wearing bunny ears—the users also often included the hashtag #snapchat and the name of the lens.
In the Project Voldemort documents, according to people familiar with them, Snap executives noted their belief that Instagram was blocking searches of these Snap-related terms and not including this content on Instagram’s “explore” page where users discover new content.
Instagram representatives also started pressuring influencers to stop adding Snapchat links to their Instagram profile pages, according to people familiar with the matter.
The Instagram representatives suggested to some influencers that they could potentially void the users’ “verified” status, which signifies that an account is legitimate and popular, according to a person familiar with the discussions.
Losing the blue check mark that comes with being verified can undermine an influencer’s ability to secure paid deals, which can range from hundreds to millions of dollars depending on the influencer’s popularity.
In 2016, Instagram added a rule that prevented users from adding links to their Snapchat profiles.
Facebook’s tactics have long engendered concern across Silicon Valley, said Paul Keable, chief strategy officer at Ashley Madison. The dating site, which caters to married people seeking affairs, is blocked from advertising on Facebook, which now operates its own dating feature.
“Facebook has created a scenario where they get to pick and choose who wins based on their personal whims,” Mr. Keable said. “All while running their own competitive products.”
Mr. Keable said he hopes he can work with Facebook to improve its relationship with the dating industry. He said he hasn’t been in touch with regulators but will provide information if asked.
—Emily Glazer and John D. McKinnon contributed to this article.
Investing.com -- WeWork's CEO and founder Adam Neumann may go the way of Uber's Travis Kalanick, and there's no end in sight to the slowdown in global manufacturing. Here's what you need to know in financial markets on Monday, 23rd September.
1. Softbank looks for the ejector seat button
Softbank, the largest outside shareholder in We Company, is pushing for CEO and founder Adam Neumann to be replaced as chief executive of , the loss-making provider of shared office space.
The Financial Times reported that Softbank had lost patience with Neumann’s erratic behavior and leadership, which has led to delays in the company’s IPO. It added that a board meeting to demote Neumann may take place as early as this week. The move echoes events at Uber Technologies (NYSE:) two years ago, when founder Travis Kalanick was forced out by outside investors.
WeWork aside, it’s set to be a heavy week for IPOs, with exercise bike-maker Peloton also reportedly struggling to drum up interest. ’s Asia deal and European software group TeamViewer are also due in the course of the week.
2. PMIs suggest downturn still continuing
The latest raft of monthly business surveys from around the world suggested no end in sight to the global manufacturing slowdown.
The euro zone’s purchasing managers index fell at its fastest rate in over six years to 50.4, suggesting the economy nearly stalled at the end of the third quarter, according to IHS Markit. in Germany, for years the most reliable source of growth in the region, fell at its fastest since the Great Recession in 2009.
Australia’s also fell below the 50 level that separates growth from contraction. IHS’s U.S. PMI will be released at 9:45 AM ET (1345 GMT).
Outgoing ECB President Mario Draghi is due to address the European Parliament later, although it's widely expected he'll leave any further monetary reaction to his successor, Christine Lagarde.
3. Stocks to open mixed on trade hangover, economic weakness
U.S. stock markets are set to open mixed to lower on follow-through from the sell-off that happened on Friday after the mood music on trade turned slightly more confrontational.
Sentiment over the weekend hasn’t been helped by another rise in oil prices (see below) amid reports that Iran is planning another strike on Saudi oil facilities (the Islamic Republic still denies any involvement in the attacks nine days ago).
By 6:15 AM ET, were down 22 points, or 0.1%, while were flat and were up 0.2%.
Risk aversion appears to have returned to markets, with the U.S. Treasury yield falling to a two-week low of 1.69%, down 4 basis points from Friday’s levels.
4. Oil bounce fades
are vacillating sharply, rising in the wake of the reports about another Iran strike, and gaining further on the back of a Wall Street Journal report suggesting that it may take months to get Saudi Arabia’s oil installations back to fully-functional.
Saudi Arabia pushed back against the report on Monday, saying that production will be restored by the end of next week.
That’s caused crude prices to drop back again to $57.70 a barrel by 6 AM ET, their lowest since the attacks on the Abqaiq processing facility and Kurais oilfield.
On Friday, data from had shown the number of active oil rigs in the U.S. fell to its lowest since spring 2017, while the reported that hedge funds had used last week’s spike in prices to reduce long positions, apparently fearful that the economic slowdown will cause a new glut.
5. U.K. Labour to Remain?
The U.K. Labour party is set to throw its weight firmly behind remaining in the EU at the next election.
Reports suggest a motion at Labour’s annual conference today embracing Remain over the objections of leader Jeremy Corbyn will pass. Paradoxically, that may make Brexit more likely rather than less, as it could harden the split between Remain-leaning parties at the next election, which is expected by many before year-end.
The fell against the dollar in early trade in Europe, after further signs of political instability emerged over the weekend with a report that Prime Minister Boris Johnson failed to disclose large grants of public money made to a close friend and former model while he was Mayor of London.
