Business

PARIS — The European Banking Authority (EBA), a key EU financial regulator, says it was among the victims of a hack of Microsoft’s email system which the US company blames on a Chinese group.

Microsoft said last week that a state-sponsored group operating out of China was exploiting previously unknown security flaws in its Exchange email services to steal data from business and government users, believed to number in the tens of thousands, so far.

The “Hafnium” group was a “highly skilled and sophisticated actor”, it said.

Hafnium has previously targeted US-based companies including infectious disease researchers, law firms, universities, defence contractors, think tanks and NGOs, it added.

In a statement on Monday, the EBA said its investigation had found no data theft so far.

“At this stage, the EBA e-mail infrastructure has been secured and our analyses suggest that no data extraction has been performed,” the statement said.

“We have no indication to think that the breach has gone beyond our email servers.”

The authority said the probe was still ongoing and that it has deployed additional security measures “in view of restoring the full functionality of the email servers”.

The EBA had said in a previous statement on Sunday that it had taken its e-mail systems offline as a precaution, noting that access to personal data held on servers “may have been obtained by the attacker”.

Microsoft Executive Tom Burt said last Tuesday that the company provided updates to fix the security flaws and urged customers to apply them.

“We know that many nation-state actors and criminal groups will move quickly to take advantage of any unpatched systems,” he added.

Beijing typically rejects US hacking charges out of hand and last year berated Washington following allegations that Chinese hackers were attempting to steal coronavirus research.

In January, the US said Russia was probably behind the massive SolarWinds hack that hit large swathes of the government and private sector, and which experts say may constitute an ongoing threat.

Meanwhile, Microsoft said the Hafnium attacks “were in no way connected to the separate SolarWinds-related attacks”.

TOKYO — Honda launched the world's most advanced self-driving car licensed for the road on Friday, releasing an initial batch of 100 models in Japan.

The Legend is capable of adaptive driving in lanes, as well as passing and switching lanes under certain circumstances.

The car also features an emergency stop function in case a driver is unresponsive to handover warnings, and Honda touts extensive safety testing.

"Approximately 10 million patterns of possible real-world situations were simulated during system development, and real-world demonstration tests were conducted on expressways for a total of approximately 1.3 million kilometres," it said in a statement.

Experts said the limited rollout would help determine whether there is sufficient demand for more autonomous vehicles.

Vehicle autonomy is classified along a 0-5 scale, with 5 indicating essentially total autonomy. The Legend is Level 3.

Several automakers have already manufactured vehicles capable of Level 3 autonomy, but few countries have legal frameworks permitting their sale and use.

Honda's Legend release comes after the carmaker won approval for sales in Japan last November.

The government had already amended the law to allow for such vehicles, believing self-driving cars will be key in a country with a rapidly ageing population in need of safe transportation solutions.

Automakers and tech firms are locked in a fierce battle for the lead in self-driving technology, with electric carmaker Tesla among the challengers.

For now, analysts say automakers are still a long way from a true Level 4 system, in which a car is considered to no longer have a driver, just passengers.

Level 5 vehicles would theoretically have no steering wheel or other driver controls and would be capable of handling all terrain types and weather without driver assistance. 

Honda's limited release of the Legend will be available only for lease sales. The partially self-driving sedan is priced at 11 million yen ($102,000).

NEW YORK — The creator of McAfee computer security software was facing charges on Friday that he cashed in on a “pump-and-dump” scheme, by promoting cryptocurrencies on Twitter to drive up their value.

John McAfee, founder of the antivirus firm that bears his name, and Jimmy Watson face charges of conspiracy, fraud, and money laundering in connection with schemes to trick cryptocurrency investors, according to an indictment unsealed by the US Department of Justice.

“McAfee and Watson exploited a widely used social media platform and enthusiasm among investors in the emerging cryptocurrency market to make millions through lies and deception,” US attorney Audrey Strauss said in a release.

McAfee, Watson, and other members of their “cryptocurrency team” allegedly “raked in more than $13 million from investors they victimised with their fraudulent schemes”, according to Strauss.

Pump-and-dump schemes typically involve over-hyping the value of stocks or, in this case cryptocurrency, by holders so that they can be sold at artificially high prices.

“McAfee and Watson used social media to perpetrate an age-old pump-and-dump scheme,” FBI Assistant Director William Sweeney said.

“When engaging in illegal activity, simply finding new ways to carry out old tricks won’t produce different results.”

McAfee and Watson also used Twitter to promote digital tokens on behalf of initial coin offerings without disclosing they were being paid for their efforts by the startups, according to the indictment.

McAfee, 75, is in custody in Spain pending a decision on his extradition to the United States where he is wanted for tax evasion.

He has been held at a prison near Barcelona since he was arrested in the Spanish city in October just as he was about to board a flight to Istanbul.

The arrest followed his indictment in June in the United States for tax evasion and willful failure to file tax returns between 2014 and 2018, despite earning millions from consulting work, cryptocurrencies and selling the rights to his life story.

Since making a fortune with his eponymous antivirus software in the 1980s, McAfee has become a self-styled cryptocurrency guru.

He has one million followers on Twitter, where he describes himself as a “lover of women, adventure and mystery”.

McAfee made headlines after he moved to Belize and his neighbour in the Central American country was mysteriously murdered in 2012, a crime that remains unsolved. 

PARIS — Google has told customers that it will raise the rates for advertisements on its French and Spanish platforms by 2 per cent from May to help offset the impact of a digital tax on profits.

France has collected the levy since 2019, and Spain since this year, under pressure from voters to make US tech giants pay a greater share of taxes in countries where they operate.

The ad rate increase is to "cover a part of the cost of conforming to laws concerning taxes on digital services in France and Spain", the internet giant said in an e-mail seen by AFP.

In France, internet companies with more than 750 million euros ($895 million) in worldwide sales, and 25 million in France, must pay a 3 per cent tax on their French operations, notably advertising sales and marketplace operations.

Spain also charges a 3 per cent tax on some of their businesses.

Jean-Luc Chetrit, head of the Union des Marques, an alliance of major brands, said Google's decision would "amputate the investment capacity of brands at a time when all companies are going through an unprecedented crisis".

Google did not respond to AFP's requests for comment, but Karan Bhatia, its head of government affairs, warned in February that "Taxes on digital services complicate efforts to reach a balanced agreement that works for all countries".

"We urge these governments to reconsider what are essentially tariffs, or at least suspend them while negotiations continue," he said.

Google as well as Apple, Facebook and Amazon — grouped together as "GAFA" — are in the crosshairs of European governments that accuse them of exploiting common market rules to declare all profits in the bloc in low-tax jurisdictions such as Ireland or Luxembourg.

Critics say they are depriving national tax authorities of millions of euros even as they profit from a surge in online activities because of home-working and social distancing rules during the COVID-19 crisis.

The companies counter that they are being unfairly targeted by discriminatory levies.

Global deal? 

Amazon had already responded to the French tax last October by raising the rates it charges France-based marketplace sellers by 3 per cent.

Apple followed suit by raising the commission it charges developers who sell apps on its platform not only in France, but also in Italy and Britain.

The French tax move on global digital companies made it a pioneer in the struggle to find a fair fiscal system for Internet multinationals whose tax bill is often tiny compared to their income.

Contacted by AFP, Facebook said it had no plans to raise prices for ads in France or Spain for now as it waited for a global accord on fiscal rules.

The French tax brought in 400 million euros to government coffers in 2019, and the government applied the levy again last year despite pressure from the Trump administration to drop it.

With President Joe Biden in the White House, the Organisation for Economic Cooperation and Development — which is overseeing negotiations on a digital tax — has said it hopes a G-20 finance ministers' meeting in July will hammer out an agreement on the issue.

Last month, the new US Treasury Secretary, Janet Yellen, said Washington would no longer insist on a "safe harbour" clause that would effectively make participation in a global tax scheme optional, removing a key sticking point with EU officials.

By Delphine Touitou

Agence France-Presse

WASHINGTON — The coronavirus pandemic has wiped out millions of jobs in the United States, but it has had the unexpected effect of increasing savings rates among Americans, especially wealthy people stuck at home and forced to give up travel and entertainment.

Along with the dramatic reduction in leisure spending, things like government stimulus checks, unemployment benefits and the suspension of monthly loan repayments for more modest earners have swelled the bank accounts of Americans who are usually known to be crumbling under debt.

Americans have accumulated $1.8 trillion in excess savings in the 11 months since the start of the pandemic, according to figures released this week by Barclays and Oxford Economics.

"And, we estimate that this number could rise to $2.5 trillion by this summer," Gregory Daco, chief US economist at Oxford Economics, indicated.

The savings rate of Americans, which averaged seven to eight per cent before the crisis, spiked to a record 33 per cent in April 2020, thanks to a massive $2.2 trillion COVID relief package for households and businesses, according to Bureau of Economic Analysis data.

The savings rate was holding at 13.7 per cent at the end of December, though decreasing as various forms of aid expired. 

It jumped in January to 20.5 per cent after $600 stimulus checks were included in a $900 billion plan adopted by Congress at the end of December.

And, it could rise again this spring, as lawmakers consider the Biden administration's $1.9 trillion relief package.

Overall, the savings trend has highlighted the disparities between rich and poor in the United States, with wealthy households saving much more than families of modest means who have been hardest-hit by job losses and have used stimulus money mostly to pay bills.

The richest Americans were generally able to maintain their jobs through teleworking — their income has remained constant while spending has plunged, resulting in excess savings.

"About four-in-ten Americans [42 per cent] say they have been spending less money than usual since the pandemic began, and that is especially the case among upper-income adults," according to a survey of 10,334 Americans by the Pew Research Centre, released Friday.

Some 53 per cent of higher-income Americans reported spending less, compared with 43 per cent of middle-income and 34 per cent of low-income people.

While financially secure people were unable to spend on leisure and travel, low-income Americans reported spending less because they were worried about personal finances.

Euphoric consumption? 

"Many Americans were already struggling to save money before the coronavirus outbreak hit," Pew said, with 47 per cent of low-income adults unable to save, compared to 25 per cent for those who are middle-income. 

Only eight per cent of upper-income Americans had the problem.

Saving rates were even more unequal when broken down by race, with 38 per cent of Black adults saying they are usually not able to save, compared with 31 per cent of Hispanics, 27 per cent of white respondents and 19 per cent of Asians, the Pew data showed.

The fundamental question remains: Whether the record savings rate will boost consumption in the United States, where consumer spending is historically the driver of the economy.

Before the pandemic, it represented two-thirds of the GDP.

"Our outlook assumes a fairly rapid acceleration in household spending in the coming year and we make the explicit assumption that households will draw down on accumulated saving in the process," Barclays economists said.

They noted the potential "for a substantial rebound in consumption post-pandemic if households experience higher benefits — akin to ‘euphoria’ — from consuming after a period of deprivation".

Daco is not so sure. While he anticipates a rebound in consumer activity, he noted that spending on things like travel probably will not skyrocket to a rate that would make up for a year's shortfall.

"Are we going to take all the trips that we would have liked to take last year, in addition to those planned once the pandemic is over? Are we going to travel in business or first class on the pretext that we have more money tucked away?" he asked. "Not necessarily".