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United States needs law ‘a lot like GDPR’ says Salesforce CEO Marc Benioff

Salesforce CEO Marc Benioff thinks the US needs “a national privacy law … that probably looks a lot like GDPR.”

“This is going to help our industry,” he said on an earnings call for Salesforces Q1 2019 results. “It’s going to set the guardrails around trust, around safety. It’s going to provide the ability for the customers to interact with great next generation technologies in a safe way.”

Benioff went on to say that as artificial intelligence is used in customer service, “that starts to cross the line on what is trust. And that’s where our industry really has to come forward and say we’re going to make sure that these technologies are trust-based. And I think the Europeans definitely got that figured out.”

Salesforce, meanwhile, seems to have figured out growth and profitability. The company reported Q1 revenue of US$3.01 billion, up 25 per cent year-on-year and a few million ahead of guidance. Net income hit $344m and future revenue under contract tops $20bn.

The company therefore issued full-year guidance of US$13.125bn, ahead of previous forecasts.

And why wouldn’t it after also reporting that Sales Cloud grew at 16 per cent, Service Cloud grew 29 per cent and Marketing and Commerce grew 41 per cent. The company’s Lightning PaaS also grew 36 per cent The company also revealed that it plans to expand its UK data centres, to serve local demand.

Acquiring Mulesoft dented Q1 results by about $150m, with more to come in Q2, but execs were positive about the combined companies’ fortunes. Benioff said Mulesoft will help Salesforce to achieve its goal of a “360 degree customer” by easing integration of information silos so that Salesforce gets more data on which to act.

And that increasingly means bringing the company’s “Einstein” AI to bear: Benioff said it answered two billion queries in the quarter.

Salesforce shares popped by about four per cent after the bell, a sign that investors like these results.

And why wouldn’t they? As Benioff said, Salesforce is the fastest-growing of the top five enterprise software companies, scored its largest-ever deal in Q1, and has long-term commitments from plenty of its customers.

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Facebook and Google are already facing lawsuits under new data rules

Europe’s sweeping data protection law came into force on Friday. And legal experts say big tech companies are already violating the new rules.

Facebook (FB) and its subsidiaries Whatsapp and Instagram, as well as Google (GOOGL), are facing lawsuits for failure to comply with the General Data Protection Regulation (GDPR).

The companies could face billions of dollars in fines if European regulators agree they failed to comply.

“We’re looking for big companies that really willfully violate the law, that kind of try to ignore it and try to get away with it,” said Max Schrems, an Austrian lawyer whose NGO, None of Your Business, filed the lawsuits.

The complaint against Facebook was filed with Austrian data regulators, Google with French regulators, WhatsApp with German regulators and Instagram with Belgian regulators as soon as the law went into effect at midnight.

From Friday, European data regulators can impose fines of up to 4% of global annual sales each time the companies run afoul of the new law.

“There is no grace period,” James Dipple-Johnstone, the deputy commissioner of the UK’s data protection authority. “We will be looking at the algorithms they use to profit off data to make sure they are fair,” he added.

Schrems has been fighting Facebook over data protection for almost a decade. His earlier lawsuit successfully challenged Facebook’s ability to transfer data from the European Union to the United States.

The next battleground with the company is GDPR.

According to Schrems and other legal experts, Facebook is breaking a GDPR rule intended to prevent companies from hoovering up sensitive information like political opinions, religious beliefs, ethnicity and sexuality without their users’ consent.

Michael Veale, a Technology Policy Expert at University College London, said that even if users’ completely remove sensitive traits from their profiles, Facebook can still glean information such as sexual orientation by analyzing their behavior on the platform and other websites.

“Facebook has trackers on 40% of websites that are visited in the world,” Veale said. “So really, Facebook can infer things from the great amount of data it has about you from across your mobile devices and apps that also send data to Facebook. The law forbids Facebook from making these inferences without explicit consent.”

Testifying in front of the European Parliament leaders on Tuesday, Facebook CEO Mark Zuckerberg insisted his company would follow the new regulations.

“We have made our policies clearer, our privacy settings easier to find and introduced better tools for people to access, download, and delete their information,” Facebook’s Chief Privacy Officer Erin Egan said in a statement emailed to CNNMoney.

Egan also said the company is building a new tool called “Clear History” which will allow users to “see the websites and apps that send us information when you use them, clear this information from your account, and turn off our ability to store it associated with your account going forward.”

The suit against Google alleges that users of the company’s Android software are forced to turn over personal data to use an Android-powered mobile device.

The lawsuit alleges this “forced consent” amounts to a violation of GDPR, which guarantees individuals the right to consent when companies want to collect and process their personal data.

Google told CNNMoney it is committed to complying with the new law.

Schrems says the new rules are tough enough to prevent the kind of data scraping that Cambridge Analytica before the 2016 U.S. election. He’s taking legal action to ensure GDPR is properly enforced.

“If we enforce the properly, we can actually get a balance in this digitalized age,” says Schrems. “In the end, you should be able to use Facebook without worrying 24/7 about your data,” he added.

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First female New York attorney general appointed by state Legislature

Barbara Underwood officially became the first woman to serve as attorney general in New York after she was appointed to the role in a joint legislative session Tuesday.

Underwood took over as the acting attorney general for New York after Eric Schneiderman resigned earlier this month amid allegations of assault by multiple women.

She will serve in this position until the end of the year. An election for the next attorney general will be held in November. Underwood has previously said she does not anticipate running for a four-year term in November.

On Tuesday, Underwood released a statement thanking the Legislature for the “privilege” of holding the position of attorney general.

“I want to thank the legislature for entrusting me with the privilege of serving as New York’s 66th Attorney General,” she said. “I’ve served in many roles in government throughout my career. But I believe this job — at this moment in history — is the most important job I have ever had.”

New York Democratic Gov. Andrew Cuomo hailed the appointment, calling Underwood a “brilliant legal mind” in a statement.

“She is a brilliant legal mind and an extraordinarily qualified attorney who has argued 20 cases before the Supreme Court, and she will provide strong leadership and important continuity in the office of attorney general during these challenging times,” Cuomo said.

Kathy Hochul, the New York state lieutenant governor, highlighted the historic nature of the appointment on Tuesday.

“Congratulations to Barbara Underwood, the first woman to hold the position of @NewYorkStateAG. Another #glassceiling shattered,” Hochul tweeted.

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GBP/USD – British Pound Unchanged after Carney Testimony

The British pound is showing little movement in the Tuesday session. In North American trade, GBP/USD is trading at 1.3427, unchanged on the day. On the release front, Britain posted a deficit of GBP 6.2 billion, below the estimate of 7.2 billion. This marked the first deficit after a string of three straight surpluses. British CBI Industrial Order Expectations disappointed with a reading of -3, missing the estimate of 2 points. This was the first decline since October. In the US, the Richmond Manufacturing Index jumped to 16, well above the estimate of 9 points. On Wednesday, the UK releases a host of inflation indicators, led by CPI. The Federal Reserve will release the minutes of its May policy meeting.

Bank of England Governor Mark Carney testified earlier on Tuesday before a parliamentary committee, but his remarks have had little impact on the British pound. Carney acknowledged that growth in the first quarter was weak, blaming “temporary and idiosyncratic factors”, such as massive snowstorms which hampered economic growth. The BoE has forecast growth in Q1 of just 0.4%. As for monetary policy, Carney was subtle, saying that “interest rates are more likely to go up than not, but at a gentle rate”. The bank balked at a rate hike earlier in May, due to weakening inflation and a spate of soft economic data. BoE policymakers are unlikely to raise rates before August at the earliest.

After weeks of an escalating trade war between the US and China, there was a breakthrough of sorts on Sunday. The US dollar has posted gains after Treasury Secretary Steven Mnuchin announced that the two sides had made significant progress and the trade war was being ‘put on hold’. Just last week, the White House sounded pessimistic about a deal being reached with China. The two economic giants have imposed stiff tariffs on one another in recent weeks, worth billions in trade. These moves had raised fears of a bilateral trade war between the two largest economies in the world. The respite in tariffs means that the US can sit down with the Chinese and discuss the US trade deficit with China, which President Trump has long complained is a result of a non-level playing field with China. In addition to the trade deficit, the US wants to discuss technology transfers and cyber theft.

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Foreign firms doing business in Iran may face sanctions, US warns

President Donald Trump’s decision to pull out of the Iran nuclear deal has left foreign firms with a choice: Stop doing business in Iran or run the risk of US sanctions.

Multinational companies have billions of dollars tied up in Iran.

In 2016, the European Union exported more than €8.2 billion ($9.7 billion) worth of goods to Iran, while importing almost €5.5 billion ($6.5 billion) from there, according to the European Commission.

But Richard Grenell, the US ambassador to Germany, warned firms that continue to do business there would face consequences.

“US sanctions will target critical sectors of Iran’s economy. German companies doing business in Iran should wind down operations immediately,” he tweeted Tuesday night.

The Federation of German Industries said any attempt to prevent firms from dealing with Iran is contrary to international law. It called on the European Union to “effectively protect European companies from the effects of illegitimate and one-sided implementation of US sanctions.”

Carl Bildt, the former leader of Sweden who is now co-chair of the European Council on Foreign Relations, highlighted that the sanctions would have the biggest impact beyond America’s borders.

“US Iran sanctions are hardly hitting any US companies, but aim primarily at European ones,” he said in a tweet.

Under the nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), the United States committed to ease a series of sanctions on Iran and has done so under a string of “waivers” that effectively suspend them.

Virtually all multinational corporations do business or banking in the US, meaning any return to pre-pact sanctions could torpedo deals made after the 2015 agreement came into force.

“It’s a huge challenge,” said Dr. Sanam Vakil, a professor in the Middle East studies department at the Johns Hopkins School of Advanced International Studies in Bologna, Italy. “The US economy is 10 times that of Iran in terms of size and value, so it makes more sense to do business with the US than the Islamic Republic [of Iran].”

Among US companies, the plane-maker Boeing has signed the biggest deals, and Treasury Secretary Steven Mnuchin said Tuesday that its existing licenses — as well as those of its European competitor, Airbus Group — would be invalidated.

In December 2016, Airbus signed a deal with Iran’s national carrier, IranAir, to sell it 100 planes for around $19 billion at list prices. Boeing later struck its own deal with IranAir for 80 aircraft with a list price of some $17 billion, promising that deliveries would begin in 2017 and run until 2025. Boeing separately struck another 30-plane deal with Iran’s Aseman Airlines for $3 billion.

Boeing has yet to deliver any aircraft to Iran under those deals and said that it will “continue to follow the US government’s lead.”

Airbus, which is subject to the US license because it makes at least 10 percent of its aircraft components in the US, says it will abide by the new US sanctions but it could take “some time” to determine the full impact on the industry. It has already delivered two A330-200s and one A321 to Iran.

French oil company Total SA has been the most aggressive Western oil company to move back into Iran, signing a $5 billion, 20-year agreement with Iran in July. A Chinese oil company also has a deal to develop the country’s massive South Pars offshore natural gas field. Total did not respond to requests for comment.

Adam Smith, a Washington-based lawyer with Gibson Dunn and former Treasury official, agreed that if sanctions are imposed then companies will essentially be forced to choose between the US and Iranian markets.

“It’s a cost-and-benefit question for EU companies,” he said, explaining that firms would find themselves in the same situation as they were in before sanctions were lifted. “It’s a back to the future situation. It would be a world which we have been in before.”

The Treasury said there will be a “wind-down period” of 90 to 180 days to allow companies to complete transactions with Iran to avoid future US sanctions.

However, the Treasury warned that sanctions will come back into full effect after this grace period.

On Aug. 6, the US government will re-impose sanctions on activities such as the acquisition of US dollar banknotes by the Iranian government, Iran’s trade of gold and precious metals and the country’s automotive sector.

On Nov. 4, the US will re-impose sanctions on other activities including Iran’s oil and shipping industries and its energy sector, as well as on transactions by foreign financial institutions with the Central Bank of Iran.

Despite Trump’s announcement, France’s foreign minister insisted that the nuclear deal was “not dead,” adding that French President Emmanuel Macron was scheduled to speak with his Iranian counterpart Hassan Rouhani later Wednesday.

In a joint statement on Tuesday, France, Germany and the UK did not specifically address the issue of US sanctions on European companies, but said their governments remained committed to ensuring the “continuation of the economic benefits of the agreement for the benefit of the world, economy and the Iranian people.”

The UK government updated its guidelines on exporting to Iran shortly after Trump’s announcement Tuesday, saying the re-imposition of the US sanctions against Iran “may have implications for UK businesses and individuals dealing with Iran.” It advised companies to seek legal advice where necessary.

Smith said it was unclear whether Trump would actually impose sanctions on EU companies that continue to deal with Iran, adding that the threat may be strategic, and that the administration could eventually end up granting exemptions.

Vakil said it was now up to Europe to keep the deal alive and protect investment in Iran. “The ball is in the EU’s court,” she said. “I’m skeptical that companies are going to stay in Iran because the risks are so high.”

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Q1 rankings see resurgence of UK firms, as Freshfields rises up tables

UK law firms have returned to dominance in the Q1 M&A tables after playing second fiddle to the US elite last year, with Freshfields Bruckhaus Deringer rising up the rankings following a busy quarter for the firm.

Figures from Mergermarket show Freshfields topped the European deal value ranking for the first quarter of the year, after acting on 37 deals worth a total of $121bn (£86bn).

While last year the Q1 European M&A rankings were dominated by US firms, this year the top five spots were taken by four magic circle firms and Herbert Smith Freehills (HSF).

Freshfields’ strong showing also saw the firm rise to second in the global M&A rankings, up from ninth last year, after acting on 45 global deals worth a total of $141bn (£100bn).

Skadden topped the global and US deal value tables for Q1, after advising on 47 global deals worth a total of $194bn (£137bn) and 39 US deals worth $170bn (£121bn).

Slaughter and May came top for UK M&A by value, having acted on 12 deals worth a total of $37bn (£26bn), with Herbert Smith Freehills (HSF) second and Clifford Chance (CC) third.

Meanwhile, DLA Piper took the top spot for European deal volumes, acting on 50 deals worth a total of $52bn (£37bn). Kirkland & Ellis took first place for global deal count, acting on 112 deals worth $67bn (£47.5bn) during the quarter, with CMS top for UK volumes with roles on 21 deals.

Total global deal value increased by 18% on Q1 last year to $891bn (£632bn), although global deal volume dropped 19% to 3,774, the lowest quarterly figure since Q3 2013.

Deal count in Europe also fell by 22% year on year to 1,409, the least active quarter since Q1 2013. Despite the fall in deal numbers, total deal value across the continent rose to $256bn (£182bn), a 22% increase on last year’s Q1 total of $211bn (£148bn).

The same trend was seen in the UK, with a fall in the total number of deals coming against an increase in deal value. UK deal numbers for Q1 fell 31% year on year from 386 to 266, alongside a 41% increase in total deal value across the same period to $59bn (£42bn), up from $42bn (£20bn).

HSF M&A partner Caroline Rae said: “Several of the issues we faced in Q1 2017, including Brexit, remain unresolved, but many UK corporates now have the confidence to plough on and execute their M&A strategies despite the ongoing uncertainty.

“One of the key trends in 2018 will be technology as an important factor for M&A strategy. Technology is having an impact across sectors and we are seeing a lot of clients who are looking at how they are going to keep up with their competitors. They are looking to M&A as a way to acquire technology.”

Allen & Overy (A&O) global co-head of corporate Richard Browne added: “The market is strong across a broad base, and we are not seeing any sign of it slowing up. Quite a lot of significant deals have been announced in the quarter, including a lot of good-sized private M&A deals. There are a lot of political macro events out there that can affect the market, but the fundamental dealmaking environment is still strong.”

The rankings are notable for the resurgence of UK firms in the top 10 European advisers by value, with six making the top 10.

Freshfields, Linklaters, CC, A&O and HSF ranked first to fifth respectively, with DLA Piper in eighth. For 2017, the Q1 rankings saw just three UK firms make the top 10 European and UK advisers by value.

The largest UK deal of the quarter was GlaxoSmithKline’s $13bn (£9bn) purchase of a 36.5% stake in its consumer health joint venture with pharma giant Novartis. Freshfields advised Novartis while Slaughters represented GSK.

Slaughters also won a role on the second largest UK deal, representing FTSE 100 engineering business GKN on its bitterly contested takeover by Melrose. Its initial £7bn bid was rejected, but Melrose won support of more than half of GKN’s investors and its subsequent $12.1bn (£8.6bn) bid was accepted last week (29 March).

Meanwhile, the biggest European deal this quarter was E.ON’s €46.6bn (£33bn) deal to acquire a controlling stake in renewable energy business Innogy from German rival RWE. That deal handed key roles to Freshfields for RWE, Linklaters for E.ON and Hengler Mueller for Innogy.

Going forward, partners believe activity levels will continue to hold up, despite Brexit looming on the horizon.

Skadden M&A partner Scott Simpson says: “Everyone saw a slowdown of M&A activity during the time of the Brexit vote and thereafter, but M&A activity has returned. It doesn’t mean the uncertainty is behind us, but people are getting on with their plans and probably concluding Brexit is not going to disturb their long-term investment plan for Europe.”