– The Wall Street Journal (paywall) reported that the EU has accused Apple of failing to comply with a new digital-competition law, alleging that the company’s App Store isn’t allowing developers to freely direct customers to alternative ways to make purchases. The charges are the first to be issued under the EU’s Digital Markets Act, which took effect earlier this year and includes rules intended to boost competition in digital advertising, online search and app ecosystems. The EU refers to the charges as preliminary findings.
Apple could be fined as much as 10 percent of its global revenue if EU regulators ultimately determine that the company broke the rules. In response to the charges, Apple said it has made changes in recent months to comply with the act in response to feedback from app developers and EU regulators. ‘We are confident our plan complies with the law,’ the company said in a statement, adding that it would continue to listen to and engage with regulators.
– The International Sustainability Standards Board (ISSB) said it would publish guidance to harmonize how companies publish details on their ‘transition plans’ to meet net-zero targets, Reuters (paywall) reported. Such plans are becoming increasingly important and are already mandatory for listed companies in the EU under the Corporate Sustainability Reporting Directive. Companies outside the EU are set to apply disclosures written by the ISSB that require information on transition plans to be disclosed, if a company has such a plan.
‘To support application of these disclosure requirements and to reduce fragmentation in information provided in the market, the ISSB plans to support work to streamline and consolidate frameworks and standards for disclosures about transition plans,’ the ISSB said in a statement.
– According to the WSJ, airlines see sustainable aviation fuel as the only realistic way for the industry to decarbonize but fuel producers and airlines are unsure about how best to invest their cash because no one agrees what counts as ‘sustainable’. For example, almost everyone agrees that used cooking oil can be used to make sustainable aviation fuel but a glut of imports recently raised suspicions that the UK market was flooded with fake oil – virgin oil that was never used for cooking. In Europe, regulators are excluding ‘crop-based’ feedstocks such as corn, soy and sugar cane from a new mandate.
– CNBC reported that John Hess, CEO of Hess Corp, has joined the board of Goldman Sachs as an independent director. Hess is the latest addition to the board after senior banking executive Tom Montag joined as an independent director last year. Hess will also become a member of the Goldman board’s compensation, governance and risk committees, the bank said.
– The EU charged Microsoft with antitrust violations related to the company’s bundling of its Teams tool with Office 365 and Microsoft 365, the WSJ reported. The European Commission, the bloc’s antitrust enforcer, said it has informed Microsoft of its preliminary view that the company broke antitrust rules by tying Teams to popular offerings that include Microsoft Word and Excel. The commission said Microsoft may have given Teams an advantage by not giving customers a choice about whether they would get access to the software when subscribing to other products.
Changes Microsoft made last year to how it distributes Teams did not go far enough to address the competition concerns, the commission said. It also raised concerns about the extent to which rival tools can integrate with Microsoft’s other products.
Microsoft president Brad Smith said the company appreciates the additional clarity it received on Tuesday ‘and will work to find solutions to address the commission’s remaining concerns.’
– According to Reuters, Delaware will adopt changes to its corporate law that critics argue could weaken US boards in favor of influential investors such as private equity firms. State lawmakers recently approved a bill that gives a corporation the authority to enter into contracts with one or more shareholders that give the investors power over key board decisions. ‘This is a radical change in Delaware law,’ said Usha Rodrigues, a law professor from the University of Georgia, one of more than a dozen opponents who spoke at a Senate hearing on June 11. Delaware Governor John Carney has said he will sign Senate Bill 313, which addresses three recent rulings by the Delaware Court of Chancery. It will become law on August 1.
– According to CNBC, activist investor Politan Capital Management said that despite voting for change at last year’s AGM, shareholders in medical device maker Masimo have seen their governance concerns go largely unresolved. With a month to go until the 2024 AGM, Politan, which has already won two board seats, has nominated two additional directors to Masimo’s board, saying that without their election, management will continue to operate without oversight. Masimo founder and CEO Joe Kiani said he won’t come back if shareholders vote him out.
‘This is shareholders’ last chance [for] meaningful change,’ Politan wrote in a letter to Masimo shareholders, laying out its case to investors ahead of the meeting.
A representative for Masimo did not immediately return a CNBC request for comment.
– CNBC reported that the US Supreme Court put new limits on the power of the SEC to enforce securities laws, ruling 6-3 that adjudication of cases by in-house agency judges violates the right to trial by jury. The challenge focuses on how the SEC enforces securities laws, including those prohibiting insider trading. The SEC has long used in-house proceedings presided over by administrative law judges. The agency can also sue in federal court. Those subject to the in-house adjudication have complained, saying the process violates their rights and gives the agency too much power.
– According to Reuters, Vista Outdoor has delayed a special meeting of its shareholders from July 2 to July 23. The company and its ammunition business have attracted offers from the Czechoslovak Group (CSG) and MNC Capital. Investment firm MNC Capital had raised its bid for the parent of Federal Ammunition to $3.2 bn on Wednesday, just days after the US company agreed to sell its sporting goods and ammunition business to CSG.
Vista confirmed on Thursday that it had received MNC Capital’s revised offer and would carefully review it.
The company said it had issued a letter to the investment firm requesting certain information, including evidence of committed financing, by July 1 for the board to assess the revised proposal.
MNC Capital did not immediately respond to a request for comment.
– Reuters reported that Tesla is claiming Elon Musk won his legal battle over his $56 bn pay package because shareholders voted in favor of it, despite a judge rescinding it earlier this year, according to court documents. The company’s filing comes two weeks after Tesla shareholders voted to ratify the 2018 package of stock options. Tesla held the vote following a January ruling by Chancellor Kathaleen McCormick of Delaware’s Court of Chancery to void the compensation because Musk allegedly controlled the negotiation process and the company misled shareholders about key details.
Tesla argues that McCormick’s final order should state that ‘judgment is entered for the defendants’. Tesla’s shareholders’ legal team wants the judge to stick with her original ruling voiding Musk's pay package, however, and order Tesla to pay a legal fee award, potentially worth billions of dollars in the company’s stock.
McCormick will hear oral arguments over the legal fee on July 8.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
