How the pandemic helped Walmart battle Amazon Marketplace for sellers

CHICAGO (Reuters) – Between 2009 and 2014, Walmart’s Marketplace business, where outside merchants hawk everything from baby blankets to power tools, counted no more than six sellers, and was described by one expert as “in limbo.”

But what was treated as an afterthought for years has emerged as an important leg in the world’s biggest retailer’s long-term strategy to take on Amazon Inc, which it is battling for advertising and ecommerce dollars.

Walmart Marketplace grew to an estimated 70,000 sellers in 2020, fueled by a surge in online shopping due to the Covid-19 pandemic and a series of investments in technology and vendor relationships reported here for the first time.

That is expected to rise 146% by the end of 2022, according to projections by data firm Marketplace Pulse that have not yet been published.

The rapid growth is starting to stress the system, some merchants said, a growing number of whom worry that if the pace picks up, Walmart risks damaging its reputation as a haven for quality sellers. Reuters spoke with vendors from Walmart.com and Amazon, analytics companies that help merchants sell on both marketplaces, industry experts, consultants and executives.

“A year or two ago, every brand on Walmart.com would be trustworthy but now it’s getting very similar to Amazon and that’s a huge risk,” said Cal Chan, who sells supplements and skincare products on both Walmart and Amazon. “Amazon let everyone under the sun in – that helped them grow, but now they’re trying to clean up the riff-raff and it’s very hard to close Pandora’s Box.”

Amazon disputed the characterization by merchants and said it has a thorough vetting process designed to help honest sellers set up accounts quickly. The company employs more than 8,000 people to remove counterfeit products, false listings and identify intellectual property theft. In 2019, Amazon stopped over 2.5 million suspected bad actors from opening Amazon selling accounts, and blocked more than 6 billion suspected bad listings, an Amazon spokesman said in an email.

Walmart has distinguished itself as a safer, less crowded marketplace than rivals like Amazon, making it easier for merchants to stand out and sell products. But it is now expected to see a surge of new vendors after it said last month it will open its online store to international merchants, which are less accountable to U.S. consumer protection laws. Walmart has already added over 130 new Chinese sellers, Marketplace Pulse said.

(Graphic: More Chinese merchants join Walmart Marketplace – )

Reuters Graphic

The retailer said it is actively courting foreign vendors including from ecommerce giant Flipkart, which is bigger than Amazon in India and in which Walmart holds a 77% stake. It vowed to maintain quality control.

“We do not plan to lower our bar or change our vetting standards, our monitoring or management of sellers,” Jeff Clementz, Vice President of Walmart Marketplace, said. “We are aiming to attract the best from around the world.”

Walmart said its sourcing teams in other countries have begun vetting potential sellers by their reviews, licensing permissions, reputations and items.

The business of providing a storefront for outside sellers is, as one analyst called it, a “secret weapon” for Amazon and a major growth engine that has caught the attention of Target and big tech rivals Google and Facebook, which are eager to expand similar businesses.

Sales generated by Amazon’s third-party vendors totaled $189 billion last year in the United States, or nearly 60% of the company’s total U.S. retail ecommerce sales, according to eMarketer data from Insider Intelligence.

Amazon, which declined to verify these numbers, dwarfs Walmart’s marketplace and is estimated to have more than 3 million sellers on its U.S. third-party store at the end of 2022, and 7.5 million globally, according to Marketplace Pulse.

But the lure of Walmart’s over 5,000 stores and clubs – more important than ever as pick-up and delivery hubs take off due to the pandemic – is a big attraction for many vendors.

“Walmart has something Amazon can’t match: brick-and-mortar stores. If you do well on Walmart.com, there’s potential you can get into a regular Walmart,” said Bradley Sutton, who works at third-party seller consulting firm Helium 10.

“It’s like the Holy Grail for vendors. That’s way bigger than Amazon.”

(Graphic: U.S. third-party merchants’ sales surge – )

Reuters Graphic

‘STRATEGIC PRIORITY’

Marketplace’s elevation to what Clementz in June called a “strategic priority” tracks Walmart’s reinvention from digital also-ran to the No. 2 spot behind Amazon.

The transformation began with the 2016 addition of serial entrepreneur Marc Lore to lead Walmart’s U.S. ecommerce business. That year, it agreed to spend $3.3 billion on Lore’s less than three-year-old Jet.com.

“This company, over time, is going to look like more of an ecommerce company,” Walmart Chief Executive Doug McMillon said at the time.

By early October 2016, 17 days after joining Walmart, Lore laid out a strategy that included a plan to not only lure hipper, urban, millennial shoppers to Jet.com and Walmart.com, but also to make both sites attractive to smaller merchants.

Lore eyed an opportunity to lure sellers of “more premium-type brands that don’t typically want to sell on marketplaces” of rivals.

(Graphic: Walmart Marketplace vendors seen rising sharply – )

Reuters Graphic

Some vendors described a rigorous process to get on Walmart Marketplace that can take weeks and includes submitting bank account information, sales records and social security details.

When Clementz, previously COO of Walmart.com, was put in charge of Marketplace, the first order of business for the veteran of PayPal and Intel was to improve “glitchy,” complicated software for listing products and simplify the process of connecting analytics and delivery firms for vendors, said sellers.

Walmart spruced up its advertising platform, rolled out software to protect sellers’ intellectual property, launched a delivery and logistics service, and introduced its version of Amazon Prime, called Walmart+, a membership program that “100% boosts sales,” according to fitness equipment merchant Michael Lebhar.

Hoping to address complaints from sellers, Walmart hired “strategic account managers” who cater to top vendors. On Tuesday, Walmart emailed vendors to apply for “a chance to win the opportunity to sell” U.S.-made products in stores.

To sweeten the pot, Walmart has also undercut Amazon on the commission it takes on sales of some items. Walmart takes a 3%-20% cut of items sold versus Amazon’s rate of 6%-45%, depending on the type of product.

The month Walmart opened its market to international sellers, new vendors were told they would not have to pay a commission at all for a limited time.

But concessions like this generate concern among some sellers.

“This is alarming and will end up with Walmart having similar counterfeit or quality issues like Amazon is having,” said Ryan Ebel, 30, a third-party seller from Las Vegas.

Lore, who left the company at the end of January and remains an advisor, said he is “not worried” about Walmart’s expansion to foreign sellers.

“The magic is finding that white line, the right balance between adding more assortment but not going down a path of letting anybody on the platform,” he said.

Reporting by Richa Naidu in Chicago; Editing by Kenneth Li and Nick Zieminski

Egypt seizes ship that blocked Suez Canal over $900m compensation claim

Egypt will impound the giant container ship that blocked the Suez Canal last month until its Japanese owner pays $900m (£652m) in compensation.

One of the Ever Given’s insurers, UK Club, said the Suez Canal Authority had rejected its offer to settle the claim.

It described the claim, which includes $300m for a salvage bonus and $300m for loss of reputation, as “extraordinarily large” and “largely unsupported”.

The Ever Given is anchored in the Great Bitter Lake, the canal’s midway point.

The 400m-long (1,312ft), 220,000-tonne ship became wedged diagonally across the waterway on 23 March after running aground amid high winds and a sandstorm that affected visibility.

It was freed six days later, after a salvage operation involving a flotilla of powerful tug boats and dredging vessels that shifted an estimated 30,000 cubic metres (1.1m cubic ft) of mud and sand.

More than 400 vessels had to wait to pass through the 193km (120-mile) canal, which connects the Mediterranean Sea to the Red Sea and provides the shortest sea link between Asia and Europe.

The chairman of the Suez Canal Authority (SCA), Osama Rabie, said on Tuesday that the Ever Given had been “seized due to its failure to pay $900m” in compensation, Egyptian state media reported.

The figure was based on the “the losses incurred by the grounded vessel as well as the flotation and maintenance costs”, he added.

UK Club – which insured the ship’s owner Shoei Kisen Kaisha for third-party liabilities, including damage caused to infrastructure or claims for obstruction – said in a statement that it had been negotiating in good faith with the SCA “despite the magnitude of the claim”

“On [Monday], a carefully considered and generous offer was made to the SCA to settle their claim,” it added. “We are disappointed by the SCA’s subsequent decision to arrest the vessel.”

“We are also disappointed at comments by the SCA that the ship will be held in Egypt until compensation is paid, and that her crew will be unable to leave the vessel during this time.”

A handout satellite image made available by Maxar Technologies shows the excavation and dredging operations around the Ever Given on 28 March 2021
image captionThis satellite photograph shows how the Ever Given was wedged across the canal

UK Club said the SCA had not provided a detailed justification for its claim, noting that the grounding resulted in no pollution and no reported injuries.

It also said the claim did not include the fees of the specialist salvage company brought in to help refloat the Ever Given, which the owner and another insurer expected to pay separately.

A spokeswoman for Shoei Kisen Kaisha confirmed to Agence France-Presse that the Ever Given’s fate was “in the legal arena”.

Map showing Suez Canal and location of Ever Given in the Great Bitter Lake (30 March 2021)

The Ever Given’s technical managers, Bernhard Schulte Shipmanagement, also expressed disappointment with the decision on Wednesday in a statement confirming that inspections by the American Bureau of Shipping, the vessel’s classification society, had been concluded.

“The vessel has been declared suitable for onward passage to Port Said where she will be assessed again before departing for Rotterdam,” it said.

The Ever Given’s 25 Indian crew members had been co-operating fully with the Egyptian authorities and their investigation into the grounding, including granting access to the vessel’s voyage data recorder and other materials and data, the statement added.

“The crew on board remain in good health and good spirits, fulfilling their duties to the highest of standards. BSM is in regular contact with the crew and has offered support to the seafarers’ families.”

Coinbase listing marks latest step in crypto’s march to the mainstream

LONDON (Reuters) – Coinbase Global Inc, the biggest U.S. cryptocurrency exchange, will list on the Nasdaq on Wednesday, marking a milestone in the journey of virtual currencies from niche technology to mainstream asset.

The listing is by far the biggest yet of a cryptocurrency company, with the San Francisco-based firm saying last month that private market transactions had valued the company at around $68 billion this year, versus $5.8 billion in September.

It represents the latest breakthrough for acceptance of cryptocurrencies, an asset class that only a few years ago had been shunned by mainstream finance, according to interviews with investors, analysts and executives.

“The listing is significant in that it marks the growth of the industry and its acceptance into mainstream business,” said William Cong, an associate professor of finance at Cornell University’s SC Johnson College of Business.

Bitcoin, the biggest cryptocurrency, hit a record of over $63,000 on Tuesday. It has more than doubled this year as large investors, banks from Goldman Sachs to Morgan Stanley and household name companies such as Tesla Inc warm to the emerging asset.

Coinbase’s direct listing – which means it has not sold any shares ahead of its market debut – is likely to accelerate that process, those interviewed by Reuters said, by boosting awareness of digital assets among investors.

“This is a very positive thing for bitcoin in itself, as it proves the bridge that has been built from an esoteric, left-of-field arena, full of cowboys, to mainstream finance,” said Charles Hayter of data firm CryptoCompare.

Still, some institutional investors voiced caution over long-term prospects for Coinbase and the crypto sector.

Swiss asset manager Unigestion said it was wary of the hype around cryptocurrencies, and as a result would not be buying Coinbase stock.

“We think there is a lot of frenzy and exuberance in everything that looks like crypto,” said Olivier Marciot, a portfolio manager at Unigestion, which oversees assets worth $22.6 billion.

“Hedge funds and retail will probably be the early birds in these new stocks – probably buying into them pretty heavily – which shouldn’t be a clear indication of how they will be in the longer term.”

BEHOLDEN TO BITCOIN?

Others experts said risks included Coinbase’s exposure to a highly volatile asset that is still subject to patchy regulation.

Founded in 2012, Coinbase boasts 56 million users globally and an estimated $223 billion assets on its platform, accounting for 11.3% crypto asset market share, according to regulatory filings.

The company’s most recent financial results underscore how revenues have surged in lock-step with the rally in bitcoin trading volumes and price.

In the first quarter of the year, as bitcoin more than doubled in price, Coinbase estimated revenue of over $1.8 billion and net income between $730 million to $800 million, versus revenue of $1.3 billion for the entire 2020.

“The correlation to bitcoin will be very high after the stock stabilizes after listing,” said Larry Cermak, director of research at crypto website The Block.

“When price of bitcoin goes down, it’s inevitable that Coinbase’s revenue and inherently price of the stock will decline as well.”

Regulatory risks also loom, others said, as Coinbase increases the number of digital assets users can trade on its platform.

Coinbase last year suspended trading in major digital currency XRP after U.S. regulators charged associated blockchain firm Ripple with an $1.3 billion unregistered securities offering. Ripple has denied the charges.

“Given the expansion of assets covered by Coinbase it’s almost inevitable that other listings will come into question,” said Colin Platt, chief operating officer of crypto platform Unifty.

Coinbase declined to comment.

Reporting by Tom Wilson and Anna Irrera; Editing by Nick Zieminski

SolarWinds dealing with hack fallout cost at least $18 million

WASHINGTON (Reuters) – Texas-based SolarWinds Corp said the sprawling breach stemming from the compromise of its flagship software product has cost the company at least $18 million in the first three months of 2021.

In preliminary results made public on Tuesday, the company said it spent between $18 million and $19 million in the first quarter of 2021 to investigate and remediate what it described as “the Cyber Incident.”

SolarWinds has been working since December to deal with the fallout of a series of intrusions blamed on Russian hackers across the U.S. government and scores of private companies. In many cases, the hackers compromised their targets by piggybacking on a subverted version of SolarWinds Orion, a widely used network management tool.

SolarWinds has hired cybersecurity company CrowdStrike Holdings Inc and professional services firm KPMG to help it investigate the intrusions. The company said its costs were likely to grow.

“We expect to incur significant legal and other professional services expenses associated with the Cyber Incident in future periods,” it said in a note.

Solarwinds shares gained 2.1% in Tuesday trading on the New York Stock Exchange.

Reporting by Raphael Satter; Editing by Dan Grebler

Russian opens case against Yandex over alleged competition law breach

MOSCOW (Reuters) – Russia’s Federal Antimonopoly Service (FAS) on Tuesday said it had initiated proceedings against internet giant Yandex over alleged competition law violations on the company’s search engine.

The state agency told Yandex in February it had created unequal market conditions for general online search services, that it was preferentially promoting its own products and asked it to stop. Yandex asked for extra time to respond to the accusations earlier this month.

The FAS said it would investigate possible anti-competitive practices and assess their consequences, adding that Yandex could be subject to a fine should evidence it was restricting competition be found.

“We do not agree with the accusation of restricting competition and are ready to defend our position,” Yandex said in a statement.

Yandex said it was using the global practice of enriched search results to enhance the user experience.

“Over 30,000 companies already use our enriched search technology for free,” Yandex added.

Reporting by Alexander Marrow; editing by Barbara Lewis

Apple backs wide emissions disclosure rules

(Reuters) -Apple Inc on Tuesday called for the U.S. Securities and Exchange Commission (SEC) to require companies to disclose far-reading emissions information such as how customers use their products, according to a tweet from Apple Vice President Lisa Jackson.

The comments by the iPhone maker mark the most specific prescription to date from a large public company about what disclosures are needed, said Veena Ramani, senior program director for Ceres, a Boston-based climate advocacy group.

The SEC last month said it will seek input on how companies might report on their greenhouse gas emissions and other climate factors.

Investors have poured money into funds that use environmental, social and governance factors to pick stocks, but a lack of common standards has made it hard to compare issuers’ operations.

Jackson, a former U.S. environmental regulator, in her tweet included a statement that Apple “believes that the SEC should issue rules to require that companies disclose third-party-audited emissions information to the public, covering all scopes of emissions, direct and indirect, and the value chain.”

An Apple spokeswoman confirmed the phrasing referred to so-called Scope 3 emissions like those resulting from the use of a company’s products by other parties. While that can be simple for technology or finance companies to provide, calls to publish the data can be controversial for other industries.

In reporting its Scope 3 emissions in January for the first time, oil major ExxonMobil Corp wrote that the data “is less certain and less consistent because it includes the indirect emissions resulting from the consumption and use of a company’s products occurring outside of its control.”

Various other business leaders have previously called for mandatory climate disclosures including Larry Fink, CEO of top investor BlackRock Inc. In February, BlackRock also urged heavy polluters to disclose their Scope 3 emissions to investors, like the Task Force on Climate-Related Financial Disclosures has also recommended.

In addition, Apple was among hundreds of companies that on Tuesday pressured the administration of U.S. President Joe Biden to slash greenhouse gas emissions.

Reporting by Ross Kerber in Boston Additional reporting by Stephen Nellis in San FranciscoEditing by Bill Berkrot and Matthew Lewis

Nornickel to boost nickel production in Finland for EV battery market

MOSCOW (Reuters) – Russian metals producer Nornickel said on Tuesday it will boost output of nickel products at its Harjavalta plant in Finland as it bets on the expanding market for battery materials needed for electric vehicles (EV).

Finland’s state mining investment firm Finnish Minerals Group, German chemicals giant BASF and Finnish utility Fortum are among companies currently forming an EV battery cluster in Finland.

Nornickel, one of the world’s largest producers of nickel, wants to meet rising demand from those companies in coming years, its head of sales, Anton Berlin told reporters.

Its Harjavalta refinery will expand production of nickel sulphate solution, which is used for the manufacture of intermediate products for lithium-ion batteries.

Being close to customers is vital for this product as long-distance transport eats up the bulk of its profitability, Berlin said.

“We are confident that this market will be rising,” Berlin said. Estimates of nickel consumption by the global electric and hybrid vehicles sector vary from 400,000 tonnes to 700,000 tonnes a year by 2025, he added.

Harjavalta currently produces 65,000 tonnes of nickel products a year, of which 10,000 tonnes comes in nickel sulphate solution.

It plans to raise production of nickel products to 75,000 tonnes by 2023 and to more than 100,000 tonnes by 2026, including at least 40,000 tonnes of nickel sulphate solution.

This solution would be enough to produce 1 million of electric vehicles, based on the current nickel per car usage.

Despite its expansion of raw materials production for the EV sector, Nornickel does not plan to move into actual EV battery production as it believes that “is a completely different business” to its own, Berlin added.

The Harjavalta project will cost the company several tens of million dollars, he added.

Reporting by Polina Devitt and Anastasia Lyrchikova; editing by Susan Fenton

Brexit: JD Sports to open Dublin warehouse

Retailer JD Sports is to open a 65,000 sq ft warehouse near Dublin to tackle post-Brexit trading problems.

Goods which JD imports from East Asia to GB now incur tariffs when they are distributed onward to its stores across Europe.

To deal with this JD has already opened a warehouse in Belgium but says it needs a specific facility for Ireland.

The company says the Irish facility will become operational in the second half of this year.

It is also considering a bigger facility elsewhere in the EU from which it would process all EU online orders.

In a trading update the firm said: “We continue to review opportunities for a larger permanent facility in Europe which can process substantially all of the volume required for stores and online orders in mainland Europe although it will likely be Autumn 2022 before an enlarged facility would be available for use.”

In February the chairman of JD told the BBC that Brexit had turned out to be “considerably worse” than he feared.

Peter Cowgill said there was no true free trade with the EU, because goods that JD Sports imports from East Asia incur tariffs when they go to its stores across Europe.

“I actually think it was not properly thought out,” he said.

“All the spin that was put on it about being free trade and free movement has not been the reality.”

By John Campbell
BBC News NI Economics & Business Editor

Air France-KLM prices capital hike at 4.84 euros per share

PARIS (Reuters) – Air France-KLM on Tuesday launched a capital hike at 4.84 euros ($5.76) per share as part of a 4 billion-euro recapitalisation to shore up its finances amid the COVID-19 crisis.

The airline said in a statement it could raise up to 1.036 billion euros if demand was sufficient to exercise an option to increase the size of the rights issue.

It added that the subscription pricing amounted to an 8.85% discount to Monday’s closing price.

Shares of the Franco-Dutch company were down 4.33% at 5.08 euros at 0810 GMT, the worst performer on France’s French SBF 120 index.

Air France-KLM said on Monday it will expand its partnership with China Eastern Airlines, as the Chinese carrier committed to subscribe to the issue. It will hold less than 10% of the firm’s capital.

The French state will cover as much as two-thirds of capital increase.

($1 = 0.8404 euros)

Reporting by Matthieu Protard; Editing by Kirsten Donovan

Bitcoin hits record high of $62,575

LONDON (Reuters) – Bitcoin hit a record of $62,575 on Tuesday, extending its 2021 rally to new heights.

The world’s biggest cryptocurrency has more than doubled in price this year amid growing mainstream acceptance as an investment and a means of payment, and as investors seek high-yielding assets amid low interest rates.

Major firms including BNY Mellon, Mastercard Inc and Tesla Inc are among those to have embraced or invested in cryptocurrencies.

Reporting by Thyagaraju Adinarayan and Tom Wilson, Editing by Iain Withers

Goldman Sachs to open office in Birmingham in UK

LONDON (Reuters) – Goldman Sachs said on Tuesday it would open a new office in the English city of Birmingham, expanding its office footprint in Britain at a time when many rivals are reducing space due to the pandemic.

The bank said the first staff would begin working in the new office in the third quarter of this year, with headcount growing to several hundred over time.

Goldman said its engineering division would be the first to base staff in Birmingham through a mix of hiring and transfers.

The U.S. banking giant’s CEO David Solomon has been among the most vocal company executives wanting to get staff back to the office as soon as local virus restrictions allow, calling remote working an “aberration” in February.

But other banks – including HSBC – have been quick to target deep office cuts particularly in retail banking and even move some staff to permanent home working.

“We see tremendous opportunity to enhance our UK presence and continue delivering for our global clients,” said Richard Gnodde, chief executive officer for Goldman Sachs International.

Reporting by Iain Withers, Editing by Tommy Wilkes

Intel to produce chips for automakers within six to nine months: CEO

(Reuters) – The chief executive of Intel Corp told Reuters on Monday the company is in talks to start producing chips for car makers to alleviate a shortage that has hobbled factories.

Chief Executive Officer Pat Gelsinger said the company is talking to companies that design chips for automakers about manufacturing those chips inside Intel’s factory network, with the goal of producing chips within six to nine months. Gelsinger earlier on Monday met with White House officials to discuss the semiconductor supply chain.

Reporting by Stephen Nellis in San Francisco; Editing by Chris Reese

U.S. budget deficit hits record high for March as aid payments swell outlays

WASHINGTON (Reuters) – The U.S. government posted a March budget deficit of $660 billion, a record high for the month, as direct payments to Americans under President Joe Biden’s stimulus package were distributed, the Treasury Department said on Monday.

The deficit for the first six months of the 2021 fiscal year ballooned to a record $1.706 trillion, compared to a $743 billion deficit for the comparable year-earlier period. The first six months of fiscal 2020 largely did not include emergency pandemic spending to counter the coronavirus-related lockdowns that started in March 2020.

The March deficit, which compared to a year-earlier deficit of $119 billion, included receipts of $268 billion and outlays of $927 billion – both record highs for that month.

A Treasury official said the March outlays were further increased by $339 billion in direct payments of $1,400 that were sent to many individuals under Biden’s American Rescue Plan Act that was enacted last month.

More funding from the $1.9 trillion stimulus package will roll out in coming months, the official said, likely keeping outlays elevated.

For the first six months of fiscal 2021, outlays were a record $3.410 trillion, while receipts were $1.704 trillion, the Treasury said. Total direct payments in the six-month period came to $487 billion, including those from a year-end stimulus package passed under former President Donald Trump, the Treasury official said.

Reporting by David Lawder; Editing by Paul Simao

HSBC bans customers from buying bitcoin-backer MicroStrategy shares

LONDON (Reuters) – HSBC has banned customers of its online share-trading platform from buying or moving into their accounts MicroStrategy Inc stock, a message seen by Reuters showed, calling it a “virtual currency product”.

The bank will not facilitate the buying or exchange of products related to or referencing the performance of virtual currencies, the message to an HSBC InvestDirect client said. Bitcoin is the largest and best-known virtual currency.

MicroStrategy declined to comment. The U.S. business software firm is led by bitcoin proponent Michael Saylor and owns bitcoin worth billions of dollars.

While HSBC will allow the holding, sale and outgoing transfer of MicroStrategy shares, it will forbid new purchases or incoming transfers, said the message dated March 29.

“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),” HSBC said in a statement.

HSBC InvestDirect is available to customers in countries including Canada and Britain.

The bank said its policy towards cryptocurrencies had been in place since 2018 and is kept under review. It could not immediately say which countries the ban applied to.

The move comes amid a growing embrace of cryptocurrencies by large financial firms, companies and investors seeking yield in a world of ultra-low interest rates.

Goldman Sachs Group Inc said last month it would offer investments in bitcoin and other digital assets to its wealth management clients. Morgan Stanley has also started offering clients investments to the emerging asset class.

MicroStrategy has along with Tesla Inc and payments firm Square Inc become one of several publicly listed U.S. companies to buy large amounts of bitcoin for its treasury.

MicroStrategy said last week it owns around 91,579 bitcoins. Its holdings, worth around $5.5 billion according to a Reuters calculation, are equal to around 80% of its $6.8 billion market capitalisation.

Reporting by Tom Wilson; Editing by David Holmes

Exclusive: GameStop initiates search for new CEO-Sources

(Reuters) – GameStop Corp is looking for a new chief executive to replace George Sherman as it pivots from being a brick-and-mortar video game retailer to an e-commerce firm, three people familiar with the matter said on Monday.

It would be the biggest shakeup at GameStop since Ryan Cohen, the co-founder and former chief executive of online pet food company Chewy Inc, joined its board in January.

GameStop’s board is working with an executive headhunter on the CEO search, the sources said, requesting anonymity because the matter is confidential.

A GameStop spokesman declined to comment.

Reporting by Svea Herbst-Bayliss; Editing by Dan Grebler

FBI arrest man over alleged Amazon centre bomb plot

US authorities have arrested a man who allegedly plotted to bomb an Amazon data centre, which he believed would “kill off about 70% of the internet”. 

Seth Aaron Pendley, 28, was arrested after receiving a dud explosive device from an undercover FBI agent, and was charged with a malicious attempt to destroy a building with an explosive,

He came to the FBI’s attention after somebody reported his online posts. 

If convicted, Mr Pendley could face up to 20 years in prison.

According to investigators, Mr Pendley’s main goal was to damage Amazon’s web server network. 

He believed that there were 24 buildings that “run 70% of the internet”, including services used by the CIA and FBI, according to a conversation detailed in the criminal complaint against him.

Damaging them would frustrate the “oligarchy” – or small group of elites – in power in the United States, he believed.

Amazon Web Services (AWS) does play a hugely important role in the modern internet, hosting and processing the information behind many popular online services and websites. 

Outages caused by a problem at one centre tend to knock services offline for several hours at most, and often for a limited number of people or for specific sites.

For example, in 2017, a major fault at one US AWS centre knocked sites such as Quora and Trello offline for several hours. And even the total loss by fire of a European data centre earlier this year – which disrupted an estimated 3.6 million websites including government portals across Europe – went unnoticed by many internet users.

From Capitol Riot to C-4

Mr Pendley attended the Capitol Riots of 6 January, investigators found, having driven from Texas to Washington DC. Investigators said he told friends he had brought an assault rifle with him, but left it in his car – and also that although he reached the windows of the Capitol building, he did not enter it.

Two days after that event, a “concerned citizen” reported Mr Pendley’s posts on a militia website – where he went by the name of Dionysus, the Greek god of wine – to the FBI.

“We are indebted to the concerned citizen who came forward to report the defendant’s alarming online rhetoric. In flagging his posts to the FBI, this individual may have saved the lives of a number of tech workers,” acting US attorney Prerak Shah said in a statement.h

The BBC is not responsible for the content of external sites.View original tweet on Twitter

The posts from “Dionysus” that sparked concern spoke of his desire to “conduct a little experiment,” which he said would be dangerous and “draw a lot of heat” and could be “dangerous”. Asked by another user what the result would be, he responded, “death”, according to the court documents.

The FBI managed to uncover Dionysus’s email address, and link that to his Facebook account and real-world identity.

In late January, Mr Pendley began using the encrypted messaging app Signal to detail his plans to bomb an AWS facility – but the recipient of those messages was a confidential FBI informant, investigators said. 

Over the course of February, Mr Pendley shared his plans, including the type of explosive he sought, potential targets, and maps. 

On 31 March, the confidant introduced Pendley to a supposed explosives supplier – who was actually an undercover member of the FBI. His plan at this point, according to a recorded conversation, was to attack three Amazon buildings clustered close together.

On 8 April, at the handover of the supposed explosives, the undercover FBI employee showed Mr Pendley boxes he claimed were C-4 weapons-grade explosives, and showed him how to arm and detonate them. After Mr Pendley took the devices and placed them in his car, he was arrested by the FBI.

Mr Pendley made an initial court appearance on Friday, and remains in custody.

Source: BBC

EU proposes six-month tariff freeze with United States – Der Spiegel

BERLIN (Reuters) – The European Union has suggested that it and the United States suspend tariffs imposed on billions of dollars of imports for six months, EU trade chief Valdis Dombrovskis was quoted as telling Germany’s Der Spiegel on Saturday.

That would go beyond a four-month suspension agreed last month, and send a signal that Brussels is seeking compromise in a 16-year-old dispute over aircraft subsidies.

“We have proposed suspending all mutual tariffs for six months in order to reach a negotiated solution,” Dombrovskis told the news magazine.

“This would create a necessary breathing space for industries and workers on both sides of the Atlantic,” he added.

In March, the two sides agreed on a four-month suspension covering all U.S. tariffs on $7.5 billion of EU imports and all EU duties on $4 billion of U.S. products, which resulted from long-running World Trade Organization cases over subsidies for planemakers Airbus and Boeing.

Dombrovskis also said the EU would closely monitor U.S. President Joe Biden’s “Buy American” laws which provide for U.S. public contracts to be awarded exclusively to American firms.

“Our goal is to push for procurement markets that are as open as possible all over the world,” he told Der Spiegel.

Reporting by Madeline Chambers; Editing by William Maclean and Helen Popper

BHP, Vale Samarco JV files for Brazil bankruptcy protection

RIO DE JANEIRO (Reuters) – Samarco Mineracao SA, a joint venture between Brazilian miner Vale SA and BHP Group Ltd, has filed for bankruptcy protection to prevent creditors’ claims from affecting its operations, Vale said in a Friday securities filing.

The collapse of a dam at the Samarco mine complex in 2015 killed 19 people and severely polluted the Doce River with mining waste, one of Brazil’s worst environmental disasters. The facility, which resumed production in December, is the focus of significant litigation from bondholders holding nearly $5 billion in debt.

“The (judicial reorganization) filing is necessary to prevent legal actions already underway … from affecting Samarco’s ability to produce, ship, receive for its exportations and to fund the normal course of its activities,” the company said.

Vale said the bankruptcy protection filing would not impact Samarco’s ability to pay reparations to those affected by the 2015 dam burst. It said out-of-court negotiations with creditors had slowly broken down over time.

The in-court reorganization request, filed in the state of Minas Gerais, is roughly analogous to a Chapter 11 bankruptcy filing in the United States.

Samarco has $4.7 billion of financial debt from non-related parties, Vale said. In the years following the Samarco disaster, Samarco had negotiated with creditors to reach a restructuring agreement. However, those talks slowed in 2019 after changes in dam regulations in Brazil, which materially affected operations at Samarco, Vale said.

In 2019, another dam burst at a Vale mine in Brazil, killing some 270 people and prompting a tightening of the rules governing mining damns.

A significant portion of the debt is now held by “investors active in the distressed assets market,” rather than the original bondholders at the time of the disaster, Vale said.

Reporting by Gram Slattery; Editing by Christian Plumb and Will Dunham

U.S. senators criticize Apple for not testifying on antitrust concerns

(Reuters) – Apple Inc is refusing to testify at an upcoming U.S. Senate subcommittee hearing on competition issues related to mobile app stores, the bipartisan leaders of the panel said on Friday.

App makers long have accused Apple’s App Store for iPhones and iPads, along with Google’s Play store for Android devices, of engaging in anticompetitive behavior by requiring certain revenue sharing payments and setting strict inclusion rules. A subcommittee hearing was being planned for late April but no date has been set yet.

Senators Amy Klobuchar, a Democrat, and Mike Lee, a Republican, said they wrote to Apple Chief Executive Tim Cook on Friday urging the company to reconsider.

“A little more than two weeks before the planned hearing, Apple abruptly declared that it would not provide any witness,” the letter said. “Apple’s sudden change in course to refuse to provide a witness to testify…is unacceptable.”

Apple did not immediately respond to a request for comment.

Apple and game maker Epic Games are scheduled to square off on those issues in a federal trial beginning May 3 in California.

A spokeswoman for Klobuchar did not immediately comment on whether Google or other companies had agreed to testify at the planned subcommittee hearing.

Google has agreed to testify at the hearing, a source said. The company did not immediately respond to a request for comment.

Reporting by Paresh Dave; Editing by Marguerita Choy

Amazon defeats historic Alabama union effort

man with RWDSU sign outside warehouse in Alabama

Amazon has defeated activists hoping to establish the company’s first unionised warehouse in the US.

Workers at the Bessemer, Alabama warehouse voted 1,798 to 738 against the effort, labour officials said. 

That represents a majority of votes cast, though some ballots have been challenged and have yet to be counted.

The contest was seen as a key test for the e-commerce giant, which has faced global criticism for its treatment of workers during the pandemic.

The union said it would challenge the results.

It accused Amazon of interfering with the right of employees to vote in a “free and fair election”, including by lying to staff about the implications of the vote in mandatory staff meetings and pushing the postal service to install a mailbox for the vote in an effort to intimidate workers.

“Amazon has left no stone unturned in its efforts to gaslight its own employees,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union (RWDSU), which organised the effort.

“We won’t let Amazon’s lies, deception and illegal activities go unchallenged, which is why we are formally filing charges against all of the egregious and blatantly illegal actions taken by Amazon during the union vote.”

Biden faces key test on EV battery trade dispute

WASHINGTON (Reuters) – U.S. President Joe Biden faces a Sunday deadline to decide whether to intervene in a trade dispute between two South Korean electric vehicle battery makers that could impact a Georgia factory and his push for more electric vehicles.

The companies, LG Chem and rival SK Innovation Co, have spent months trying to take advantage of past and promised U.S. investments, and ties to politicians.

The Biden Administration, through the U.S. Trade Representative’s office, is set to decide as early as Friday whether to take the rare step of reversing the U.S. International Trade Commission (ITC), unless the Korean battery companies reach a last-minute settlement.

The White House declined to comment on Thursday.

The ITC in February sided with LG Chem in its trade secrets claims, but permitted SK to import components for batteries for Ford EV F-150 program for four years, and Volkswagen’s North American EVs for two years.

Volkswagen of America CEO Scott Keogh said Wednesday Biden’s intervention was critical: “The White House could accelerate the future of zero-emission vehicles and green jobs, or threaten to reduce U.S. battery capacity and delay the transition to electric vehicles.”

The global auto industry is racing to develop EVs. Biden has proposed $174 billion to boost EV sales and charging.

Unless the White House intervenes, SK says the ITC ruling would force it to halt construction on a $2.6-billion factory in Georgia, where two newly-elected Democratic Senators are the linchpin of Biden’s slim Democratic Congressional majority.

Last month, Republican Georgia Governor Brian Kemp urged Biden to intervene, noting SK’s plant will employ nearly 2,600: “Simply put: the livelihoods of thousands of Georgians are now in your hands.”

Georgia Senator Jon Ossoff has held numerous meetings with the Korean battery makers and Biden Administration, his office confirmed, and stressed “the urgent need for both companies to come to the negotiating table and agree to a settlement to save the Georgia plant,” a spokeswoman said.

LG’s battery unit LG Energy Solution is nearing completion of an Ohio cell manufacturing plant with General Motors and is close to announcing plans build a $2.3 billion second facility in Tennessee, sources told Reuters.

LG plans to invest at least $4.5 billion in U.S. battery production over the next four years. LG insists it can handle automakers battery needs if SK abandons its Georgia plant.

SK argues LG could not handle VW and Ford contracts and warns Chinese manufacturers may replace lost battery capacity.

Reporting by David Shepardson; Michael Perry

More money poured into stocks in past five months than over last 12 years: BofA

LONDON (Reuters) – Investors have pumped more money into equities over the past five months than in the last 12 years, BofA’s weekly flow figures showed on Friday, as ultra-easy monetary policies and unprecedented stimulus has sparked a secular shift into stocks.

BofA said $576 billion had gone into equity funds in the past five months, beating the combined $452 billion inflows seen in the last 12 years,

Based on clients’ asset allocations, Bofa said a record 63.6% of the money was invested in stocks, 18.5% in debt and 11.6% in cash.

The exuberance has however slowed in recent weeks, with investors pouring $22.7 billion into cash during the week to Wednesday, on top of the nearly $100 billion committed in the last two weeks.

Reporting by Thyagaraju Adinarayan; editing by Sujata Rao

Covid-19: People can start thinking about foreign travel – Shapps

People in England can start thinking about booking foreign holidays again this summer, Transport Secretary Grant Shapps has said.

But he said the cost of the Covid tests required needed to be driven down, amid criticism from the travel industry. 

Mr Shapps has also given more detail on the traffic light system which will see countries graded on their risk.

Passengers will have to take the tests before leaving and on returning – even from low-risk “green” countries.

There will be a watch list for countries that could go from green to amber.

Announcing the findings of the Global Travel Taskforce set up by the government to examine how leisure travel could be reopened safely after lockdown, Mr Shapps said foreign holidays would resume on 17 May at the earliest.

He said for the first time in months he was not advising against booking foreign trips.

He told BBC Radio 4’s Today programme: “This is the first time I’m able to come on and say I’m not advising against booking foreign holidays. 

“Yes, you’ll want to check what the situation is in two or three weeks’ time when that list – the green, amber, red, is produced – you’ll want to know that you’ve got good holiday insurance and flexible flights and the rest of it. 

“But for the first time I think there is light at the end of the tunnel and we’ll be able to restart international travel, including cruises by the way, in a safe and secure way, knowing about the vaccinations, everything we know about the disease this year, and of course that abundance of caution – having the tests in place.”

The traffic light system will grade foreign destinations as being:

  • Green: Passengers will not need to quarantine on return, but must take a pre-departure test, as well as a PCR test on return to the UK
  • Amber: Travellers will need to quarantine for 10 days, as well as taking a pre-departure test and two PCR tests
  • Red: Passengers will have to pay for a 10-day stay in a managed quarantine hotel, as well as a pre-departure test and two PCR tests

Mr Shapps told BBC Breakfast the use of PCR tests – those needing to be sent to a lab – enabled scientists to detect potential variants of concern.

But he said he was “concerned” about the cost of the tests, adding that the government was committed to driving down the price of these by working with the private sector.

The transport secretary said the government was also looking at the possibility of allowing people to take cheaper lateral flow tests before travelling. 

The government has not yet said which countries will be green, amber or red – but said it would do so by early May. 

Mr Shapps said countries would be categorised based on level of infections and vaccinations, variants of concern and the quality of their genetic sequencing.

He said this list would be kept under constant review and that he was hopeful European countries would be upgraded as their vaccination rates improve. 

Nearly 40 countries are currently on the UK government’s current red list of countries from which travel is banned, except for British and Irish nationals and those with residence rights in the UK.

The rules will be reviewed at the end of June to see whether any measures can be rolled back, the government said.

Shadow home secretary Nick Thomas-Symonds said the government had not outlined the traffic light system in detail and criticised the release of the plans while the House of Commons was not sitting. 

He told BBC Breakfast: “The government has spoken about factors like vaccination rates, infection rates, the position with variants and also about the level of genomic sequencing. But I’ve no idea what the levels of each of those are for the government to place countries into, whether it’s the green category, amber or red.” 

The first ministers of Scotland and Wales have both already argued that 17 May will be too early for foreign holidays to resume.

Northern Ireland has not yet announced its plans, but its chief medical officer has said it would be “premature” to book a foreign summer trip.

At the moment, almost anyone seeking to travel to England must first take a coronavirus testbefore departure and then two tests when they arrive, bought through a private provider. Children under 11 are exempt.

Consumer group Which? estimated that each PCR test – which is just one of the tests needed – could cost about £120 per person.

However, the government said it would work with airlines, travel firms and the test providers to see whether prices can be reduced. That could involve cheaper tests, or the government providing the pre-departure tests.

2px presentational grey line
Analysis box by Caroline Davies, transport correspondent

Today’s report is not the grand reopening many in the travel industry wanted. 

There is real worry, particularly among lower cost carriers, that around £100 per person for a test will dissuade travellers from booking, with many paying more for it than for their flights. 

But there are suggestions that the government has tried to address some of the concerns too. 

The introduction of a green watch list, to flag any countries potentially about to move from green to amber, is an attempt to avoid some of last year’s confusion, as people rushed back to the UK before countries required quarantine.

Nothing is guaranteed yet, but the government now says it will confirm whether or not international travel will restart on 17 May early next month. 

How early is the next question. 

2px presentational grey line

What is the travel industry saying?

The government’s plans have been met with mixed reaction from the travel industry.

  • Heathrow Airport chief executive officer John Holland-Kaye expressed concern about the requirement for PCR testing, adding “we need to make sure that travel is something anyone can do and is not just something for the wealthy”
  • Industry body Airlines UK said that the proposed framework “does not represent a reopening of travel as promised by ministers”
  • Mark Tanzer, boss of travel trade organisation Abta, said permitting the use of lateral flow tests would “make international travel more accessible and affordable” 
  • Jet2.com has extended the suspension of its flights and holidays up to 23 June following the government’s announcement 
Travellers arrive at Heathrow Terminal 5
image captionThe travel industry says lateral flow tests, which are cheaper and faster, would be preferable to PCR tests

Thursday’s daily government figures showed a further 53 people had died with coronavirus within 28 days of a positive test, while another 3,030 confirmed cases were reported.

Graphic showing UK daily coronavirus figures

China halts new enrollments at Jack Ma’s business school: FT

SHANGHAI (Reuters) – Beijing authorities have forced an elite business school backed by Alibaba Group Co Ltd founder Jack Ma to halt enrollments, the Financial Times said on Friday, citing sources familiar with the matter.

The clampdown on the school, founded in 2015 by Ma to train China’s next generation of entrepreneurs, comes as his business empire faces government scrutiny.

Hupan Academy, based in the city of Hangzhou, where Alibaba has its headquarters, suspended a first-year class set to begin in late March, the newspaper said.

Alibaba and Hupan Academy did not immediately respond to Reuters’ requests for comment.

Tuition for the three-year program amounts to 580,000 yuan ($88,500.98). Students listed in the incoming class of 2019 included executives from Keep, a successful Chinese exercise company, and fast-growing domestic chip firm Horizon Robotics.

The school is among the initiatives launched by Ma related to education, a sector the erstwhile English teacher has committed to since stepping down from his role as Alibaba’s chairman in 2019.

The enrollment halt comes amid Beijing’s crackdown on Ma’s businesses. Late last year Ant Group, a financial affiliate of Alibaba, abruptly suspended a planned $37 billion IPO in Shanghai following pressure from the authorities.

The botched listing came after Ma made comments in public criticising China’s financial regulators. He has yet to make a public appearance since, save for a brief 50-second video clip broadcast to a group of teachers.

($1=6.5536 Chinese yuan renminbi)

Reporting by Josh Horwitz; Editing by Clarence Fernandez

Hyundai to suspend South Korea production on chip shortage: Yonhap

SEOUL (Reuters) – South Korea’s Hyundai Motor Co plans to suspend production for two days from Monday at its Asan plant because of a chip shortage, Yonhap news agency said, citing an unidentified company official.

The shortage had led to problems for Hyundai over powertrain control unit parts, the agency added.

The Asan factory turns out 300,000 vehicles each year, including the Sonata and Grandeur sedans.

Reporting by Heekyong Yang; Editing by Clarence Fernandez

China to clear Tencent’s $3.5 billion Sogou deal

(Reuters) – China’s antitrust regulator is ready to clear tech giant Tencent Holdings Ltd’s plan to take the country’s no.3 search engine Sogou private, three people with knowledge of the matter told Reuters, a move that signals the watchdog is willing to wave some deals through even as it ratchets up sector scrutiny.

The regulator, State Administration of Market Regulation (SAMR), has no objection to the $3.5 billion deal for the 60% of U.S.-listed Sogou that Tencent doesn’t already own, the people said, as long as Tencent is willing to set up a special mechanism to ensure data security – a first for SAMR deal approvals.

Tencent must also pay a comparatively small fine – 500,000 yuan ($76,000) – for not reporting deals properly for antitrust reviews, two of the people said, in line with past cases for similar violations.

The move highlights Chinese regulators are still looking to approve merger and acquisition deals in the tech sector, but now with strict conditions after years of a laissez-faire approach. The green light for the closely watched deal will come as a relief for China’s tech sector, reeling from Beijing’s antimonopoly crackdown on home-grown internet giants that culminated weeks after the shelving of fintech firm Ant Group’s $37 billion IPO in November.

“What SAMR wants is enforcement … it is not in their interest to kill or actively block a deal,” said one of the people. “They are fine with companies’ actual market-leading status as long as it doesn’t prevent new entry into the market.”

The people with knowledge of the matter declined to be identified due to the sensitivity of the matter.

Sogou trails only Baidu and Qihoo 360 in China’s enormous internet search market, according to analytics firm SpeedTest, and is the sole search engine on Tencent’s all-in-one mobile app WeChat, a must-have in everyday life in China. Tencent, China’s biggest video game and social media company, first announced plans to take it private last September.

Tencent and SAMR did not immediately respond to requests for comments when contacted by Reuters.

Sogou declined to comment.

DATA CONCERN

One of the areas of heightened scrutiny has been M&A deals in the sector in the recent past, with the regulators taking a dim view of the violation of antitrust rules and, in some cases, data privacy laws.

The linchpin of the deal approval conditions is meeting the regulator’s requirement on data security – defining who can have what kind of access to the bulk of users’ data and personal information, and how to use that, said the three people.

A merger of China’s two leading video games streaming sites – Huya and Douyu, both backed by Tencent – is also under review and will need to satisfy similar requirements on data security, said the sources.

Reuters reported last month that Tencent was having to offer concessions to get approval for its plan to merge the two sites, including giving up exclusivity on some of its content rights.

After the merger, Huya and Douyu will need to set up a firewall in-between and cannot share user data and information to each other, two of the people said.

SAMR would also approve the merger soon after a final touch on the concessions are made, they said.

($1 = 6.5468 Chinese yuan renminbi)

Reporting by Pei Li and Julie Zhu; Editing by Sumeet Chatterjee and Kenneth Maxwell

Johnson & Johnson CEO Alex Gorsky

ISS joins Glass Lewis in recommending vote against J&J CEO’s pay package

(Reuters) – Proxy advisory firm Institutional Shareholder Services (ISS) has joined Glass Lewis in recommending investors reject a proposed pay package of nearly $30 million for Johnson & Johnson Chief Executive Officer Alex Gorsky.

J&J is attracting investor scrutiny because it partially shields Gorsky from some $9 billion in costs over two years that have arisen from lawsuits claiming the healthcare company fueled the U.S. opioid crisis and allegations of asbestos in its talc baby powder.

In a note to shareholders on Thursday, ISS said “…investors may nonetheless expect an explanation from the company of how the compensation committee considered the extraordinarily large litigation charges when making compensation decisions.”

Last week, Glass Lewis based its recommendation on the argument that the healthcare company was shielding its top executives from the legal cost of poor business decisions.

J&J did not immediately respond to a request for comment on the ISS note outside regular business hours.

The company has previously said it has always set aside certain one-time costs, such as litigation, when calculating stock awards for executives, an approach common across corporate America.

Gorsky’s compensation totaled $29.6 million in 2020, up 17% from the previous year. A non-binding resolution on the pay packages will be up for a vote at the company’s annual general meeting on April 22.

Gorsky, who became CEO in 2012, has been at the helm of J&J during the opioid abuse and addiction crisis, which according to the U.S. Centers for Disease Control and Prevention claimed nearly 450,000 lives in the United States between 1999 and 2018.

In 2019, 50,000 people died in the U.S. from opioid related overdoses, according to the National Institute of Health.

J&J has denied any part in fueling the crisis.

Reporting by Shubham Kalia and Akriti Sharma in Bengaluru, and Greg Roumeliotis in New York: Editing by Neil Fullick

US blacklists seven Chinese supercomputer groups

The US has blacklisted seven Chinese groups it accuses of building supercomputers to help its military.

It is the first move by the Biden administration to make it harder for China to obtain US technology

On Thursday, three companies and four branches of China’s National Supercomputing Center were added to the US blacklist.

This bars American companies from exporting technology to the groups without proper approval.

The US commerce department said the groups were involved in building supercomputers used by Chinese “military actors” and facilitating programmes to develop weapons of mass destruction.

The sanctioned groups are leading China’s supercomputing development and are key players in Beijing’s plan for chip self-sufficiency.

US Commerce Secretary Gina Raimondo said the Biden administration would use “the full extent of its authorities to prevent China from leveraging US technologies to support these destabilising military modernisation efforts”.media captionWhat is quantum computing?

The Trump administration had also targeted dozens of Chinese companies it suspected of using American technology for military uses, including phonemaker Huawei.

Mr Biden’s move on Thursday requires the seven Chinese groups to obtain licences to access American technologies, including chip infrastructures designed by Intel and other U.S chipmakers.

While the blacklist bars US-based companies from providing services and products to the Chinese firms, it doesn’t bar those that are produced in facilities outside of the US.

One such company is TSMC, the Taiwan-based company that has become the world’s most advanced semiconductor manufacturer.

What is a supercomputer?

Supercomputers have a considerably higher level of performance compared to a general-purpose computer and can make billions of calculations per second.

Supercomputers are made up of thousands of connected processors and are used for functions like forecasting weather and climate trends, simulating nuclear tests and for pharmaceutical research.

They are also necessary for the development of advanced weapons such as hypersonic missiles.

“Supercomputing capabilities are vital for the development of many – perhaps almost all – modern weapons and national security systems, such as nuclear weapons and hypersonic weapons,” Ms Raimondo added.

‘Not waiting around’

The US is worried about China gaining access to American technology that helps its army close the gap with the US military.

The Biden administration is currently reviewing dozens of China-related actions that Donald Trump took, including an order that prohibits Americans from investing in Chinese companies believed to be linked to the military.

“Do you think China is waiting around to invest in its digital infrastructure or research and development? I promise you, they are not waiting,” Mr Biden said in a speech on Wednesday.

Mr Biden said China and the rest of the world “are racing ahead of us in the investments they have in the future”.

Nike settles lawsuit against maker of Lil Nas X ‘Satan Shoes’

NEW YORK (Reuters) – Nike Inc said on Thursday it has settled a lawsuit against a Brooklyn company that made “Satan Shoes” in collaboration with the rapper Lil Nas X, and that the company has agreed to a voluntary recall.

The settlement with MSCHF Product Studio Inc resolves a trademark infringement lawsuit that Nike filed last week over the black-and-red, devil-themed sneakers, which carry the Nike “swoosh” logo.

Reporting by Jonathan Stempel in New York; Editing by Chris Reese

Italian man ‘offered €10,000 in Bitcoin’ to maim ex-partner

Investigators in Rome have placed under house arrest a man who they say paid an attacker over the dark web to maim his ex-girlfriend.

The suspect is accused of offering €10,000 (£8,700; $12,000) in Bitcoin in return for the attack, which would have paralysed the woman, police said.

He was traced by Italian authorities and the EU’s crime agency and the woman was unharmed.

The would-be attacker has not been identified.

What is the man accused of?

“It looks like the plot of a contemporary thriller,” Italy’s Postal and Communication Police said in a statement.

The suspect, a 40-year-old IT expert from the northern region of Lombardy, is alleged to have gone on the dark web some months after his relationship broke down in July 2020.

Police said he contacted an intermediary via a website on the dark web, seeking to hire an attacker to throw acid at his ex-girlfriend’s face and to break her back, leaving her paralysed.

Despite having made the first of four payments to the would-be attacker, the suspect remained in contact with his intended victim, sending her flowers and messages, according to police.

Italian news agency Adnkronos quoted the arrest warrant as saying that the attack was to be staged to look like a robbery.

The suspect, who had been in a two-year relationship with the woman, had passed on her home address and Facebook profile, the news agency added.

How was he traced?

Italian authorities said they were alerted after messages from the suspect were intercepted by police from another European country in February.

The request had been placed through the Tor network – privacy-focused software used to access the dark web while often obscuring users and data. 

However, EU crime agency Europol said it was able to carry out “an urgent, complex crypto-analysis to enable the tracing and identification” of the Bitcoin provider, based in Italy.

Italian police were then able to get hold of further details about the suspect from the crypto-currency provider. 

The suspect’s home in Milan was searched at the end of February, according to Italian media, and as the search unfolded he is then said to have called off the attack via his computer.

He is currently under house arrest, charged with aggravated harassment and attempted personal injury, reports say

UK: Redcar cyber-attack: Government to help cover costs

A council left without online services for weeks following a cyber-attack is to receive £3.68m from the government to help towards the cost of rebuilding its systems.

The attack was estimated to have cost Redcar and Cleveland Council £10m, with the authority having to foot the remainder of the bill itself.

It said no ransom was paid to the hackers.

Critics said the government should be covering more of the cost.

Experts from the UK’s National Cyber Security Centre (NCSC) had to be drafted in to help restore appointment bookings, planning documents, social care advice and council housing complaints systems that had been knocked offline in February last year.

‘Conned’ over settlement

The council said the money to be provided by the government would help replenish its reserves, which had been used to restore its online systems.

It declined to say whether any services would be affected as a result of covering the remainder of the bill.

Council leader Mary Lanigan, who heads a coalition of independents and Liberal Democrats, said: “We are pleased that the government recognised the unique circumstances under which we requested support, and awarded grant funding, rightly distinguishing the criminal ransomware attack suffered by the council from the financial rescue packages of some other local authorities where permission to borrow has been granted.

“No money was handed over to these criminals and we continue to hope that they will eventually be brought to justice.”

Middlesbrough South and East Cleveland MP Simon Clarke, a Conservative, described the settlement as “exceptionally generous”.

Fellow Tory Jacob Young, MP for Redcar, said it would “go some way to restoring the hit on the council’s finances”.

However, former council leader Sue Jeffrey, of Labour, said residents were being “conned into thinking they have got a good deal” having only been awarded “a tiny proportion of the support they were promised by the government and local Conservative MPs”.

Naspers investors want big deals, share buyback after Tencent windfall

JOHANNESBURG (Reuters) – Investors in Naspers Ltd – Africa’s biggest company – said on Thursday they want proceeds from a $14.7 billion stake sale in its Tencent Holdings investment to go towards blockbuster acquisitions or a share buyback.

Naspers’ Dutch-listed subsidiary Prosus NV sold a 2% stake in the Chinese gaming and social media giant on Thursday in the world’s largest-ever block trade, reducing its stake to 28.9%.

Prosus’ portfolio is dominated by Tencent, which owns China’s biggest messaging app, WeChat.

Bob van Dijk, chief executive of both Naspers and Prosus, said on Thursday the stake sale created the financial flexibility to go for mergers and acquisitions, continue its on-going share buyback programme and explore other ways to create shareholder value.

A major acquisition could give one of Prosus’ other business segments – classifieds, food delivery, fintech, payments or online education – a welcome boost, analysts said.

“We might see some deal announcements again in the next six months or the rest of this year,” said Jean Pierre Verster, CEO of the South African hedge fund management firm Protea Capital Management, which holds shares in Naspers and Prosus.

Aside from acquisitions, Verster, who said Prosus had shown discipline in capital deployment after an earlier Tencent stake sale in 2018, said it could put Thursday’s windfall towards another share buyback.

“That in my mind is very efficient capital allocation and that should decrease the discount because shareholders would gain a lot of comfort that management is allocating capital efficiently,” he said.

Naspers spun off its international assets into Prosus and listed it in Amsterdam in 2019 to try to reduce a yawning discount its shares traded on the Johannesburg Stock Exchange (JSE) to the value of its stake in Tencent.

And in October, Prosus announced it planned to buy back $1.37 billion worth of Prosus shares and $3.63 billion worth of Naspers shares.

That has yet to reduce the discount.

At current share prices, Naspers is trading at a discount of 26% to the value of its roughly 73% stake in Prosus. Prosus in turn trades at a 22% discount to its stake in Tencent.

Peter Takaendesa, head of equities at Mergence Investment Managers, which also holds Naspers and Prosus shares, said he favoured another buyback over acquisitions, given that, aside from Tencent and its online classifieds, Prosus’ other businesses are loss-making.

“Some of the proceeds should go to buy back shares, which may be a better way to deploy those proceeds instead of assets that we don’t know how they’re going to play out,” he said.

Reporting by Promit Mukherjee; Editing by Joe Bavier and Barbara Lewis

Electric trucks may soon challenge diesel if charging hurdle cleared: Study shows

(Reuters) – Electric heavy trucks will soon be able to compete economically with diesel trucks as battery technology rapidly improves, a study by Sweden-based think tank the Stockholm Environment Institute (SEI) showed on Thursday.

A green shift in the transport sector, which generates roughly a quarter of global carbon dioxide emissions, is seen as important to help align with globally agreed climate goals.

Battery-powered trucks have often been dismissed as too costly to replace diesel trucks in many capacities, with batteries too heavy for long-haul freight.

But researchers at SEI said a tipping point was now in sight.

“Battery technology is very close to a threshold that makes electric trucks feasible and economically competitive. All that is missing is one companion component: fast charging,” said Bjorn Nykvist, senior researcher at SEI.

The study, which evaluated costs, energy use, and battery pack weight, showed that the availability of fast, high-capacity charging was key, as that meant truck batteries could be kept relatively small and light.

This should be an incentive to the private sector and policy makers to focus on making charging infrastructure more available, said co-author Olle Olsson.

“In many settings, electric freight trucks can play an important role in reducing emissions from heavy transport,” he said.

Research by Capgemini Invent, part of Capgemini Group, recently showed that electric trucks are among 55 clean technologies that can help the European Union reach its goal of climate neutrality by mid-century.

General Motors Co and electric truck startup Nikola Corp said last year they would join forces to build electric pickup trucks and fuel cell commercial trucks to take on Tesla Inc.

Volvo Trucks, Sweden’s AB Volvo’s main truck brand, aims to sell a complete range of electric, heavy-duty trucks in Europe starting this year.

Reporting by Helena Soderpalm; editing by Niklas Pollard

Europe should invest in chip design, not a mega-fab: Think tank

BERLIN (Reuters) – Europe’s ambition to make the most powerful computer chips risks wasting billions of euros, a German think tank said in a report on Thursday, urging policy makers to focus instead on rebuilding the region’s chip design industry.

The EU executive’s new goal of doubling its global semiconductor share by 2030 is doomed to fail because the bloc lacks a meaningful market that any super-advanced chip foundry could sell into, author Jan-Peter Kleinhans said.

“For an EU foundry there is simply no business case at the moment in Europe, mainly for the lack of customers,” said Kleinhans, an analyst at the Stiftung Neue Verantwortung (SNV) think tank in Berlin.

The European Commission last month launched a 10-year plan, the Digital Compass, setting its sights on a 20% global semiconductor market share and building a fabrication plant, or fab, that can make superfast 2 nanometer chips.

The push has gained urgency due to supply-chain dislocations caused by a sharp recovery in demand for products ranging from smartphones to electric vehicles following a slump at the onset of the coronavirus pandemic a year ago.

The problem with the EU’s strategy is that, unlike the United States and Asia, Europe lacks a meaningful chip design industry that could justify the cost of a mega-fab, Kleinhans told Reuters in an interview.

“In terms of volume it’s simply not enough to fill a fab,” he said. “That would mean an EU foundry would need to attract foreign customers – this is extremely unlikely.”

Industry leaders TSMC and Samsung already plan investments in the United States to serve chip design leaders like Qualcomm or Nvidia that rely on contract manufacturers to produce their chips.

Plans by Intel to launch its own foundry service, or contract manufacturing operation, starting in the United States, would add to capacity and raise questions about the economics of expanding production in Europe, said Kleinhans.

Europe should instead focus on reviving its vestigial chip design industry, he said. Of its last two publicly listed “fabless” chipmakers one, Dialog, has just agreed to be bought for $6 billion by Japan’s Renesas.

Apple’s announcement that it will invest 1 billion euros ($1.2 billion) in a new chip design facility in Munich, Germany, shows where the EU should be focusing its efforts.

“Apple has single-handedly done more for European-based chip design than the Commission in the past 10 years,” said Kleinhans.

($1 = 0.8430 euros)

Reporting by Douglas Busvine; editing by David Evans

ENA: Macron to scrap French leaders’ elite training school

One of France’s top colleges – the Ecole Nationale d’Administration – will be shut down, French President Emmanuel Macron is expected to announce, under plans to boost social mobility.

A degree from the ENA has been the passport to the upper echelons of French politics for generations.

Its graduates include Mr Macron himself and ex-presidents François Hollande and Jacques Chirac.

However, it has become the target of populist anger at perceived elitism.

The entrance exams are notoriously tough, and the ENA’s intake is dominated by students from privileged backgrounds.

It admits fewer than 100 students a year, who are fast-tracked into prestigious civil service jobs. 

Speaking in the western city of Nantes in February, Mr Macron said it was time to open up access to top colleges for students from modest backgrounds. The aim, he said, was that “no kid in our republic should say: this is not for me”.

He deplored the current state of social mobility in France, saying it was “worse than 50 years ago”.

A picture shows the building of the Ecole Nationale d'Administration (National School of Administration) (ENA) on January 14, 2013 in Strasbourg, eastern France.
image captionThe ENA in Strasbourg is world-famous for intellectual rigour

His announcement is expected in a video conference with several hundred top civil servants. But he first suggested closing the ENA in 2019, after months of gilets jaunes (“yellow vest”) street protests which severely challenged his presidency.

Those protests were triggered by a rise in fuel tax, but morphed into a much wider social protest against a perceived Parisian elite neglecting the needs of provincial communities.

Before becoming president, Mr Macron attended the prestigious Sciences Po university, then the ENA, before obtaining a plum job at the Financial Inspectorate – part of the finance ministry.

The ENA was established in Strasbourg in 1945 by then-President Charles de Gaulle, whose aim was to rebuild a modern French state from the wreckage of World War Two.

But while designed as a meritocracy, research shows that ENA students’ parents are often senior civil servants themselves or CEOs. Very few come from working-class backgrounds.

“It’s the school of the elite,” said Prof Jean-Michel Eymeri-Douzans, a political scientist who has studied the ENA extensively and now works with it.

Mr Macron is under pressure to improve his ratings ahead of next year’s presidential election, and France’s painful struggle with Covid-19 has exposed shortcomings in the state administration. 

France’s vaccination rate remains relatively sluggish, and its long-admired health service has looked vulnerable in the crisis, especially intensive care.

French Europe 1 news says Mr Macron aims to attack what is widely seen as a French civil service job-for-life culture, dominated by academic qualifications. 

The reforms could mean more staff turnover, job mobility and a sharper focus on pressing issues such as French secular values, poverty and the environment.

London Stock Exchange investigating Refinitiv data outage

LONDON (Reuters) – The London Stock Exchange Group said on Thursday it was investigating a lengthy outage at its newly-acquired Refinitiv market data unit.

The outage at Refinitiv’s Eikon platform for market prices began around 0830 GMT. Subscribers who rely on its data for trading currencies and other assets, said on Twitter they were unable to access prices.

“We’re aware of an issue disrupting our service to customers,” LSEG said in a statement.

“We are currently investigating the cause of the issue and working hard to resolve the problem. We apologise to customers for the disruption.”

LSEG completed its $27 billion purchase of Refinitiv on Jan 29. Analysts had already expressed concerns last month that integration costs will be heavier and cover a longer period than had been expected.

Its shares have fallen 20% so far this year.

“Clearly this morning this is bad news for the group not to mention that clients have been left high and dry with no trading and loss of crucial market data,” said Securequity sales trader Jawaid Afsar.

Thomson Reuters, owner of Reuters News, has a 15% stake in LSE Group.

LSE shares were up 1.07% at 08:59 GMT according to prices on Yahoo.

Reporting by Thyagaraju Adinarayan and Huw Jones; Editing by Rachel Armstrong and Jon Boyle

Korean video game firm Krafton applies for IPO, seen worth billions of dollars

SEOUL (Reuters) – South Korea’s Krafton Inc, the video game holding company that publishes the blockbuster game PlayerUnknown’s Battlegrounds (PUBG), has applied for preliminary approval for an initial public offering (IPO), Korea Exchange said on Thursday.

The IPO is expected to be one of the biggest Korean listings this year, Seoul-based analysts said, with over-the-counter trades on Thursday valuing Krafton at around 20 trillion won ($17.92 billion).

Krafton founder Chang Byung-gyu is the largest shareholder with a 16.4% stake as of end-2020, followed by China’s Tencent holding a 15.5% stake through an investment company. Small shareholders with less than 1% stake individually held a combined 23.2% of Krafton, according to a company filing.

PUBG is one of the highest-grossing video games of all time, with up to 55 million daily users excluding China on weekends and 70 million copies of the game sold for PC and game consoles, Krafton said. Upcoming new mobile game “PUBG: New State” gained more than 5 million pre-registrations within a week, Krafton said in March.

Krafton reported revenue of 1.67 trillion won and operating profit of 774 billion won in 2020, Korea Exchange said in a statement.

The main adviser for the IPO is Mirae Asset Daewoo, while other advisers are Credit Suisse, Citigroup Global Markets, Korea Investment & Securities, JP Morgan and NH Investment & Securities.

Robust investor demand has fuelled a flurry of sizable listings in South Korea this year.

An IPO by vaccine developer SK Bioscience Co Ltd last month was the biggest in Seoul in nearly four years, while battery component developer SK IE Technology’s (SKIET) planned IPO is expected to be worth at least $1.5 billion.

($1 = 1,116.3800 won)

Citi adds ESG scores to data platform for climate-conscious investors

(Reuters) – Citigroup has added environmental, social and governance (ESG) scores to its securities services data platform for clients to track the sustainability exposure of their portfolio holdings, the U.S.-based banking group said on Thursday.

For the Citi Velocity Clarity platform, the lender said it analyzes “multiple sustainability measures” provided on a daily basis by the ESG insight company Arabesque S-Ray, and will work with clients to include more data from other providers.

“The ability to understand ESG exposure has become imperative across the entire industry as investors, advisors and regulators are increasingly asking for transparency from asset managers and asset owners,” said Fiona Horsewill, global head of data for Citi securities services.

Along with growing investor concerns over climate change, Citi has introduced several measures in its green push, including plans last month to merge three of its investment banking groups into one.

Volvo, SSAB plan first fossil-free steel trucks on road to carbon neutrality

STOCKHOLM (Reuters) – Swedish truck maker AB Volvo and steel maker SSAB have signed an agreement to produce the world’s firstvehicles made of fossil-free steel, the companies said on Thursday.

Volvo plans to start production this year of prototype vehicles and components from steel made by SSAB using hydrogen produced from renewable energy. Small-scale serial production will start in 2022.

“This is an important step on the road to completely climate-neutral transport,” Volvo CEO Martin Lundstedt said.

The vehicles and machines will be emissions-free in operation, Volvo said, without specifying how they would run, while adding the company is reviewing all the materials used in their construction to eliminate anything based on fossil fuels.

It will be sourcing steel from green steel venture HYBRIT – which is owned by SSAB, Swedish state-owned utility Vattenfall and Swedish miner LKAB.

Last August, it began test operations in Lulea, Sweden, to replace coking coal, traditionally needed for ore-based steel making, with fossil-free electricity and hydrogen, which in turn is produced using only renewable power. [L8N2FX3LV]

China’s Geely Holding, which has a stake in AB Volvo, owns Volvo Cars, which it has said will be fully electric by 2030. [L2N2KZ10C]

Prosus nets $14.6 billion from sale of Tencent stake

AMSTERDAM (Reuters) – Amsterdam-based technology investor Prosus NV has netted $14.6 billion from the sale of a 2% stake in Tencent Holdings Ltd, the Chinese gaming and social media giant said, in one of the world’s largest ever block trades.

“Our belief in Tencent and its management team is steadfast, but we also need to fund continued growth in our core business lines and emerging sectors,” Prosus Chairman Koos Bekker said in a statement after the completion of the deal on Thursday.

In a Hong Kong Stock Exchange filing, Tencent said Prosus sold 191.89 million shares for HK$114.1 billion, reducing its stake to 28.9%.

That works out at HK$595 ($76.44) per share, at the top of an indicative range of HK$575 to $HK595 set out when Prosus announced its intention to sell the stake in an accelerated offering on Wednesday afternoon.

The price was a 5.5% discount to Tencent’s Wednesday close of $HK629.50. Tencent stock, which is up 10% so far this year, opened down 2.5% in Hong Kong on Thursday following the news.

The block trade – a trade of a large number of securities – was the largest of Tencent stock since 2018 when Naspers sold 2% of the group for $9.8 billion, Refinitiv data showed.

Prosus also invests in online food delivery platforms, classified marketplaces and digital payments businesses.

For the half-year ended Sept. 30, it reported a 29% increase in core earnings to $2.2 billion, as proceeds from its Tencent stake offset losses at other online interests.

Citigroup Inc, Morgan Stanley and Goldman Sachs Group Inc were joint global coordinators for the sale.

($1 = 0.8425 euros)

($1 = 7.7849 Hong Kong dollars)

Twitter launches ‘Milk Tea Alliance’ emoji as movement grows

BANGKOK (Reuters) – Social media giant Twitter on Thursday launched an emoji for the Milk Tea Alliance, a global online pro-democracy movement that has united anti-Beijing campaigners in Hong Kong and Taiwan with protesters in Thailand, Myanmar and beyond.

Activists welcomed the announcement of the emoji – a white cup set against a background of three colours representing different shades of milk tea in Thailand, Hong Kong and Taiwan – for the first anniversary of the movement.

The Milk Tea Alliance sprang from a Twitter war that flared after Chinese nationalists accused a young Thai actor and his girlfriend of supporting democracy in Hong Kong and Taiwanese independence.

It is named after a shared passion for sweet tea drinks in the three places.

Use of the hashtag peaked again in February after the military coup in Myanmar, where protesters using the hashtag rallied regional support.

“We have seen more than 11 million Tweets featuring the #MilkTeaAlliance hashtag over the past year,” Twitter said in an announcement that pushed the hashtag to among the top trending in Thailand, Hong Kong and Taiwan on Thursday.

Previously, Twitter launched emojis for #MeToo and #BlackLivesMatter movements.

The Twitter emoji showed global recognition and lent greater credibility to the youth movement, said prominent Thai activist Netiwit Chotiphatphaisal, one of the alliance’s leading voices.

“It’s important as it shows the young people fighting for democracy that the world is with them and they’re making an impact,” Netiwit told Reuters. “It’s a sign that online activism can go much further.”

Twitter is blocked in China and its apparent endorsement of a movement with a strong current of opposition to Beijing was unlikely to hurt its business, said James Buchanan, a lecturer at Bangkok’s Mahidol University International College.

“Twitter has plenty to gain by appealing to young people in the Asian markets that are open to them,” he said.

Exclusive: Apple’s MacBook, iPad production delays on chip shortage – Nikkei

(Reuters) – Production of some Apple Inc’s MacBooks and iPads has been postponed due to a global component shortage, the Nikkei reported on Thursday.

Chip shortages have caused delays in a key step in MacBook production, according to the report, which added that some iPad assembly was postponed because of a shortage of displays and display components. (s.nikkei.com/3uAZhI7)

Apple did not immediately respond to a Reuters request for comment.

Apple to argue it faces competition in video game market in Epic lawsuit

(Reuters) – Apple Inc said it plans to argue that it faces abundant competition in the market for video game transactions to defend itself against antitrust allegations by “Fortnite” maker Epic Games, the iPhone maker said on Thursday.

Epic sued Apple last year in federal court in California, alleging the 15% to 30% commissions that Apple charges for the use of its in-app payment systems and Apple’s longstanding practice of exercising control over which apps can be installed on its devices amount to anticompetitive behavior. The dispute arose after Epic tried to implement its own in-app payment system in the popular “Fortnite” game and Apple subsequently banned the game from its App Store.

The case is to be heard in May in Oakland, California, by U.S. District Judge Yvonne Gonzalez Rogers, who will have to rule on which notion of a “market” is the correct one for analyzing Apple’s moves for signs of anticompetitive conduct.

Epic has framed its case around the idea that Apple’s iPhones, with an installed base of more than 1 billion users, represent their own distinct market for software developers. Epic has argued that Apple has monopoly power over that market because it decides how users can install software on the devices and says it abuses that power by forcing developers to deliver their software through the App Store, where developers are subject to fees on some transactions.

In a filing that Apple planned to make Thursday, the company rejected that notion and said the proper market to analyze the case is the video game transaction market, which includes platforms such as Nintendo Co Ltd and Microsoft Corp’s Xbox gaming consoles, which also limit the software that can run on their hardware and charge fees to developers.

Apple said it plans to argue that consumers have many choices on how to carry out video game transactions, including purchasing virtual tokens from game developers on other platforms such as Windows PCs and using the tokens on iPhones with no fees to the game developer.

Cyber-attack on school: Pupils’ grading system tempered

Pupils’ coursework has been destroyed in a “significant” cyber-attack on a school.

Redborne School
image captionThe school said the attack was likely to cause long-term disruption

Redborne Upper School and Community College in Bedfordshire said the attack took place on Wednesday.

Although no data was taken, the school’s servers were left unreadable resulting in “the loss of a significant amount of data”, it added.

The school said it was working “to ensure that no students will be disadvantaged”.

In a letter sent to parents on Friday, the school, based in Flitwick Road, Ampthill, said it had rebuilt its servers.

It said: “This process has resulted in the loss of a significant amount of data including student user areas.”

The school said no data had left its servers “and no unauthorised persons have access to any information”.

Exam board discussions

Students’ personal data including academic records was kept on a different server, said the school.

The letter said: “It is this data that will form the basis of the grades we will be supplying to exam boards this summer in most cases.”

However, it added coursework, which would play “a significant role” in some subjects, had been lost.

“To mitigate this we have already contacted the exam boards and are in the process of putting in place arrangements to ensure that no students will be disadvantaged by the impact of this,” the letter said.

The school added it still has “sufficient data” to “award accurate grades this summer”.

The incident comes days after the University of Northampton reported it had been hit by a cyber-attack which had interrupted IT and telephone services.

The National Cyber Security Centre said since late February an increased number of ransomware attacks had affected education establishments.

Speaking on the Today programme on Friday, its chief executive Lindy Cameron said the coronavirus pandemic has “highlighted both the scale of our dependence on the digital world and the challenges we face”.

But she added the UK is “one of the safest places to live and work online”.

‘Don’t weaponise the net’ warns – former NCSC cyber-chief

In cyber-space, a strong defence should take precedence over arming ourselves with new weapons, the UK’s National Cyber Security Centre (NCSC)’s ex-chief has warned.

Gordon Corera
Security correspondent, BBC News

Ciaran Martin added that we “weaponise” and “militarise the internet at our peril”.

His remarks follow reports of the use of offensive cyber-techniques by nations, including the UK.

Mr Martin said he was not a digital pacifist, but he urged restraint.

“The case for cyber-restraint is a hard-headed one,” he said in a lecture to the Strand Group, part of King’s College.

“A more secure digital environment is the best guarantor of safety and security for Western countries in the digital age.”

Red button

The NCSC is the defensive arm of the intelligence agency GCHQ, Mr Martin was the division’s first chief executive, and stepped down from the role in September.

Ciaran Martin

His comments come as the UK government is carrying out a defence and security review, which is expected to boost the nation’s cyber-capabilities.

“Where’s the red button?” a senior figure in government asked Mr Martin about the UK’s ability to carry out an attack early on in his tenure.

While he said understanding had moved on somewhat, he added there was still loose language, which revealed a “profound lack of understanding”.

And he added that there needed to be a more “cautious” and “realistic” approach.

Russian attacks

The use of offensive cyber-weapons has been gathering pace.

The US is believed to have been the first to deploy one in the Stuxnet attack against the Iranian nuclear programme a decade ago

Russia has been linked to many high-profile attacks since then, including:

  • taking down a French TV Channel in April 2015
  • switching off a Ukrainian power grid in December 2015
  • targeting Ukraine with a virus, known as NotPetya, in June 2017

Western countries have also carried out lower threshold cyber-attacks.

America’s NSA hit the infrastructure of cyber-actors in Russia, who were said to be trying to target the US elections.

And the UK, like the US, has publicly said it had targeted the electronic communications infrastructure of the group calling itself Islamic State.

Talk of cyber-attacks often fail to differentiate between different types.

Mr Martin outlined a five-tier structure using the acronym Hacks, rising in level of seriousness:

  • Hacking an opponent to prevent them acting
  • Adversarial infrastructure destruction, targeting their cyber-capabilities
  • Counter-influencing by promoting information or pre-positioning cyber-weapons
  • Kinetic attack to disrupt a target
  • Systems-wide attack, effectively war

The danger, he argued, came from Western nations using the higher-end capabilities.

“What would we think if we turned on the TV and on the news was chaos across corporate Asia, for sake of argument, because a Western operation had gone viral?” Mr Martin asked.

Russia’s NotPetya attack was a reminder of the potential for unpredictable outcomes, after the virus involved spread beyond Ukraine and affected businesses worldwide. 

Screenshot
image captionNotPetya resembled an earlier ransomware attack but proved to be much more damaging

Mr Martin also warned about the danger of cyber-weapons leaking out.

In one case, a US weapon was stolen, made public and then repurposed by North Korean hackers, who used it to unleash the WannaCry virus.

It spread around the world, hitting the UK’s NHS among others, in 2017.

“It is irresponsible for governments to plan on the basis that they can develop and store cyber-capabilities on the assumption that they will never leak or be stolen,” Mr Martin said.

But the greatest danger, he argued, is Western countries’ dependence on the net.

“Our societies will never be the winners from insecure technology and an unsafe internet,” he said. 

“Therefore, we must be unambiguously in favour of safer technology.”

Cyber-chats

The former NCSC head called for more openness when it came to disclosing cyber-operations, especially since most currently focus on crime, terrorism and propaganda. 

This week the government declined to comment on a report by the Times that GCHQ was targeting states that are spreading disinformation about a coronavirus vaccine.

And Mr Martin said national security officials must talk to civilian technologists to avoid there being two separate conversations without crossover.

It is sometimes said going on the offence is the best form of defence.

But in the case of cyber, defence is the best form of defence, Mr Martin argued.