Trade group reports controversial Oracle advertisements to FTC

An advertising industry oversight group has reported Oracle to the U.S. Federal Trade Commission after the vendor allegedly failed to comply with previous rulings.

The National Advertising Division, which is controlled by the Council of Better Business Bureaus, investigated three Oracle advertising campaigns last year after complaints from IBM. Each of the campaigns contained “an overbroad and unsupported comparison between one Oracle product and one IBM product,” the group said in a statement late Thursday.

In July 2012, Oracle agreed to pull advertisements claiming that its Exadata database machine was vastly more powerful than IBM’s Power Systems hardware, but said at the time it believed the NAD’s ruling was too broad.

“Now, IBM has brought NAD’s attention to a fourth Oracle advertising campaign, featuring the claim that Oracle’s Sparc T5 has ‘2.6x Better Performance’ as compared to IBM’s Power7+ AIX server,” the NAD said. “The advertising in question features the same stark, overbroad IBM-versus-Oracle comparison that NAD recommended against in the three previous cases.”

Oracle has repeatedly failed to “make any (much less a good faith) effort to bring its advertising into compliance,” which has required referring the matter to the FTC, according to NAD’s statement.

An Oracle spokesman said via email Friday that the company disagrees with the NADs’ decision, and “believes the ad is fair and accurate.”

“The ad provides a clear and objective comparison between an IBM Power7+ AIX system and an Oracle Sparc T5 system using industry standard benchmark results that legitimately show 2.6x better performance by the Oracle system,” said spokeswoman Deborah Hellinger. “NAD has failed to take into account the sophistication of the ad’s target audience, namely businesses that purchase enterprise hardware systems.”

Meanwhile, IBM is “gratified” by the NAD’s decision, spokesman Jeffrey Cross said in a statement.

The Sparc T5 advertisement “suffers from the same problems as its former campaigns: A disconnect between the message conveyed by the advertising and the testing offered in its support,” he added.

There’s little love lost between Oracle and IBM, who are fierce competitors in the high-end server market.

Oracle’s hardware revenue has consistently fallen since it got into the business with the acquisition of Sun Microsystems, but company officials maintain they are focused on selling higher-margin products like Exadata, which customers must also load up with lucrative software licenses.

U.S. curbs Bangladesh trade privileges

A Bangladeshi man cries for a missing relative, believed to have died in the rubble, after an apparel factory building collapsed and killed over 1,100 workers in April.

The government said it would no longer allow duty-free imports of certain products made in Bangladesh under a program that helps encourage trade with developing countries by providing breaks on tariffs.

The trade decision comes as Bangladesh is facing mounting international pressure to improve working conditions after a series of fatal fires last year killed hundreds, and a building collapse in April killed over 1,100 workers. Almost all of the accidents have happened in its apparel industry. Bangladesh is the fourth largest exporter of clothes to the U.S., behind China, Vietnam and Indonesia.

However, the U.S. decision isn't expected to affect clothing imports, because apparel isn't covered under the duty-free program.

Related: Bangladesh: Cheap clothes lead to danger and tragedy

The program is part of a global effort overseen by the World Trade Organization and applies to imports from developing countries. Thursday's curbs is likely to affect imports of tobacco products, sports equipment, china and plastic products from Bangladesh, according to the country's embassy.

In 2011, the U.S. imported $26.3 million worth of goods that got duty free breaks under the program, according to trade records. That's less than 1% of the more than $4 billion of Bangladesh exports to United States.

"While (it) doesn't cover garments from Bangladesh, it's still important to U.S. companies purchasing goods from Bangladesh under the program, such as ceramics and dinnerware," said Daniel Anthony, research director at the Coalition for GSP, an advocacy group for the program funded by U.S. companies and associations.

The government of Bangladesh described the development as "unfortunate."

"While Bangladesh is absolutely respectful of a trading partner's choice of decisions, it expresses its deep concern that this harsh measure may bring in fresh obstacles in an otherwise flourishing bilateral trade," the Ministry of Foreign Affairs said in a statement.

Related: Why I'm protesting against Gap over Bangladesh

The U.S. program granting duty free status to developing nations was already set to expire July 31.

The program can be extended only if Congress acts by the deadline, which doesn't look likely so far, according to congressional aides and lobbyists.

In 2011, Congress renewed the program retroactively. But the dire budget situation combined with forced spending cuts could reduce enthusiasm for a trade program that eats into U.S. revenue.



Labor unions have been pushing the Obama Administration to respond to labor and safety problems in Bangladesh.

"The AFL-CIO hopes that the suspension of benefits will be a catalyst to accelerate an effective process involving the government, employers and workers of Bangladesh to achieve these goals," President Richard Trumka said in a statement.

Bangladesh is among more than 120 countries that gets tariff breaks under the program, known as the U.S. Generalized System of Preferences.

Related: Bangladesh pay hike would cost shoppers only pennies

"I have determined that it is appropriate to suspend Bangladesh's designation as a beneficiary developing country under the GSP program because it is not taking steps to afford internationally recognized worker rights to workers in the country," President Obama wrote in the proclamation.

Bangladesh's working conditions are also in the spotlight in Europe. The European Union is considering a move to revoke Bangladesh's duty free privileges also on clothing, which could really really hurt the country.

Apparel is Bangladesh's top business and makes up 80% of exports. The average worker in the garment industry in Bangladesh makes between 10 and 30 cents an hour, and many of the factories do not have windows, fire escapes or emergency exists, according to labor rights activists.

The Bangladeshi government has turned a blind eye to working conditions in an effort to entice retailers with low costs. International governments are now amping up the pressure hoping that Bangladesh will step up its vigilance over its country's factories.

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U.S. says Chinese wind turbine firm stole trade secrets

A wind farm operating in China.

The Chinese company -- Sinovel -- is one of the country's largest producers of wind turbines. It is accused of encouraging an employee of U.S.-based AMSC (AMSC) to steal copyrighted source code from a computer in Wisconsin for use in its turbines.

Sinovel then used the technology in four turbines that were sold to customers in Massachusetts and installed not far from AMSC's headquarters.

"The fact that Sinovel has exported stolen American intellectual property from China back into the United States -- less than 40 miles from our global headquarters -- shows not only a blatant disrespect for intellectual property but a disregard for international trade law," AMSC CEO Daniel McGahn said in a statement.

Sinovel did not immediately respond to requests for comment.

PM3000, the software in question, helps regulate the flow of electricity from turbines to electrical grids. The theft resulted in a loss of $800 million for AMSC, according to the indictment handed up by a federal grand jury in Wisconsin.

Some 500 AMSC employees have lost their jobs following Sinovel's "egregious and unlawful behavior," McGahn said.

Related: EU-China trade spat widens

"The allegations in this indictment describe a well-planned attack on an American business by international defendants -- nothing short of attempted corporate homicide," U.S. Attorney John Vaudreuil said in a statement.

A conviction could carry penalties approaching $5 billion for Sinovel, as well as lengthy prison sentences for the accused individuals.

The U.S. has recently adopted a new strategy for combating what officials see as a persistent threat to the American military and economy: It has started naming China -- and its armed forces -- as the source of actions that pilfer military, trade and industry secrets.

The change in tactics follows years of virtual silence from American officials on the issue. The government's claims have been bolstered by a growing number of security firms and companies who say they have fallen victim to intellectual property theft attacks emanating from China.

President Obama raised the issue earlier this month during a summit with Chinese President Xi Jinping, but the meeting did not produce a publicly-announced breakthrough.

"It's quite obvious now that the Chinese senior leadership understand clearly the importance of this issue to the United States," White House National Security Adviser Tom Donilon said after the summit.

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Steven Spielberg, Harvey Weinstein Side with France in Free Trade Talks

This story first appeared in the July 19 issue of The Hollywood Reporter magazine.

Those who like to view France as a cultural bastion against the crass commercialization of Hollywood have reason to cheer.

An effort by French and European filmmakers, including Oscar winners Michel Hazanavicius, Pedro Almodovar and Michael Haneke, has succeeded in keeping Europe's heavily subsidized film and TV industries off the table in free-trade talks between the U.S. and Europe, set to start July 8 in Washington.

PHOTOS: The Stars Come Out for the French Open

While Hollywood sees French subsidies and cultural quotas as an obstacle when it comes to competing in that market, such vocal advocates as Steven Spielberg and Harvey Weinstein, in solidarity with fellow filmmakers abroad, have supported the French position. Without those subsidies -- about $1.3 billion a year in France alone -- supporters say art house films such as Amour or this year's Cannes Palme d'Or winner, Blue Is the Warmest Color, would be impossible to make.

But Europe's true trade battle is about cyberspace, not celluloid. Europeans increasingly are watching films and TV online, served up by the likes of Google, Apple or Amazon and other digital operators. And because of that, France wants a new tax on smartphones and tablets to help fund French movies.

 

Ecuador waives U.S. trade rights over Snowden case

QUITO - Ecuador said on Thursday it was waiving preferential rights under a U.S. trade agreement to demonstrate its principled approach to the asylum request of former American spy agency contractor Edward Snowden.

Officials in Quito added that the U.S. fugitive's case had still not been processed because he had not reached any of its diplomatic premises.

In a deliberately cheeky touch from the leftist government of President Rafael Correa, Ecuador also offered a multimillion donation for human rights training in the United States.

Snowden, 30, is believed to be at Moscow's international airport.

"The petitioner is not in Ecuadorean territory as the law requires," government official Betty Tola said at an early morning news conference in Ecuador.

Bristling at suggestions Quito was weighing the pros and cons of Snowden's case in terms of its own interests, officials also said Ecuador would not base its decision on its desire to renew the Andean Trade Preferences Act with Washington.

"Ecuador gives up, unilaterally and irrevocably, the said customs benefits," said another official, Fernando Alvarado.

"What's more, Ecuador offers the United States economic aid of $23 million annually, similar to what we received with the trade benefits, with the intention of providing education about human rights," Alvarado added.

"Ecuador does not accept pressure or threats from anyone, nor does it trade with principles or submit them to mercantile interests, however important those may be."