Google Privacy: EU Countries Take Action

A group of European regulators has brought legal action against Google to try to force the tech giant to overhaul its privacy practices.

Data protection authorities from France, Britain, the Netherlands, Germany, Spain and Italy agreed on the joint action after Google failed to reverse changes it made to its policy last year.

If successful, the regulators could impose fines or restrictions on Google's operations across the entire 27-country European Union.

Last year Google merged 60 separate privacy policies from around the world into one universal procedure.

The European organisations say the new policy does not allow users to figure out which information is kept, how it is combined by Google services or how long the company retains it.

The European regulators, led by the French, have demanded specifics for anyone using Google on what is being collected and a simpler presentation.

Any fines would have a limited financial impact on Google but successful legal action could hurt its image and block its ability to collect such data until it addresses the regulators' concerns.

Proposed Europe-wide data protection legislation will take until at least 2015 to be fully implemented.

Successful legal action could hurt Google's image

Google dominates the European market for internet searches. According to one survey, 95% of searches in Europe are carried out through Google, compared with about 65% in the US.

Tensions are ramping up between privacy organisations and technology companies due to their growing ability to spin online usage data into vast profits.

This is especially the case in Europe where privacy laws tend to be strong and nearly every country has a regulatory body.

However, internet users have consistently shown a willingness to give up privacy in exchange for convenience and new online services that Google and other tech companies offer.

Google says it merged its myriad privacy policies in March 2012 for the sake of simplicity, and that the changes comply with European laws.

But Johannes Caspar, a German data protection commissioner, says the company's policies are vague - it uses the word 'may' dozens of times on a single page when describing its rights to data.

"Many users don't even know what is happening with their data and might worry that their private information is used to produce personality profiles of them," Mr Caspar said.

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Welfare Shake-Up 'Could Increase Fraud'

Osborne Defends Benefits Shake-Up

Updated: 5:14pm UK, Tuesday 02 April 2013

George Osborne has robustly defended the Government's controversial benefits shake-up - insisting Britain can no longer afford to reward people who do the "wrong thing".

Speaking at a supermarket distribution centre in Kent, the Chancellor condemned the old system as "fundamentally broken" and warned Labour that they were out of step with public opinion on the issue.

Mr Osborne insisted that nine out of 10 working households will be better off as a result of the welfare and tax changes.

He said people in Britain understood that the welfare system needed to change.

"In 2010 alone, payments to working age families cost £90bn," he said.

"That means about one in every £6 of tax that working people like you pay was going on working age benefits. To put that into perspective - that's more than we spend on our schools."

He pledged to make sure people were better off in work than out, thereby making the system much "fairer". Changes, such as cutting housing benefit for social housing tenants deemed to have a spare bedroom, were simply asking people on welfare to take the same choices as working families, he said.

The Chancellor told the Morrisons workers: "For too long, we've had a system where people who did the right thing - who get up in the morning and work hard - felt penalised for it, while people who did the wrong thing got rewarded for it.

"That's wrong ... This month we will make work pay.

"What this Government is trying to do is to put things right. We're trying to make the system fair on people like you, who get up, go to work, and expect your taxes to be spent wisely.

"And we're trying to restore hope in those communities who have been let down by generations of politicians, by getting them back into work."

Wider welfare and tax changes coming into force this month will also see council tax benefit funding cut, and working-age benefits and tax credit rises pegged at 1% - well below inflation - for three years.

Disability Living Allowance is being replaced by the Personal Independence Payment (Pip), while trials are due to begin in four London boroughs of a £500-a-week cap on household benefits, and of the new universal credit system.

Mr Osborne dismissed "depressingly predictable outrage" about the reforms, claiming they would help the most vulnerable and "give people a ladder out of poverty".

He said: "Because defending every line item of welfare spending isn't credible in the current economic environment.

"Because defending benefits that trap people in poverty and penalise work is defending the indefensible.

"The benefit system is broken. It penalises those who try to do the right thing and the British people badly want it fixed.

"We agree - and those who don't are on the wrong side of the British public."

But Shadow Chancellor Ed Balls told Sky News that "the truth" was that households were losing out because of the reforms.

Citing an independent study by the Institute for Fiscal Studies showing the average family would be £891 worse off this year as a result of all the coalition's changes since 2010, he added: "Working families are worse off and now the Government is cutting the top rate of income tax only for the richest people.

"A millionaires' tax cut paid for by millions of working people. That's not fair, that's not right."

Changes that mean the rate for top-rate taxpayers has been reduced from 50% to 45% also come into effect this month.

Sky News Deputy Political Editor Joey Jones said Mr Osborne's speech was "combative" and "aggressive".

"He has not apologised for the stance he is taking," he said.

It came a day after Work and Pensions Secretary Iain Duncan Smith, the architect of the reforms, was facing a a growing backlash after suggesting that he could get by on £53 a week, rather than his current after-tax income of £1,600 a week.

In the wake of the comment in a radio interview, tens of thousands of people have signed a petition on the change.org website, calling for the minister to try surviving on that money for a year.

During his speech on Tuesday Mr Osborne refused to be drawn on whether he could manage on £53 a week. In response to a question, he said: "I don't think it's sensible to reduce this debate to one individual's state of circumstances.

"We have a welfare system where there are lots of benefits available to people on very low incomes. 

"This debate is not about any individual, it's about creating a welfare system that rewards work."

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South Korea Warns Military Action An 'Option'

South Korea's defence minister, Kim Kwan-jin, has said that military action is an "option" to protect its citizens in its stand off with North Korea.

The news comes as the United States has said it will "not accept" North Korea as a nuclear state, after Pyongyang raised tensions by refusing the South entry to a joint industrial complex.

The North says it will restart all nuclear facilities including its mothballed Yongbyon reactor, which is able to produce bomb-grade plutonium.

Standing firm: Kerry stated he will not accept N Korea as a nuclear state

North Korean leader Kim Jong-Un insisted it was only seeking a deterrent and did not repeat recent threats to attack South Korea and the US.

But the North delayed the daily opening of its Kaesong industrial zone with South Korea on Wednesday morning, in a move that could represent a sharp escalation of tensions between the two countries.

The North had previously threatened to close the joint complex as part of a stand-off with Washington and Seoul.

"We are waiting for access from the North Korean authorities," a Unification Ministry official said.

More than an hour after the time the daily entry clearance is normally granted, the ministry said 861 South Korean workers were in the industrial complex while 179 workers awaited access.

The complex is a rare lucrative source of income for the impoverished North since it was established as a form of joint-Korean cooperation in 2002.

Sky News Asia Correspondent Mark Stone said the site was the only place where relations between the two countries existed.

"As with everything, it's hard to know whether this is more game playing or whether they plan to keep it closed for a while," he said.

Face off: South Korea's Kim Kwan-jin and North Korean leader Kim Jong-un

"But a number of analysts who have studied the Korean problem for some time said last week that while the park remained open, the situation was not overly worrying. Now it appears to be shut."

Both Washington and Seoul stressed their countries' military readiness and said de-nuclearisation was the only way forward for North Korea.

US Secretary of State John Kerry said: "What Kim Jong-Un has been choosing to do is provocative, it is dangerous, reckless and the United States will not accept (North Korea) as a nuclear state."

America's deployment of advanced aircraft and warships to South Korea was a signal that "the United States will defend our allies and that we will not be subject to irrational or reckless provocation," he said.

North Koreans attend a rally against the US and South Korea

The parading of US air and naval power with nuclear capability within view of the Korean peninsula, is as much about psychological war as real war.

The US is keen to discourage North Korea's unpredictable leader from starting a fight that could get out of control.

Mr Kerry, who will visit South Korea next week, reminded the North Koreans that "they have an option, and that option is to enter into negotiations for de-nuclearisation ... and to begin to focus on the needs of their people".

Meanwhile, China has expressed "serious concern" over the escalating situation on the Korean peninsula.

South Korean trucks refused entry to the Kaesong complex

An official from China's Foreign Ministry met ambassadors from the US, North Korea and South Korea, following the closing of Kaesong.

China hopes the differences can be resolved through talks and diplomacy, said Foreign Ministry spokesman Hong Lei.

United Nations Secretary General Ban Ki-moon appealed for dialogue and negotiation to resolve the crisis.

South Korean soldiers after a military drill near the demilitarised zone

"Nuclear threats are not a game," he said. "Aggressive rhetoric and military posturing only result in counter-actions, and fuel fear and instability."

Meanwhile, Russia's Deputy Foreign Minister, Igor Morgulov, has expressed concern that even a simple human error could cause the crisis to escalate.

The country shares a short border with North Korea south of Vladivostok. In the current crisis, Moscow has steered clear of openly criticising North Korea.

"Russia has to be worried as we are talking about an explosive situation in the immediate vicinity of our Far East borders," he said.

US and South Korea Navy ships in formation west of the Korean peninsula

"In the current tense atmosphere, it would only need an elementary human error or technical problem for the situation to go out of control and plunge into a critical dive.

"We urge all sides to refrain from any comments or actions which could further complicate the situation," said Morgulov.

A speech by the North's young leader, Kim Jong-Un, given on Sunday but published in full by the Korean Central News Agency on Tuesday, appeared to dampen any prospect of a direct confrontation with the US by emphasising that nuclear weapons would ensure the country's safety as a deterrent.

"Our nuclear strength is a reliable war deterrent and a guarantee to protect our sovereignty," Mr Kim said.

"It is on the basis of a strong nuclear strength that peace and prosperity can exist and so can the happiness of people's lives."

The crisis flared after Pyongyang was hit with US sanctions for conducting a third nuclear test in February, before America and South Korea staged military drills that North Korea viewed as "hostile".

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Vodafone Shares Slip As Verizon Denies Deal

Verizon Communications has denied speculation that it was preparing to bid for Vodafone - either alone or with others.

It comes after speculation that the US telecommunications company would pair-up with its biggest rival AT&T to buy out the British mobile phone giant.

Vodafone's shares fell following the denial - after rising to a 10-year high on Tuesday amid rumours of the deal.

But Verizon did reiterate that it was still interested in purchasing Vodafone's share of their wireless US venture.

"As Verizon has said many times, it would be a willing purchaser of the 45% stake that Vodafone holds in Verizon Wireless," the company said in a statement.

"It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others."

Vodafone shares have risen by almost 20% since January

Early trading saw Vodafone's shares drop by almost 3% before easing to just under 2% down by midday.

Verizon owns the 55% of Verizon Wireless that Vodafone doesn't and has been openly interested for years in buying out its partner.

Speculation about a deal between Vodafone and Verizon has been circling since January when the British company began exploring what to do with its US asset, which makes up about 75% of its value.

But media reports claimed a huge tax bill faced by Vodafone had held the deal back.

City AM said the British company would be left with a levy equal to the rate of corporation tax on the capital gains it has made since starting the venture if it sold its stake.

The newspaper said analysts have valued the stake at up to £100bn, which could result in a tax bill of around £20bn.

A deal that included AT&T could prove more tax efficient; with Verizon taking Vodafone's US assets, and AT&T buying the rest.

But other analysts said that although it made sense for Verizon to purchase the rest of its wireless venture, it would be risky for AT&T to take on Vodafone's foreign assets.

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Australia Reveals Big Firms' Tax Details

Australia will force corporate giants such as Google and Apple to disclose their tax arrangements in an effort to curb alleged tax avoidance by multinationals.

"The government intends to improve transparency around how much tax large enterprises are paying," assistant treasurer David Bradbury told Reuters.

"We want to make sure that large multinational companies are paying their fair share."

In Australia, multinationals, including the local arm of Google, have been accused of shifting income to countries such as Holland or Ireland where tax rates are lower.

Apple has also come under parliamentary scrutiny over local pricing structures, which mean consumers can pay more for downloading software than in some other countries.

Neither Google nor Apple could immediately comment when contacted.

The increasingly borderless global economy means big firms often have no tax liability in a country, even with a major local presence, Mr Bradbury added.

Executives of Amazon, Google and Starbucks were grilled by British MPs

"This should not be a guessing game."

The government revealed that it would require about 2,000 large local and multinational businesses to have their tax details published by the government.

Companies with yearly revenue of A$100m (£70m) or more are expected to be affected.

The move comes as Chancellor George Osborne and Prime Minister David Cameron called for a sea-change in multinationals' approach to taxation.

In December, Mr Osborne announced extra investment to help clamp down on multinational companies who avoid paying tax in Britain.

MPs grilled executives from international firms including Starbucks, Google and Amazon over low levels of UK tax.

Multinational IT firms and the so-called Big Four accountancy companies were also criticised over of tax avoidance schemes.

The companies concerned have all stressed that these methods are entirely legitimate and in accordance with UK tax laws.

Starbucks faced criticism after it emerged that since its arrival in Britain in 1998, it has paid £8.5m in corporation tax, despite total sales of £3bn.

Australia's corporate tax rate is 30%, compared with Ireland's rate of 12.5%. Some of its major companies including Rio Tinto have already begun publishing tax details, expanding on information in existing financial statements.

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RBS Shareholders Launch £4bn Lawsuit

By Poppy Trowbridge, Business and Economics Correspondent

A group of Royal Bank of Scotland (RBS) shareholders has launched proceedings against the bank and four directors, including former chief executive Fred Goodwin.

The RBOS Shareholder Action Group, which represents more than 12,000 investors, claimed they were misled by directors over its £12bn rights issue in April 2008.

The group said the final claim against the bank could be worth up to £4bn.

A spokesman for the Action Group said: "Today represents a giant step forward for the many thousands of ordinary people who lost money as the result of inexcusable actions taken by banks and their directors in the financial crisis.

"Now, for the first time, some of these directors will have to answer for their actions in a British court."

It named the bank, Mr Goodwin and former directors Tom McKillop, Johnny Cameron, and Guy Whittaker as defendants.

Fred Goodwin oversaw RBS' multi-billion pound deal to buy ABN Amro in 2007

As the financial crisis took hold in 2008, RBS announced new shares would be offered to investors to buy, in an effort to raise the £12bn and boost the bank's financial strength.

RBS also announced at the time that it would suffer write-downs of nearly £6bn because of its exposure to credit markets.

The shareholders claim the true purpose of the rights issue was not disclosed at the time and the directors in charge gave the false impression the bank was generally financially sound.

The bank has around a month to respond to the lawsuit by issuing their defence, or apply for extra time before replying. It has the option of settling the claims or going to court.

Patricia Mohammed, one of the shareholders involved in the claim, said investors trusted RBS to tell them the truth.

"It was a huge institution, it had a huge history behind it and people on enormous salaries running it - people that we trusted to do the right thing," Ms Mohammed told Sky News.

"If we get some compensation, that is very nice.

"But if it is brought to the Government's attention that there are people prepared to do something - that they are not happy - that is important."

In 2007, RBS beat rivals, including Barclays, to buy Dutch lender ABN Amro in 2007 for nearly £50bn.

But the deal left the bank dangerously overstretched, and the following year it was forced to take a multi-billion pound bailout by the British Government.

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Barclays 'Must Learn' From Culture Review

Barclays must go further in overhauling its pay practices after a culture of "overly generous" bonuses put profit first in the run-up to the bank's Libor scandal, an independent review has revealed.

A report by lawyer Anthony Salz, who was commissioned to look at the bank's culture following its £290m Libor settlement last year, found Barclays became "too complex to manage".

It also found that excessive pay and bonuses saw some bankers believe they were "unaffected by the rules".

In the 244-page report, which follows more than 600 interviews over eight months, Mr Salz calls for Barclays to bolster its board, strengthen its human resources function and ensure pay is linked to the "long-term success of the institution".

The company said it must learn from the findings revealed in the review.

The report said the bank developed a specific "culture" based on "the struggle for survival, independent of government, (which) dominated its activities".

It added: "This led to a 'backs against the wall' mentality and a strong drive to win, 'winning' being an evident part of the investment bank's culture."

Barclays chairman David Walker said in a statement: "The report makes for uncomfortable reading in parts."

"Our plan is to report back in advance of the AGM on how we intend to implement the recommendations made, particularly those that go beyond the scope of work already underway."

Barclays, which was criticised for its key role in Libor-fixing, and also payment protection insurance mis-selling, said the review of business practices already substantially aligned with its transformational progress.

Amid the scandals the company came under renewed fire recently over the issue of pay restraint.

Barclays picked Budget Day in March to reveal nine executives would receive more than £40m in shares.

It was earlier revealed that the bank paid 428 staff more than £1m - with some of those receiving £5m salaries.

Meanwhile, chief executive Antony Jenkins has also revealed that the growing automation of banking services could result in tens of thousands of jobs disappearing from its workforce during the next decade.

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Moleskine Shares Rise After Debut In Milan

Shares in notebook maker Moleskine have risen following their market debut in Milan.

The company - known for its jotters based on originals used by Ernest Hemingway and Vincent Van Gogh - is the first to join the main Milan stock exchange this year.

Its shares were up by almost 3% in early trading, outperforming the market, which fell by 0.5%.

The company's chief executive, Arrigo Berni, said: "We are better than the average of luxury makers in terms of profitability."

He added that he expected to see "significant" growth in the coming years, as Moleskine develops apps to appeal to smartphone users and opens its first stores in China.

The flotation highlights the popularity of Italy's luxury brands - even though the country is struggling with a deep recession amid the ongoing eurozone crisis.

It is the fourth high-end Italian company to list in less than two years, following the initial public offerings (IPOs) of Prada, Salvatore Ferragamo and Cucinelli.

The last company to join the main Milan stock exchange was cashmere brand Brunello Cucinelli in April 2012.

Moleskine's origins date back to the late 19th and early 20th centuries, when French bookbinders supplied Paris' writers and artists with the now-iconic notebooks.

The brand was revived in 1997 with the name Moleskine - a nickname travel writer Bruce Chatwin gave to his small, black jotter in the 1980s.

The Milan-based company priced its shares at 2.30 euros (£1.95) each - near the middle of its proposed range - valuing the company at 488m euros (£414m).

It offered 106.3 million shares - including 12 million new ones - meaning just over 50% of the company's shares are now traded on the market.

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SSE Fined £10.5m By Ofgem Over Mis-Selling

Energy provider SSE has been fined £10.5m by industry watchdog Ofgem for repeated mis-selling to householders.

The regulator said the proposed penalty is the largest it has made against an energy firm.

It relates to failures at "every stage" of the sales process for telephone, in-store and doorstep activities.

Ofgem said: "The level of fine reflects the seriousness and duration of breaches, the likely substantial harm that they have caused and the likely gain to SSE."

Ofgem found that a failure of SSE's management arrangements meant that insufficient attention was paid to ensuring compliance with obligations.

The watchdog said this enabled misleading and unsubstantiated statements to be made by sales agents to potential customers about savings.

SSE is one of Britain's "big six" energy suppliers and has admitted its selling procedures were below an adequate level.

On its website, SSE said: "We've been busy making lots of practical changes to make it simpler, fairer and easier for you to deal with us.

"We're building a better way to do business, and we believe the changes we are making will improve the energy industry for good."

Many consumers struggled to understand firms' complex tariff structures

The watchdog said the company's various selling techniques had brought the company into disrepute.

"Ofgem found failings at all stages of SSE's sales processes, from the opening lines on the doorstep, in-store or over the phone through to the confirmation process which follows a sale," the regulator said.

"In particular, SSE consistently failed, over a prolonged period of time, to conduct its sales activities in a way that would provide clear and accurate information on prices and potential savings to enable customers to make an informed decision about whether to switch suppliers."

Although SSE terminated doorstep sales in July 2011, the failures in telephone and in-store sales persisted, Ofgem said.

"Today's fine sends a clear message to suppliers that Ofgem will hold to account those companies which fail to treat consumers fairly.

"It is time for the energy industry to take note and get behind Ofgem's reforms to rebuild trust and make the market simpler, clearer and fairer for consumers."

Ofgem does not have legal power to require companies to award consumer compensation.

It has argued for powers of redress and said it was encouraged that the Government has backed its call over new powers.

The regulator said the when the Energy Bill powers come into force they will further strengthen Ofgem's ability to take more targeted action against companies that are found in breach of their licence.

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Citizens Advice Chief To Head Banking Panel

The head of the Citizens Advice network is to chair a panel being set up by Britain's banks to provide an early-warning system aimed at preventing another industry mis-selling scandal.

I have learnt that Gillian Guy, chief executive of the charity which runs the Citizens Advice network of bureaux across England and Wales, is to head the British Bankers' Association's (BBA) new Consumer Panel, which will be launched in the coming weeks.

The appointment of Ms Guy is designed to provide credibility to a forum which is set to play a key role in banks' efforts to improve the experience of their retail customers.

News of her recruitment, which is likely to be announced shortly, comes on the day that an independent review of the culture and business practices of Barclays attacked the bank for its obsession with enriching a limited number of top executives and its poor focus on customer service.

Ms Guy, who previously ran the charity Victim Support, will be joined on the BBA panel by representatives of other consumer affairs groups as well as some of the UK's biggest banks.

The BBA, which has briefed its members on her appointment, is fighting a rearguard action under its new chief executive, Anthony Browne, following years of mis-selling scandals that have cost Britain's major banks well over £10bn.

The BBA continues to hold talks with the Financial Conduct Authority - which replaced part of the function of the Financial Services Authority earlier this week - about imposing a deadline for consumers to file claims for the mis-selling of payment protection insurance.

Under the aegis of the new Consumer Panel, the major banks will hold regular meetings with consumer group representatives aimed at flagging up potential issues and concerns relating to the sale of financial products.

However, the panel will not have any formal powers, and senior bankers are aware that they will have to demonstrate publicly that it can exert genuine influence on their behaviour.

The lobbying group declined to comment on Ms Guy's appointment.

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