Apple’s top executives committed “securities fraud” when they made “materially false” statements during the holiday quarter about the robustness of iPhone sales in China, alleged a complaint (in Pacer) Tuesday in U.S. District Court in Oakland, seeking class-action status. CEO Tim Cook and Chief Financial Officer Luca Maestri misled investors by standing by their optimistic iPhone forecasts when they “knew and failed to disclose” that the U.S.-China trade war “had negatively impacted demand for iPhones and Apple’s pricing power in greater China,” alleged the Roseville (California) Employees’ Retirement System, which bought 512 shares of Apple stock Nov. 18 for $175.83 a share. Cook and Maestri also hid from investors the high rate at which Apple customers “were replacing their batteries in older iPhones rather than purchasing new iPhones,” and that it was “negatively impacting” iPhone sales growth, said the complaint. Apple’s decision to stop disclosing iPhone unit sales was designed to “mask” the declining shipments, it said. When Apple “shocked the market” Jan. 2 by finally disclosing it would miss its quarterly revenue target by up to $9 billion on the poor state of iPhone sales, especially in China, it sent the stock tumbling to a 52-week low of $142 the next trading day (see 1901030036), it said. Apple shares closed 2 percent higher Wednesday at $203.13. The “misrepresentations” alleged in the complaint “would tend to induce a reasonable investor to misjudge the value of Apple common stock,” rising to the level of fraud, it said. Apple didn’t comment Wednesday.

The Electronic Piracy Information Center is concerned about Customs and Border Protection use of personally identifiable information in cargo screening. "Although CBP claims that risk scores are only used on cargo and not individuals," the impact of cargo holds or screening affects individuals, EPIC commented on the 21st Century Customs Framework, posted Friday in docket 2018-0045-0044. "It is imperative that the methods -- now mostly secret -- and factors used in making targeting assessments are made public, and that the system is governed by ethics and accountability." The agency should adopt the "Universal Guidelines for Artificial Intelligence," the group said.

The Cloud Act will deter international data localization trends that threaten global commerce and public safety, DOJ said in a white paper released Wednesday. Enacted in March 2018, the act (see 1806180052) allows bilateral agreements in which law enforcement can request transfer of foreign-stored data. Foreign partners must have “robust” privacy and civil liberties protections to enter into agreements for purposes of fighting crime and terrorism, DOJ said. The agreement will make citizens in partner states “safer, while at the same time ensuring a high level of protection of those citizens’ rights,” DOJ said.

Questions about Huawei speak to the future of the internet and 5G, said Claude Barfield, resident scholar at the American Enterprise Institute, in an interview AEI posted Wednesday: “Other nations are watching the United States as to how we react and how we challenge, or choose not to challenge, China.” Barfield said President Donald Trump appears to be most focused on the trade deficit in China policy. The Chinese say U.S. complaints are tied to the U.S. “pushing its own companies,” he said. “We have no dog in this fight.” The two main alternatives to Huawei are Ericsson and Nokia, both foreign, he noted. “Are they going to be adequate substitutes?” Barfield said. “If they’re not, what do you do? The administration has not really faced up to that.” So far, there’s no evidence the Chinese government has intervened, he said. “The problem with that though, is that we are just beginning 5G.” Huawei and the Chinese Embassy didn't comment. Strand Consult, meanwhile, said it's launching ChinaTechThreat.com "to focus on cybersecurity challenges and how they affect the telecom and other industries."

A draft technical model for granting access to nonpublic Whois data is being finalized and will be sent to the European Data Protection Board (EDPB) to see if it shifts legal liability away from registries and registrars that provide access to domain name registration information, ICANN President Goran Marby blogged. With its temporary spec for generic top-level domain registration data expiring May 20, ICANN wants to ensure that it has a policy in place to comply with the EU general data protection regulation, he said. Comments on a final policy report on the issues are due April 17, after which additional questions will be posed to privacy regulators. ICANN directors will then consider the policy recommendations and the organization will publish its questions to the EDPB. The policy team's work now moves to its second phase, which includes creating a standard mechanism for access to nonpublic gTLD registration data, Marby said Friday.

The International Competition Network's Steering Group unanimously approved a multilateral framework for procedures among antitrust enforcement agencies worldwide to promote due process in competition law investigation and enforcement, said DOJ Friday. The document is based on the principles of the Antitrust Division’s Multilateral Framework on Procedures. The Antitrust Division, consulting with leading competition agencies from around the world, “developed the proposal, which was then introduced to the global antitrust community last fall and received overwhelming support,” DOJ said. “At the request of several partner agencies, the Antitrust Division agreed to implement the proposed arrangement through the International Competition Network to take advantage of existing structures and to reduce administrative burdens.”

Three product safety agencies of North America -- the U.S. Consumer Product Safety Commission, Health Canada, and the Consumer Protection Federal Agency of Mexico -- jointly developed consensus recommendations to improve test methods for ensuring the safety of AC and USB chargers, said the CPSC Thursday. In trilateral letters to the standards development organizations in the three countries, the agencies recommended new testing to assess potential fire and burn hazards caused by AC and USB chargers for small electronic devices. The effort is the first example of a joint consumer product safety standard recommendation developed among multiple governments that aren’t members of a single administrative region, they said. Goal of the multiyear project is to foster closer alignment of consumer product safety requirements through technical consultations and seek consensus approaches to consumer product hazards not yet being addressed through formal regulatory or standards work, they said. In joint letters to U.S.-based Underwriters Laboratories, Canada-based CSA Group and the Mexican government’s Directorate General of Standards, staff cited numerous incidents of injuries: burns from contact with hot surfaces on an electronic device, or the charger itself; fires and explosions that initiated within the charger, or in one of the cords attached to the charger; and electric shock injuries from user-contact with an exposed energized conductor when the charger housing is breached by melting, or when the housing breaks apart. Incidents also included lithium-ion battery fires as a result of improper charging. The letters noted that incidents are more prevalent when an AC charger or USB charger hasn't been evaluated and certified by a third-party testing facility. The team examined incident data and analyzed existing voluntary standards before proposing new testing procedures and requesting that standards developers add the tests to their current standards. The initiative proved multiple jurisdictions “can develop consensus recommendations to improve voluntary safety standards, if they consult early and compare data and experience,” said CPSC acting Chairman Ann Marie Buerkle. A second round of the Early Consultation Initiative will be underway this year, she said.

The International Trade Commission launched a Tariff Act Section 337 investigation into allegations Taiwan Semiconductor Manufacturing Co. is manufacturing semiconductor devices that infringe patents held by Innovative Foundry Technologies, the ITC said. Innovative says TSMC’s infringing semiconductors are then incorporated into integrated circuits made by MediaTek and Qualcomm, which are then incorporated into BBK, Hisense, TCL and Vizio smartphones, tablets, smartwatches and televisions. The ITC will consider whether to issue a limited exclusion order and cease and desist order banning import and sale of infringing semiconductor chips and the integrated circuits and consumer electronics that contain them. TSMC didn't comment Wednesday.

Fixed broadband subscribers should top a billion by year's end on fiber connections growth in Asia Pacific, particularly China, Kagan said Monday. It said 2018 ended with 974.7 million subscriptions and a household penetration rate of 45.5 percent. It said household penetration rates should top 50 percent by 2025. Fiber-to-the-premises was the fastest-growing broadband platform, up 14 percent in 2018, said Kagan. It said China and the U.S. are "by far" the largest fixed broadband markets, with China representing 40.1 percent of the global total and 74.4 percent of Asian broadband subscribers due to the fiber deployments in its national Broadband China project. It said DSL is the dominant multichannel platform in Western Europe, the Middle East and Africa, with cable dominating in North America and Latin America and fiber subscriptions having overtaken DSL in Asia and Eastern Europe.

Sony’s decision to close its Beijing SE Potevio Mobile Communications (BMC) manufacturing plant in Beijing is part of a global plan announced in October to reduce operating costs incurred in fiscal year 2020 to about 50 percent of the level recorded in FY 2017, a Sony Electronics spokesperson emailed us. The Beijing plant was scheduled to cease operations by Sunday, said the spokesperson, and BMC offered a leave program to employees beginning March 20. Sony will continue to sell and market smartphones in China, “providing full company support,” said a company statement, and it will continue to manufacture phones in Thailand. U.S. tariffs didn’t factor into the decision to close the China plant, the spokesperson said.