Spotify Files EU Antitrust Complaint Against Apple 

Spotify has filed a complaint with European Union antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service. 

Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple’s control of its App Store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015. 

Central to Spotify’s complaint, filed with the European Commission on Monday, is what it says is a 30 percent fee Apple charges content-based service providers to use Apple’s in-app purchase system (IAP). 

Forced to raise price

Horacio Gutierrez, Spotify’s general counsel, said the company was pressured into using the billing system in 2014, but then was forced to raise the monthly fee of its premium service from 9.99 to 12.99 euros, just as Apple Music launched at Spotify’s initial 9.99 price. 

Spotify then ceased use of Apple’s IAP system, meaning Spotify customers could only upgrade to the fee-based package indirectly, such as on a laptop. 

Under App Store rules, Spotify said, content-based apps could not include buttons or external links to pages with production information, discounts or promotions and faced difficulties fixing bugs. Such restrictions do not apply to Android phones, it said. 

“Promotions are essential to our business. This is how we convert our free customers to premium,” Gutierrez said. 

Voice recognition system Siri would not hook iPhone users up to Spotify, and Apple declined to let Spotify launch an app on its Apple Watch, Spotify said. 

Spotify declined to say what economic damage it believed it had suffered. 

“We feel confident in the economic analysis we have submitted to the commission that we could have done better than we have done so far,” Gutierrez said. 


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Trade Chief: US Working on Steel, Aluminum Tariff Relief for Mexico, Canada

The United States is working on a plan to lift tariffs from Mexican and Canadian steel and aluminum but preserve the gains that domestic producers have received from the duties so far, U.S. Trade Representative Robert Lighthizer said on Tuesday.

“What I’m trying to do is a have a practical solution to a real problem … get rid of tariffs on these two, let them maintain their historic access to the U.S. market which I think will allow us to still maintain the benefit of the steel and aluminum program,” he told the U.S. Senate Finance Committee at a hearing about the World Trade Organization.

The United States imposed the “Section 232” tariffs on steel and aluminum nearly a year ago to protect domestic producers on national security grounds. A plan to lift tariffs on the metals from Canada and Mexico was once linked to the renegotiation of the North American Free Trade Agreement but ultimately was excluded from that deal.

Since then, a number of U.S. lawmakers have said they did not believe the new U.S.-Mexico-Canada Agreement (USMCA) could win approval in Congress if the metals tariffs — along with and retaliatory duties on U.S. farm and other products — were left in place.

Members of the New Democrat Coalition in the House of Representatives echoed a similar message in a meeting with Lighthizer later on Tuesday.

“Some of us impressed the need to resolve 232 before we have a chance to move forward” on consideration of USMCA, said Representative Ron Kind, a pro-trade Democrat from Wisconsin.

Kind added that Lighthizer expected to meet with Mexican and Canadian counterparts on the issue this week.

A spokeswoman for the U.S. Trade Representative’s office declined to comment, saying there were no scheduling announcements on the 232 issue.

The United States has sought quotas on steel and aluminum in lieu of tariffs, but Canada and Mexico have resisted such restrictions, arguing that they pose no threat to U.S. national security.

A Mexican official said talks were continuing.

“Our position is that we should not have tariffs or quotas.

We have to help the U.S. construct the narrative of why exclusion for Mexico is valid,” added the official, who was not authorized to speak publicly on the matter and requested anonymity.

Kind cautioned that the Trump administration would need to submit the USMCA enabling legislation soon to Congress so it could be considered before the August recess. After that, it could become caught up in another border wall funding fight in the fall and later the 2020 presidential election campaign, which would diminish its approval chances.

“There’s a lot of work and the clock’s ticking,” Kind added.


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Lopez Obrador Rebuts Finance Ministry over $2.5B Mexico Refinery Funding

Mexican President Andres Manuel Lopez Obrador on Tuesday denied any delay to a flagship refinery project in his home state after the deputy finance minister was quoted as saying $2.5 billion for its construction will be moved to state oil firm Pemex.

The planned investment for the Dos Bocas refinery “can go to exploration and production” for Pemex, Arturo Herrera told the Financial Times in an interview during a trip to London for meetings with investors.

However, Lopez Obrador stood by his plan to build the refinery within three years, saying the tender could be unveiled next week. In answer to a question about whether the $2.5 billion would be spent this year on the refinery, said “Yes.”

The president’s plans to fast-track construction of the new refinery in Tabasco, his home state, have concerned investors that it would take away much-needed resources from Pemex, which is creaking under $106 billion of debt.

His energy minister, Rocio Nahle, said she understood Herrera’s budget concerns but said the project was on track.

“The faster we do this project, the cheaper it will be,” she said on Mexican radio.

The conflicting statements appeared to confuse investors.

Mexico’s benchmark stock index reversed gains and weakened 0.7 percent after Lopez Obrador’s rebuttal of Herrera’s comments, while the peso pared gains.

“Contradictions within the federal government do not help financial markets,” said James Salazar, an economist at bank CI Banco.

The government is under growing pressure to dispel doubts Pemex can successfully manage more than $16 billion of debt payments due by the end of next year, halt the firm’s extended oil output slide and avert a threatened credit rating downgrade to “junk.”

Finance minister Carlos Urzua said last week the government would announce new measures to support the ailing company, after unveiling a $3.9 billion bailout in February that failed to impress ratings agencies.

Herrera said the government was in talks with the International Monetary Fund and other multilateral organizations about structuring a fresh capital injection for Pemex, though he noted that those discussions were technical and no borrowing was involved, according to the Financial Times.

Lopez Obrador said it was very likely the government would make an announcement about tenders for the refinery on March 18, a national holiday that celebrates the 1938 nationalization of Mexico’s oil industry.

He also predicted Pemex would reverse its output decline by next year, with “new wells” coming on line by December under a production plan that allows Pemex to hire service companies to help explore mature fields.

He repeated that the refinery would cost between $6 billion and $8 billion, and said that work for now was focused on preparing the ground at the refinery site and readying the framework for the tender.

The refinery has already hit obstacles after the proposed construction site was cleared of protected mangrove without the correct environmental permits. The government has yet to present an environmental impact assessment for the wildlife-rich site.

Herrera said the tender framework was being prepared, but said the finance ministry needed to see a solid financial plan before releasing funds.

“We will not authorize (construction) until we have a final figure that is not very different from the original $8 billion,” said Herrera.

($1 = 19.3083 Mexican pesos)


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Official: US Plans ‘Very Significant’ Additional Venezuela Sanctions

The United States is preparing to impose “very significant” Venezuela-related sanctions against financial institutions in the coming days, U.S. special envoy Elliott Abrams said on Tuesday.

Abrams did not elaborate on the fresh measures but his warning came a day after the U.S. Treasury imposed sanctions on Russian bank Evrofinance Mosnarbank for helping Venezuelan state oil firm PDVSA evade U.S. financial restrictions.

Abrams said Washington was also preparing to withdraw more U.S. visas from Venezuelans with close ties to President Nicolas Maduro.

Washington has taken the lead in recognizing opposition leader Juan Guaido as Venezuela’s rightful president after the 35-year-old Congress chief declared Maduro’s 2018 re-election a fraud and announced an interim presidency in January. Most countries in Europe and Latin America have followed suit.

Abrams’ comments came as Venezuela ordered American diplomats to leave the country within 72 hours.

Washington said it had decided to withdraw the remaining diplomats due to deteriorating conditions in Venezuela, which has been plunged into its worst blackout on record.

Abrams emphasized that the withdrawal of diplomats was not a change in U.S. policy.

“This does not represent any change in U.S. policy toward Venezuela, nor does it represent any reduction in the commitment we have to the people of Venezuela and to their struggle for democracy,” he said, adding that the U.S. intended to keep up pressure on Maduro through sanctions.

“You will see very soon a significant number of additional visa revocations. You will see in the coming days some very significant additional sanctions,” Abrams added.

He said the United States was in talks with other countries that could act as its “protecting power” in Venezuela to ensure the safety of the U.S. embassy’s premises and provide assistance to Americans in trouble.

A “protecting power” is a country that represents another in cases where two countries have broken off diplomatic relations.

Washington, for example, has appointed Switzerland as its “protecting power” in Iran.

“We are trying to decide on a protecting power,” Abrams said.

He said the safety of U.S. diplomats was a key factor in the withdrawal decision reached by U.S. Secretary of State Mike Pompeo in the late hours of Monday night.


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Pawn Business Growing in US

You never know what you will find in a pawnshop. 

Where else can you find a snow blower parked next to a mink jacket? Or an ornate 19th century mantle clock from France next to modern-day laptop computers?

At Top Dollar Pawn in Waldorf, Maryland, a man comes in wanting to sell the gold caps from his deceased grandfather’s teeth. While some would be taken aback, the affable store manager Stuffie Carroll is not. “This happens all the time,” he said, as he explains to the customer that the store would only buy the gold after it had been removed from the teeth.

Top Dollar owner Michael Cohen, who has two pawnshops in Maryland outside Washington, DC, buys and sells “anything of value,” which includes high-end jewelry, musical instruments, and power tools. His biggest seller is the jewelry he says, as he shows off an assortment of diamond rings and gold necklaces.

While sales bring in money, pawn shops make most of their income through cash loans to customers in exchange for an item of value. There is also interest on the loan that is higher than a bank rate. If the money is repaid in 30 days, then the customer gets their item back; otherwise the store keeps it for resale. Eighty-five percent pay back the loan.

For people without credit or other financial resources, pawn shops can help them get the money they need. The average loan is $150.

“In a lot of cases people don’t have any other outlet to get the money they need to get through the week to buy diapers for their babies, put gas in the car, or pay the electric bill,” said Top Dollar Manager, Mike Thomen. He said customers often talk to him about their problems and he “encourages them when they’re down on their luck.”

Long gone are the days when pawn shops were considered seedy places, where only people down on their luck went to. Today’s pawn shops, mostly independently owned, look more like a brightly lit, welcoming second-hand store.

“The pawn shop is the new cool place to come into, the new chic place,” said Eric Rizer, the owner of three stores in northern Virginia called Royal Pawn. “We have tons of different stuff like artwork, antiques, rugs, and sports memorabilia.”

“Customer service is a huge part of our business,” Cohen said, “and hopefully that keeps people wanting to come back to us.”

Like regular customer Anthony Ruggaero who is pawning some tools.

“I came to pawn a few times to pay for my wedding, which is in 3 months,” he explained. “I bought my fiancé’s wedding ring here last week. I have my own business, so as soon as checks come in to help me pay for expenses, I’ll buy my stuff back.”

Hidden treasures

It’s estimated that 30 million people visit the 11,000 pawn shops in the United States every year, perhaps finding some hidden treasures. 

“We had an original Picasso,” said Rizer. “We actually had a bird head that I sold to a man for $500.” Later Rizer discovered that the bird had been extinct for more than 100 years, and the head was valued at $20,000.

He says worn vintage guitars are finding a new market.

“These beat up guitars are called reliced,” he said. “People go absolutely nuts over them just because they look like they’re worn from being out on the road.”

Including customer Austen Ballard, a music producer at MMP Studios in Burke, Virginia. 

“It’s so much fun to pick up an old instrument from the 1950s or 60s. You never know where a guitar’s been. It might be on a record you’ve heard on the radio.”

Cohen said his business has taken a hit from second-hand merchandise internet sales. Although he realizes more pawn shops may have to start selling items on the internet to survive, he thinks the brick or mortar stores are here to stay. 

“There’s people who go from pawn shop to pawn shop looking for a good deal. We definitely have our regulars that like to bargain with us every week.”

Like customer Keith Winslow who haggles over the price of some power tools.

“I want to talk to the people I’m buying products from,” he said. I don’t want something from online that may not be exactly what I want.”


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China Tweaks Tech Supremacy Plan

For the first time in recent years, Chinese Premier Li Keqiang’s annual Government Work Report did not mention Made in China 2025, the country’s ambitious plan to achieve high-tech dominance, and that has analysts asking whether Beijing is going to completely overhaul the plan or keep it going quietly behind the scenes.

Made in China 2025 relies heavily on government subsidies to Chinese companies and their ability to acquire new technologies covering 10 different sectors such as electric cars, emerging bio-medicine, next-generation information technology, advanced robotics and artificial intelligence.

The plan is part of China’s broader industrial policy outlined in the 13th Five-Year plan, which lays out government goals from 2016-2020. It raised concerns, however, because of China’s use of forced technology transfers and specific targets to capture market share by 2025.

The plan has been a focus of discussion between U.S. and Chinese negotiators, with Washington demanding an end to subsidies given to local companies under the plan. The United States also wanted China to do away with unfair trade practices that include the forcible transfer of technology from foreign companies.

A significant portion of technologies used in China in the 10 listed sectors come from foreign sources.

But the government is now amending laws that will leave Chinese companies in a somewhat difficult situation. It is also expected to cut subsidies it gives to local companies in order to overcome objections raised by the United States during the trade war.

New laws and policy changes that the government is bringing on during the ongoing sessions of China’s legislature, or National People’s Congress (NPC), would seriously affect its ability to acquire foreign technology.

“China will suffer in the short run but in the medium run they seem to be fine,” said Lourdes Casanova, director at Cornell’s Emerging Markets Institute.

To a great extent, Chinese companies have used three means to acquire technology: the use of borrowed or stolen ideas, the forcible transfer of know-how from foreign partners and the purchase of foreign companies.

Acquisitions by Chinese companies have now become problematic because of growing cautiousness and recent legislation in the United States and European Union.

Some analysts believe there were design defects in the 2025 plan itself, and the government has been rethinking it for some time now.

“The original 2025 plan was too nationalistic and too top down. It was wasteful,” Mats Harborn, president of the European Union Chamber of Commerce in China, told VOA.

“They [government leaders] thought technology should be owned by Chinese companies. There was a ‘we can do this on our own’ attitude,”

“There is a shift or maturity in understanding. There is an understanding that China cannot do all things on its own. It has to use international value chains and integrate as much as possible,” Harborn said.

New information emerging now suggests there has been a struggle within the government about the suitability of this grandiose plan.

“It [the strategy] should not have been done that way anyway. I was against it from the start, I did not agree very much with it,” Lou Jiwei, China’s finance minister between 2013 and 2016, said on the sidelines of the legislative meeting in Beijing.

Other legislators told VOA the government is making adjustments in accordance with public opinion.

Putting less emphasis on Made in China 2025 “reflects a more rational approach by the government, to reduce unnecessary obstacles, noises and reaction, to keep moving forward in a positive direction,” said Tang Nong, a NPC delegate from Guangxi.

“The government is moving forward with the 13th Five-Year plan. What is Made in China 2025, is it a plan or a broad outline?” asked Sun Xianzhong, an NPC delegate and professor of international law at the Chinese Academy of Social Sciences.

Analysts believe the government may revamp and repackage the plan, but it is unlikely to soften its efforts.

“The government remains committed to moving China’s economy up the value chain and will continue to use a variety of active industrial policies to achieve this goal,” said Duncan Innes-Ker, regional director for Asia at The Economist Intelligence Unit.

Harborn believes the government will shift from the idea of acquiring new technologies to absorbing them in the industrial value chain.

“This is a wakeup call. The new focus will be on integrating the best technologies at the best price and creating the best final product or service,” he said.

State owned companies in China may be better able to readjust themselves if the 2025 plan is revamped because their focus is more on revenues than on profit.

“For a state-owned company, profits going down in favor of revenues or jobs, so what’s the problem? They are fine,” said Casanova adding, “Profits are less or not of primary consideration.”

 

 

 


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Global Backlash Over Boeing 737 MAX-8 Growing After Deadly Crash

Australia and Singapore have suspended the Boeing 737 Max 8 passenger jet from operating in their respective airspaces, joining a growing list of countries taking precautionary measures involving the troubled plane after its second fatal crash in five months.

 

Airlines in countries across the globe, including China, Indonesia, Brazil and Mexico, have grounded all the 737 Max 8 jets in their respective fleets after 157 passengers and crew were killed when a 737 Max 8 operated by Ethiopian Airlines crashed Sunday shortly after taking off from Addis Ababa.

Statements from both Australia’s and Singapore’s civil aviation authorities say the suspensions are temporary while the investigation into Sunday’s tragedy continues. The suspensions affect Fiji Airlines and Singapore’s SilkAir, which was already suspended from operating by the city-state.

 

The Ethiopian Airlines Max 8 was the same model as the one that crashed into the Java Sea in October, just minutes after taking off from Jakarta, killing 189 people.

 

At least two witnesses say they saw smoke coming from the back of the plane before it crashed.

 

Investigators have found the flight data recorder and the cockpit voice recorder, which they hope will give them clues as to why the Boeing 737 Max 8 jet went down en route to Nairobi.

 

Indonesian investigators said information from the flight data recorder showed the plane’s automatic safety system repeatedly pushed the plane’s nose downward despite the pilots’ desperate attempts to maintain control.

 

Tributes and condolences poured in Monday for the victims of Sunday’s crash, who hailed from at least 35 countries and included 22 United Nations staff members heading to a U.N. environmental conference in Nairobi.

 

Flags at the conference were lowered to half-staff Monday. The Nairobi conference and a General Assembly meeting in New York both opened with moments of silence.

“A global tragedy has hit close to home, and the United Nations is united in grief. I extend my deepest condolences to the families and loved ones of all the victims, to the government and people of Ethiopia, and all these affected by this disaster,” Secretary General Antonio Guterres said in New York.

 

The victims were also remembered at U.N. refugee headquarters in Geneva and at the State Department in Washington.

 

Menur Nur Mohamed lost his brother Ahmed on the doomed plane. Ahmed Nur Mohamed was the co-pilot.

 

“Me and my brother grew up together. He wasn’t only my brother, but also my friend,” Mohamed told Tsion Tadesse of VOA’s Horn of Africa service.

 

Mohamed said he learned of his brother’s death when the head of Ethiopian Airlines mentioned his name.

 

Boeing shares plunged seven percent Monday on Wall Street.

 


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US Sanctions Bank Jointly Owned by Russia, Venezuela

The U.S. on Monday sanctioned a Moscow-based bank jointly owned by Russian and Venezuelan state-owned companies for its support for Venezuela’s embattled President Nicolas Maduro and the country’s state-controlled oil industry.

The U.S. Treasury said it was targeting Evrofinance Mosnarbank, which was founded in 2011 to help provide financing for joint Russia-Venezuela oil and infrastructure projects, for allegedly trying to circumvent U.S. sanctions on Venezuela.

“This action demonstrates that the United States will take action against foreign financial institutions that sustain the illegitimate Maduro regime and contribute to the economic collapse and humanitarian crisis plaguing the people of Venezuela,” Treasury Secretary Steven Mnuchin said in a statement.

The U.S. and more than 50 other governments recognize opposition leader Juan Guaido as the interim president in Venezuela. They contend that Maduro, who is clinging to power, was not legitimately re-elected last year because opposition candidates were not permitted to run.

The sanctions are the latest effort by the administration of U.S. President Donald Trump to try to force out Maduro.

The Treasury statement said that Evrofinance has been a key “lifeline” of Maduro’s government. It supported the Maduro government’s failed effort last year to create a new cryptocurrency, the petro.

“Evrofinance’s involvement in the petro demonstrated Maduro’s hope that the petro would allow Venezuela to circumvent U.S. financial sanctions,” the statement said.

The sanctions prohibit Americans and U.S. businesses from conducting any transactions with Evrofinance, with the aim of ending Venezuela’s access to international financial markets.


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Boeing Shares Plunge After Ethiopian Airlines Crash

Aircraft giant Boeing’s shares dropped nearly twelve percent shortly after markets opened Monday, a day after an Ethiopian Airlines jet crashed, killing all 157 people on board.

The Dow Jones Industrial Index sharply dropped as a result early Monday, capping gains in the broader markets.

Airlines in China, Indonesia, and Ethiopia grounded all Boeing 737 MAX 8 airplanes after that model crashed on Sunday on its way to Nairobi. The Boeing 737-MAX 8 is also the same model that took off in October from Jakarta and crashed into the Java Sea a few minutes later, killing all 189 people onboard a Lion Air flight.

Boeing released a statement shortly after Sunday’s crash expressing its “heartfelt sympathies” to the friends and families of victims.

“A Boeing technical team will be travelling to the crash site to provide technical assistance under the direction of the Ethiopia Accident Investigation Bureau and U.S. National Transportation Safety Board,” it read.

Boeing has not publicly addressed concerns about the 737 MAX 8 model or the grounding of its planes in three countries.


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China’s MoBike Shutting Some International Operations

Chinese bike-sharing startup Mobike is shutting down operations in Australia and South and Southeast Asia, months after rival Ofo began winding down its international division.

“Mobike’s international business is undergoing rationalization to improve efficiency,” the company said in a statement Monday. “This will result in the closure of some markets, particularly in certain Asia countries.”

In recent years, Mobike, Ofo and other startups flooded Chinese cities with bright, candy-colored two-wheelers unlocked and tracked using smartphone apps. Two years ago, Mobike began expanding into overseas markets, bringing its signature orange bikes first to Singapore, then Europe, the Americas, and other countries and regions.

Technology publication TechCrunch said on Friday that Mobike would shutter all its international operations. Mobike spokesman Steve Milton called the reports “exaggerated,” saying the closures were limited to Southeast Asia, specifically India, Thailand, Malaysia, Singapore and Australia.

“It does not relate to other operations of Mobike International,” Milton said. “We are continuing to look for strategic partners, particularly in Europe and Latin America.”

Three Mobike employees familiar with the closures said they were told by senior executives that the company planned to eventually shutter all its international divisions, not just Southeast Asia and Australia. Two of the employees said the reason for the closures wasn’t poor market performance, but because of Mobike’s acquisition last year by Chinese online services giant Meituan Dianping.

“Meituan doesn’t have any overseas business agenda or experience,” said one employee, who asked to remain anonymous to avoid retaliation from superiors. “They just want to be operating in China, which they can control.”

The closures come on the heels of turmoil in the Chinese bike-sharing industry.

Chinese state media once touted shared bikes as a technology in which China was surging ahead in the new global economy, along with high-speed rail, mobile payments and e-commerce. But following huge investments, the business turned into a brutal cost-cutting war. Last year, Mobike’s largest competitor, Ofo, said it was considering filing for bankruptcy as millions of users applied to get their deposits back.


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