Business

BRUSSELS — The European Commission slapped a new fine of 376 million euros ($400 million) on US chipmaker Intel on Friday after an EU court annulled a previous record penalty for abusing its dominance in the computer chip market.

The case is one of many protracted legal battles against tech behemoths the European Union has faced, fights which have driven Brussels to introduce tough new curbs on how digital giants do business in Europe.

The EU's antitrust enforcer said Intel had engaged in "anti-competitive practices aimed at excluding competitors from the relevant market".

The commission said it was restoring the fine partially "for a previously established abuse of dominant position in the market for computer chips called x86 central processing units".

An EU court in Luxembourg last year annulled the fine of 1.06 billion euros handed down in 2009, after it found that Brussels failed to adequately prove anti-competitive practices.

The EU's initial case was based on alleged market abuse between 2002 and 2007, but its origins go as far back as 2000 when complaints against Intel were first lodged at the commission.

Brussels slapped the fine on Intel after saying the company had offered clients price rebates to use its own computer chips in preference to rival AMD.

Intel at the time dominated the market for the x86 CPUs with a 70-percent share during the more than five years it was accused of breaking EU antitrust rules.

Intel said it was "reviewing" the commission's fine.

"While we are disappointed in a fine of this amount, we continue to focus on our future investments in the EU, and on cooperating with the EC in helping advance Europe's semiconductor industry," the company said.

Germany and Intel signed a deal in June for the company to build manufacturing sites in the eastern city of Magdeburg after months of tense negotiations.

"Intel paid its customers to limit, delay or cancel the sale of products containing computer chips of its main rival. This is illegal under our competition rules," said the EU's competition commissioner, Didier Reynders.

"Our decision shows the commission's commitment to ensure that very serious antitrust breaches do not go unsanctioned," he added.

Reynders replaced Margrethe Vestager on September 5 after she stepped down temporarily to run as a candidate for the head of the European Investment Bank.

Under Vestager's leadership, the EU hit tech titans with a series of fines, triggering a wave of legal challenges in the past few years.

Brussels doled out more than eight billion euros in fines to Google alone for abusing its dominant market position between 2017 and 2019, but the penalties are the subject of appeals in EU courts.

The biggest players online will have to comply fully with the landmark Digital Markets Act from next year, or they face fines of up to 10 percent of a firm's global revenue.

But the EU might not be able to run away from legal dramas as experts in Brussels expect some companies to launch legal battles to avoid the harsher market restraints.

Earlier this month, Brussels listed Google parent Alphabet, Amazon, Apple, Meta, Microsoft, and China's ByteDance as online "gatekeepers" that will come under the new rules.

MOSUL — Abir Jassem is busy preparing stuffed vegetables at a kitchen in Iraq's Mosul, where after years of unrest a women-run catering service has helped single mothers like her achieve financial security.

The 37-year-old, who lost her husband while the city was under the control of the Daesh  group, said she had to get a job to put food on the table for her and her children.

"If I didn't work, we wouldn't have anything to eat," said Jassem.

She is now one of some 30 employees of "Taste of Mosul", which celebrates local delicacies and was founded in 2017 after the northern Iraqi metropolis was liberated from IS jihadists.

Most of the workers — cooks as well as two deliverywomen — are widowed or divorced.

Mosul residents are all reeling from the brutal IS rule and the war to defeat it, but for women in Iraq's largely conservative and patriarchal society, the challenges are often compounded.

For Jassem, whose husband died of hepatitis, the catering business has offered a lifeline.

Her family had refused for her to work in any mixed-gender spaces, "but I wanted to work so I would not have to depend on anybody", she said.

Now she earns 15,000 dinars ($11) a day cooking meals that are then delivered to clients.

Her speciality is Mosul-style kibbeh, a minced meat dish.

"Neither Syrians nor Lebanese can make" some of the recipes her Iraqi city is known for, Jassem boasted, as other women sat beside her at a large blue table were preparing the day's menu.

One cook rolled vine leaves. Another copiously stuffed hollowed-out peppers with orange-coloured rice, and a third made meat fritters.

'Strong women' 

Only slightly more than 10 per cent of Iraq's 13 million women of working age are in the job market, according to a July 2022 report issued by the International Labour Organisation.

When the war in Mosul ended in the summer of 2017, the United Nations refugee agency UNHCR estimated the number of "war widows" in the thousands.

"Their husbands were often the families' sole breadwinners," the UN agency said.

"Without an income and often with children to support, Mosul's war widows are among the most vulnerable to have been displaced during months of fighting for the once thriving city."

Mahiya Youssef, 58, started "Taste of Mosul" to allow women to enter the labour market in the battered city.

"We have to be realistic," she said. "If even people with university degrees are unemployed, I wondered what kind of work" would "let them cover their children's needs and be strong women".

Launched with just two cooks, the initiative has since grown and now also provides employment for young graduates, said Youssef, a married mother of five.

Appetisers and main dishes on the menu go for the equivalent of $1-10, and monthly profits top $3,000, according to Youssef, who plans to expand.

She said she hopes to open a restaurant or create similar projects in other parts of Iraq.

'Unique' 

Youssef said her passion was "old recipes that restaurants don't make", like hindiya, a spicy zucchini stew with kibbeh, or ouroug, fried balls of flour, meat and vegetables.

One of her employees, Makarem Abdel Rahman, lost her husband in 2004 when he was kidnapped by Al Qaeda militants.

The mother of two, now in her 50s, delivers food in her car, which she said has drawn some criticism.

"My children support me, but certain relatives are opposed" to her working, she said.

But Abdel Rahman hasn't let that stop her, and said she has found in "Taste of Mosul" a "second home".

Many clients order again, but some have become particularly loyal.

For more than two years, Taha Ghanem has ordered his lunch from "Taste of Mosul" two or three times a week.

"Because of our work, we are far from home," said the 28-year-old cafe owner.

"Sometimes we miss our home cooking, but we have this service," he said, hailing "the unique flavours" of Mosul's cuisine.

LONDON — The Bank of England (BoE) left its key interest rate unchanged Thursday, snapping 14 straight hikes following a shock slowdown to UK inflation and one day after the US Federal Reserve (Fed) also hit pause. 

The BoE's monetary policy committee decided in a close 5-4 vote to maintain its key rate at 5.25 per cent, the highest level in more than 15 years.

It cautioned that the rates outlook hinged on inflation staying elevated, echoing the views of its US and European peers.

UK policymakers had been tipped to raise borrowing costs again heading into this week's gathering — until surprising official data Wednesday on consumer prices clouded the picture.

The UK has seen also a rise in unemployment and weak economic growth as rate hikes take their toll.

In reaction, the pound clawed back some of its losses having earlier plumbed a five-month low of $1.2239.

Thursday's decision comes toward the end of a busy week for rate calls from global central banks, which have hiked numerous times for more than 18 months to tame inflation that surged following Russia's invasion of Ukraine.

'Finely balanced' 

"The decision on whether to increase or to maintain... at this meeting had become more finely balanced," said BoE on Thursday.

"Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures," they added.

Even if the rate has peaked, analysts expect the cost of borrowing to stay elevated for well into next year.

The BoE "doesn't want the markets to decide that a peak in rates will be soon followed by rate cuts, which would... undermine its attempts to quash inflation", noted Paul Dales, chief UK economist at Capital Economics.

Five policymakers, including governor Andrew Bailey, voted not to hike for the first time since December 2021.

A minority of four urged a quarter-point hike "to address the risks of more deeply embedded inflation persistence".

The Fed on Wednesday held US rates but indicated another hike was likely this year should inflation remain high. It hinted also that there would be fewer cuts than anticipated in 2024.

Also Thursday, Sweden's Riksbank and Norway's Norges Bank each raised their key interest rates by a quarter-point.

But the Swiss National Bank unexpectedly left its rate unchanged, confounding expectations for an increase.

All three said more rate increases may be necessary if inflation remains too high.

Shock data

UK official data on Wednesday showed the Consumer Prices Index slowed to 6.7 per cent in August from 6.8 per cent in July.

That was the lowest inflation figure since February 2022 and confounded expectations for an acceleration to 7.1 per cent on higher energy prices.

Central banks have tightened borrowing costs to multiyear highs in the wake of surging energy and food prices.

The European Central Bank has carried out 10 straight rises, including a quarter-point hike last week, but is now signalling that eurozone borrowing costs may have reached a peak.

It comes as data this week showed eurozone inflation slowed slightly in August.

Cost-of-living crisis 

In a bid to cool prices, the BoE began lifting its key interest rate from a record low of 0.1 per cent at the end of 2021, when inflation started to creep higher as economies slowly emerged from lockdowns.

Nevertheless, UK inflation subsequently struck a 41-year peak at 11.1 per cent in October 2022, while the BoE is tasked by the British government with keeping the level at about 2 per cent.

The country has since been blighted by disruptive strikes, notably by rail and health workers, as salaries fail to keep up with the surging cost of living despite record-high growth in average UK wages.

The rate increases have worsened the cost-of-living crisis, with retail banks following suit by significantly hiking mortgage rates.

Landlords, faced with higher repayments, have in turn pushed up rents by sizeable amounts.

At the same time, banks are offering higher returns on savings, for those who can afford to set money aside.

In response to Thursday's BoE decision, XTB analyst Walid Koudmani warned rates may not have peaked.

"The key message today is that rates are at their peak or close to it," Koudmani said.

"But with current data, it could be a dangerous signal to send the markets since if inflation keeps running hot, the BoE will need to hike once more."

DETROIT — The Canadian auto workers union has reached a tentative agreement with Ford, averting a strike as the labour group's US counterpart eyes expanding its ongoing stoppage to more plants.

Unifor, which represents Canadian auto workers, said late Tuesday the agreement pertained to more than 5,600 Canadian Ford workers who stood poised for a potential walkout.

"We believe that this tentative agreement, endorsed by the entire master bargaining committee, addresses all of the items raised by members in preparation for this round of collective bargaining," said Unifor National President Lana Payne.

"We believe that this agreement will solidify the foundations on which we will continue to bargain gains for generations of auto workers in Canada," Payne said in a statement.

Payne has pursued a quieter and less confrontational strategy than United Auto Workers President Shawn Fain, who last week sent 13,000 UAW members out on strike at key Ford, General Motors and Stellantis plants in the United States after failing to reach a deal with the companies.

The collective agreement between Unifor and Ford had expired September 18 at 11:59pm but Unifor agreed to a 24-hour extension to see if negotiators from both sides could finish off the tentative agreement.

Unifor said it was withholding details about the agreement, pending ratification meetings with union members. But Payne earlier this week said Unifor was looking for substantial increases in pensions and wages.

Ford confirmed the tentative settlement but declined to discuss specifics of the proposed contract "to respect the ratification process", a company spokesman said in an email.

Fain has warned the UAW could expand its strike beyond the three plants currently striking in Michigan, Ohio and Missouri if the current negotiations don't yield any signs of progress by Friday morning.

Fain is seeking 40 per cent wage hikes and other significant labor reforms, including the elimination of different pay tiers and the reinstatement of pensions for young employees.

The UAW strike marks the first time the union has called stoppages at all of Detroit's "Big Three" auto manufacturers.

However, unlike recent auto strikes, the union this time is using a targeted stoppage that leaves the vast majority of workers on the job.

AMMAN — KPMG, a leading provider of audit, tax, and advisory services, has released its latest Banking Perspectives: Jordan 2023, titled “A new era of banking”. 

The new publication, the second in its annual flagship series on the financial services industry, highlights the consolidated financial performance of the Kingdom’s banking sector in 2022, and some key trends and themes that were noticed, according to a KPMG statement.

Despite global challenges, the banking sector has shown stability with increased net profits, total assets and customer deposits. KPMG details the impact of rising market interest rates on loan duration and expected credit loss coverage ratio, as well as the industry’s robust granting and collection strategies.

Notably, there has been a significant increase in net profits in FY2022 by approximately 42 per cent compared with FY2021, and total assets have grown by 5.9 per cent since December 31, 2021, demonstrating the sector’s stability. Furthermore, the increase in net income for YE2022 is far beyond the increase in the bank’s total analysed assets, which is directly linked to the rapid increase in the market interest rate.

Despite negative global economic indicators, NPLs have remained relatively the same in 2022 compared with 2021, the coverage ratio for NPLs has increased and the coverage ratio per stage percentage is also considered high which reflects the robust granting, provisioning and collection strategies implemented by the banks.

“The beginning of 2023 presented widespread challenges for the global banking industry, notably in Europe and the US, requiring some introspection and risk aversion to avoid any spill-over effect,” commented Rabih Shalabi, head of Audit at KPMG in Jordan. “That said, macroeconomic indicators are supportive of further growth, and market participants should pursue competition based on individual strengths and have a closer eye on the capital adequacy and liquidity position.”

The increase in the market interest rates has led to an increase in loan duration, resulting in an increase in expected credit losses coverage ratio for non-performing loans  from 124.67 per cent to 135.75 per cent between 2021 and 2022. Customer deposits have increased by 7 per cent aligning with the Central Bank of Jordan financial inclusion programme. 

The banking industry has continued to benefit from economic expansion, with an increase in lending and reaching an industry-wide loan-to-deposit ratio of around 73 per cent at the end of December 2022, while experiencing an increase in both loan book by 8 per cent and customer deposits by 7 per cent.

Fintech and ESG

To integrate fintech into the traditional financial system, significant investments in technology and regulatory support will be required. In Jordan, some banks have already invested in this area by establishing fintech entities, and there has been innovation in mobile applications to enhance convenience, personalisation and data-driven services.

“The next wave of fintech innovation is expected to focus on solving or supporting major global transitions such as the coming demographic impact on productivity, the low carbon economy, emerging markets integration, and automation,” commented Ovais Shahab, Head of Financial Services at KPMG in Saudi Arabia and Levant. “Disruptive or progressive — the innovative solutions developed by fintech will drive change everywhere.”

Jordan is dedicated to integrating sustainability into the banking and finance sector, showing a commitment to the future. The ESG agenda in the Middle East is gaining momentum due to government initiatives and the growing need for disclosure on sustainability reporting and implementations. The publication noted that the main challenge for sustainability reporting is the complexity of sustainability, which includes a variety of topics that make the data collection process and coordination challenging.

TAICHUNG — Germany's Saxony state signed an agreement with Taiwanese chip giant TSMC on Tuesday to train German students in an effort to meet the growing demand for workers in the semiconductor sector.

A shortage of skilled workers including in the crucial chip sector has emerged as a major challenge for Germany, Europe's largest economy, as vast cohorts of older employees retire.

Last month, the Taiwan Semiconductor Manufacturing Company — which controls more than half of the world's chip output — announced a new $3.8 billion chip factory in Saxony's capital Dresden.

The agreement, signed between TSMC, Saxony and the Dresden University of Technology (TU Dresden) "is specifically designed to train German STEM students for careers in the semiconductor industry", the Taiwanese firm said in a statement.

Up to 100 high-achieving students from the state will come to Taiwan for a six-month exchange programme and "collaborate with Taiwan's top universities", it added.

The first students are expected in February 2024, according to TSMC.

Market research has shown a demand for more than 1 million skilled workers in the chip industry, said Lora Ho, TSMC's senior vice president of human resources.

"We are preparing in advance for the shortage of talents that may come shortly and strengthening semiconductor education is the most critical way to resolve the global shortage of technical talents."

Construction of TSMC's Dresden facility, which will be focused on automotive chips, is scheduled to begin next year, with production starting by the end of 2027.

It is expected to create around 2,000 direct high-tech jobs.

"We know companies from the semiconductor field [are] facing problems with finding enough talents," Sebastian Gemkow, Saxony's State Minister for Science, told AFP.

"That's why we started very early to structure this process so TSMC and later ESMC will have all the employees that it needs," he said, referring to the European Semiconductor Manufacturing Company.

ESMC is a joint venture between TSMC, Germany's Bosch and Infineon, and Dutch firm NXP that will build the Dresden plant.

TSMC's production has expanded beyond Taiwan as Western powers lines have raised concerns about the chip industry — critical for the modern global economy — being centred on an island that China claims as its territory.

Beijing has ramped up political and military pressure on the island in recent years, adding to fears about the global semiconductor supply chain.

PARIS — Fatih Birol had big dreams of becoming a footballer or a filmmaker when he was younger. 

Instead, he became a surprising champion of the battle to kick the world's addiction to fossil fuels as the executive director of the global energy watchdog.

Birol, 65, heads the International Energy Agency (IEA), a Paris-based organisation that was founded in 1974 in the wake of the oil crisis to ensure the security of the world's supplies of crude.

Created by the Organisation for Economic Co-operation and Development, the IEA advises 31 wealthy democracies ranging from the United States to Mexico, Japan and European nations.

Its mission has evolved in more recent years.

Today, Birol goes around the globe to press nations to accelerate their development of renewable energy and wean themselves off oil, gas and coal — with IEA data to back his case.

"I'm a very direct man, I believe in numbers," Birol told AFP in an interview at the IEA's headquarters near the Eiffel Tower.

He cited a 1970s French music hit, "Paroles paroles", meaning "words words", to press his point.

"There is a lot of 'paroles'. I believe in numbers. I believe data always win," Birol said.

Last week, Birol made headlines again by stating that the world "may be witnessing the beginning of the end of the fossil fuel era" as he gave a preview of next month's annual IEA energy outlook report.

Demand for oil, gas and coal will peak by the end of 2030 thanks to the "spectacular" growth of clean energy technologies and electric cars, Birol said.

"Some people say climate change is not real, some people say we shouldn't move so fast," he told AFP.

"There are different views but the rigour of our analysis is not questioned," said the Turkish energy expert, who has worked at the IEA for two decades and became its executive director in 2015.

OPEC career

The IEA caused a stir in 2021 when it published a roadmap to reach the Paris Agreement goal of having a carbon neutral world by 2050 and limit global warming to 1.5ºC.

The message from the organisation that once worked to secure crude supplies was blunt: all future fossil fuel projects must be scrapped.

The report has opened the window of "what is deemed possible" in the rapid deployment of low-emissions energy, said Gernot Wagner, a climate economist at Columbia Business School.

Birol featured on Time magazine's list of the 100 most influential people in the world that same year.

Some climate campaigners have described him as an "unexpected hero" in the movement against global warming.

Such an image may have once seemed unlikely for a man who worked for six years for the Organisation of the Petroleum Exporting Countries (OPEC), the Saudi-led oil cartel.

But Birol said he now goes around the world telling countries that rely on oil revenues that demand for their product will slow down.

"The real friends say the bitter truth. Instead of feeling upset, it's a wake up call for them to diversify their economies, not to focus their economies only on the oil income," he said.

Oil industry 'shock' 

Birol has also pushed for change within the IEA, too, through a "modernisation strategy" that include opening the organisation's door to emerging countries such as Brazil, China, India, Mexico and South Africa.

Of those, Mexico became a full-fledged member in 2018.

He had also decided that it was "time to make the IEA a leader in global clean energy transition".

He said the UN's 2018 report on the impact of climate change showed the IEA needed to draw a roadmap for the energy transition.

The document "became a benchmark" for governments, investors and the boards of energy companies, Birol said, noting that it "was a shock" for the fossil fuel industry.

"I'm very happy with that. And we are coming with an update soon," he said.

Some 300 experts toil in the IEA's small, modern building to produce analyses and projections all year.

The IEA also holds meetings to discuss how to finance the transition or secure raw materials.

Birol, ever the football fan, sees his organisation as an "honest referee" who tells the world "what is right, what is wrong".

He loves his job, even though it means that he regularly misses games of his football club, Galatasaray.

"I work seven days per week. The reason is I like it," he said. "I like it because I see it makes a difference. These months and years are so critical."

WASHINGTON — US industrial production kept expanding in August, the Federal Reserve (Fed) said on Friday, beating expectations even though the pace of the increase slowed due to sluggish manufacturing growth.

Overall industrial production rose by 0.4 per cent, up from a revised 0.7 per cent a month earlier, the Fed announced in a statement. 

This was above the median expectation of economists surveyed by MarketWatch. 

The August reading for manufacturing was up just 0.1 per cent, "held back" by a 5 per cent decline in motor vehicles and parts, the Fed said. 

This marked a sharp turnaround from July, when a jump in motor vehicle production helped spur a 0.4 per cent increase in manufacturing, pushing industrial production back into positive territory.

"Overall industrial production rose more than expected in August but manufacturing output matched consensus expectations," High Frequency Economics Chief US Economist Rubeela Farooqi wrote in a note to clients.

"Higher borrowing costs and weaker demand for goods are headwinds for manufacturing," she added. 

Factory output rose by 0.6 per cent, while the index for mining was up 1.4 per cent from a month earlier.

Year-on-year, overall industrial production expanded by 0.2 per cent. 

The figures will give the Fed additional information ahead of its interest rate decision next week, as it weighs another hike to its key lending rate to cool above-target inflation.

However, traders and analysts expect the US central bank to announce it is holding rates steady on Wednesday to give policymakers more time to assess the health of the world's largest economy.