Three Ukrainian nationals linked to FIN7, a prolific cyber hacking group from Eastern Europe, were arrested and charged for their roles in allegedly attacking more than 100 U.S. companies, said DOJ Wednesday. Dmytro Fedorov, Fedir Hladyr and Andrii Kopakov are in custody facing charges filed in the U.S. District Court in Seattle. DOJ alleged since at least 2015 the group targeted more than 100 U.S. companies, mainly in the restaurant, gaming and hospitality industries. The perpetrators “hacked into thousands of computer systems and stole millions of customer credit and debit card numbers,” said DOJ.

European smart homes over the next five years will triple to 103 million, and annual smart device shipments will reach more than 154 million, ABI Research reported Tuesday. Signify (formerly Philips Lighting), Hive, tado and Netatmo will gain there, the researcher said. U.S. giants Amazon, Apple and Google will influence the market and its growth, said analyst Jonathan Collins. Attempts to replicate U.S. smart home strategies in Europe struggled, the analyst said, but products including from Deutsche Telekom and Swisscom are driving smart home management availability, and Vodafone and BT entered the smart home services market this year.

The U.S. trade relationship with China "significantly impacts” CTA members relying "on the global supply chain,” said Sage Chandler, vice president-international trade. She asked to appear at Aug. 20-23 hearings to oppose 10 percent Trade Act Section 301 tariffs proposed by the Office of the U.S. Trade Representative. Members identified 302 tariff lines of Chinese imports in USTR sights, with more than $109 billion in value, for which 10 percent duties “would be detrimental,” said Chandler's Friday filing. Harmonized Tariff Schedule codes that most worry members would affect startups using U.S. IP, research, design and engineering, said Chandler. Duties on those products would cause “substantial” harm to the entire IoT “ecosystem,” she said. What spooks Chandler most is a “single line item,” HTS 8517.62.00, listed as covering machines for reception, conversion and transmission or regeneration of voice, images or other data, she told us Monday. That “captures servers, gateways, modems,” plus “Bluetooth-enabled devices, like headsets, speakers, fitness trackers, smart health devices and watches,” she said. It exposes “basically the entire ecosystem of the internet,” she said. “You’re looking at what potentially could be pass-down costs everywhere along the chain for the Internet of Things."

It’s an “understatement to say” NXP Semiconductors is “disappointed in the outcome of the regulatory approval process in China” that doomed Qualcomm’s $44 million NXP buy (see 1807250062), said NXP CEO Rick Clemmer on a Thursday earnings call. The combined Qualcomm/NXP would have “represented the true semiconductor industry powerhouse,” he said. NXP’s mission now is not to “dwell on what could have been” but to “focus on what we can do to accelerate and expand our leadership,” said Clemmer. Amid questions about “the level of commitment of the NXP executive management team” now that the Qualcomm deal died 21 months after its inception, “the management team, including Peter and myself, are fully committed to continue to drive the future success of NXP,” said Clemmer, referring to Chief Financial Officer Peter Kelly. NXP took an estimated $31 million hit in Q2 from the Commerce Department’s ban on materials shipments to ZTE that caused disruptions to NXP’s RF power components business “and to a lesser degree our digital networking and other businesses,” said Clemmer. Shipments to ZTE have resumed and will “hopefully continue” as normal for the rest of the year, said Kelly. Clemmer suggested Chinese regulatory authorities refused to approve the Qualcomm buy in retaliation for the ZTE ban because it “was considered to be one of the factors in the discussions with the Chinese relative to the regulatory approval process.” Clemmer finds it quite surprising “that the Chinese made the decision they did, not to actually approve the transaction, given that ZTE was brought back to life” by the Trump administration and Congress, he said. Representatives of China’s Foreign Ministry didn’t comment Friday, nor did Qualcomm, which Thursday blamed the NXP deal's demise on the "geopolitical environment" (see 1807260005).

Intel opposes the proposed 25 percent Trade Act Section 301 duties on semiconductor imports from China, it said in comments posted Wednesday in docket USTR-2018-0018. Intel is one of many tech interests arguing this week for removing Chinese semiconductor imports from the tariffs list because most semiconductors the U.S. imports are made in the U.S., shipped to China for final, low-end assembly, testing and packaging (ATP), and then shipped back to the U.S. “No rational U.S. semiconductor company is going to incur the very high costs and other risks raised by relocating an ATP facility in China with an already established ecosystem to a green field site in another country,” said Intel. It estimates it would cost $650 million to $875 million to move an ATP plant out of China. The Internet Association wants to testify at U.S. Trade Representative hearings Aug. 20-23 to urge removing 22 tariff lines “that cover products internet companies use to function on a daily basis,” said the company in a filing posted Thursday in docket USTR-2018-0026. IA wants excluded from proposed 10 percent tariffs “control or adapter units for automatic data processing machines” and other components. Imposing new duties on the 22 tariff lines“would not help to correct China's practices, but would cause disproportionate economic harm to American internet companies,” said the association. Friday is the deadline for requests to appear.

Anything that goes against free trade between the world's two largest economies "could eventually have a macro effect that would be detrimental to everybody,” said Texas Instruments Chief Financial Officer Rafael Lizardi on a Tuesday-evening earnings call, about the Trump administration’s proposed 25 percent Trade Act Section 301 tariffs against Chinese semiconductor imports (see 1807240005). TI sees no “direct impact other than some minimal impact” if those tariffs take effect, he said. TI draws only about 13 percent of its revenue from products it imports to the U.S., he said. “Only a sliver of that has Chinese origin,” he said. “Only about 1 percent of our revenue would have those tariffs applied to it,” and that's before TI makes “any adjustments” in its supply chain “and other things that we could do to even minimize that impact further,” he said. The earnings call was TI's first since it named Chairman Rich Templeton to return to his former CEO role, replacing Brian Crutcher, who resigned for allegedly violating the company's code of conduct in his personal behavior (see 1807180062). Templeton, who didn't appear on the call, is "fully engaged" and busy "executing our strategy," said Dave Pahl, vice president-investor relations.

CTA wants the Office of the U.S. Trade Representative to remove 54 tariff lines involving many chip-related items plus things like motion sensors from imports from China targeted for a second tranche of 25 percent duties, said Sage Chandler, vice president-international trade, in comments Monday in docket USTR-2018-0018. Chandler’s testimony at the USTR’s Tuesday hearing said the tariffs would bring “disproportionate” harm to U.S. consumers and businesses without thwarting allegedly unfair Chinese trade practices, emailed a CTA spokesperson. "The tariffs will not only impact electroindustry manufacturers’ supply chains, but also may be passed on to their customers’ supply chains and the broader U.S. industrial and infrastructure base," commented the National Electrical Manufacturers Association. Lutron also had concerns. Dell said such measures “would further undermine U.S. competitiveness in information technology.” It said it's "deeply troubled by the cumulative and self-destructive impact" of such penalties "on critical information technology inputs.” Voxx International wants five tariff lines removed, it said, including antenna components.

Several tech industry allies will testify Tuesday against 25 percent Trade Act Section 301 tariffs on imports from China on the Office of the U.S. Trade Representative's first of two days of hearings, said a new witness list. Sage Chandler, CTA vice president-international trade, will speak, as expected (see 1807200059). Logitech and Universal Electronics will argue for excluding remote controls and other devices imported from China, their comments in docket USTR-2018-0018 showed. The “vast majority” of Universal’s remotes are manufactured in Chinese factories that Universal owns and operates, said CEO Paul Arling, who will testify. Imposing the additional duties on those products “would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers,” by forcing higher subscription costs for pay-TV and over-the-top services, said Arling. Many of the spare parts and components U.S. companies import from China “are in fact made by other U.S. companies,” said Jonathan Davis, global vice president-industry advocacy at Semi, which represents electronics industry supply-chain interests. Those companies hold on to their own intellectual property and “only perform low-value manufacturing in China, while the high value-added work is completed in the United States,” said Davis. Josh Kallmer, senior vice president-global policy at the Information Technology Industry Council, will testify for excluding several tariff lines on diodes and integrated circuits, he told the USTR. David Isaacs, Semiconductor Industry Association vice president-government affairs, who will testify on the same panel as Kallmer, said that such tariffs on semiconductors would “fail to address problematic Chinese forced tech transfer and IP theft. Chinese companies export almost no semiconductors to the U.S. market. Most U.S. semiconductor imports from China are semiconductors designed and manufactured in the U.S., and then shipped to China for the final stage."

A German court will refer ICANN's case against domain registrar EPAG (see 1806220001) to the Higher Regional Court, ICANN blogged Thursday. The injunctive action, filed in May in the Regional Court in Bonn, asked for "assistance in interpreting" the EU general data protection regulation after EPAG said it will no longer collect registrants' administrative and technical contact information when it sells new domain names, for fear of violating the regulation (see 1805280001). The Regional Court ruled against ICANN, which then appealed for an order requiring EPAG to reinstate collecting the data. The court re-evaluated the decision with comments from EPAG and will now refer the case to the higher court.

A “massive influx” of Chinese-sourced computers and electronics to the U.S. has been the “primary driver of the bilateral trade deficit” between those countries, the U.S-China Economic and Security Review Commission reported Thursday. U.S. imports of Chinese computer and electronics products jumped 458 percent to $184 billion in 2017 from 2002, “by far” the largest category of Chinese shipments last year, comprising 37 percent of total imports, said the commission, created in 2000 by Congress and whose 12 commissioners are picked by legislative leaders. “Low labor costs, a central position in East Asia, and preferential policies in China’s special economic zones caused a structural readjustment of global supply chains and enabled China to become the world’s hub for the production of laptops, phones, and data storage devices.”