Data Sheet—Tuesday, February 21, 2017

By Adam Lashinsky and Heather Clancy
February 21, 2017

After reading The Wall Street Journal’s outstanding new article about Jay Y. Lee, the head of the Samsung empire who has been arrested in South Korea on bribery charges, I reread the profile I wrote 18 months ago about him. Coincidentally, the events that led to Lee’s recent arrest occurred just as I was publishing that article. His fateful meeting with the president of his country happened the week after I left Seoul.

I covered a lot of topics in my feature story. I wrote about Lee’s efforts to modernize the corporate culture of Samsung, a key element of The Journal’s fresh reporting. I also wrote about Samsung’s strengths and weaknesses, its penchant for following others, its dominance in semiconductors, and the new ground it is breaking in an area of pharmaceutical manufacturing called “biologics.”

One line in my long article stands out now. “Lee has told people he understands the downside of being an enigma,” I wrote in the summer of 2015. “He has said he understands the need to demystify the role of the founding family.”

With his arrest, Samsung’s founding family faces its greatest crisis ever. The heads of Korea’s conglomerates frequently have faced prosecution followed by little or no time in jail. Jay Y. Lee’s own father was convicted and pardoned. His first cousin, head of a non-Samsung conglomerate known as CJ, spent a brief time in prison a year ago.

Reading the political winds from afar, this time could be different. The Korean people have mixed emotions about the chaebol, as the conglomerates are known. They experience pride and revulsion simultaneously, the former for all Samsung and its ilk have accomplished, the latter for the advantages they have enjoyed. The advantages might soon deteriorate significantly, especially if South Korea’s democracy, frequently described as “young,” decides it is time.

How will this affect Samsung’s businesses? For the time being, they seem to flourish or flounder no matter who the company’s titular leader is. A company can’t outrun its own culture, though. Were Jay Y. Lee to be sidelined indefinitely Samsung would be sailing in uncharted territory.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

 


BITS AND BYTES

It looks like Uber is taking employee’s claims of sexual harassment seriously. The mammoth ride-sharing service hired former U.S. attorney general Eric Holder to look into allegations made by a former female engineer in a blog post. Susan Fowler, who now works at Stripe, writes that she reported incidents with her male manager to Uber’s human resources organization, which didn’t take action because he was a “high performer.” (Reuters, Fortune)

Chinese payments giant moves into South Korea. Ant Financial is sinking $200 million into Kakao Pay, the mobile payment subsidiary of South Korean messaging platform giant Kakao. The affiliate of retail giant Alibaba is expanding aggressively ahead of an initial public offering anticipated for later this year. It shored up its U.S. presence last month through an $880 million deal for MoneyGram. (Reuters)

Attention Snap fans. Mark your calendar for March 2. That’s when stock from the highly anticipated initial public offering is expected to begin trading. Plus, the company is now selling its video-recording Spectacles online, making them much more broadly available. (Fortune, Fortune)

Should robots pay taxes? Bill Gates thinks so, largely to help with retraining humans. (Fortune)

Chipotle is making big progress on digital orders. The fast-casual restaurant chain has cut the wait time for requests made through its mobile app or website by 50% at most of its 2,100 locations. But it hasn’t slowed down service times for walk-in customers to do so. (Fortune)

A huge apartment rental company is suing Airbnb. Apartment Investment & Management Company wants to prevent Airbnb from allowing listings for its properties, saying that tenants are breaking their leases when they use the service. AIMCO owns approximately 50,000 apartments across the United States. (Fortune, Wall Street Journal)

What we know about Apple’s secret data center in Nevada. It looks the tech giant is preparing a $50 million data center facility, codenamed Project Isabel. The site would support demand for Apple’s iCloud services business, although the plans are far from finalized, based on permit paperwork filed earlier this month. (Fortune)

How the biggest grocery chain in the U.S. is using tech to keep shoppers in its stores. As food delivery services plot to steal foot traffic, Kroger is using an array of cameras, sensors and analytics software to make the experience of visiting a store far more personal. In Kroger’s world, cashiers are plentiful, coupons can be created on demand with a mobile app, and clerks anticipate questions proactively. (Wall Street Journal)


THE DOWNLOAD

Intel CEO touts new strategy for next wireless wave. Brian Krzanich is tired of hearing how his company missed the mobile revolution, at least for the first wave of smartphones and the 3G and early 4G wireless networks that they relied on. After analyzing what went wrong, he’s more focused on Intel cashing in on the next wave of even speedier wireless technology: 5G.

With the entire mobile and telecommunications industry coming together next week for their annual conference, the Mobile World Congress, all manner of 5G products will be on display. Intel, too will be unveiling its latest mobile gear for the expected next step in wireless. But it’s not just the products, it’s the way Intel has gone about developing and testing them that could improve the chipmaker’s prospects, Krzanich says. Fortune‘s Aaron Pressman reports on what’s next.



ONE MORE THING

SAP’s Bill McDermott is a natural-born entrepreneur. When he was 16, McDermott began working at a deli. He soon owned the business. Today, McDermott is the CEO of SAP, a software company that placed number 462 on our 2016 Global 500 list. He has a uniquely optimistic spirit, and believes a person becomes a serious leader when they can control their mind. Learn more about his rise in this week’s episode of the Fortune Unfiltered podcast.

This edition of Data Sheet was curated by Heather Clancy.
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