Displaying items by tag: Department of Justice

The US Justice Department has filed (yet another) antitrust lawsuit against Internet behemoth Google and it could have major repercussions for Apple. It is estimated that Google pays Apple between $8 billion to $12 billion a year to be the default search engine on Apple’s devices and soon it may all come to a head.  

The scrutiny of the deal, which was first agreed 15 years ago and has rarely been discussed by either company, has highlighted the special relationship between Silicon Valley’s two most valuable companies —‘an unlikely union of rivals’ that regulators say is unfairly protecting its monopoly and preventing smaller companies from flourishing.  

The Justice Department, which is asking for a court injunction preventing Google from entering into deals like the one it made with Apple, argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives.

The lawsuit describes that the relationship's evolution from Google being the default search engine on Apple's Safari browser in 2005 in exchange for ad revenue to a broader agreement that included iPhones and later Apple's assistant Siri. "Today, Google's distribution agreement with Apple gives Google the coveted, preset default position on all significant search access points for Apple computers and mobile devices," the Justice Department stated.

While the deal is nice for Google - which sees about 50% of its searches originate from Apple devices, it is much more lucrative for Apple considering that the payments are purely profit. This is believed to be the single biggest payment Google makes to anyone, and it is estimated to account for 15 to 20 percent of Apple's annual profits.

"There is a risk, if you play it out, that there actually could be more financial impact to Apple than there is for Google," Toni Sacconaghi, an analyst for Bernstein, told The Wall Street Journal in an article, estimating that Apple stock could decline as much as 20% if the agreement with Google is dissolved.

If we estimate that payments from Google stood at about $10 billion in the fiscal year ‘19 and Apple had to forgo the entire amount, services revenues would be lower by about 22% with total revenues lower by about 4%. The impact on Apple’s profits would be much more evident as it likely incurs no costs to earn these revenues.

However, the Financial Times reported that Apple is stepping up efforts to develop an alternative to Google search. In a small change to the newest model of the iPhone working system, iOS 14, Apple has started to point out its personal search outcomes and hyperlink on to web sites when customers sort queries from its house display.

That internet search functionality marks a necessary advance in Apple’s in-house improvement and provides an alternate if regulators block its profitable partnership with Google. Nearly half of Google’s search traffic now comes from Apple devices, according to the Justice Department, so the prospect of losing the Apple deal has been described as a “code red” scenario inside the company. 

The landmark lawsuit, which follows a 16-month investigation by the House of Representatives' judiciary committee, is a part of a broader regulatory push against big tech. However, it remains unclear which of the Silicon Valley companies will prove more vulnerable to mounting regulatory pressure.

The US Department of Justice has confirmed that it will continue to seek the extradition of Huawei CFO Meng Wanzhou who was arrested in Vancouver in December. The DOJ are claiming that she violated trade sanctions with Iran and want her to appear on trial in the United States.

The arrest of the prominent Huawei CFO who is the daughter of the company’s founder kicked off a diplomatic row between China and Canada, which is still ongoing. China detained a number of Canadian diplomats in the immediate aftermath of the arrest of Wanzhou in Vancouver, which was seen as retaliation.

However, the DOJ are continuing their efforts in terms of extraditing the Huawei CFO back to US for questioning, despite reports to the contrary that claimed they were willing to drop the extradition order.

"We will continue to pursue the extradition of defendant Ms. Meng Wanzhou, and will meet all deadlines set by the US/Canada Extradition Treaty," said Justice Department spokesperson Marc Raimondi.

Wanzhou was freed on bail of Can$10 million (US$7.5 million) bail and is awaiting a hearing on her extradition. According to the agreement between the two countries, the United States has 60 days after an arrest made at its request in Canada to formalize an extradition request. 

Once a request has been submitted, the Canadian justice ministry then has 30 days to proceed with official extradition proceedings, though the process can take months or years.

In the United States, almost 7,000 children committed suicide using a gun from 199 to 2014. Meanwhile, thousands of people are killed every year with “misappropriated” guns. In a bid to end this colossal loss of life from guns, the concept of ‘smart guns’ has emerged: guns equipped with fingerprint scanners, radio frequency chips or other technology that could block anyone but the owner from using it.

The New York Times recently reported that the U.S. Department of Justice issued official guidelines for the manufacture of ‘smart guns’ on November 16. The guidelines have been released aiming to “shape the future of gun safety technology,” which was an executive order executed in January by President Barack Obama. The President received swift backlash from the National Rifle Association gun lobby, who said the guidelines were a desperate effort by Obama to claim “a ‘win’ during his waning days in office.”

According to the NYT report, ‘smart gun’ technology is currently available. In fact, the new guidelines “reignite the promise of smart guns’ – an idea that was cut short 16 years ago when the N.R.A. boycotted Smith & Wesson after the gun manufacturer approached the White House with a proposal to explore intelligent gun technology. The idea was patented by Jonathan Mossberg, “scion of the nation’s oldest family-owned gunmaker, O.F. Mossberg & Sons,” says the report. The patent was for a shotgun in 2000 that was able to block firing by anyone not wearing the shooter’s radio-frequency identity ring.

The NYT report suggests that the gun industry doesn’t lack the knowledge for ‘smart gun’ technology, but is restrained by gun-lobbyists who are opposed to change and advancing the safety of weapons. But the guidelines could push for exciting new industry standards, such as reliable battery power in a smart gun for increased speed when drawing a weapon and for the distance allowed between the gun and its owner’s ID device.

“If a child can’t open a bottle of aspirin, we should make sure that they can’t pull a trigger on a gun,” said President Obama when he ordered Justice and Homeland Security officials to outline a strategy for “the real-world deployment of smart-gun technology.” This, according to the report, includes testing of new smart firearms at the Army’s Aberdeen Test Center in Maryland. Questions have been raised about whether or not President-elect Donald Trump will continue to push for safer gun regulations.