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A round up of some of the week’s most significant corporate events and news stories.
Google takes a few bytes out of third-party cookies
News that Google is looking for an alternative to the online tracking tool known as a cookie is a harbinger of broader structural changes in the internet and advertising industries, writes Emily Steel in New York.
Bad news for life assurers, cash-strapped public libraries and anyone queueing to buy stamps in a post office: Apple chairman Art Levinson and Google chief executive Larry Page (pictured) have teamed up to launch a health venture focused on extending life expectancy. Sell Prudential and Aviva. Buy Werther’s Originals and Tena Lady . . .
A legacy of the early days of the internet, cookies are controversial yet widely used small computer files that store information about internet users’ habits. Cookies can help a website calculate how many people visit the site, personalise the content visitors see and target ads. Third-party cookies are used to build profiles of web surfers by tracking their activities across a network of sites.
Yet the use of third-party cookies has come under scrutiny from regulators who are concerned about privacy. Privacy advocates call for more transparency and a “do not track” approach that would allow companies to track users only with their permission. Advertisers, meanwhile, have resisted changes that would keep them from tracking information about consumers.
Google is seeking to replace so-called third party cookies, which are installed by companies other than the operator of the website a person is visiting. Under discussion is the use of a personal identifier, where internet users would be able to adjust a single setting in their browser to determine how much information about them is given to advertisers. Apple takes a similar approach.
The move comes as momentum builds to create new techniques that would allow for more robust profiles about individuals.
BP tries to cut admin budget for disaster compensation
BP has attempted to cut the administrative budget of the office that assesses compensation under its settlement for the 2010 Deepwater Horizon disaster, as it takes a more assertive approach to managing the cost of the spill, writes Ed Crooks in New York.
Court filings show administration costs for the settlement have already exceeded $600m.
The total had reached $593m by late July, according to Patrick Juneau, the court-appointed claims administrator, and the budget for his office in the third quarter was $131m.
John Wayne impersonators might find it hard to capture the perennially gritty cowboy by drawling, ‘Get off your horse and drink your non-fat decaf latte’. But it seems legions of latter-day gun-toting Stetson wearers have made Starbucks their saloon of choice, prompting the US chain to ask them to seek milky beverages elsewhere.
BP objected to that budget, but it could not persuade the court to block it. It is trying again, seeking to cut the fourth-quarter budget, which Mr Juneau originally set at about $130m but cut to $111m.
Mr Juneau has suggested BP may be trying to “slow walk” claims: cutting his staff so that compensation payments will be processed more slowly. BP says it is trying to control costs and make the administration more efficient.
The steering committee of lawyers representing businesses and individuals seeking compensation for the spill supports Mr Juneau and accuses BP of arguing in “bad faith”.
BP has made repeated attempts in court to suspend payments under the settlement because of allegations of fraud, and to overturn the generous interpretation of business losses allowed by Mr Juneau, without success.
Originally predicted by BP to cost $7.8bn, the settlement is on course to be worth at least twice that.
Danske ousts chief to seek out ‘stronger qualifications’
Firings do not come much more brutal than that of Danske Bank’s chief executive this week when the Danish lender’s board said it wanted somebody with “stronger qualifications within banking”, writes Richard Milne in Oslo.
Eivind Kolding’s dozen years on Danske’s board before becoming chief executive – six as vice-chairman and a year as chairman – mattered little to the board. Mr Kolding is a former chief executive of Maersk Line, the world’s largest container shipping group, which is Danske’s biggest shareholder.
Instead, Danske’s board plumped for Thomas Borgen, head of its corporate business and a former boss of its Norwegian subsidiary.
Ole Andersen, Danske’s chairman, is well known in Denmark for shedding chief executives due to his positions on boards at companies such as Bang & Olufsen and ISS.
He said being a member of a bank board for “10 or 15 years does not qualify you to run a bank”, adding that, while Mr Kolding was the best candidate when he took over last year, views of the skills needed of a bank chief had evolved.
Mr Kolding’s missteps as chief executive included the disastrous launch of an edgy advertising campaign featuring lesbians kissing.
Charges imposed on many customers for having a current account soured the mood further in Denmark, and some analysts were alarmed when Danske’s management entered into a public dispute with its regulator over how much capital it should hold.
Fighter contracts remain mired in controversy
Two US military contractors took key steps towards exporting fighter jets this week – but both the Netherlands’ announcement that it intends to buy Lockheed Martin’s F35 fighter and South Korea’s shortlisting of Boeing’s F15 remain mired in controversy, writes Robert Wright in New York.
South Korea announced that, of three tenders it had received to replace its air force’s ageing fighter jet fleet, only one – for Boeing’s F15 silent eagle – had come within the Won8.3tn ($7.7bn) price ceiling for the tender. That should make the finalising of an order for the aircraft a formality when the country’s cabinet considers the order next week.
However, many in South Korea remain opposed to the country not choosing the F35 fighter that Japan, a key ally, and the US will be operating. The F15 is a significantly less advanced fighter than the F35. There has been speculation that the cabinet will decide to postpone the decision while holding further talks on how to proceed.
An order that Lockheed won in Europe could be unravelling, meanwhile. Members of the Netherlands’ Labour party – part of the governing coalition – have expressed concern about how the government came to opt to spend €4.5bn on 37 F35s. That could force the government to back away from the order, announced on Tuesday.
The US defence department and contractors are eager to expand US military exports to counteract the effects of the US’s “sequestration” spending cuts.
Lloyds passes milestone with £3.2bn stock sale
The long-awaited reprivatisation of Lloyds Banking Group began this week as the government sold £3.2bn of shares, largely to UK and US institutional investors, overnight on Monday, writes Sharlene Goff.
Bankers close to the deal claimed it was a success for all involved: the Treasury made a £61m profit on the sale; investors bought the shares at a 3 per cent discount to the market price; Lloyds welcomed the reduction in the government’s stake from 39 to 33 per cent.
The strong demand for the shares – the book was almost three times subscribed within hours of launch – was also taken as a sign of investors’ increasing faith in the UK’s economic recovery.
Retail investors could be next in line for a slice of Lloyds as George Osborne, chancellor, said he would consider involving them in future share sales of Lloyds.
Lloyds shares ended the week slightly above the 75p sale price, at 75.5p.
The sale came as rival UK lender Barclays issued its prospectus for a £5.8bn rights issue, making some unwelcome disclosures about a previous cash call.
Barclays said it was contesting a regulator’s £50m fine for acting “recklessly” by failing to disclose £322m in fees paid to Qatari investors during its emergency capital raising five years ago.
According to Barclays, the FCA said two agreements to pay a total of £322m over five years had been struck primarily for Qatar’s participation in the cash calls and not to obtain advisory services, as had been argued by the bank.
And finally ...
● As serious Monopoly players know, the best “Chance” card to pick up says: “Building loan matures. Receive £150.” Sadly, real-life property mogul Gerard Ronson landed on Liverpool Street, borrowed £315m to build the Heron Tower, and now the banks want repayment or a forced sale. He is not being allowed to pass “Go” 1.57m times
● ‘Darktrace’, a cyber security firm, recruits Cambridge boffins and a former head of MI5 to trap digital villains in online ‘false honeypots’. If you think it sounds like Bond film hype, you’re half right. Darktrace is actually the first tech company to be backed by ex-Autonomy boss Mike Lynch. But even he wonders if the sector is a ‘bubble’
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