Skip to Content

Purdue Settlement, U.S. Crude, Facial Recognition: CEO Daily for March 27, 2019

Good morning,

Qualcomm scored a victory yesterday in its epic legal battle against Apple, which has become the Jarndyce v Jarndyce of the corporate law world.

U.S. International Trade Commission Judge MaryJoan McNamara said she would recommend an import ban on some iPhones, which are made in China, because it infringes one of the chipmaker’s patents. Qualcomm’s stock price rose more than a dollar after the news broke yesterday; Apple’s fell by $5.

The battle began early in 2017 when Apple sued Qualcomm for $1 billion, claiming the chip manufacturer was charging excessive amounts for its patents. It has continued unabated since. Qualcomm has traveled to courts around the world, claiming Apple is stealing its intellectual property. Apple has argued that Qualcomm operates an “illegal business model” that violates antitrust laws. Both sides have won victories along the way.

If you care about all the twists and turns that this over-wrought case has taken, you can read a nice summary here. One thing is clear: both companies are spending gobs of money on lawyers. Dickens’ famous case ended when legal costs devoured the entire estate. Better if Qualcomm and Apple sit down and sort this out before their dispute does the same. This is no way to conduct a business negotiation.

By the way, if you are still trying to figure out what to make of Apple’s announcement of a pivot to subscription services yesterday, Fortune’s tech guru Adam Lashinsky has a concise explanation here. And if you don’t have time for Adam’s take, here’s Oprah’s: “They’re in a billion pockets, y’all. A billion pockets.”

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

Top News

Facial Recognition

Tech firms have been helping themselves to pictures of people’s faces with few legal restrictions, and they’re using the imagery to build their facial recognition software. As Fortune‘s Jeff John Roberts writes: “Consumers may be surprised at some of the tactics companies have used to harvest their faces. In at least three cases, for instance, firms have obtained millions of images by harvesting them via photo apps on people’s phones.” Fortune

Purdue Settlement

OxyContin firm Purdue Pharma will pay $270 million to settle claims in Oklahoma regarding its role in fuelling the U.S.’s opioid epidemic. This is much more than it paid out in two previous settlements in other states, but it seems super-keen to avoid a televised trial and a jury verdict that could call for an even bigger sum. New York Times

U.S. Crude

U.S. shale oil is being rejected by some Asian refiners because of contamination that makes it hard to process. As the crude makes its way through the complex American supply chain, it apparently picks up problematic metals and chemical compounds. Oil coming from the Middle East doesn’t tend to have this problem because each type of oil there goes through its own infrastructure, whereas in the U.S. the same infrastructure is used for various types of crude. Bloomberg

EU Copyright

The European Parliament yesterday greenlit a massive change to copyright law that will, from 2021, make online platform providers liable for users’ copyright violations. This will force most platforms to install upload-filtering technology. According to Emmett Shear, the CEO of game-streaming platform Twitch, the law leaves his company unsure of whether or not it needs to comply. Fortune

Around the Water Cooler

Speed Limits

The EU institutions have wrapped up negotiations on a new road safety law that will, from 2022, make certain safety measures mandatory in cars, including “intelligent speed assistance” that will alert drivers when they are breaking the limit. Cars will also have to be fitted with breathalyzers to stop drunk drivers from firing up the engine. Telegraph

EU on Huawei

Sticking with the EU, the European Commission has decided to snub the U.S.’s push for a blanket ban on Huawei and ZTE equipment in 5G networks. Instead, the EU executive will urge member states to keep a close eye on the Chinese vendors’ equipment via risk assessments and security checks. Politico

ECB Policy

The European Central Bank, which has been holding back on rate increases in the face of weak manufacturing and growth data, is ready to maintain that position. ECB President Mario Draghi: “Our current reaction function is well designed to respond to further delays in inflation convergence. In such a situation, just as we did at our March meeting, we would ensure that monetary policy continues to accompany the economy by adjusting our rate forward guidance to reflect the new inflation outlook.” CNBC

Satellite Down

India has successfully demonstrated an anti-satellite missile, with Prime Minister Narendra Modi calling the test a major breakthrough for the country’s space program. The only other countries to have used such weapons are the U.S., Russia and China. Modi, who is up for re-election next month: “India registered its name as a space power.” Reuters

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.