SAP agreed to pay more than $8 million in fines after it admitted to violating U.S. export controls and sanctions against Iran, the Justice, Treasury and Commerce departments announced Thursday. The company came to settlement agreements after it voluntarily disclosed the violations, which included illegal exports and reexports of U.S.-origin software. Between 2010 and 2017, SAP and its partners in Turkey, the United Arab Emirates, Germany and Malaysia released such software, upgrades and software patches more than 20,000 times to Iranian users, DOJ said. SAP senior officials knew it didn’t use geolocation filters to “identify and block Iranian downloads, yet for years the company did not remedy the issue,” the department said. The software maker didn't comment Friday.
Shopify reported strong Q1 revenue performance, with gross merchandise value (GMV) growing across all geographies on “robust consumer spending,” said President Harley Finkelstein on a Wednesday call. Revenue grew 110% to $988.6 million, with about $321 million coming from subscriptions, just under $668 million from merchants, said the company. Though U.S. stimulus programs had an impact on revenue, GMV “was strong even without it,” said Chief Financial Officer Amy Shapero, saying GMV outside of the U.S. accelerated at a faster pace. Q1 revenue exceeded Q4 revenue, “a remarkable achievement” given the typical seasonal falloff after the holiday selling season, Shapero said. Markets that opened post-pandemic, including Australia and New Zealand, aren’t slowing down, said Finkelstein, saying online GMV remains elevated: “So I don't think the consumer preference shift that happened through COVID was a temporary thing.” Multichannel selling is becoming “more critical as the costs of customer acquisition climbs and the lines blurred between online and offline commerce,” said Finkelstein. In the quarter, Shopify expanded its TikTok partnerships to an additional 14 countries and broadened its Pinterest channel by 27 markets, he said. The company launched in-app buy buttons. It integrated Shop Pay as a checkout option with merchants selling on Facebook shops and Instagram Checkout. Lord & Taylor launched on Shopify in the quarter. Finkelstein noted it was America's first department store, founded in 1826, and said it’s “exciting to see their value proposition evolve into an excellent mobile and social experience" and to build on a future-looking platform "experiences that haven't even been thought of yet.” Shopify has under 30% e-commerce penetration in North America, slightly higher in the U.K., said the executive: “There's so much headroom, and there's so much room for e-commerce to grow.” As countries roll out vaccines in 2021 and populations can move about more freely, "the overall economic environment will likely improve," Shopify said. "Some consumer spending will likely rotate back to offline retail and services, and the ongoing shift to e-commerce, which accelerated in 2020, will likely resume a more normalized pace of growth." Shares closed 11.4% higher at $1,288.80.
German wearables unit volume reached 6.8 million in 2020, a 22% increase from 2019, reported gfu Tuesday. Revenue rose 20% to more than 1.1 billion euros ($1.3 billion). German consumers spent just under 170 euros ($206) on the average device. The “relatively young” wearables sector grew into a “respectable category,” said Managing Director Sara Warneke.
Eutelsat is buying an equity stake in OneWeb, with the geostationary orbit operator saying OneWeb's low earth orbit constellation will open the door to an addressable market beyond its current reach. Eutelsat said Tuesday it should close on its $550 million stake in the second half of the year. Eutelsat said it will use cash on hand and proceeds from the C-band auction for the investment. OneWeb "will become our main growth engine outside our broadcast and broadband applications," Eutelsat CEO Rodolphe Belmer said.
The Supreme Court should review a lawsuit against “warrantless, suspicionless” searches of electronic devices at U.S. airports and ports of entry, the American Civil Liberties Union and Electronic Frontier Foundation filed Friday. Merchant v. Mayorkas, filed in 2017, challenges the Department of Homeland Security's warrantless searches of electronic devices. A federal court ruled in 2019 that border agencies’ policies violate the Fourth Amendment; the 1st U.S. Circuit Court of Appeals reversed the decision in February.
Arianespace is to launch 36 OneWeb low earth orbit broadband satellites Monday from Russia's Vostochny Cosmodrome, OneWeb said Thursday. The launch will bring OneWeb's total in-orbit constellation to 182 satellites and is the fifth of its "Five to 50" program to deliver connectivity to regions north of 50 degrees latitude by June, it said. Global service will be available in 2022, it said.
Sens. Chris Van Hollen, D-Md., and Roy Blunt, R-Mo., are promoting their bill to guide government investments in advanced manufacturing or industrial research. Their new National Strategy to Ensure American Leadership Act would ask the National Academies to identify which technologies will be the critical ones in five to 10 years. Van Hollen discussed with reporters Monday U.S. export restrictions to hinder Huawei, which is a 5G infrastructure leader, while the U.S. doesn't make much 5G equipment. “Everything we can do to prevent the existing cutting-edge technologies being used by Chinese military or others” should be done, and for Huawei and ZTE, the U.S. is also justified because they stole U.S. companies' designs years ago, Van Hollen said. Blunt asked, “Why weren't we ahead of Huawei, competing at the same time that they were?” Of technologies that will be as important in 10 years as 5G is currently, he said, “How do we prevent from this happening again?”
Treasury began “enhanced bilateral engagement” with Vietnam early this year toward developing a plan “with specific actions to address the underlying causes” of Hanoi’s currency undervaluation against the dollar, reported the department Friday. U.S. Trade Representative Katherine Tai signaled strongly this month that President Joe Biden's administration intends to keep U.S. allegations of Vietnam’s currency manipulation actively on the table (see 2104020009). Tai’s predecessor, Robert Lighthizer, opted not to impose remedial tariffs on Vietnam imports in the waning days of the Donald Trump administration for Hanoi’s allegedly improper devaluation of the dong against the dollar, but he did find Vietnam’s practices “actionable” under Section 301, leaving it up to the next administration to “continue to evaluate all available options” (see 2101150052). Vietnam’s “bilateral goods trade surplus” with the U.S. widened in 2020 to $70 billion, “the largest bilateral imbalance on record between the two countries,” reported Treasury. Vietnam’s exports to the U.S. grew about 19.5% in 2020, while imports from the U.S. decreased 8%, it said. “Vietnam’s growing bilateral trade surplus continues to reflect the country’s expanding export capacity, particularly in sectors such as apparel, technology, and electric machinery and equipment,” said the report. “The expanding surplus also reflects Vietnam’s deepening links with global supply chains, with Vietnam being one of the primary beneficiaries of the ongoing shifts in Asian supply chains.” Vietnam generated 19% of all smartphone imports to the U.S. in 2020, plus 5% of laptops and tablets and 24% of TVs under 35 inches, a segment of TVs that were in especially high demand last year during the COVID-19 pandemic.
Commerce Secretary Gina Raimondo suggested her agency has no plans to remove Huawei from the Entity List and said Wednesday she will aggressively use trade tools to compete with China. But she also said she will prioritize efforts to invest in U.S. technology industries over imposing more export restrictions. “My broad view is what we do on offense is more important than what we do on defense,” Raimondo told reporters. “To compete in the long run with China, we need to rebuild America in all of the ways we're talking about.” She said U.S. offensive tools include investments in domestic semiconductor manufacturing. But defensive tools may be necessary to address China’s “uncompetitive, coercive and underhanded” actions, she said, and Commerce will continue to maintain restrictions against Huawei. “A lot of people have said, is Huawei going to stay on the Entity List?” she said. “I have no reason to believe that they won't.” Commerce added seven Chinese supercomputing entities to the Entity List early Thursday, allegedly for activities that are contrary to U.S. “national security or foreign policy interests.” They were: Tianjin Phytium Information Technology, Shanghai High-Performance IC Design Center, Sunway Microelectronics, and Chinese national supercomputing centers in Jinan, Shenzhen, Wuxi and Zhengzhou. “These entities are involved with building supercomputers used by China’s military actors,” said Commerce. The Chinese Foreign Affairs Ministry didn’t comment.
U.S. “accusations and slanders” against Made in China 2025, Beijing's long-term industrial policy, are “groundless,” said a Chinese Foreign Affairs Ministry spokesperson Thursday. An Office of the U.S. Trade Representative report on foreign trade barriers said Wednesday many of the policy tools China uses to achieve the goals of Made in China 2025 “raise serious concerns” by restricting or “otherwise creating disadvantages for foreign enterprises.” The ministry spokesperson responded that Made in China 2025 “goals and measures are open and transparent.” The strategy’s “relevant policies and measures are applicable to all companies operating in China, with foreign and domestic companies treated as equals,” she said.