mardi 31 janvier 2017

Sellers Of Magic Disease-Curing Laser Arrested, Indicted For Fraud

There are medical conditions that can be treated with lasers. Laser eye surgery is safe and commonplace, for example. Skin disorders and arthritis pain can be treated with lasers, too. However, what you can’t do is cure every disease known to medicine by paying thousands of dollars for a handheld laser from some dude in South Dakota.

Three people were arrested and indicted [PDF] on charges related to the QLaser device, including its inventor, Robert “Larry” Lytle. The device was sold as having healing properties and able to cure every disease in existence, including ALS, HIV, diabetes, and cancer.


If you’re curious about how the QLaser was marketed back in the day, a version of the ad that ran in a Florida newspaper is available on Google Newspapers, and includes a very unimpressed-looking senior golden retriever being treated with the laser. We got the link from a snarky critique of the ad and the product written by a medical doctor.

“The use of the QLaser to treat such serious conditions is unsupported by any published clinical, scientific studies, and not approved by the U.S. Food and Drug Administration,” the U.S. Department of Justice helpfully explained in its press release about the device.

Lasers don't cure dog diseases, either.
It also points out that the creator and head of the company, billed as “Dr. Larry Lytle, D.D.S., Ph.D” was no longer licensed to practice dentistry: his license had been revoked for “engaging in fraud and material deception,” and his diploma mill Ph.D was in nutrition.

Naturally, the QLaser was advertised in newspapers and targeted at the elderly, costing between $4,000 and $13,000. The government’s investigation showed that the laser could actually be dangerous if used as directed, and the people charged in the indictment are accused of continuing to sell the lasers anyway in defiance of the court order.

Since the lasers were being sent through the U.S. Postal Service, the U.S. Postal Inspection Service took the lead in the criminal investigation. A federal grand jury indicted three people associated with the company, including Dr. Lytle, with criminal contempt, mail fraud, and wire fraud. A fourth defendant, who was a QLaser distributor, pleaded guilty. [PDF]


“As the indictment alleges, these individuals targeted vulnerable citizens for years, preying on weaknesses brought about by chronic illnesses and fear of death — all to enrich themselves, and even where the scheme entailed violating a direct court order to stop,” Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division said in a statement.

Coach Is Already Doing Better By Raising Purse Prices

Accessory companies haven’t been doing so well for the last few years, especially brands that are pricey but not too pricey, like Coach, Michael Kors, and Kate Spade. A few years ago, Coach decided to pursue wealthier customers and sell higher-priced bags, and that strategy is apparently paying off.

Brands in this price range end up competing with themselves, confusing consumers, and hurting their own reputations by offering merchandise in boutiques, in department stores, and in their own outlet stores. Kenneth Cole recently shut down all of its stores, most of which were outlets.

Coach began to fight this problem in 2014, taking aim at the higher end of the handbag market. Its 1941 collection, with list prices between $295 and $1,500, has become more popular than one might have expected a few years ago. Sales of bags that cost more than $400 are up, and the top seller in the last few months of 2016 has been the brand’s Rogue bag, which starts at $795.

“That’s a bag that a year ago, we wouldn’t have had permission to sell,” the company’s president of global marketing told Fortune magazine. They could have sold it, but customers wouldn’t have accepted it — or, more importantly, probably wouldn’t have paid list price for it.

It’s not a coincidence that in the last year, the company pulled its products from department stores, believing that their relentless discounting hurts luxury brands and confuses customers.

Did the brand really turn around that quickly? Customer surveys indicate that apparently we all have short attention spans; more consumers thought of the brand as a “discount” one a year ago compared to now.

Hormel Investigating Supplier Accused Of Abusing Animals

Hormel Foods has suspended buying from one of its largest suppliers and opened an investigation into its practices after an animal rights group secretly taped workers at the plant allegedly mistreating and abusing pigs. 

The Minneapolis Star Tribune reports that Hormel opened an investigation into supplier, The Maschhoffs, after Mercy for Animals published undercover video footage that reportedly showed pigs suffering injuries and illnesses, such as workers removing testicles and tails without pain relief.

The group — which has previously filmed footage at other several chicken farms used by Tyson — also claims in the footage from the Oklahoma sow farm that mother pigs are kept in tight gestation crates leaving them with little ability to move.

Hormel tells the Star Tribune that it has a strict code of conduct for suppliers, and policies in place related to animal care and welfare.

“We will not tolerate any violation of these policies,” the company said in a statement.

To investigate the footage, Hormel says it has sent third-party auditors to the farm and other Maschhoffs properties.

While the company probes the allegations, the Star Tribune notes that Hormel is currently transitioning its own hog farms to group sow housing to allow for more mobility — a project that is expected to be completed next year.

However, 94% of Hormel’s pork is raised by suppliers. To that end, The Maschhoffs launched its own investigation into the footage and issued warnings to employees and farm managers that it has a zero tolerance animal care policy.

“We have launched a full-scale investigation in response to this video,” Maschhoffs President Bradley Wolter said in a statement. “Any animal care deficiencies discovered will be addressed in the quickest manner possible.”

Mercy for Animals has produced several undercover videos at plants used by food companies. Last year, a video shot at four Tyson Foods’ supplier allegedly showed birds are suffering in windowless sheds and enduring injuries.

Two months later, the company said it had fired 10 employees from the four Virginia processing plants.

Comcast Launching Xfinity App For Roku, But Not Ditching Set-Top Box Just Yet

With the FCC officially dropping set-top box reform from its agenda, the best we can hope for is a gradual shift toward app-based access to pay-TV programming. Comcast and Roku helped nudge things an inch in that direction today, announcing an Xfinity TV app that comes with as many questions as it does benefits.

The app has just launched in a beta test, the companies announced today. Among other things, that means it may not yet contain its full functionality, may not always work quite right, and is still subject to change in both look and function.

The app is also not yet going to be available for every Roku device owner; the initial list of devices on which it will work for now includes the Roku Express, Roku Express+, Roku Streaming Stick, Roku Premiere, Roku Premiere+, Roku Ultra, Roku 4, Roku 3, and Roku 2.

Here’s the big catch, though: For now the app will only be available to customers who “currently subscribe to Xfinity TV and Xfinity Internet service, have at least one Comcast-provided TV box, and have a compatible Xfinity IP gateway in your home.”

Rather than being a set-top box replacement, it’s basically another way you can log in to your existing Comcast cable account and view content, just like the website or mobile device apps.

There’s another big catch: The app is free for now, but may not always be.

“Customers will not pay equipment charges with respect to their use of Roku devices,” Comcast writes in its FAQ, “during the Beta trial, additional outlet charges for services to outlets connected to Roku devices are being waived. On conclusion of the trial, you will be informed of the charges that will apply for connecting this device with your XFINITY TV service and will have the opportunity to opt in.”

This arrangement may sound familiar to you. It’s almost exactly what the FCC proposed as an alternative to subscribers having to rent set-top boxes monthly from their cable providers.

Comcast, however, stood adamantly against that proposed rule, claiming before it was finalized that it would hurt innovation, raise prices, and somehow lessen consumer privacy protections. Later, while the FCC was still developing a final rule, Comcast claimed it would be impossible to comply with a regulation requiring its service to be made available as a third-party app.

After the finalized rule was announced, Comcast immediately issued a fiery statement saying that mandating cable companies make content available through apps would “stop the apps revolution dead in its tracks by imposing… heavy-handed regulation in a fast-moving technological space.”

That statement came in September; the FCC was supposed to vote to adopt the rule later that month but scrapped it from the agenda for the September meeting. Now, with the change of administration, new chairman Ajit Pai has been able to kill it off entirely.

Given the timelines of corporate partnerships and app development, it seems plausible at least that Roku and Comcast were already in talks regarding this app through 2016. And that certainly casts Comcast’s objections in a different light: perhaps it wanted not to guarantee constant revenue from X1 rentals, but rather to be allowed to charge for this Roku app and other future apps like it — something the FCC rule would have prohibited.

Meanwhile, getting the app successfully tested and launched does open up a future possibility: Why not install it on any Roku, or other similar device, in the country? Doing so would let Comcast turn broadband subscribers in any part of the country where it isn’t — like, say, Charter customers — into Comcast cable customers, even if it runs no wires anywhere near there at all.

Guinness Opening Its First U.S. Brewery In 60 Years

The Guinness brewery in Ireland is a popular tourist destination for fans of the dark brew, as it’s been 63 years since Guinness made any beer stateside. That will soon change.

Diageo — parent company to Guinness, Johnnie Walker, Smirnoff, and many other brands — announced today that it will open a new version of the Guinness Open Gate Brewery in Relay, MD.

The company will brew new Guinness beers created especially for the U.S. market, while Guinness Stouts will continue to be brewed in Dublin, Diageo says. It will also include a visitor’s center, which will run tours and host beer tastings.

The plans have yet to be finalized, but Diageo hopes to start construction this spring and open in fall 2017 timed to the 200th anniversary of Guinness imports to the U.S.

According to the company, the new facility will bring 40 jobs in brewing, warehousing, and an agile packaging operation, which may include canning, bottling and kegging. The new Guinness visitor experience will also create about 30 jobs, Diageo says.

In other Guinness-related news, the St. James’ Gate brewery has plans to develop a whiskey distillery on the site, after 258 years of solely brewing beer. The new brand made there will be called Roe & Co, Diageo says.

Uber Signs Deal To Add Mercedes-Benz Vehicles To Self-Driving Fleet

For its first generation of self-driving cars, Uber partnered with automakers Ford and Volvo, and used the driving technology that it has developed itself on cars that it now owns. The transportation network company has now made a deal with Daimler AG to add the company’s Mercedes-Benz autonomous vehicles to the Uber fleet once they’re ready.

It’s no secret that ride-hailing apps like Uber are investing in driverless technology so they’ll be able to rely on human drivers less in the future. Humans have unfortunate habits of sleeping, eating, and using the restroom. Worse, some drivers have also been known to illegally discriminate against passengers, file lawsuits, assault passengers, and go on strike. Some of those things are objectively bad and others are just bad if you’re Uber, but relying less on human drivers is helpful either way.

The company also tries to give the driverless future a halo of safety and eco-friendliness: CEO Travis Kalanick predicts fewer cars sitting idle on paved parking lots and fewer accidents in the future when we’re able to hail roving autonomous cars instead of owning our own.

Uber’s current autonomous fleet consists of hybrid Ford Focus cars in Pittsburgh, and Volvo SUVs in Arizona that started out in San Francisco until the state DMV objected. The difference with the Daimler program is that Uber owns its current self-driving fleet, using its own driving technology and developing the cars with Ford and with Volvo. The Daimler cars will not belong to Uber, and will use Daimler’s own self-driving technology.

Instead, they’ll be part of an open platform where automakers sign their vehicles up to be part of Uber’s network. Now drivers sign up with the cars that they own or lease: in the future, automakers could sign up with their own driverless fleets.

There’s no date announced yet for when the Daimler cars will begin hitting the roads, and Uber also didn’t announce the financial arrangements.

(via Reuters)

Lenders, Real Estate Brokers To Pay More Than $5M For Alleged Kickback Scheme

The home buying process is complicated and expensive enough without mortgage servicers and real estate brokers tacking on illegal and costly fees. To that end, the Consumer Financial Protection Bureau has ordered Prospect Mortgage and three other companies to pay more than $5 million to settle allegations they participated in an illegal kickback scheme. 

The CFPB announced the enforcement action Tuesday, accusing Prospect Mortgage of paying illegal kickbacks to real estate brokers ReMax Gold Coast and Keller Williams Mid-Willamette, and lender Planet Home in exchange for referrals of customers purchasing homes.

According to the complaint [PDF] against Prospect Mortgage — which operates more than 100 branches across the country — from 2011 to 2016, the company used a variety of plays to pay kickbacks for referrals of mortgage business in violation of the Real Estate Settlement Procedures Act (RESPA).

To create the system, Prospect allegedly established marketing services agreements with companies — like ReMax Gold Coast and Keller Williams Mid-Willamette — which were framed as payments for advertising or promotion services. However, the payments were actually for business referrals.

The payments, which ranged from $25 to $500 per lead, would then be passed along to agents at the broker companies.

In all, the CFPB alleges that Mid-Willamette [PDF] received at least $145,000 from Prospect between 2012 and 2015. ReMax Gold Coast [PDF] received more than $500,000 from Prospect between 2014 and 2016, the complaint states.

The CFPB claims that Prospect paid brokers to require that potential homebuyers prequalify for a mortgage with Prospect, even if the customer had already been prequalified by another lender.

One method the company used, the complaint alleges, involved requiring brokers to engage in a practice of “writing in” Prospect into their real estate listing.

Additionally, the CFPB claims that Prospect and Planet Home Lending [PDF] had an agreement in which Planet would identify and persuade eligible consumers to refinance with Prospect for their Home Affordable Refinance Program (HARP) mortgages. Once a refinance was completed, the companies would allegedly split the proceeds of the sale.

For their part in the alleged schemes, the CPFB accused ReMax Gold Coast and Keller Williams Mid-Willamette of violating RESPA by exploiting consumers’ reliance on its recommendations for services by pointing them to Prospect.

As for Planet Home Lending, the CFPB claims the company violated RESPA, as well as the Fair Credit Reporting Act, by accepting fees from Prospect and unfairly marketing Prospect to consumers.

As part of Tuesday’s enforcement action, Prospect will pay $3.5 million to the CFPB’s Civil Penalty Fund, while ReMax Gold Coast must pay $50,000, Keller Williams Mid-Willamette must pay $145,000 in disgorgement and $35,000 in penalties. Finally, Planet Home will pay $265,000 in redress to harmed consumers.

Each of the companies must also refrain from paying for referrals or entering into agreements with service providers to endorse the use of their services.

Charlie Brown & The Peanuts Gang Up For Sale

Three months after MetLife cut Snoopy and the rest of his Peanuts pals loose, the company that owns the rights to the characters is reportedly putting the gang up for sale.

According to Reuters, debt-strapped brand management company Iconix is exploring a sale of its majority stake in Peanuts Worldwide LLC. That company owns the rights to all the cartoon characters, people familiar with the matter said. Thus far, some Chinese companies and other investors looking to score some U.S. media and licensing assets might be interested.

The company also reportedly wants to unload its Strawberry Shortcake brand, a character many ‘80s kids probably remember as a spunky, fragrant fruit-themed doll and TV character.

Charles Schulz’s Peanuts characters have been licensed in more than 100 countries, and gross about $30 million a year for Iconix, according to Reuters.

Why sell Charlie off now? Iconix — which also has Ed Hardy, Fieldcrest, Mudd, London Fog, Danskin, Candie’s, Mossimo and more under its umbrella — has been struggling under the weight of some major debt, a situation that was not made easier by MetLife’s recent decision to drop the Peanuts characters as mascots.

Automakers: Possible Border Tax Would Raise Prices, Even On American-Made Cars

Facing a possible new tax on imported goods, some of the biggest name in auto manufacturing and retail are calling on lawmakers to rethink the tax, claiming it will hurt their businesses and lead to higher prices.

While no actual legislation has been introduced, the proposal that has been kicking around Capitol Hill for the last month or so involves cutting the current corporate income tax rate of 35% to 20%. To make up for that rate drop, companies would no longer be able to deduct the cost of imported goods from their profits.

So, for example, imagine a U.S. company that imports $1 million worth of product, and sells them for $2 million stateside after spending about $500,000 domestically, resulting in a profit of $500,000.

Under the current tax code, the company deducts the import and domestic expenses, and pays 35% tax, but only on the $500,000 profit. If this proposal is put in place, that company would not be able to deduct the $1 million of import costs, so it would pay the lower 20% tax, but on $1.5 million instead of $500,000.

Given the volume and cost of imported cars into the U.S., it’s little wonder that the automotive industry is making a big push for Congress to rethink this tactic.

The American International Automobile Dealers Association — a trade group that lobbies lawmakers on behalf of some 9,500 U.S. car dealers — has called on its members to pen letters to legislators, arguing that automaking is an inherently international industry, so taxing imports is going to drive up the cost of vehicles regardless of where they are assembled.

“Auto parts would be subject to a BAT, so even the most American-made vehicle sold in the U.S. today – the Toyota Camry – would be subject to a significant price increase,” writes AIADA. “Rising prices will drive away regular Americans looking for a new car and, as a result, vehicle demand will drop. Both American auto manufacturing plants and retailers like you will feel the pain, and be forced to shed jobs.”

Speaking of Toyota, while the company does assemble a significant number of vehicles in the U.S., it still imports about half of the 2.4 million units it sells in America each year.

Jim Lentz, CEO of Toyota North America tells Reuters that “Cost is going to go up, as a result demand is going to go down. As a result, we’re not going to able to employ as many as people as we do today. That’s my biggest fear.”

The carmaker recently urged its network of 1,500 dealers to put pressure on the House Ways and Means Committee to not move forward with the import tax.

Reuters also notes that two major retailer — Best Buy and Target — have recently launched efforts to shut down this tax before it goes on the books.

Target CEO Brian Cornell actually met with members of the Ways and Means Committee, says Reuters. They discussed how a border tax would affect the cost of essential household goods, like baby supplies, that are imported.

Meanwhile, Best Buy has been making the case to members of Congress that the border tax would not only hurt U.S. retailers but would be a boon to overseas online merchants like Alibaba that ship directly to consumers.

Small Cable Companies, Indie Networks Ask FCC To Force Channel Unbundling

As cable packages have ballooned in both volume and price over the years, a growing segment of consumers has demanded options for unbundled, choose-your-own-channels cable. So far, those cries have gone largely unheard, except for a few streaming, internet-based options. However, it seems the à la carte option has a growing fan base clamoring to be heard: small cable companies themselves.

That’s the gist of a recent filing the American Cable Association has made with the FCC.

While the ACA membership roster does include some large companies like Comcast and Viacom, it also includes hundreds of smaller cable advertising, programming, and distribution companies. It is on behalf of those small companies that ACA — joined by independent channels Mav TV, Ride TV, and One America News Network — filed its comment [PDF].

You know how when you subscribe to cable, you don’t just get Network X, but also Network X1, Network X2, Netwok X3, and so on? That’s bundling, and it’s basically integral to TV distribution at this point.

Here’s how it works: a content company works out an agreement with a distribution company to get its channels in front of subscribers’ eyeballs. Cable Company A agrees to pay Network B a certain sum — say, $0.25 per month per subscriber who receives the channel — in order to distribute that channel on its service.

In theory, this benefits both parties: a consumer isn’t going to sign up for a cable package that doesn’t have any channels in it, so this brings in viewers. And it’s a revenue stream for the network, which they like because business is all about making money.

But over time, those agreements have continued to grow bigger and more unwieldy. Now, a company that owns 15 cable networks might say, “We’ll grant you carriage of our flagship network for a discounted price of $1 per head, but in return you have to carry our other 14 channels for $0.01 to $0.20 each, as well.”

The numbers, of course, vary widely, but the principle is the same.

An enormous company like Comcast — which is both the cable distribution company, and also owns the entire NBCUniversal family of networks — has the clout to demand good terms, and the budget to move some cash around to make deals work out as needed. But the ACA and the independent networks say that this kind of bundling is killing them, and “represents by far the greatest threat to the viability of independent programming.”

“The largest programmers universally bundle their most desirable channels with programming that is little watched and overpriced, requiring MVPDs [cable and satellite companies] to take all the channels or get none of them,” the ACA writes. “To obtain must-have programming, MVPDs must set aside huge amounts of their limited bandwidth and programming budgets to carry dozens of bundled channels in which they (and their subscribers) have no interest.”

The comment provides one example: “a small cable operator who wants to get the must-have programming from nine of the largest media groups — Disney/ESPN, Fox, Comcast/NBCU, Turner, Viacom, AETN, AMC, Discovery, and Scripps … must carry 65 channels at a minimum.”

A company with 250,000 subscribers doesn’t have the same kind of cash to throw around as one with 25 million, nor does it have the same negotiating leverage to convince the content company to take a lower fee. If carriers are forced into agreements of this type, then there’s simply no money left to give a fair deal to an independent network that isn’t part of a media conglomerate. Nor is money the only problem: distribution of digital cable takes bandwidth, and while, again, that’s not a problem for a behemoth like Comcast or Charter, carrying excess channels can actually overtax the network of a small enough provider and prevent it from carrying alternative traffic.

The FCC proceeding to which the comment was filed seeks input on rules around two kinds of broadcasting agreements: most favored nation (MFN) clauses, and the alternative distribution method (ADM) provisions. The ACA does encourage the Commission to revamp those, but says doing that alone simply doesn’t go far enough.

Failing in some way to address the issue of bundling, the ACA says, will make the rest of the rulemaking procedure effectively moot, and so it “urges the Commission to include regulations limiting forced bundling by programmers in the rules adopted through this proceeding.” The comment did not, however, specify in what way the FCC should do so.

Drug Dealer Hiking The Price Of Pot? Don’t Call The Police

“Is your drug dealer ripping you off?” That’s a question police in Australia jokingly posed this week, after a woman called authorities to complain about a recent “outrageous” price hike on marijuana in her neighborhood.

The Northern Territory Police, Fire and Emergency Services noted the unusual call in a Facebook post, writing that the woman said she was compelled to notify police after her drug dealer instituted an unfair price hike for her weed.

“Completely offended, the woman demanded that police investigate this ‘outrageous’ price hike,” the police wrote. “When asked for further details, the woman hung up.”

Anyone else who is experiencing similar problems can reach out as well — though you probably won’t score a cheaper price on your pot.

“If you know a drug dealer who is ripping you off, give us a call, we’d love to help,” authorities promised.

She’s not the first to call the cops when she shouldn’t have, not by a long shot.

The 9-1-1 Hall Of Shame

• This guy called 9-1-1 to report that his nonexistent daughter needed help just because he was locked out of his hotel room.

• Another reason not to alert the authorities? When you want to play Pokemon Go inside the police station.

• There was the man who police said lied about having chest pains because he just wanted some help fixing his AC.

• This guy was accused of calling 9-1-1 a dozen times claiming the local watering hole had overcharged him for beer.

• Remember the shoplifting suspect who notified authorities that he was being followed around by Walmart security guards, for some reason? Not a great plan.

• Then there’s the suspected phone thief who police said called them because the victim wouldn’t leave her alone after the theft.

Is Facebook down? Don’t call the police. Seriously, this happened.

• The driver who found out the hard way that reporting a fake murder will not get you out of a speeding ticket.

• A guy called 9-1-1 repeatedly because his wife threw his beer away. Police did not appreciate this.

• On the topic of discussing drugs with police, the 9-1-1 dispatcher isn’t the person to ask where you can buy some pot.

• The Subway customer who complained to the authorities when she got the wrong sauce on her flatizza.

• There was once a woman who called the cops on herself — to defend her claim that a restaurant had served her an undercooked waffle.

• Know what won’t convince mall security to push your borrowed wheelchair to the Apple Store? Calling 9-1-1.

• Police had to arrest a woman who they say called 9-1-1 six times to complain about a bar full of drunk people.

• We can’t help but remember the helpless person who called the cops asking for help finding the red Jell-O when it disappeared from the fridge.

• Do not call 9-1-1 when you’re overcharged by $0.01 for a beer.

• There was the time a blogger admitted he had maybe overreacted by calling 9-1-1 to report cell phone use in a movie theater.

A cable outage is not an emergency that rates alerting the police.

• The McDonald’s customer who was arrested for dialing 9-1-1 about a mixed up order.

• Using 9-1-1 as a hotline for help ordering Chinese food is another guaranteed way to tick off the cops.

• How about the man who claimed he couldn’t have called emergency services to ask for a ride to get beer — because he didn’t own a phone.

• Just to clarify: 9-1-1 isn’t a sandwich complaint hotline, either.

Is your iPhone on the fritz? Yeah, don’t call police.

When Taco Bell won’t serve you when you walk through the drive-thru, well, that’s not an emergency for police to handle.

• And last but not least — driving you to the liquor store is not something police want to do.

H&M Slows Down Store Openings, Shifting Focus To Online

For years, so-called fast fashion purveyor H&M (which stands for Hennes & Mauritz) has quickly opened store after store around the world to compete with rivals like Zara and others. Now, however, the company says it will slow down its pace of new store openings in order to concentrate on current stores and online sales. 

H&M announced Tuesday in its full-year earnings report that it will no longer work to open 10% to 15% more physical stores each year and instead aim to increase sales at current divisions by the same levels.

H&M currently operates more than 4,300 stores in 64 markets around the world. While the company still plans to open hundreds of new stores in 2017, many of these new stores will be for the retailer’s other brands, including COS, & Other Stories, Monki, Weekday, and H&M Home.

Additionally, the company says it will aim to increase sales in its current operations by 10% to 15% both online and in-store.

The change of pace, the Wall Street Journal reports, comes as H&M struggled in the last quarter in some of its typically strong markets, while benefiting in newer markets.

Despite the difficulties, H&M reported on Tuesday that in the fourth-quarter its sales increased 8%. However, for the full year, the retailer’s net income was down 11% from the previous year.

According to the company, the decrease was the result of increased markdowns and higher purchasing costs.

Analysts tell the WSJ that H&M’s new strategy could provide the company with a needed jolt in sales, especially online, where it competes not only with traditional retailers like Gap, but with Amazon.

As a result, H&M Chief Executive Karl-Johan Persson tells the WSJ that the retailer is considering selling clothing through Alibaba.

Man Accused In French Art Heist Claims He Threw Away $100M Worth Of Stolen Art

When you’re about to get caught with something you shouldn’t have, trying to get rid of that evidence is only natural. But while flushing that joint down the toilet before your mom catches you in the act makes sense, destroying millions of dollars worth of precious art seems like a pretty extreme reaction.

A co-defendant in one of the biggest art heists ever testified in court this week that he destroyed and threw away five masterpieces — by Picasso, Matisse, Modigliani, Braque, and Fernand Leger — worth more than $100 million, the Associated Press reports.

The pieces were allegedly stolen by a thief nicknamed “the spider-man” in 2010 from Paris’ Museum of Modern Art, and have never been found. The man is one of three people who went on trial on Monday.

“I threw them into the trash,” he repeated three times while in tears, the AP reports. “I made the worst mistake of my existence.”

The investigating judge and other defendants at trial aren’t onboard with those claims, however, as investigators believe the paintings have been taken out of France intact. They haven’t been able to prove that, but the man’s co-defendants have testified that he was “too smart” to destroy such fine art.

One co-defendant, a suspect dubbed “the spider-man” testified that he broke into the museum pretty easily, removing the glass from a bay window without breaking it, cutting a padlocked metal fence behind it, and hopped from room to room without the guards noticing.

The accused thief confessed to stealing the five paintings and offering them to another defendant, who has admitted to receiving the stolen goods. That defendant says he was too worried to keep the artworks in his shop after a few months, and showed them to his friend — the one who claims to have destroyed them — who agreed to buy one of the paintings and store the rest in his studio.

He says he panicked when police started poking around, so he broke the stretcher bars on all the canvasses by kicking them and then threw them into the building’s trash.

The accused thief is charged with stealing public cultural property, while the other two are accused of receiving stolen goods.

Diabetes Patients Sue Drugmakers Over Escalating Insulin Prices

Insulin is an essential hormone, and millions of Americans get the insulin that they need to stay alive and healthy from a vial. With insulin prices on the rise, a group of diabetes patients has filed a federal lawsuit against three drug companies, accusing them of carrying out a fraudulent pricing scheme.

Not everyone pays that inflated price, of course. The Washington Post explains that the lawsuit focuses on the practice of rebates, a part of the drug market that consumers don’t see. Drugmakers negotiate with the pharmacy benefit managers that negotiate how much insured patients actually pay for their medications, setting prices but also setting secret rebates.

The lawsuit accuses drugmakers of abusing the rebate system by hiking the list prices for insulin so they can offer bigger rebates. This leaves patients with high-deductible insurance plans, participants in Medicare drug plans, and uninsured people with huge bills: a month’s supply of some insulins can cost $900.

FURTHER READING: Diabetes Patients Are Losing Limbs And Sight Because They Can’t Afford Insulin

The plaintiffs are bringing the lawsuit [PDF] under the Racketeer Influenced and Corrupt Organizations (RICO) Act, a conspiracy-fighting law designed for organized crime operations, to charge drugmakers with working with pharmacy benefit managers to raise prices while keeping patients away from competing

Let’s take Lantus, a popular long-acting insulin from Sanofi-Aventis, as an example.

“[T]he Lantus Pricing Enterprise periodically and systematically inflated the benchmark price of Lantus and represented—either affirmatively or through half-truths and omissions—to the general public, health care payers, and consumers, including Plaintiffs and the class, that Lantus’ benchmark price fairly and accurately reflected the actual cost of this drug,” the initial complaint of the lawsuit says.

Sanofi-Aventis offered rebates to pharmacy benefit managers along with its price hikes, which has led the price of Lantus to increase by triple-digit amounts just in the last few years.

“I think that publishing a price that you know is artificially inflated and is not a real price––other than to one group of people––is a fraud,” one of the attorneys representing the eleven plaintiffs in this case told the Washington Post.

DeVry Will Pay $2.75M To Settle State’s Allegations Of Misleading Advertising

One month after DeVry Education Group agreed to pay $100 million to settle federal regulatory charges that it used deceptive ads to recruit students, the for-profit educator has come to a multimillion-dollar settlement that should close the book on one state-level investigation.

New York Attorney General Eric Schneiderman’s office announced the $2.75 million settlement this morning. This puts an end to the state’s investigation, which alleged that DeVry used exaggerated claims about its graduates’ job-placement success, and about how much money these DeVry grads had earned.

The investigation into DeVry centered on the company’s claim in ads that 90% of students who were actively seeking employment obtained jobs in their field of study within six months of graduation.

According to the AG’s office, the 90% claim was misleading because a substantial number of graduates included in the figure were graduates who were already employed prior to graduating or even enrolling at the school.

In some cases, DeVry also inaccurately claimed that a significant number of graduates were employed in their field of study, when they were not, the AG’s complaint alleges.

For example, the AG’s office claims that DeVry counted graduates of its Technical Management program as “employed in field” when they were really working as retail salespeople, receptionists, bank tellers, and data entry workers.

Other graduates were considered to be “employed in field” when they held positions that did not require a degree. Additionally, when students failed to find a job in their field, DeVry allegedly misclassified them as “inactive.”

In addition to allegedly misleading prospective students with the 90% claim, the AG’s office also accused DeVry of overstating graduates’ salaries.

For example, DeVry ads claimed bachelor’s degree graduates earned 15% more one year after graduation than all graduates with bachelor’s degrees from all other colleges and universities. In reality, the AG’s office found that rates were inconsistent with DeVry data.

Under the New York settlement, DeVry will pay $2.25 million to associates and bachelor’s degree graduates at DeVry’s New York campuses and New York residents who attended DeVry’s online school. Additionally, the company has agreed to pay $500,000 in penalties and reform its practices concerning representation of graduates’ employment and salaries.

Tuesday’s settlement is just the latest for DeVry. Last month, the company agreed to pay $100 million to students in order to settle an FTC lawsuit that claimed the school’s advertising misled would-be students about how likely a DeVry degree is to get them a job.

Prior to that settlement, the Department of Education provided notice to the school in Jan. 2016 that it would be required to stop certain advertisements regarding post-graduation employment outcomes and take additional steps to ensure the school can substantiate employment claims.


Twitter (Again) Promises New Approach To Reduce Harassment And Abuse

Twitter is something of a double edged sword, for its millions of users. On one hand, conversations are fast-flowing, free, and open, and a single retweet can bring that smart thing you said to everyone’s attention. Conversely, a single retweet can bring that smart thing you said to the attention of a roving hate mob, making your life utterly miserable and possibly putting you in actual danger.

Twitter’s been saying for years that it needs to improve its tools for mitigating abuse and harassment, and for years users have been finding each new option insufficient at best. But this time, the company’s leadership promises, they’re going to make good changes. For real.

Twitter CEO Jack Dorsey made the announcement yesterday on — where else? — Twitter.

“We’re taking a completely new approach to abuse on Twitter,” he tweeted, “Including having a more open and real-time dialogue about it every step of the way.”

That announcement, in turn, led to a series of tweets from Ed Ho, VP of Engineering, where he laid out the general plan.

“Making Twitter a safer place is our primary focus and we are now moving with more urgency than ever,” Ho wrote. “We heard you, we didn’t move fast enough last year; now we’re thinking about progress in days and hours, not weeks and months.”

Users can expect both public-facing changes and also invisible, back-end ones coming soon, Ho promised, beginning with “long overdue fixes to mute/block and stopping repeat offenders from creating new accounts” as soon as this week.

Twitter users may be forgiven, however, for taking a “we’ll believe it when we see it” stance. Previous CEO Dick Costolo admitted in 2015 that, “we suck at dealing with abuse and trolls,” yet both everyday and high-profile incidents — like a hate mob that mobilized against actress and comedian Leslie Jones last summer — have continued to occur.

Twitter did unveil a few new tools in November, allowing users to mute not just specific accounts, but also specific keywords and conversation strings.

At that time, Twitter also updated its reporting function, so that users either experiencing or witnessing harassment and abuse could more accurately complain about the kind abuse taking place.

Netflix Engineers Dream Up ‘MindFlix’ Device That Would Let You Browse Movies With Your “Brain”

Because you will probably wear out your thumb endlessly scrolling and scanning through Netflix offerings to find something to watch, engineers at the company have cooked up a concept that would allow you to do all of that browsing without lifting a finger.

During Netflix’s annual Hack Day last week at company headquarters, product developers have 24 hours to collaborate on new ideas and technologies. One team’s contribution was MindFlix, a prototype device that uses a Muse meditation headband to navigate the Netflix menu.

“Instead of implanting chips in our brains for Hack Day, we decided to take this brain reading head band to really put it to the test,” one of the four Netflix engineers behind the device explains in a video about the project.

Another engineer demonstrates the device, nodding up or down, left or right, to peruse options on the screen. “Now think, ‘play,'” another engineer urges, and lo and behold, the content begins to play.

What’s not clear from the video is just how much your “brain” is involved in this browsing. The actions demonstrated in the quick clip all seem motion based — turning and nodding your head to browse; pushing your head forward to press “play” — which may indicate that MindFlix is just using the device’s accelerometer.

Is it a super cool idea, especially for the laziest among us? Sure, but as Netflix notes, these hacks might never become a real product or part of the internal infrastructure, and instead, serve mainly to entertain.

“We are posting them here publicly to share the spirit of the event and our culture of innovation,” Netflix notes.

Other fruits of Hack Day include a Christmas sweater that spells out phrase a la Stranger Things title credits and also a Stranger Things video game; a tool that allows Netflix users to donate to good causes from inside the app; and a picture-in-picture function that lets you see what other profiles on your account are watching at the same time.

Walmart Ditching $50/Year ShippingPass For Free Two-Day Shipping

Less than a year after its national launch, Walmart is pulling the plug on its $50/year ShippingPass subscription service that was intended to compete directly with Amazon Prime. In its place, the big box retailer plans to offer free-two day shipping on millions of products with a lower minimum purchase price.

This morning, Walmart announced the end of its ShippingPass service, while also launching a new no-membership shipping option that lowers the minimum purchase amount for free shipping from $50 to $35.

The new shipping option will be available on two million items that customers purchase the most, the company says, noting that this includes household essentials, pet products, food, cleaning supplies, beauty products, and toys.

If shoppers are willing to go to a Walmart store to pick up their online purchases, there will be no minimum amount required for free shipping.


“Two-day free shipping is the first of many moves we will be making to enhance the customer experience and accelerate growth,” Marc Lore, president and CEO of Walmart eCommerce said in a statement.

The revamped shipping option, Walmart says, means there is no need for ShippingPass, the $50/year Amazon Prime competitor the company launched nationally in the summer of 2016.

“ShippingPass was a great way to test what we ultimately wanted to offer customers – free two-day shipping,” Lore said in a blog post about the change. “All current ShippingPass members will receive a refund on their membership.”

Walmart first began testing ShippingPass in 2015, offering customers who paid the $50/year subscription price the ability to receive their orders in three days.

When the company officially launched the service in June 2016, it cut down its shipping window to two days to match its competitor, Amazon. Since then, Walmart acquired Amazon rival for $3 billion.

While ShippingPass only cost half the price of Amazon’s $99/year (or $10/month) Prime service, it didn’t offer the extras like streaming video, music, free photo storage, and other ancillary options.

lundi 30 janvier 2017

FTC Opens Antitrust Investigation Of Mylan Over EpiPen’s Market Dominance

The EpiPen was a perfect symbol of the current state of pharmaceutical companies and health care expenses: It was a life-saving drug that had been around for decades, often used by children, and with a price that kept rising. The controversy over the epinephrine injectors led to news stories, a Congressional hearing, a $465 million settlement for overcharging Medicaid, and investigations by the states of New York and West Virginia.

The EpiPen benefited from brand recognition and programs where the company gave away pens, but Mylan was still charging as much as $600 for an auto-injector that hasn’t changed significantly in decades and contains less than $1 worth of the drug epinephrine. Now the Federal Trade Commission is looking into Mylan’s practices around marketing the EpiPen to determine whether the drugmaker acted in an anti-competitive way.

Bloomberg News reports that Mylan has received a request for information from the FTC. Possible violations of antitrust laws for the EpiPen could include changing the devices in small ways to avoid having the patent expire or making deals with other drugmakers to keep competing products off the market.

“Any suggestion that Mylan took any inappropriate or unlawful actions to prevent generic competition is without merit,” a company spokesperson said in a statement to Bloomberg.

The investigation is brand-new, and the FTC may conclude that Mylan didn’t break any laws, and its dominance in the market is due to its marketing efforts that have made customers familiar with the product.

Chance Of Cardiac Event Jumps By 23% Two Days After Major Snowstorm

Whether it’s overexertion from shoveling snow, the stress of being stuck inside, or any number of other possible causes, a new study shows that the chance of a cardiovascular-related hospital admission significantly increases two days after a major snowstorm.

The report, published Monday in the American Journal of Epidemiology and produced by Harvard’s T.H. Chan School of Public Health, aimed to take a closer look at the health issues associated with cold weather and cold weather activities.

To do so, the researchers analyzed 433,037 admissions from 2010 to 2015 at the four largest hospitals in the Boston area.

The report found that the number of cardiovascular-related admissions at the hospitals declined on days when major snowstorms occurred but increased by 23% two days later.

In fact, cardiovascular disease admissions decreased by 32% on high snowfall days when more than 10 inches of the white stuff fell. Despite that decrease, the number of similar admissions increased 23% two days after.

Although researchers note that changes in temperature can lead to cardiovascular issues for consumers, they also believe that other factors likely play a role.

For example, snow shoveling may be a factor, as it puts more pressure on a person’s heart. As a result, the study found there was an elevated risk for ischemic heart disease and myocardial infraction.

While previous reports have looked at data to estimate cold weather temperatures and mortality and hospital admissions, the new study goes a step farther, providing a detailed characterization of other adverse health outcomes.

Specifically, cold-related admissions increased by 3.7% on high snowfall days, and remained high for five days after the storm. The largest increase in admissions occurred on days of moderate snowfall, but subsequent admissions declined.

Additionally, falls increased by 18% on average in the six days after moderate snowfall. On the fourth, fifth, and sixth day following a low snowfall, the report found a small but statistically significant risk of falls. For moderate snowfalls, days four and six after the event proved the most dangerous for falls.

Much of the country has six weeks or so of winter remaining, regardless of what happens on Groundhog Day, so there are still multiple opportunities for Mother Nature to wreak havoc.

Our colleagues at Consumer Reports recently offered tips on how consumers can shovel more safely, from warming up before the act, staying hydrated during, and using the right shove. For more tips, read the whole story here.

Report: Treasury Secretary Nominee Mnuchin Misled Senate About Robo-Signed Foreclosures

Steve Mnuchin, President Trump’s nominee for Treasury Secretary, recently told members of the Senate Finance Committee that his former bank OneWest did not use the illegal practice of “robo-signing” when foreclosing on homeowners after the collapse of the housing bubble. However, a new report claims that OneWest repeatedly used robo-signed documents on foreclosures.

For those who have forgotten about the whole robo-signing mess, it refers to the practice of speeding up foreclosures by having non-experts sign hundreds affidavits and other documents without actually reviewing them. These documents usually require a thorough review of someone who is not only well-versed in the foreclosure process, but familiar with the loan.

Many of the nation’s largest banks and mortgage servicers were caught using robo-signed documents to fast-track foreclosures, resulting in billions of dollars in penalties, settlements, and redress for affected homeowners.

As part of Mnuchin’s confirmation process, he responded in writing to questions from individual members of the Finance Committee, declaring that “OneWest Bank did not ‘robo-sign’ documents.”

However, the Columbus Dispatch claims to have found multiple OneWest foreclosures involving Ohio homes that appear to be cases of robo-signing, including three foreclosures that were dismissed by a judge for using inaccurate, robo-signed documents.

One local woman says received a note from a OneWest field inspector declaring that her house was vacant and was to boarded up.

Problem was, not only was the homeowner still living there, but she was not behind on her mortgage payments. What she didn’t know was that OneWest had decided to ignore a loan modification previously granted by a lender that OneWest had acquired. She says it took her five years and a personal bankruptcy before the foreclosure was finally thrown out.

The OneWest employee who signed these foreclosure documents had admitted in a separate lawsuit that she signed some 750 documents a week, while only reviewing about 10% of them for accuracy.

OneWest was known for using a practice called “dual tracking,” which refers to when a bank would simultaneously review a loan modification while moving forward with a foreclosure.

This practice is now heavily restricted, thanks to rules put in place in 2013 by the Consumer Financial Protection Bureau and the Dodd-Frank financial reforms.

Mnuchin has been openly critical of these reforms, telling Senators that it’s time for these laws to be reviewed.

The Dispatch report has helped to rile up opposition to Mnuchin, who is nonetheless expected to be confirmed this week.

“Mnuchin profited off of kicking people out of their homes and then gave false testimony about his bank’s abusive practices,” Sen. Sherrod Brown (OH) said in a statement to the Dispatch. “He cannot be trusted to make decisions about policies as personal to working Ohioans as their taxes and retirement.”

In a statement, Karl Frisch of Allied Progress says, “We already knew that Steven Mnuchin made hundreds of millions at the expense of hardworking Americans and their families. Now we know he lied about his bank’s foreclosure practices during the Senate confirmation process. Rather than taking responsibility for the way he profited off kicking people out of their homes, he blatantly deceived members of the U.S. Senate.”

IKEA Launching Customizable “Open Source” Furniture To Give Customers More Choices

Maybe you can’t afford that bespoke chaise with the walnut legs and expensive upholstery, but that doesn’t mean you have to resign yourself to having the same living room as everyone else who shops at IKEA: in an effort to help customers living in tight spaces more options, the Swedish furniture company is introducing what it calls its first “open source” furniture.

IKEA says it will start selling a sofa that’s designed with customization in mind in early 2018, The Wall Street Journal reports: the Delaktig — Swedish for “being part of something” — has an aluminum frame and a slatted base, much like IKEA’s basic flat-packed bed.

The company is planning to price it in the middle of its sofa range, which could be anywhere from $399 to $899. It will come in various sizes with a number of accessories that can be clipped onto it, like lamps, a headboard, side table, and arm rests, depending on what the owner wants to use it for.

IKEA says it hopes to introduce other accessories as well, which is where the “open source” part of it all comes into play: the Delaktig’s metal frame has a bunch of grooves that take a standard-size bolt head, which allows folks to make and clip anything they want — perhaps something designed and sold by a third-party — to it.

In that spirit of hackability, IKEA worked with students in a workshop at London’s Royal College of Art to develop ideas like a clip-on privacy screen, a baby’s crib, and shelving, among other designs with the Delaktig in mind.

All schools that take part in these workshops own whatever the students create, IKEA said, and the company will buy any ideas they’re interested in taking further.

“It’s the most amazing moment to call a student and say that ‘IKEA is going to produce your clock or chair,'” Creative Leader Sigga Heimis said earlier this month.

New Hacker Trick: Locking All Hotel Guests Out Of Rooms, Demanding Ransom

Ransomware is a type of malware that infects computers and smartphones, encrypting the data on them and locking up the device, making it unusable. This is pretty bad when it happens to your personal device and you have no backup, but imagine an entire hotel full of guests locked out of their rooms because the hotel staff has been locked out of the computer system.

Ransomware is becoming alarmingly common: ordinary people are infected and have to very quickly learn what bitcoin is, and even devices like smart TVs are infected and held for ransom.

FURTHER READING: Bitcoin: What The Heck Is It, And How Does It Work?

Hospitals, offices, police stations,and even an entire public transit system have been infected with malware, and victims have paid up.

One Kansas hospital paid the ransom only to have the perpetrators come back and ask for more money. Another hotel paid $17,000 to get access to its files back.

Experts recommend restoring files from a backup (you back up your devices regularly, right?) and not paying the ransom, since the money will fund more ransomware attacks or something even more nefarious.

The New York Times described an incident where ransomware struck a hotel in the Austrian Alps. The attack took out the key card system, leaving guests without a way to get into their rooms and keeping staff from creating new key cards.

While the hotel staff didn’t want to give in and pay the ransom of 2 bitcoin (now worth about $1,845) they were stuck between their own locked-out guests and hackers that the managing director of the hotel described as “very pushy.”

Now the hotel in Austria is considering a drastic upgrade to its security system: changing out the electronic locks for old-fashioned metal keys. You can’t reprogram them in a few seconds with a computer, but you can’t hack them, either.

Feds Sue Debt Relief Law Firm For Charging Customers Illegal Fees

Nearly four years ago, federal regulators shut down a debt relief company — Morgan Drexen — accused of deceiving customers with promises of reducing their debt and charging illegal upfront fees to do so. While that company eventually paid $170 million to resolve the allegations, the Consumer Financial Protection Bureau Monday sued a related company using the same playbook. 

The CFPB filed suit [PDF] Monday against Howard Law, the Williamson Law Firm, and Williamson & Howard, as well as attorneys Vincent Howard and Lawrence Williamson, accusing the company of running a debt collection scheme that bilked tens of millions of dollars from consumers.

According to the lawsuit, the allegedly illegal plot began in 2007 when Howard and Williamson began working with Morgan Drexen to offer debt relief services.

Through the connection, the two men developed intake procedures, contracts, document templates, and other components of their debt relief program that were integrated into Morgan Drexen’s computer platform.

With the newly created debt relief program, customers would sign two contracts for debt relief services with Howard Law or Williamson Law Firm. The CFPB says customers were required to pay advance fees prior to obtaining a settlement.

However, the Telemarketing Sales Rule prohibits debt relief operations from charging customers a fee until the debt is actually settled, reduced, or the terms of the debt are changed.

The company required customers to sign two contracts, one for debt relief settlement services and the other for bankruptcy-related series.

Customers who signed the contracts — which includes upfront fees ranging from $1,000 to $3,250 and a monthly “administrative fee” of $50 — say they believed they were seeking services related to debt relief not bankruptcy.

The CFPB alleges that the bankruptcy contract was used by the company as a ruse to disguise the upfront fees.

By using this system, the CFPB alleges that the companies brought in millions of dollars from consumers, including $5.2 million from June 2015 to Oct. 2015.

With the lawsuit, the CFPB seeks to stop the company’s alleged scheme and refund customers.

Back in 2013, the CFPB sued Morgan Drexen, accusing the debt relief company of deceiving customers with promises of reducing their debt and charging illegal upfront fees to do so. Last year, the Bureau announced a federal district court approved a final judgement requiring the company to pay $132.8 million in restitution and a $40 million civil penalty.

Driver Says Police Radar Confused His Car With A Really Fast Deer

My speedometer must be broken…. You must have me confused with another car… I think your radar gun needs calibrating… I think that super-fast deer over there is the one who should get the ticket… One of these statements is not a common excuse for trying to get out of a speeding ticket.

The Newburyport Daily News brings us the story of a Massachusetts man who recently raised the speed-demon deer theory as a reason for why the court should throw out his ticket for allegedly going 40 mph in a 30 mph zone.

In court last week he questioned the officer who wrote the ticket, asking him if was 100% sure that his radar device had captured his speed, or perhaps a really fast deer that could have been in the area at the time.

“You’re not contending the radar picked up the deer?” the judge asked, as the courtroom giggled.

The defendant replied that anything was possible. However, the judge ruled in favor of West Newbury police minutes later and imposed the original $105 fine.

“In the 30-plus years of me being a police chief, I have never heard anyone use that defense and expect it to succeed,” West Newbury’s police chief said.

His scape-deering isn’t the first time we’ve heard of drivers handing over some wild excuses to get out of speeding tickets — some which have actually turned out to be true:

• A Florida driver called 9-1-1 to report a fake murder in order to lure police away from the scene of his traffic violation.

• The 22-year-old driver who showed police officers proof that he’d really and truly won $50,000 after he was pulled over for speeding.

• The motorcyclist who was hit with a hefty fine after he was caught going 140 mph, all because he said he really, really had to pee.

*The deer in the image accompanying this story is not, to our knowledge, related to this incident.

Super Bowl Advertisers Spending Millions To Run Ads About Their Ads

Advertisers love the Super Bowl, since it’s one of the few times that huge numbers of people sit and watch the same thing in real time, while paying attention to the commercials. Some marketers want to increase the impact of their ads even more, by spending over $1 million promoting their Super Bowl commercials. They’re shelling out to advertise their ads.

The New York Times introduced us to this phenomenon, learning from a sports and entertainment marketing executive that she tells clients planning a Super Bowl commercial that they should plan to spend another 25% over the cost of running the ad on promoting the spot.

This year, commercials during the Super Bowl cost up to $5 million, which means that the marketing budget would be as high as $1.25 million.

That doesn’t mean that the companies are running commercials on TV: marketing campaigns include pitches to print and online news outlets and TV commercials. When you see a news item about an upcoming Super Bowl ad, the advertiser probably didn’t pay to for that story, but did pay someone to bring that story around to news outlets. That’s called “earned media,” or publicity that a brand gets based on just being interesting.

Marketers even disagree on whether it’s better to keep an ad out of the public eye until the game, or to release it early to build up extra buzz. The director of marketing for Buick told the Times that Buick is releasing its ad early this year and using social media, including Instagram’s newly-monetized stories feature, to promote its spot before the game. Releasing the ad early “gives us a longer time span to engage consumers, and I believe it’s a better return on our investment,” she explained.

Trump Executive Order Requires Cutting 2 Old Rules For Every 1 New Rule, But Is It That Easy?

This morning, President Donald Trump signed an executive order that is being described as “two out, one in,” meaning that for each new federal regulation, two existing rules are to be cut. While it might seem like a simple concept, the reality is quite different.

While the White House is claiming that this order (full text at the bottom of this story) is about slashing onerous federal regulations, the more likely effect is a slowdown on new rules. That’s because the process for undoing and revising existing rules can be just as time-consuming as creating new ones.

The Administrative Procedures Act (APA) provides what is effectively a 4-step process for the executive branch agencies when crafting new federal regulations.

1. Issue a notice of proposed rulemaking: This is when the agency tells the world, “Hey we’re thinking about issuing a rule to do XYZ” with some general details and goals.

2. Get comments on this rule: This is when the public and other various stakeholders in a proposed regulation chime in, filing comments that the agency is then supposed to take into consideration before moving on to the next step…

3. Issuing the final rule: These are the the text-heavy beasts — sometimes hundreds of pages — that get into the nuts and bolts of the regulation. Understanding the finer points of these rules (and how to sidestep them) is why corporate lawyers often make very good money.

4. Publishing and setting an effective date: For a finalized regulation to be official it first has to be published in the Federal Register, and even then there is at least a 30-day window before it goes into effect.

Doing It Over Again

The APA doesn’t spell out a separate process for undoing a rule, but the law does define “rule making” as the “agency process for formulating, amending, or repealing a rule.”

In 1982, the Court of Appeals for the D.C. Circuit ruled in Consumer Energy Council v. FERC that, via this definition, the APA “expressly contemplates that notice and an opportunity to comment will be provided prior to agency decisions to repeal a rule.”

In other words, that means that repealing an existing rule requires the same process. And since the just-signed executive order mandates that two current rules must be targeted for repeal, that would mean that introducing a single new rule would actually mean going through the rulemaking process three times.

Even an expedited rule requires several months to go through the notice, comment, and finalizing process. Complicated new rules can take more than a year before being finalized.

Zero-Sum Game

If you establish a new regulation, under this order, it’s not simply a matter of finding two pieces of low-hanging regulatory fruit that could arguably be sacrificed to make way for the new rule. The order specifies that for this fiscal year, the net incremental cost of all new regulations must be “no greater than zero.”

That means that the eliminated rules must at least offset the cost of the incoming rule. Regulatory experts we spoke to said that this raises concerns about eliminating existing regulations based on their cost rather than their effectiveness.

Unstoppable Rules

Some rules are required by existing law, and these may fall outside the control of this order. If an agency fails to draft a regulation that is required by an existing statute, the agency can be sued and a court can compel the government into following through on its legal obligation.

The order does allow for exceptions to the 2-for-1 requirement, in case of “emergencies and other circumstances that might justify individual waivers.”

There is currently a freeze on all new and in-progress rules in the Executive branch agencies. This is a common practice whenever a new administration moves into the White House.

What remains to be seen is if the 2-for-1 requirement will apply to only entirely new rules or also to in-progress rulemaking.

“Cartoonish & Unsophisticated”

While the White House and the order’s supporters contend that it’s a boon for American business, a number consumer advocates say that this new requirement is a disaster for consumer protections.

Robert Weissman of Public Citizen called today’s order an “arbitrary attack” and contends that the Trump White House will likely use the 2-for-1 requirement to gut a wide array of rules protection our finances, food, and environment.

“This unprecedented and untested measure will gut the enforcement of wildly popular and successful laws including the Clean Air Act, the Clean Water Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Food Safety Modernization Act, the Pipeline Safety Act and many more,” writes Weissman. “It’s horrifying that even after the Wall Street crash, the massive BP oil spill and numerous other public health and safety disasters across the country due to a lack of strong regulations, Americans will once again have to pay the price for the consequences of corporate recklessness, greed and lawbreaking.”

Michael F. Jacobson, Executive Director at the Center for Science in the Public Interest says that this is just deregulation for the sake of deregulation.

“It’s fair to assume that this latest edict was not run by any of the agencies that actually do the serious business of regulating,” contends Jacobson. “If it were, Trump might have learned that not all regulations are reflexively opposed by the businesses affected by them. Certainly in the food safety world, responsible business leaders supported the Food Safety Modernization Act, which required the writing of new regulations that keep produce, packaged foods, and imports safe.”

He continues, “Rather, this executive order springs from a cartoonish and unsophisticated view of the regulations that keep our air clean, our water potable, our food safe, our planes from crashing, and so on, and ignores the public health benefits of those rules.”

Legislative Shortcuts

As we’ve mentioned in recent months, the new Congress is expected to deploy the Congressional Review Act (CRA) to quickly dispatch a number of recently finalized rules.

The CRA is a little-used law from 1996 that gives lawmakers a brief window to review and, if necessary, voice their disagreement with any newly finalized major regulations. If the House and Senate sign off on a joint resolution of disapproval on a regulation and the President signs it, then the rule is rolled back.

Expect to see several attempts to use the CRA to undo regulations issued in the final months of the Obama administration. Last week, the cable and telecom industries urged congressional leaders to use the CRA to get rid of the FCC’s new broadband privacy rules that were finalized shortly before the election.

=====Full Text Of Executive Order ====


– – – – – – –


By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Budget and Accounting Act of 1921, as amended (31 U.S.C. 1101 et seq.), section 1105 of title 31, United States Code, and section 301 of title 3, United States Code, it is hereby ordered as follows:

Section 1. Purpose. It is the policy of the executive branch to be prudent and financially responsible in the expenditure of funds, from both public and private sources. In addition to the management of the direct expenditure of taxpayer dollars through the budgeting process, it is essential to manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations. Toward that end, it is important that for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.

Sec. 2. Regulatory Cap for Fiscal Year 2017. (a) Unless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.

(b) For fiscal year 2017, which is in progress, the heads of all agencies are directed that the total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law or consistent with advice provided in writing by the Director of the Office of Management and Budget (Director).

(c) In furtherance of the requirement of subsection (a) of this section, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations. Any agency eliminating existing costs associated with prior regulations under this subsection shall do so in accordance with the Administrative Procedure Act and other applicable law.

(d) The Director shall provide the heads of agencies with guidance on the implementation of this section. Such guidance shall address, among other things, processes for standardizing the measurement and estimation of regulatory costs; standards for determining what qualifies as new and offsetting regulations; standards for determining the costs of existing regulations that are considered for elimination; processes for accounting for costs in different fiscal years; methods to oversee the issuance of rules with costs offset by savings at different times or different agencies; and emergencies and other circumstances that might justify individual waivers of the requirements of this section. The Director shall consider phasing in and updating these requirements.

Sec. 3. Annual Regulatory Cost Submissions to the Office of Management and Budget. (a) Beginning with the Regulatory Plans (required under Executive Order 12866 of September 30, 1993, as amended, or any successor order) for fiscal year 2018, and for each fiscal year thereafter, the head of each agency shall identify, for each regulation that increases incremental cost, the offsetting regulations described in section 2(c) of this order, and provide the agency’s best approximation of the total costs or savings associated with each new regulation or repealed regulation.

(b) Each regulation approved by the Director during the Presidential budget process shall be included in the Unified Regulatory Agenda required under Executive Order 12866, as amended, or any successor order.

(c) Unless otherwise required by law, no regulation shall be issued by an agency if it was not included on the most recent version or update of the published Unified Regulatory Agenda as required under Executive Order 12866, as amended, or any successor order, unless the issuance of such regulation was approved in advance in writing by the Director.

(d) During the Presidential budget process, the Director shall identify to agencies a total amount of incremental costs that will be allowed for each agency in issuing new regulations and repealing regulations for the next fiscal year. No regulations exceeding the agency’s total incremental cost allowance will be permitted in that fiscal year, unless required by law or approved in writing by the Director. The total incremental cost allowance may allow an increase or require a reduction in total regulatory cost.

(e) The Director shall provide the heads of agencies with guidance on the implementation of the requirements in this section.

Sec. 4. Definition. For purposes of this order the term “regulation” or “rule” means an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency, but does not include:

(a) regulations issued with respect to a military, national security, or foreign affairs function of the United States;

(b) regulations related to agency organization, management, or personnel; or

(c) any other category of regulations exempted by the Director.

Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof; or

(ii) the functions of the Director relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.


January 30, 2017.

Apple Disables Tool That Identified If Phones Were Stolen

Several years ago, Apple introduced Activation Lock, a program that allows consumers to render their devices useless once stolen, along with Activation Lock status checker, which allowed customers to determine if their phone had been secured with another user, a sign it may have been stolen. Now, it appears the latter option is no more.

Mac Rumors reports that Apple removed the status checker from iCloud in the last week, effectively preventing customers from being able to check if a phone is Activation Locked.

Activation Lock is automatically enabled when users turn on Find My Phone and prevents anyone else from using the device unless they can enter the owner’s Apple ID and password.

With status checker, iPhone users could enter the serial number or IMEI of iOS devices – including iPads, watches, and iPhones — to find out if Activation Lock was active.

For example, if someone purchasing a phone enters the serial number, finds that Activation Lock is enabled, and the seller won’t unlocked the device, it could be a sign the phone is stolen or was once lost.

When visiting, users are now greeted with a 404 “Not Found” screen.

Additionally, Mac Rumors reports that a corresponding section in Apple’s “Find My iPhone” detailing how to check Activation Lock has been removed.

Activation Lock is just one anti-theft option — often known as so-called “kill switches” —  intended to render phones uses for criminals by allowing consumers to disable their stolen devices. Such kill switches were created to reduce smartphone thefts and save consumers billions of dollars a year in the cost of replacement phones and phone insurance plans.

RIP: Arcade Pioneer & “Father Of Pac-Man” Masaya Nakamura

The man responsible for millions of people spending millions of hours glued to video games has gone to that glowing maze in the sky: Masaya Nakamura, founder of the Japanese video game company behind Pac-Man, passed away last week at the age of 91.

Nakamura founded Namco, now part of Bandai Namco, in 1955 with two mechanical horse rides on a department store rooftop, the Associated Press reports, before going on to pioneer amusement parks and video game arcades. The company confirmed that he died on Jan. 22.

Pac-Man was designed by Namco engineer Toru Iwatani. The signature circular shape of the Pac-Man character is said to have been inspired by the image of a pizza with missing slice. The story is that Nakamura came up with the word “Pac,” or “pakku” in Japanese to mimic the sound of the Pac-Man chewing up his prey.

Pac-Man, which debuted in 1980, went on to become one of the most beloved and popular video games of all time, going from arcade game to the Nintendo home console. It has since has been adapted for cellphones, PlayStation, and Xbox formats, and has been played an estimated 10 billion times, the AP notes. Guinness World Record has also named it the world’s most successful coin-operated game.

Walgreens Says That All Prescriptions Count For For Balance Reward Program, But Not Quite

When the word “all” appears in an ad, are you supposed to take it literally? That’s a good question, and it’s an important question when it comes to how Walgreens advertises its Balance Rewards program. The store’s marketing claims that “all” prescriptions are part of Balance Rewards, but that is not true.

MousePrint noticed this discrepancy in a TV ad promoting the prescription rewards program, noting that the commercial promotes the program by telling customers that they can earn rewards points on all of their prescriptions, with the emphasis on “all.”

Only Mouseprint-decipherer-in-chief Edgar Dworsky knows better than to believe the ad, since he has personal experience with which prescriptions earn points, and knows that his maintenance prescriptions don’t earn points. He checked. Prescriptions like his that come from the mail-order service that Walgreens runs to get customers 90-day refills aren’t eligible.

This makes sense, of course: the goal of the program is to get customers into the store more often. Receiving their drugs in a package in the mail every three months means that customers visit the store to visit the pharmacy rarely, if ever.


The only mention of this that you see on the screen is where it says “Other restrictions apply” in the commercial. Dworsky contacted Walgreens to find out why this information was missing from the ad, and received a response that said in part,

“As stated on our website in the Frequently Asked Questions, only prescriptions picked up in-store are eligible to earn Balance Rewards points at this time.”

The ad directs customers to the store for details, and Dworsky notes that the information isn’t available on the site’s Frequently Asked Questions page. It’s elsewhere on the site.

A few days later, the proper disclaimers explaining the rules appeared on the site. Will they be added to the TV ads? If they are, it will be in tiny print that most customers probably won’t notice.

Industry, ISPs End Controversial “Six Strikes” Copyright Alert System

Since the Napster era began in 1999, content creators and distributors have really, really hated it when you share their stuff online without paying up. Industry groups have tried many ways to stem the tide but one, a four-year-old cooperative alert system, is being scrapped after basically proving not to work.

Variety reports that the pact among internet service providers, movie and TV studios, and record labels that created the Copyright Alert System is being allowed to expire, and will not be renewed and the end of this particular system has come.

The Copyright Alert System (CAS) is also known as the “Six Strikes” program, because that’s how many warnings suspected infringers get.

If your ISP participates in Six Strikes, it first gives you two “educational” alerts when you are suspected of unlawfully sharing copyrighted material. After that come two “acknowledgement” alerts, that require you in some way to indicate you received and read them, and after that come two “mitigation” alerts, that can include throttling your connection speed, redirecting all of your browsing to a landing page that makes you acknowledge the warning on it, or other “minor consequences.”

Comcast, Verizon, Time Warner Cable, and others all signed on in 2011. It was supposed to launch in 2012, but faced delays; finally, the program went live about four years ago, in Feb. 2013.

By Feb. 2014, one year later, Comcast was reportedly sending out 1,800 CAS notices per day to some of its millions of broadband subscribers. At most, if every single alert Comcast ever sent in the first year went to a different account-holder, roughly 3% of Comcast subscribers would have received one.

In the years since, Six Strikes has not exactly proven overwhelmingly effective. At first, file-sharers deliberately tried to trip the system but were unable to. Later, it turned into a tool that copyright trolls tried to use to identify and shake down consumers of various pornography.

Meanwhile, a court ruled in 2015 that an IP address is not enough information to identify someone as an actual file pirate: anyone using the network can show as coming from the same IP address. (Or it could be a house in Atlanta or a farm in Kansas.)

The Motion Picture Association of America, notoriously adamant about stopping file-sharing, did not provide a specific reason for ending the program, Variety reports. However, clearly the organization is frustrated at how much it hasn’t worked.

General counsel Steven Fabrizio told Variety in a statement that “repeat infringers” are still driving “ongoing and problematic [peer-to-peer] piracy,” which he claimed led to 981 million movies and TV shows being downloaded last year.

CAS was “simply not set up to deal with the hard-core repeat infringer problem,” Fabrizio concluded, saying that persistent infringers “must be addressed by ISPs” as outlined by the Digital Millennium Copyright Act.