Airbus says it will obey WTO ruling on aircraft subsidies

A European Commission document said Airbus would repay an A350 loan to the UK government this year and reduce the drawdown of other loans. (Reuters)
Updated 22 May 2018
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Airbus says it will obey WTO ruling on aircraft subsidies

PARIS: Airbus plans to set out measures that will bring it into line with a World Trade Organization ruling on subsidies for its A350 and A380 jets, a senior lawyer said on Tuesday.
The move comes after the US won the right to seek sanctions against EU goods following a partial victory in its 14-year legal battle against European government support for Airbus at the World Trade Organization.
The EU says it expects to strike a similar legal blow in a parallel case on US support for Boeing later this year.
“We will be announcing this morning a complete package of measures to fully comply with last week’s ruling, putting us basically at a point where we have nothing left to answer and no sanctions possible,” Karl Hennessee, senior vice president and head of litigation at Airbus, told BBC radio’s Today program.
The subsidies row coincides with transatlantic tensions over US aluminum and steel tariffs, and the impact on European firms from Washington’s decision to exit an Iran nuclear pact.
It is also part of a two-way battle between the EU and the US over aircraft subsidies that could spark tit-for-tat reprisals between the two trade superpowers.
In a rare public face-off between senior strategists in the dispute, Boeing’s chief external lawyer in the case told the same BBC program that the US would be free to target any European products, not just aerospace.
“The WTO will decide what the proper number is and ... give the US that authority,” Robert Novick, co-managing partner at US law firm WilmerHale, told the BBC Today program.
“In parallel, the US will develop a list of products on which it might consider imposing countermeasures,” he added.
The transatlantic dispute stems from mutual claims that the world’s two largest planemakers benefited from illegal subsidies in the form of subsidized government loans to Airbus and research grants or tax breaks to Boeing.
Underscoring the cost and complexity of the case, the two sides have been arguing since 2011 about whether they complied with earlier rulings.
Airbus did not say how it would comply with the final ruling on European aid but a European Commission document said it would repay an A350 loan to the UK government this year and reduce the drawdown of other loans.
It also said the bankruptcy of Russian carrier Transaero, resulting in fewer A380 deliveries, had helped it to comply, while other aid been blunted by the passage of time — an argument that has previously been rejected by the US.
Hennessee also called for a settlement similar to one between Canada and Brazil that set the tone for global plane financing.


Australian court fines Apple $6.7 million over iPhone ‘bricking’ case

Updated 59 min 43 sec ago
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Australian court fines Apple $6.7 million over iPhone ‘bricking’ case

SYDNEY: An Australian court fined US electronics giant Apple Inc. A$9 million ($6.7 million) on Tuesday after a regulator accused it of using a software update to disable iPhones which had cracked screens fixed by third parties.
The Australian Competitor and Consumer Commission (ACCC) sued the world’s biggest company by market value for “bricking” — or using a software update to disable — hundreds of smartphones and tablet devices, then refusing to unlock them if the devices had been serviced by non-Apple repairers.
On Tuesday the Australian Federal Court found in the regulator’s favor, saying Apple had breached the country’s consumer law by telling some 275 customers they were not eligible for a remedy if their device had been repaired by a third party.
“The mere fact that an iPhone or iPad had been repaired by someone other than Apple did not, and could not, result in the consumer guarantees ceasing to apply,” ACCC Commissioner Sarah Court said in a statement.
“Global companies must ensure their returns policies are compliant with the Australian Consumer Law, or they will face ACCC action,” Court said.
An Apple spokeswoman said in an email the company had “very productive conversations with the ACCC about this” without commenting further on the court finding.
The ACCC said after it told Apple about its investigation, the US company sought to compensate customers whose devices were made inoperable by the software update, known as “error 53.” So far, Apple had contacted about 5,000 customers, the ACCC said.
Apple has also offered to improve staff training, information about warranties and consumer law on its website, and processes to ensure compliance, the ACCC said.