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Post-Brexit: Can Businesses Shape UK Law?

Have you ever heard the story about the business person who tried to affect a legal decision who everyone praised for doing so? No? Me neither.

In my experience, the public has never appreciated a business trying to influence the law. That’s probably because when businesses do try to affect the way the law is, it’s often through shady lobbying deals that are scandalous for both the businesses and the politicians involved.

Brexit, though, is a different matter entirely. As the UK is going through the biggest political upheaval it’s faced since the Second World War, business leaders have a duty to represent their employees and customers in the same way that politicians represent their voters. This isn’t about lobbying; it’s about campaigning.

We saw this before the referendum. Wetherspoons used its enormous influence on the average British drinker and produced beer mats which argued staunchly for the leave vote. Whether or not you agree with Wetherspoons’ stance is beside the point; the pub chain had the right idea. British businesses can and should have tried to make their view on Brexit clear.

Now that the vote is over, businesses shouldn’t act like the legal battle is over. Rather, they should be doubling down on their stance, because the fight has only just begun.


The Great Repeal Bill and The Future of British Business

Turning the current hotchpotch of EU laws into one cohesive British law will be a complicated process, so the aim of the Great Repeal Bill is to make this process as simple as possible. While critics have called it a “power grab”, it’s actually much less exciting than that.

The bill is more of a symbolic matter, rather than a huge victory for the leading party. The actual process of deciding which EU laws the UK will keep — as well as which ones it will get rid of and which ones it will change — will happen in the Commons and in Brussels.

As an example, HSE currently recommends racking inspections from a SEMA approved expert at least once every 12 months. A big reason for this is that EU standard EN 15635 recommends something very similar. As a result of Brexit, we have the chance to change this HSE recommendation and the laws associated with it.

With Brexit negotiations creating story after story, the news media has focused a lot on the decision-making happening in Brussels. Post-Brexit, we should see a lot more decision-making happening in the Commons. This is where the British public and British business leaders will have their say.

Some businesses might want the UK to remain open to workers from the EU by keeping old employment laws. This is something which David Davis has suggested and which businesses should campaign for if they believe in it.

On the other hand, a business might want the UK to forge ever closer ties with the US by creating some sort of trade agreement or by emulating some of its business regulations. This is something which Michel Barnier has suggested. It’s also something which businesses should campaign for if it’s what they, their customers, their employees, and their clients really want.

As for EU standard EN 15635, there are many reasons why we should keep following this standard. In the UK, people love to complain about “health and safety gone mad”, yet this culture of safety is why workplace fatalities have fallen by 85% since 1975. EU standards like EN 15635 and the HSE recommendations associated with it are part of the reason that employees in the UK are so safe and employers are able to run workplaces which function with minimal injuries or fatalities.

There’s a lot to be gained by trying to be closer to the UK’s longest political ally as well as its biggest trade partner. There’s a lot to gained if businesses can continue to depend on EU labour. And there’s a lot to be gained from continuing to make our workplaces safer with the right legislation. In order for any of that to be guaranteed, however, businesses need to fight for that legislation, just as the public will be.

What’s The Most Likely Scenario?

Immediately after the referendum, speculation about what would happen in a post-Brexit world was rife. Well over a year later, we’re still mostly speculating.

We know that the predictions of doom and gloom were mostly wrong. The pound has fallen in value — and continues to fall — but the British economy is slowly growing. We know that the Great Repeal Bill will come into force immediately after Brexit, and we know that politicians have made some pretty large promises about what the deal will look like.

Of course, if politicians are consistently anything, they are consistently inconsistent. As such, it’s imperative that the British public and business leaders do whatever they can from now until 2019 — and well beyond — to let their voices be heard. Otherwise, businesses and citizens of the future will look back and wonder why we did nothing.

Apple Supplier Foxconn Reportedly Hired “School Aged” Employees for Overtime Work

Foxconn, one of Apple’s largest manufacturing partners, has allegedly employed school-aged students to work illegally long hours in its China-based factories, according to a report in the Financial Times.

The Taiwanese electronics company, which operates a large number of factories throughout the People’s Republic of China and other countries, has long attracted criticism for its hiring, labour and compensation practices.

The students, who were aged between 17 and 19 years, were reportedly told that they needed to work on the company’s Zhengzhou-based plant in order to graduate. Around 3,000 students were hired in total.

Many of the students were required to work 11 hour days at the factory, potentially in addition to a standard school workload. The hiring practices violated Chinese labour laws, which prohibit school-aged employees from working for upwards of 40 hours per week.

Apple and Foxconn have publicly stated that the employees were “compensated and provided benefits” for their work, but agreed that the students — who worked voluntarily in the factory — “should not have been allowed to work overtime.”

Foxconn operates a large range of internship programmes in China. While the internship itself is legal under Chinese law, students are forbidden from working overtime hours and capped at 40 hours of voluntary employment each week.

The manufacturing company has stated that the internship represents “a very small percentage” of its total workforce in the country. Foxconn has previously been criticised for its employee care practices after the company was accused of “failing to protect Chinese factory workers.”

Students hired by Foxconn as part of the internship programme were tasked with assembling the iPhone X — Apple’s latest smartphone and one of its key sources of revenue. One student claimed that they assembled as many as 1,200 iPhone X cameras per day at the factory.

The iPhone is an extremely important product for Apple, contributing more than half of the US technology giant’s revenue. Apple’s share price hit record highs after the launch of the newest iPhone, which is estimated to have sold 46.6 million units between July and September.

The company’s most expensive smartphone, the iPhone X costs as much as $1,149 USD (£999 GBP) and provides users with a high-resolution touchscreen that occupies the entire front of the device.

Apple has reported extremely high sales numbers for the latest iPhone, with the level of demand exceeding expectations. As tech analyst Ming-Chi Kuo explained, the phone could be subject to supply constraints that limit Apple’s ability to meet demand in 2017.

Working conditions have long been a difficult aspect of manufacturing in China for consumer electronics companies. Foxconn has faced several public working conditions issues, many of which have resulted in the manufacturing giant taking steps to improve its hiring practices.

Foxconn is one of Asia’s largest consumer electronics manufacturing companies. In addition to its well known manufacturing contracts with Apple, the company also assembles products for a variety of other consumer technology brands, including Sony, Nintendo and Microsoft.

£16 Million Lost in Christmas Shopping Fraud in 2016

Christmas is approaching, and a growing number of shoppers are purchasing this year’s gifts online. However, new data from Action Fraud shows that the percentage of fraudulent online transactions (and the total amount of money lost each year) is on the rise.

According to the newly released data for 2016, more than 15,000 people lost an estimated £16 million due to online fraud in last year’s Christmas shopping season, with men aged from 20 to 29 the most frequently targeted victims.

The total amount stolen in fraudulent online auctions, misleading sales and other scams is up 45% compared to the same period in 2015, indicating that online fraudsters are making bigger moves during each year’s Christmas shopping period.

Some of the most commonly targeted transactions include online auction purchases, in which fraudsters commonly ripped off consumers by selling fake products. Drones, designer sneakers and high-end makeup were among the most commonly counterfeited products sold online.

On average, victims lost as much as £727 from each fraudulent transaction, indicating that both the scale of the problem and the amount being taken from each victim can be significant.

Action Fraud, which is operated by the City of London Police, believes that this year’s Christmas shopping season could be a particularly lucrative period for fraudsters, as well as a challenging one for consumers.

Police Commander Dave Clark stated “Christmas is a busy time of year when we are required to make several quick decisions, especially when it comes to prevent buying.”

“Fraudsters see the Christmas rush as an ideal opportunity to take advantage of people’s generosity without a single care about the consequences this may cause for the victim.”

“With a sharp rise in fraud reporting at Christmas time, it is more important than ever that people do everything they can to protect themselves from fraudsters stopping them from enjoying the holiday season at the expense of others.”

Along with the product categories listed above, City of London police have listed mobile phones as items that are commonly used in fraudulent schemes. Consumers often purchase technology from online auctions, only to receive different items from the ones they expected.

Designer sneakers, such as the Yeezy footwear range, are also common items sold by online fraudsters. Action Fraud has recommended avoiding online sales and auctions where an item’s price “seems cheaper than expected” or “too good to be true.

Other fraud prevention tips for consumers include using PayPal to pay for goods purchased on online auction websites, as this allows for a quick and easy refund if the goods sold aren’t what they’re supposed to be. Consumers should also avoid transferring money directly to strangers.

When purchasing tickets, consumers are recommended to only ever buy them directly from an official source and never pay by direct transfer. The City of London Police also recommend that consumers check holiday deal sellers for ABTA and ATOL registration before spending money.

Other potential hazards include email phishing schemes designed to steal login data, which can be reported online to Action Fraud.

Belgian Investigation Rules Video Game “Loot Boxes” Are Gambling

The Belgian Gaming Commission is considering banning loot boxes in video games, claiming that the in-game prizes are a form of gambling.

Loot boxes are a controversial element of many online games. The recent Electronic Arts online shooter Star Wars: Battlefront II has attracted criticism from both gamers and industry reporters for its loot box-focused rewards system.

Using loot boxes, players can exchange real money for the chance to earn in-game items. The system is a favourite of video game developers and publishers, as it allows for players to keep spending money even after a game is purchased.

The items contained in the loot boxes often provide players with an advantage in online play, incentivising players to “spend to win” in their favourite games. Many of the loot boxes operate using a similar mechanism to a slot machine, offering rewards on a chance basis.

EA, which previously planned to allow players to spend real money on loot boxes, backed off from its decision after a widespread consumer boycott. Now, game developers could face an extra level of regulatory scrutiny due to the growing popularity of loot boxes.

Last week, Belgium’s Gaming Commission launched its own investigation of loot boxes, noting that they could be considered a form of gambling. Loot boxes are considered an especially big issue as they’re often included in games targeted towards children.

Parents have reported cases of children using saved in-game payment information to purchase loot boxes, often racking up hundreds or thousands of dollars in in-game charges for items and credits for in-game promotions.

The recently concluded Belgian investigation concluded that loot boxes are a form of gambling — a finding that means the European Union could place restrictions or a complete ban on the business model.

Gaming industry experts contend that loot boxes are growing in popularity not because of any genuine interest from gamers, but because they’re viewed as a simple way for developers to generate more revenue from their triple-A titles.

In-game purchases have grown tremendously over the last decade, with gamers shelling out anywhere from $1 to $1,000+ for in-game items such as upgraded weapons, character skins and other content.

These small transactions are now a key source of revenue for many game companies, allowing for games to be offered at a lower purchase price and monetised — often indirectly — through the purchase of extra in-game upgrades.

Game developers claim that the loot boxes are often a necessary evil in an industry where costs have risen substantially over the past decade. As a PC Gamer piece noted, previous generation “triple-A” games were developed by 35-50 people; today’s top games are developed by 500.

This has put extra pressure on developers and publishers to implement in-game monetisation to increase revenue and offset the costs of development.

However, with loot boxes potentially facing regulatory issues in the European Union, or even an outright ban, developers of upcoming triple-A titles may need to look at new ways to earn extra revenue from their new releases.

Thomas Cook UK Earnings, Shares Down

Travel company Thomas Cook has reported lower-than-expected UK profit margins due to highly competitive conditions in the travel industry.

The well-known travel brand recently reported a 40% decline in its UK earnings, fuelled by a “challenging” travel market and a cut in total revenue caused by a weakened pound. For the year to September 30, Thomas Cook generated earnings of £52 million — lower than the £86 million reported during the previous 12 months.

Thomas Cook is one of several travel companies to face a decline in earnings over the past year. Others, including numerous low-cost airlines, have reported declining profits due to an increasingly intense price war and difficult currency conditions.

The weakened pound has hurt many holiday providers, the majority of which price services in pounds before purchasing accommodation, tour packages and other services in euros. Rising hotel prices have also been blamed for this year’s lower-than-expected profit margins.

In its statement, Thomas Cook reported that a high level of competition for Spanish package holidays also contributed to its smaller margins. The company has also been set back by the costs of reimbursing customers after Hurricane Irma.

Finally, the company reported that fraudulent illness claims cut into its 2017 profits, costing the company a significant amount. Executives have reported that there may be legal action against individuals that make fraudulent illness claims.

To reverse the downturn in earnings, Thomas Cook plans to focus its offerings on inexpensive, rapidly growing destinations such as Egypt and Turkey, both of which have seen an increase in demand over the past year.

Despite poor earnings from its UK division, the Thomas Cook Group has had a positive year on the whole. The company’s earnings grew by £24 million to a total of £330 million, largely due to increased customer demand.

Bookings for the winter season are currently higher than expected, with the company noting a 5% increase in total booking volume fuelled by customer interest in warm destinations such as the Canary Islands.

A persistent price war has affected UK-based holiday companies that focus on destinations like Spain, where limited availability and an increase in demand has resulted in higher-than-normal prices for hotels and holiday apartments.

Due to Spain’s image as a safe holiday destination and the weakened pound, Thomas Cook and other travel companies predict that the price of holidays to Spain will continue to rise by anywhere from five to 10 per cent over the next year.

The challenging market conditions haven’t only affected holiday tour companies. Earlier this year, UK-based Monarch Airlines ceased trading due to financial difficulties, leaving 10,000 holidaymakers stranded overseas.

Even the industry’s most robust companies have reported lower-than-anticipated profits, with budget airline easyJet stating a 17% annual decrease in profits. Chief executive Carolyn McCall described the year as a “difficult” one for the entire travel industry.

Still, with demand increasing and bookings on the rise, 2018 could potentially be a year of new opportunities and financial turnaround for many of Britain’s airlines and travel service providers.

Meg Whitman to Leave HP Enterprise

Meg Whitman will step down from her role as chief executive of Hewlett Packard Enterprise in February, approximately six years after joining the company and overseeing a significant effort to turn around its direction.

Whitman joined Hewlett-Packard’s board of directors in January 2011 and was appointed CEO in September of the same year. After joining the company, she prioritised a commitment to the PC business — a product range that HP had previously considered ending.

Under her leadership, HP became the world’s largest manufacturer of PC equipment — a title it held until being surpassed by Lenovo in 2013. The company also went through a series of large job cuts, with tens of thousands of positions cut from 2013 onwards.

Whitman’s leadership of Hewlett-Packard was controversial. The CEO inherited a company in a challenging position and ultimately prompted HP to break into two separate companies,  HP Inc. and Hewlett Packard Enterprise.

After retiring in February, Whitman will be succeeded by Antonio Neri, the current president of Hewlett Packard Enterprise.

Hewlett-Packard’s split saw the pany transform from one business into two companies. The consumer side of the company was converted into HP Inc., which produces PCs and home electronics such as printers and scanners.

Hewlett Packard Enterprise has since run the company’s corporate software and hardware product lines, including services such as data storage and corporate networking equipment.

One of Silicon Valley’s oldest companies, HP was founded in the 1960s and grew into a key early player in the computer hardware industry. Throughout the 1970s and 80s, HP released many of the world’s most important calculators and early personal computer equipment.

HP expanded throughout the 1990s, doubling in size throughout the decade and completing a merger with Compaq later described as “disastrous.” The company completed several major acquisitions throughout the early 2000s, including a purchase of Palm, Inc.

Since splitting into a separate company, the value of Hewlett Packard Enterprise has remained roughly the same as it was prior to the split. Company representatives have noted that owners of Hewlett Packard Enterprise shares have benefited from recent dividends and buybacks.

In spite of this, HPE has continued to slash jobs and downsize its workforce since becoming a separate entity. In September, the company announced that it would cut as much as 10% of its workforce in an effort to reduce costs and remove underperforming divisions.

Many of HPE’s challenges relate to enterprise cloud storage, where the company has lagged behind rivals such as Google and Amazon Web Services.

Despite being called one of the world’s most “underachieving CEOs” by Bloomberg in 2013, Whitman’s tenure at HP has generally attracted praise from analysts. In a New York Times piece on her resignation, analyst A. M. Sacconaghi stated that Whitman was given “a tough hand in a legacy business” and was “a complete realist” about her role at HP.

Whitman will remain with Hewlett Packard Enterprise until February, at which point she will be replaced by Antonio Neri. Neri has served as HPE’s president since June and has a 20-plus year history with the company and its predecessors.

Amazon Australia Soft Launch is Underway

Amazon’s long awaited opening in Australia is underway. On Friday, Amazon.com.au, which has long been a popular shopping destination for Kindle content and other digital products, will start to feature a range of physical products similar to Amazon.co.uk and Amazon.com.

Amazon Australia is currently undergoing a “soft launch,” which has been dubbed as something of an anti-climactic event by the Australian media. The full website is currently only available to a small test audience, with the new product categories expected to launch on Friday.

The new version of the website will reportedly feature a full range of product categories similar to the American and UK Amazon stores, offering everything from consumer electronics to toys, groceries and more.

Details of the soft launch were leaked after Amazon sellers received emails alerting them that their Australian product offerings needed to be ready by “2pm AEST Thursday” to be viewable on the website.

The current Australian Amazon website only features a limited number of product categories, with Kindle books and other digital content but little else. The newer, expanded marketplace is hotly anticipated in Australia, where e-commerce options are less numerous than the USA.

Millions of Australian consumers already shop using the UK and USA Amazon stores, often for goods that are not available in Australia. Purchasing items internationally is a popular way for consumers to avoid the “Australia tax” of inflated pricing that often applies to imported goods.

Amazon has confirmed that Australian users will still be able to shop from its US and UK online stores — something that’s reassured many customers. However, many of the items sold on the company’s US and UK platforms may be more affordable to purchase locally via Amazon AU.

According to the Daily Mail, some analysts have predicted that Amazon’s prices will be as much as 30% cheaper than other merchants in Australia — a welcome sign for Australian consumers.

However, other have pointed out that this sudden reduction in pricing for many consumer goods could create difficulties for local retailers, many of whom haven’t been subject to the same level of pricing pressure from Amazon as their UK and US-based counterparts.

According to the Australian Financial Review, the marketplace’s launch is expected to trigger “the biggest shake-up in retail in a generation.”

Amazon has grown tremendously over the past decade, expanding from an online marketplace for books into the world’s largest e-commerce company, supplying approximately one third of all online product purchases.

The company has also expanded into areas such as original content creation and cloud storage, with its Amazon Web Services division contributing substantially to its recent revenue growth.

Other recent moves by Amazon include its successful $13.7 billion acquisition of Whole Foods, a health-focused grocery chain. The company’s stock price has increased from $750 near the beginning of 2017 to a recent peak of more than $1,000 in July.

With its Australian opening underway, it appears that Amazon’s growth story has plenty of room to continue.

Can Tesla’s New Truck And Roadster Help it Escape “Production Hell”?

Tesla unveiled two new models last week, an electric semi truck capable of covering up to 500 miles on a single charge and an updated, upgraded version of its famous Roadster. But can the new models help the exciting but troubled automaker escape its current “production hell”?

The California-based automotive company’s latest announcements aren’t likely to reach stores anytime soon. However, Tesla as a company is facing very real challenges producing its Model 3 sedan, an affordable electric vehicle aimed at transforming the brand into a mass market one.

Tesla has, until now, produced high-end cars aimed at a market of customers interested more in cutting edge technology than affordability. But the Model 3 takes a different approach — one that could potentially create problems for the growth-focused company.

Contrary to Elon Musk’s ambitious projections and announcements, Tesla has struggled to keep pace with manufacturing its mass market vehicle. The company planned to produce 1,600 cars in September; it only managed to produce 220.

A Washington Post article from earlier this month reported that Tesla’s current “production hell” included broken assembly robots, sleepless nights for employees and a mounting pressure to deliver on the company’s production promises.

Around the same time as the Model 3 “production hell” hit full swing, Tesla announced its largest ever quarterly loss — a total of $671.1 million for the third quarter. Tesla also recently announced a series of layoffs, ostensibly due to employee performance problems.

The recent announcements breathed new public relations life into Tesla, but both the Roadster and the company’s new semi truck have resulted in the same questions from commentators — namely, when they will move from announcement to reality.

The new models have also come under scrutiny from industry experts, who believe the electric vehicle company’s ambitious plans for the commercial and industrial transportation industry are perhaps too ambitious to become true.

Key concerns from the trucking industry include the vehicle’s reliability, particularly compared to the 100-plus year old diesel technology used in today’s trucks. In this setting, dependability is a bigger selling point than technological innovation or green credentials.

Others include the time at which vehicles will be available. With Tesla’s reputation for delivering a quality product, albeit often late, major companies that depend on vehicular uptime might not be ready to put down deposits for a vehicle that may not ship on time.

The new Roadster, on the other hand, has won over praise from automotive journalists. With a 0-60 time of just 1.9 seconds, the proposed car could potentially be the fastest ever made when it enters into production.

In fact, the Roadster’s performance is so spectacular that numerous commentators have urged Tesla to build a racing team around the platform.

In short, it’s an exciting but difficult time for the innovative California-based automaker. Tesla is mired in “production hell” and aside from a few recent PR wins, doesn’t seem to have a proven way out of it. However, its recent announcements have certainly won the company attention.

Easyjet Weathers 17% Profits Decline From Price War

Basel, Switzerland - April 11, 2011: Operatives load luggage onto an easyJet branded Airbus A319-111 parked on the apron at Basel airport. The low-cost British airline easyJet carries more passengers that any other United Kingdom-based carrier, serving airports in Europe, Noth Africa and Eastern Asia. easyJet calls itself the web's favourite airline.

EasyJet’s annual profits have declined by 17% over the past year, with the company weathering a £101 million reduction in earnings due to currency fluctuations and the effects of a short haul flight price war.

The budget airline, which specialises in short haul flights between the UK and Mainland Europe, has suffered through a two-year price war with rival airlines, all competing for a lucrative market of weekend travellers.

Prices for short haul flights have been pushed down over the past two years due to an intense level of competition between airlines. Although the low prices have been good for consumers, a growing number of airlines are facing financial issues as a result of the aggressive pricing.

Earlier this year, German “semi-low cost carrier” Air Berlin filed for insolvency, ending operations at the end of October. UK-based Monarch Airlines also ceased trading recently, stranding over 110,000 passengers abroad as it abruptly closed its doors.

Compared to many of its competitors, easyJet appears to have weathered the effects of pricing wars relatively well. The company has increased its bookings over the past year and expects its revenue per seat to grow substantially over the next 12 months.

Chief executive Carolyn McCall, who is leaving the company for ITV, stated that the year was a “difficult” one for the industry as a whole. McCall noted that easyJet’s performance over the year had been “robust” and that the company had performed well in a difficult period.

Her optimism appears to be shared by investors, with easyJet shares increasing by 6% after the company’s financial results were released to the public.

Despite the slight decline in profits, easyJet hit several other performance targets over the year, often as other airlines faltered. It achieves a record-setting load factor of 92.6%, indicating that it filled its planes efficiently to maximise revenue per flight.

EasyJet also flew a record 80 million passengers over the course of the year, hitting its highest ever total amount. Analysts have described the airline’s financial outlook as “encouraging” — a rare description in an industry that’s recently become infamous for financial difficulties.

Both easyJet and other budget airlines have numerous opportunities ahead, with the coveted slots operated by former rival Monarch Airlines soon to become available to other carriers.

Monarch previously held valuable take-off and landing slots at two UK airports, operating from Luton and Gatwick. The slots are a lucrative asset for any airline, and it’s expected that a range of low-cost carriers will attempt to acquire them.

EasyJet also benefited from issues with its key rival RyanAir, which has seen more than 700 of its pilots leave over the past 12 months — an increase of 75% from previous years. Many of the pilots have attributed their decisions to boss Michael O’Leary’s “utter contempt” for staff.

Despite the resignations, the Irish low-cost airline planes to continue its expansion, announcing that it will hire up to 200 engineers across Europe as it puts into action plans to expand its fleet of aircraft from 430 to 585.

Uber “Covered Up” 2016 Hacking Attack That Compromised 57 Million Users

San Francisco, USA - May 12, 2016: Uber headquarters entrance in San Francisco with sign on the right. A woman is leaving the building through the front door. Reflections of Market street in the window.

Uber has ousted its chief security officer after it was revealed that the company “covered up” a massive cyberattack that compromised the personal information of more than 57 million users.

Chief security officer Joe Sullivan and deputy Craig Clark both resigned recently in response to the attack, which was disclosed earlier today by Bloomberg News reporter Eric Newcomer. The cyberattack is believed to have affected more than 50 million users and seven million drivers.

Uber CEO Dara Khosrowshahi, who replaced founder Travis Kalanick as CEO earlier this year, stated that “none of this should have happened,” referencing the attempt by Uber to hide the full effects of the hack. He also stated that Uber “will not make excuses” for the decision.

According to reports, former CEO Travis Kalanick was informed of the hack late last year. Uber did not disclose any information about the cyberattack to its drivers or users, potentially creating privacy issues for its customer base.

The hacked data included the names, phone numbers and email addresses of approximately 50 million Uber customers. Around seven million drivers were affected, with driver’s license data for approximately 600,000 people compromised.

The hackers reportedly targeted Uber’s Amazon cloud account, “breaking in” to the company’s online records. Uber paid out $100,000 to the hackers to ensure the security break-in wouldn’t become public and prevent the data from being shared with others.

Sullivan, who has attracted much of the public attention for the “coverup” of the hack, joined Uber in 2015. He previously worked for Facebook as an online security specialist, as well as auction platform Ebay.

Uber representatives have publicly stated that the hack did not affect sensitive user data, such as credit card numbers, location information or bank account data. The hackers also failed to access private personal information such as social security numbers or birth dates.

Uber’s failure to disclose the hack could potentially have legal repercussions for the company. In California, where Uber is based, companies are required by law to report any data breach that affects more than 500 residents of the state.

Downplaying the impact of the hack, Khosrowshahi stated that Uber “obtained assurances that the downloaded data had been destroyed” by the hackers, and that the company has since taken steps to improve its digital security.

Uber will also offer free identity theft protection and credit monitoring services to its drivers to limit the effects of the cyberattack. The company’s statement on the hack and its outcome can be read here.

The 2016 hack could be the latest legal issue in a long list of problems for Uber, which has been plagued by sexual harassment claims over the past year. The New York state attorney general’s office has reportedly opened an investigation into the company’s slow response to the hack.

Other companies have been fined hundreds of millions of dollars for similar data breaches that affected large numbers of users. A 2015 security breach at Anthem Inc cost the company over $115 millions in fines and settlements.

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