Business

NEW YORK — Amazon was fined 746 million euros ($880 million) by Luxembourg authorities over allegations it flouted the EU's data protection rules, the online retail giant said on Friday.

The fine was issued on July 16 by the Luxembourg National Commission for Data Protection following its determination that "Amazon's processing of personal data did not comply with the EU General Data Protection Regulation [GDPR]", Amazon said in a securities filing. 

"We believe the CNPD's decision to be without merit and intend to defend ourselves vigorously in this matter," the company added, using the organisation's French acronym.

The fine was believed to be the largest ever for a data protection violation since the passage of the regulation.

The Securities and Exchange Commission document offered no details, but Amazon was sued by a European consumer group claiming personal data was collected for ad targeting without permission.

The Luxembourg agency confirmed that it made a ruling this month on Amazon but declined to elaborate, saying its investigations are confidential.

It was the latest case of US tech firms being hit with violations of the landmark GDPR.

French authorities fined Amazon 35 million euros last year for failing to follow laws on browser "cookies" that track users. Google was hit with a fine of 100 million euros for similar violations.

Facebook is under investigation in Ireland after details on 533 million users were leaked on a hacking website

Under the GDPR, which came into effect in 2018, Internet users have a wider range of rights relating to their data.

Regulators have been armed with new powers including the ability to fine firms up to 4 per cent of their annual global turnover.

The GDPR has resulted in fines imposed not only on technology firms but marketers, data brokers, Austria's postal service and even the Spanish football association, La Liga.

Amazon made the disclosure as part of its quarterly update which showed profits jumped 48 per cent from a year ago to $7.8 billion and revenues increased 27 per cent to $113.1 billion in the April-June period.

SEOUL — Samsung Electronics' net profits surged more than 70 per cent in the second quarter thanks to higher memory chip prices fuelled by pandemic-led demand, the South Korean tech giant reported on Thursday.

Coronavirus-driven working from home boosted demand for devices and appliances powered by Samsung's memory chips. The company said that "memory shipments exceeded previous guidance and price increases were higher than expected".

The world's biggest smartphone maker saw net profits rise 73.4 per cent year-on-year to 9.6 trillion won ($8.4 billion) for April-June, the company said in a regulatory filing.

Operating profit increased 54.3 per cent to 12.6 trillion won from 8.1 trillion won a year earlier, more than half of which came from the firm's semiconductor business.

These results come despite an on-quarter decline in Samsung's earnings from its smartphone business because of supply chain problems that disrupted global production.

Samsung Electronics is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires that dominate business in South Korea, the world's 12th largest economy. 

The conglomerate's overall turnover is equivalent to one-fifth of gross domestic product. 

Analysts say the chip unit's proportion of the firm's profit is likely to grow in the months ahead.

"Samsung will benefit from memory chip prices that are likely to go higher in the third and fourth quarter," Park Sung-soon, an analyst at Cape Investment & Securities, said.

The firm anticipates favourable market conditions for the rest of the year, with continued demand for memory chips in the server and mobile markets. 

But it warned pandemic-fuelled uncertainty would persist in the second half, noting "continued disruptions in component supply".

Shares in Samsung Electronics closed down 0.25 per cent on Thursday. 

Eligible for parole 

Samsung is expected to showcase the latest foldable smartphone models of its Galaxy Z and clamshell Galaxy Z Flip next month. 

Makers of foldables are increasingly competitive, and include rivals such as China's Huawei and Xiaomi. 

The upcoming gadgets will be equipped with "new multitasking capabilities and enhanced durability", said TM Roh, head of Samsung Electronics' mobile communications business. 

Samsung aims to solidify its position in the smartphone market "with the rollout of its premium mobile lineups as well as cheaper models in the third quarter", said James Kang, senior analyst at Euromonitor International. 

But Kang said the company could face headwinds next year, as consumer demand is likely to be weaker than in 2021. 

Samsung also faces legal challenges. 

Its leader Lee Jae-yong is currently on trial, charged with manipulating a takeover to smooth his succession at the top of the Samsung group.

Lee was separately jailed in January over a sprawling corruption scandal that brought down former president Park Geun-hye.

South Korea's corporate leaders and scholars say a leadership vacuum could hamper the firm's decision-making about large-scale investments, previously key to its global rise.

But Lee's absence would not have much of an impact on Samsung's earnings for the second half, said Park of Cape Investment. 

Still, his return to management "could accelerate the decision-making process for long term investments", he added. 

Lee is eligible for parole next month after completing more than half of his two-and-a-half year jail term.

Meanwhile, LG Electronics, South Korea's second-largest appliance firm after Samsung, posted a 65.5 per cent jump in operating profit for the second quarter, to 1.1 trillion won. Its shares rose 1.5 per cent.

LONDON, United Kingdom — European stock markets rose on Wednesday as investors cautiously awaited a key Federal Reserve (Fed) interest rate decision and digested a raft of earnings.

London shares climbed 0.3 per cent in late morning deals, with Barclays soaring almost 3 per cent on news of surging first-half profit at the UK bank.

Frankfurt also won 0.3 per cent and Paris jumped 0.9 per cent in early afternoon eurozone trade.

Madrid added 0.7 per cent but Santander stock shed 0.8 per cent despite the Spanish lender revealing that it rebounded into bumper quarterly profit.

The Fed's monetary policy meeting ending on Wednesday was closely watched for any guidance on its plans in light of the economic recovery, reopening and spread of the Delta coronavirus variant that has sent infections spiking.

"As always, investors will want to know the central bank's latest view on the outlook for the US economy and whether it is time to tinker with policy support measures,” said AJ Bell analyst Danni Hewson.

"The spread of the Delta virus variant in recent weeks and months could give the Fed reason to make no changes to its policy, but any sign of taking a more forward-looking view and wanting to taper bond purchases could cause ripples across global markets."

Investors were underwhelmed by better-than-expected earnings from US tech titans Apple, Google-parent Alphabet and Microsoft.

Apple's third-quarter profit rose to $21.7 billion on growth in iPhone sales.

Asian markets mostly fell again on Wednesday as fears over China's regulatory crackdown continued to reverberate around trading floors, following losses on Wall Street.

Hong Kong and Shanghai were in focus after suffering a diabolical previous three days in the wake of Beijing unveiling a series of measures aimed at curbing a range of industries — including tech and private tuition — that have raised fears of further action.

Hong Kong rose more than 1 per cent having oscillated wildly but it made only a small dent in the more than nine per cent drop suffered over the previous three days.

Bitcoin sat around $39,500 following a recent rally that has helped it briefly break $40,000, helped by renewed support from tycoon Elon Musk and other investors, with some analysts saying it could test $45,000 again soon.

WASHINGTON — While the global economy is still growing, the uneven distribution of vaccines is widening disparities as rich countries pick up speed and leave developing nations behind, the International Monetary Fund (IMF) warned on Tuesday.

"Vaccine access has emerged as the principal fault line along which the global recovery splits into two blocs," the IMF said in its updated World Economic Outlook.

But the IMF warned of the danger to the whole world if new virus variants are allowed to take hold.

The recovery "is not assured even in countries where infections are currently very low so long as the virus circulates elsewhere", the report said.

World gross domestic product (GDP) will expand by 6 per cent this year, unchanged from the April forecast, but IMF Chief Economist Gita Gopinath flagged the "widening gap" as advanced economies grow faster and developing nations, especially in Asia, slow.

The United States is projected to see much faster growth this year than previously forecast, expanding seven per cent growth thanks to massive government spending and widespread COVID-19 vaccinations, but the IMF slashed the forecast for India, which is facing a resurgence of infections.

The Washington-based crisis lender once again stressed that "the immediate priority is to deploy vaccines equitably worldwide", and pushed a $50 billion plan that offers a "feasible cost to end the pandemic".

Advanced nations have vaccinated nearly 40 per cent of the population, compared to barely 11 per cent in emerging markets and a tiny fraction in low-income countries, the report said.

Gopinath said "at least 1 billion vaccine doses should be shared in 2021 by countries with surplus vaccines."

Failure to achieve widespread vaccinations could allow highly infectious virus variants to take hold, like the Delta variant that has become prevalent. That could derail the recovery, wiping out $4.5 trillion cumulatively from global GDP by 2025, more than half of that lost from rich nations, the fund estimates.

This is not just a "tail risk" that is highly unlikely but "a realistic downside risk", said Petya Koeva-Brooks, deputy director of the IMF Research Department.

More worried now 

Although some emerging market nations like Brazil and Mexico are poised to show stronger growth this year, developing nations as a group are struggling to return to their pre-pandemic levels.

"I would say we're more worried than we were back in April," Koeva-Brooks said.

Vaccinations allowed an economic reopening and led to upgrades for the United States for this year and next, when growth is expected to hit 4.9 per cent.

However, that assumes the US Congress will approve another round of spending later this year of about $4 trillion in President Joe Biden's infrastructure and job creation programmes.

The IMF also raised the 2021 estimates for Canada and Britain to 6.3 per cent and 7 per cent, respectively, while the euro area GDP is expected to expand 4.6 per cent, just slightly higher than the April WEO.

India's growth forecast was slashed three points to 9.5 per cent, and even China was trimmed by three-tenths of a per centage point to 8.1 per cent.

In Latin America, Mexico is expected to post higher growth, helped by the positive spillovers from the recovering US economy as well as from increasing domestic demand, while Brazil also got a boost amid rising commodity prices, which will fade next year, the report said.

Temporary 

or persistent? 

Rising prices are another factor weighing on the global recovery, and pose a challenge to policymakers.

While the recent inflation spike is the result of the unprecedented and uneven turnaround from the pandemic and should prove temporary, the IMF raised the possibility that price increases could become "persistent".

"The unprecedented convulsion in the global economy last year continues to trigger aftershocks," the IMF said, pointing to a shortage of computer chips and a lack of shipping containers where they are needed, which has delayed deliveries of materials.

Koeva-Brooks said some of the bottlenecks and price jumps were to be expected and should be temporary, but acknowledged that the situation is hard to measure.

"We've never seen how to reopen economies after a crisis like this one," she said.

The IMF said inflation should return to pre-pandemic ranges in 2022 and urged central banks to hold off on reacting to the temporary price pressures — but to be ready to take "preemptive action".

WASHINGTON — US antitrust enforcers have asked a federal court for extra time in refiling a monopoly abuse case against Facebook which could roll back its acquisition of Instagram and WhatsApp, but was thrown out last month.

The Federal Trade Commission (FTC) said Facebook did not oppose the request to extend the filing deadline by some three weeks until August 19, according to a filing in court on Friday and posted online on Monday.

The extension gives the FTC time to revise its argument in the case.

Last month, Judge James Boasberg of the US District Court of Washington, DC, said in a 53-page opinion that the agency's initial lawsuit lacked evidence, notably in defining the market that Facebook was allegedly monopolising.

The federal agency based its case on a "vague" assertion that Facebook controlled more than 60 per cent of the social networking market, but the FTC "does not even allege what it is measuring", according to the judge's June 28 ruling.

The judge said the December FTC complaint "says almost nothing concrete on the key question of how much power Facebook actually had... it is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist".

The judge issued a separate opinion dismissing the case by the states, saying attorneys general had waited too long to bring the case for the acquisition of Instagram in 2012 and WhatsApp in 2014.

He initially gave the FTC 30 days to refile the case.

The new FTC filing said the agency will file an amended complaint by August 19, and that Facebook will have until October 4 to file its response. Additional briefs will come November 17 from the FTC and December 1 from Facebook.

The move comes amid a ramped-up effort by US antitrust enforcers against the largest technology firms which have increasingly dominated key sectors of the economy, including Facebook, Apple, Amazon and Google.

LONDON — Coffee prices surged this week to multiyear peaks, extending stellar gains this year after frost damaged crops in the world's biggest producer Brazil.

The futures price for arabica coffee, one of the South American nation's top commodity exports, soared on Friday to just over $2 a pound, the highest level since 2014.

The commodity has rocketed by a blistering 60 per cent since January.

Lower quality robusta coffee, mainly grown in Asia, leapt to an October 2017 peak of $1,993 per tonne, capping a near 40-per cent gain so far this year.

"Several reasons explain the astronomical gains for coffee prices," Rabobank analyst Carlos Mera noted, citing mainly the devastating weather conditions in Brazil.

Mera also blamed soaring transportation costs and political unrest in number-three producer, Colombia.

Brazil suffered a historic drought earlier this year. 

That was followed by damaging frosts this week at key plantations in Minas Gerais — a southeastern inland state that produces 70 per cent of the nation's arabica beans.

Sub-zero temperatures have "sparked defoliation of crops and even kill the youngest plants" that are crucial for future harvests, Mera said.

Arabica has also been heavily impacted because the crop has a biennial plant cycle, whereby low-yield production one year is followed by bumper output the following year.

'Long price crisis' 

The market rallied "on freezing temperatures in Brazil growing areas last night", added Price Futures Group analyst Jack Scoville on Friday.

"Freezing temperatures were reported in much of Minas Gerais and Parana and also in Sao Paulo."

"It is not yet known how extensive the damage was but... a significant part of the cop got hurt."

"It is flowering time for the next crop and the flowers were frozen and will drop off the trees," he added, noting, however, that the weather was now turning warmer.

At the same time, world coffee demand is picking up this year as global economies reopen from the deadly coronavirus turmoil.

That has stimulated demand for arabica which tends to be used in coffee shops and restaurants, unlike the lower grade robusta favoured for making instant coffee granules.

While conditions are ripe for high prices, commodity economist Philippe Chalmin explained that the cost of coffee has been particularly low in recent years, pointing out that a pound of arabica cost more than $3 in May 2011. 

"Coffee producers have experienced a very long price crisis," Valeria Rodriguez, Head of Advocacy & Public Engagement at the fair trade association Max Havelaar said.

"In the last four or five years, most of them have been working at a loss," she told AFP. 

"If the crop is smaller, it means that there are coffee producers somewhere in Brazil who will have no coffee to sell and therefore no income," she warned.

Moderate effect 

for consumers 

The rising prices are being passed on to consumers, "but slowly", according to Mera. 

"Roasters use the futures market to hedge themselves against short price increases, so it usually takes three to nine months to see the effects at retail level," he explained.

"Even then, the increases at retail level are much more moderate," he said with other components such as transport, packaging and marketing contributing to the retail price.

"Ground coffee is sold on average at 15 euros per kilo and coffee in pods at 45 euros per kilo or even more," said Rodriguez.

This is far removed from the current price of arabica coffee, which is less than four euros per kilo.

In France, the price of coffee sold in supermarkets has changed very little in recent months and remains close to its 2015 reference price, according to data shared by the national statistics agency.

The current rise in coffee prices is also part of a wider context of inflation in the cost of raw materials, whether agricultural or industrial — with copper and tin both breaking records in recent weeks.

PARIS — Electric cars — key to reducing emissions and meeting climate change goals — have boosted their market share in Europe, data showed on Friday, as the region prepares to abandon petrol and diesel.

Battery electric vehicles more than doubled their share of new car sales in Europe in the second quarter, according to the European Automobile Manufacturers' Association (ACEA) which groups together major car firms.

All-electric vehicles accounted for 7.5 per cent of new car sales in Europe in the three months from April through June, against 3.5 per cent during that period last year.

In absolute terms, sales of battery electric vehicles more than tripled across Europe to reach 210,298 cars.

The ACEA said there were substantial gains in the region's top four markets, led by sales more than quadrupling in Spain and Germany.

The publication of the data comes a week after the European Commission unveiled plans for what amounts to an effective ban on sales of new petrol and diesel vehicles from 2035.

It believes such a move is necessary for Europe to meet its goal of becoming carbon neutral by mid-century and meet its goals under the 2015 Paris accord that aims to limit the global rise in temperatures.

The ACEA also found sales jumped of different types of hybrid vehicles, which are seen by some as a transitional technology as they can reduce emissions from standard petrol or diesel vehicles. 

"Plug-in hybrid electric vehicles had an even more impressive second quarter of 2021, with registrations jumping by 255.8 per cent to 235,730 units," said the ACEA. That took their market share to 8.4 per cent.

Slump in petrol cars 

Sales of hybrids which cannot be recharged from power mains also more than tripled to 541,162 vehicles, remaining the largest category of alternatively-powered cars with a 19.3 per cent market share. 

Meanwhile, registrations of new petrol and diesel vehicles increased given the low number of vehicles sold in the second quarter last year, when many European countries had severe restrictions on businesses due to the pandemic.

But in terms of market share, which shows the relative weight of the current choices being made by consumers, both petrol and diesel saw huge drops.

Diesel saw its market share plunge to 20.4 per cent from 29.4 per cent. 

Petrol, which still claimed a majority of sales in the second quarter of last year with a 51.9 per cent of market share, saw a bigger slump to 41.8 per cent.

The data also comes as a growing number of automakers are unveiling their plans to shift to all-electric vehicles as policymakers indicate the days of internal combustion engines are numbered.

Daimler was the latest, announcing on Thursday that from 2025 it would introduce only electric new car platforms as it prepares to be ready to make a complete shift by 2030.

WASHINGTON — Against expectations, US retail sales rose in June, the Commerce Department said on Friday, with shoppers stepping up purchases at department stores and electronics outlets as pandemic business restrictions ease.

Sales rose 0.6 per cent last month to $621.3 billion, beating forecasts for a decline after they fell by a downwardly revised 1.7 per cent in May, the data said.

Sales jumped the most at department stores, electronics and appliance retailers and clothing outlets, as well as at gas stations, likely a consequence of rising oil prices and an increase in domestic travel.

Motor vehicle and parts dealers, however, saw a two per cent fall in sales amid soaring used car prices and a shortage of semiconductors that's forced some manufacturers to idle assembly lines.

"Core" retail sales excluding gas stations and the auto sector rose 1.1 percent.

"To see core sales rising so strongly in June is a positive sign that consumers feel confident and are still cash-rich, in aggregate," said Ian Shepherdson of Pantheon Macroeconomics.

Government stimulus payments combined with an easing of Covid-19 business restrictions has pushed retail sales higher in recent months, though the growth has been uneven.

Gas stations saw sales rise 2.5 per cent, electronics and appliance stores 3.3 per cent and general merchandise stores climbed 1.9 per cent -- within which department stores grew 5.9 per cent.

Food service and drinking places -- comprising the bars and restaurants that were hardest hit by business restrictions meant to stop Covid-19 -- saw sales increase 2.3 per cent last month.

On top of the decline in auto sales, furniture and home furnishing stores saw a decline of 3.6 per cent, building materials and gardening equipment outlets lost 1.6 per cent and sporting goods and hobby retailers lost 1.7 per cent.

Gregory Daco of Oxford Economics called the overall increase "modest" and said it reflected shifts in consumer preferences during the summer months.

"The great spending rotation saw households cut back on furniture, autos, sporting equipment and building material -- categories that outperformed during the pandemic -- while spending more freely at restaurants and bars, gas stations and electronic stores," he said.

Shepherdson said it remains to be seen how Americans will chose to spend the massive $2.3 trillion in savings they have accumulated during the pandemic, thanks in part to the stimulus measures, and whether it will keep retail sales moving higher.

"In the absence of any prior experience remotely like the current situation, this is impossible to forecast with confidence. But we continue to think its implausible to argue that people will choose to hold all the cash and rely solely on regular income to finance all their spending," he said.