03/02/2016 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Sally Bundock.


Privacy Shield, a new deal between the US and Europe promises


to keep Europeans data safe from US intelligence but will it get


the green light from politicians in Brussels?


Live from London, that's our top story on Wednesday, 3rd February.


After the old data-sharing framework, Safe Harbour,


was deemed unfit for purpose - it left business in legal limbo.


We'll assess what it could mean for firms on both sides


ChemChina, a Chinese state-owned company is closing


in on a $43 billion dollar deal to buy Swiss firm Syngenta.


Markets remain pretty fickle and volatile


We'll get the inside track on the gadget that's helping small


And as a Chem-China snaps up Sygenta for a massive $43 billion


we want to know do you worry about what goes into your food?


The European Commission and the United States have agreed


on a new set of rules for how our personal data can be


It's called the EU-US Privacy Shield.


It comes after the previous deal, known as Safe Harbour,


was declared unfit for purpose in October.


The new rules are designed to protect the rights of Europeans,


regardless of where their data is actually stored.


If you live in the EU and use sites like Google, Facebook or iTunes,


your personal data will have been removed from your country and


shipped off to the US for processing. It happened as part of a


deal called Safe Harbour which came into force in 2000, but last year, a


Facebook user challenged the deal. He said it allowed US intelligence


agencies to look at his data while it was being stored in the States.


He won and the data sharing agreement was ruled invalid. Now, a


new deal has been agreed. This mechanism will be known as EU-US


privacy shield. Under the terms of the new deal, there will be an


annual joint review on the new data sharing pact. Complaints from Europe


will be dealt with on an individual basis but a new US Government


employee. The new pack still needs political approval, but it will come


as a relief from both sides of the Atlantic.


Dee-Ann Huward-Mills, Head of data protection at Baker


This will be an interesting day. We are expecting to hear announcements


from the EU watchdogs, data protection authorities and that's


going to be a very, very interesting development. After the old deal was


thrown out, firms really were in legal limbo, not knowing whose laws


they should be complying with. This should be a sigh of relief? It


presents a good opportunity for business certainty. Much needed


business certainty and the firms and the businesses that take data


protection and privacy seriously will come out on top and have an


opportunity to build the consumer trust. It is critical. Is the burden


greater on them in terms of what they have to do to make sure they


are following the letter of the law? I think this is going to be an area


where firms are going to have to take data protection and privacy


seriously. They will have to look at the systems they have in place and


perhaps audit and see where they are. We all interface with the


internet, we have smartphones and whether you are a retailer or a


pharmaceutical business or financial organisations, they are going to


have to take to area very seriously indeed. Clarify what data we are


talking about here. This is data we have willingly provided and put


online or given to firms? It is information about you and myself.


When we go to a store, we purchase goods. The organisations are able to


track what we're doing, where we surf, what we download and so it is


information about you and myself. Really, briefly, is this safer,


privacy shield? Does it mean we're safer? The point of this is to raise


the bar, raise the standards, raise the safeguards. You're going to have


greater oversight, greater transparency, that's good for


business and good cord consumers. Thank you very much indeed for


coming N When we hear from the various


hurdles they have to overcome in terms of getting there through, we


will update you. A US judge has cleared the way


for investors to sue the Brazilian oil firm Petrobras over billions


of dollars of losses which allegedly stem from a bribery


and corruption scandal. A judge in New York says two


different sets of investors can pursue the case as a


class action lawsuit. Mexican Grill says sales slumped in


the US. It is the first sales drop since the company went public a


decade ago. Artificial intelligence firm Swift


Key is to be bought by Microsoft. The Financial Times says the deal is


worth $250 million. Swiptkey is known for its predictive keyboard.


It was another grim session for financial markets in Asia. We will


talk about that in a minute. China said its economic growth projection


range between 6.5% and 7%. That's coming from an official at the top


economic planner. That was an announcement that came through


today. Of course, any reminder of some of the challenges facing China


in terms of economic growth puts a shiver down the spine of investors


around the world. It is a story we've talked a lot about and one we


will discuss at length more. Leisa, bring us up-to-date with the


details. It is massive, Ben. We are not talking about the zeros in 43


billion. It worked out at $470. This is the biggest purchase of an


overseas company by the Chinese. It is the second biggest take-over in


the chemical industry. There is consolidation going on in the


sector. But this isn't a done deal. It has to be signed off by


regulators in Europe and the US and they will be looking at this closely


because Chem China will become the biggest supplier of chemicals. A lot


of people are going who is Chem China. Well, it is Government owned.


In March they bought Pirelli, the tyre maker. The bottom line is that


China is betting big on seed and crop technology because after all,


China has to feed the world's biggest population. Thank you very


much. I'm sure it is a firm we will hear more from over the course of


the coming year. One we'll watch closely. Thank you.


The Nikkei is down over 3%. Oil back up on the course of the day, but it


is just shy of $33. Hammering energy firms again and sending stocks


lower. It shows how fickle the equity markets are right now.


Underlying that is the concern over the economic outlook particularly in


China as we have discussed. In Europe, we will get the latest


service sector numbers from Germany today. All expected to remain


robust. In the UK, despite the talk of how unbalanced economic growth


has been, of course, largely based on consumer spending again, today's


service sector figures are expected to show some weakness from December,


but there was a lot of flooding in many parts of the UK and that


stopped people going out to spend. It could be a temporary blip. So


what will move at Wall Street later? Michelle has the details in New


York. Ahead of the big jobs report


on Friday, look out for data on hiring by private employers,


analysts are forecasting a slowdown in January with an estimated


195,000 jobs, compared Meanwhile the flood


of earnings continues. General Motors is expected


to report strong burnings. Executives have already predicted


a strong road ahead. The largest US cable operator


Comcast is expected to impress investors despite facing more


competition from streaming services How well is the owner of Pizza Hut


and Tyco bell doing? When it reports fourth-quarter


results, investors will be interested to see how it's doing


in its home market but also looking for updates on the upcoming spin off


of the Chinese business. Another busy day on Wall Street. Tom


Stephenson is with us. Nice to see you, Tom. Good morning.


So where oil goes, share markets follow, it would seem? Yeah. Equity


markets are obsessed by the oil price at the moment and unusually,


they are moving in the same direction as the oil market because


one argument is that a falling oil price is good news for equities


because it is good for consumers and good for companies. Because their


costs fall. The market is not seeing it that way at the moment. The


market is looking at the oil price and saying it is a reflection of


slowing growth. Sorry, I was interrupting there without


realising. One of the issues that we were talking about earlier is the


fact that people are not spending that money that they have perhaps


got in their pocket because they are not having to pay so much for their


petrol and their gas in their car or their energy bills, they are saving


it, we're all a bit worried? The expectation was as the oil price


fell consumption would rise, we haven't seen that. We may find there


is a delayed reaction of the reason people save the money was because


they were highly indebted after the financial crisis. What we may find


is as household balance sheets come back into order, as people pay down


their debts, they will start to spend more and we're seeing that


with higher car sales for example in the US and in the UK. So it maybe


beginning to come through. Let's touch on the service sector


figures. Just giving us an idea really of the rebalancing that we


talk a lot about, particularly in the UK, but it is true across Europe


in terms of the how the economy will rebalance, away from consumer


spending and away interest the service sector? We need the economy


to rebalance, but in the short-term we people to spend more. It is a


tricky balance and you talk about China earlier on, we saw that. China


is going through this big rebalancing away from investment and


towards consumption and that, actually is a good thing for the


Chinese market. Tom, we will see you soon. Returning in five minutes to


look at other stories at business in the press.


Swiping with your smartphone, we will speak to the the head of one of


the firms providing card readers for smartphones and tablets. That's


designed to help small business take card payments. You're with Business


Live from BBC News. When you use apps, you leave a trail


of data and at the moment there is limits on how the data is used, but


the Institute of Chartered accountants is warning this could


change. They are worried if you don't exercise enough, you could


find yourself with a massive increase in your life insurance


policy. Well, Philippa Kelly is from the Institute of Chartered


accountants and joins us now. Good morning. You might expect that this


is actually a good thing. It is about using technology to make sure


that people who take the right decisions in life are rewarded for


it. Is that not the case? Good morning. Yes, it will be a good


thing for some people as you say, if you make healthy choices and make a


decisions, you are a safe driver, etcetera, you will probably be


rewarded with lower insurance premiums through use of this


additional data we're all generating in our every day lives, but where


someone benefits, there will be someone who is disadvantaged as


well, because insurance has always been about sharing risk and when we


move away from that, there will be people who win and people who lose


and that's what we're considering in the report is where do we need to


intervene to make sure that coverage can be fairly provided if someone is


losing out because of a factor that they can't control?


Explain then what is changing that means that this data at the moment


can't get into the hands of insurance companies could soon get


into their hands? So we are all generating loads of data as you said


throughout our every day lives with Clubcard and with mobile phones and


at the moment, we're happily sharing that da with other organisations. So


your supermarket, your smartphone provider, so if they wanted to, they


could probably be quite well placed to design an insurance product for


you on that basis. So there is the potential for other companies to


enter the insurance market and sell us insurance products using the data


we have given them, but also insurance companies themselves are


looking at more ways that they can start gathering this ta so if you


are part of a company health insurance scheme and your employer


offers you a fit bit, it could be if they get a certain percentage of


employees to wear them, they get a lower premium.


We are out of time. It is fascinating.


Buy to let landlords will be selling 500,000 homes thanks to changes in


legislation. You are watching Business Live. European data should


now be safe. Ridge in the United States after a new sharing agreement


comes into force. It still needs the approval of politicians in Brussels.


It is dull paving the way for a new deal after the old system was deemed


unfit for purpose. -- it is still paving the way.


Now, firms like Paypal might have revolutionised the way we pay


for goods online, but when it comes to face-to-face transactions,


many smaller companies are still using cold hard cash.


But one firm that wants to change that is iZettle.


The Finnish tech firm has come up with a gadget that lets


small businesses take card payments - via apps and card


The company has also recently branched into financing,


offering small loans to their clients.


They now operate in 12 countries, including the Nordics,


UK, Brazil and, most recently, Italy.


It's founder and Chief Executive says the company


is "democratising payments" - letting small firms compete


with their bigger rivals - but is he right?


Well, Chief Executive of iZettle Jacob de Geer is with us.


Thank you for joining us. I have to say, I'm not familiar with your


company or the gadget. I've not seen it but I read about it today and I


thought, gosh, this is great because there are so many small shops I go


into and if I haven't got cash I have to spend ?5 or more in order


for them to do a transaction without them paying fees. If I just need a


pint of milk and I have got no money on me it is quite a problem. It is


and that is just the first problem really. Prior to companies like


iZettle, the chance for these businesses to get access to taking


card payments was pretty slim or complicated at least. With the


business model and the tools that we provide they can get access to


payments but also loans. In a simple way. This is also about offering


payments for people who would not traditionally have a bricks and


mortar store like market traders, craftspeople or a tradesman who


comes to your house, rather than carrying the kit around they can


take a payment with their phone. Yes, for all of those previously


underserved by banks like sole traders. Those businesses typically


account for 20-30% of GDP in a given market. Correct me if I'm wrong, but


iZettle gives readers to homeless magazine sellers. Someone who would


normally have to take cash but you gave it to homeless people to sell


magazines. I assume that is true. It means that greater access to the


system has got to be a good thing? Absolutely. If you look around the


world, cash is on a pretty rapid decline. If you look at any store,


25% of the customers that come in, if they can't pay with a card they


will leave and the same thing goes with street newspaper vendors or.


Access to the card network system and that whole infrastructure is


vital for any type of business. If you are giving them away, which you


are to a great degree to sellers of the Big Issue, how do you make


profits? Banks take a setup fee, monthly these, we have taken that


away, and the only fee is a transaction fee, pay-as-you-go


service, basically. Based on your transaction volume, you pay a


percentage and that goes down the more you sell. Is it competitive


compared to others with a similar service? Absolutely, because these


people typically can't get access to the infrastructure. You touched on a


fact there are others doing the same thing. How difficult is it to stand


out in this market? We like and you to PayPal. One company that changes


the way we do things. It is also a market where the winner takes all


and you want to be dominant and change behaviour and the one that


people turn to. You have competitors and how do you make sure that people


use your service and not others? Well, it's a combination of many


factors from how you sign up and how fast you get access to the card


terminal. We are the first company in the world giving out the


terminals for free. Chip and pin. Typically people charge a lot for


that infrastructure. It's a combination of factors. It could be


anything from data analytics and how customers actually spend money, how


should we mix and match products to maximise your margins? It's a


combination of those things. I will let you in. I want to ask about the


death of cash. How long does cash have left? I imagine you would like


to see cash falling by the wayside eventually? Is a matter of fact I


should not say I don't like cash. And that I want to see the end of


cash, but the fact of the matter is, coming back to privacy and things


you have discussed previously, I think cash is a vital part of our


privacy and I hope that cash will continue on its decline, but I is


dull hope there will be cash in the world so I can buy things that I


don't want anyone else to know about. Like Sally with their pint of


milk. The piggy bank. Is that just my house? Thanks for coming in. Very


interesting. IZettle. Let's take a quick look at the news


that's making headlines The FT leads on the news that Yahoo


will lay off 15% of its workforce as it pursues an "aggressive


strategic plan" to return It is the latest attempt to turn


around the troubled Internet company.


The Huffington Post reports that the CEO of BlackRock wants


companies to stop quarterly earnings estimates.


He says the force investors - and in turn, CEOs -


to focus too much on the short-term gain.


Many of us were able to get through a depressing January by looking at


swimming pools and bowling alleys on property websites. We can't afford


to buy. I thought I saw your house on there. That is the one with the


swimming pool and bowling alley! Tom Lees back to talk about these


stories. -- he is back. We started the programme with a question about


whether you care about what is in food. That breeze says that organic


food is winning, you are what you eat. This is about the Chinese deal.


I knew what you eat? It's terribly important and I buy organic if I


can. Let's talk about Yahoo. This story broke yesterday. Marissa Mayer


is struggling to turn around the fortunes of the company. 15% of the


workforce is going and it's not really working. If you look at


Yahoo, the value is essentially its stake in Alibaba. That is something


they can't really access because of the tax implications. What's


interesting for me about Yahoo's situation for an investor is that it


is a symptom of how business cycles are shortening. It makes investment


very challenging because it's only a few years ago that the Internet


portal was the way forward and that's where Yahoo was so


successful. As people became more familiar with the Internet they


started using it in a different way and Yahoo has struggled to keep up


with those changes. The boss has been there for four years now, she


came from Google and was a star at Google. Just 37, six months pregnant


when she announced she would become the new boss. And Yahoo went through


three bosses in a year. Loads of pressure on her to make this work.


As you have just explained it's a company that really many have moved


on from? It is just up against an unstoppable change in the direction


of how we access information on the Internet. I think you talked about


the churn at the top, and that's often the case when you get


companies which are fundamentally struggling to compete. It's very


difficult for any Chief Executive to come in and make the necessary


changes and she is clearly struggling. Let's talk about


Blackrock next. I like this story. I'm not having much luck with my


technology this morning. This is the Chief Executive who wants companies


to stop quarterly earnings estimates, purely because we are too


focused on the short term and not the long-term. Yes, and it's not


what you expect from the Chief Executive of an investment company,


less information, to be pushing for. There is a self-serving element


because if there is less publicly available information then an


organisation like Blackrock has a competitive advantage but


fundamentally his point is right, companies are obsessed by the


short-term, three cycles of reports and it means they don't make good


long-term gains. Thank you. See you soon. Goodbye.


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