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The Morning Risk Report: Retailers Grapple With Enforcing Mask Rules
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Face coverings for shoppers have become a flashpoint in the debate over how to stop the spread of the coronavirus. PHOTO: BRYAN SMITH/ZUMA PRESS
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Good morning. Retail chains are being forced to decide whether and how to enforce rules on masks after a string of attacks on clerks and security guards by patrons who refused to cover their faces.
As more cities, states and businesses require customers to cover up in stores, face coverings have become a flashpoint in the debate over how to stop the spread of the coronavirus. Some opponents of forced shutdowns and social-distancing requirements are flouting mask mandates, leaving grocers, drugstore chains and big-box retailers to weigh public-health requirements against the risk of putting their workers in harm’s way.
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Retailers are taking varied approaches. Some chains have advised workers to let maskless customers in despite state and local laws, while others are drawing a harder line on site or directing workers to call local law enforcement if a shopper breaks the rule.
Costco Wholesale faced angry critics and a boycott after the warehouse retail chain said earlier this month that all customers must wear a mask, whether or not one is required by local governments. Not enforcing face-mask rules also comes with risks, and not just to the health of workers and patrons. A CVS Health pharmacy in Fresno, Calif., was put on notice by local code enforcers who, in responding to a complaint earlier this month, found an unmasked shopper inside the drugstore.
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From Risk & Compliance Journal
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Morningstar Credit Ratings LLC will pay $3.5 million to settle charges that it violated a conflict-of-interest rule by mixing analytical operations with sales and marketing efforts, the Securities and Exchange Commission said.
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Credit-rating analysts at the company’s asset-backed securities group were involved with sales and marketing to prospective clients from mid-2015 to September 2016, the SEC alleged. The SEC said Morningstar didn’t have written policies and procedures that were sufficient to separate the firm’s analytical functions from business development, at least between June 2015 and November 2016.
Morningstar said it has enhanced and will strengthen policies, procedures and internal controls, as well as ramp up compliance training. The company neither admitted nor denied the SEC’s findings.
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The U.S. Commerce Department said it would restrict the ability of Huawei, which it considers a national-security risk, to develop semiconductors abroad with U.S. technology. PHOTO: NICOLAS ASFOURI/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The Trump administration said it would impose export restrictions designed to cut off Chinese telecom-equipment maker Huawei Technologies from overseas suppliers, threatening to ignite a new round of U.S.-China economic tensions.
The restrictions stop foreign semiconductor manufacturers whose operations use U.S. software and technology from shipping products to Huawei without first getting a license from U.S. officials, essentially giving the U.S. Commerce Department a veto over the kinds of technology that Huawei can use.
The restriction further tightens the U.S. export-control system’s existing rules related to Huawei. Washington alleges that Huawei gear could be used by Beijing to spy globally, which Huawei has repeatedly denied.
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The Justice Department and a group of state attorneys general are expected to file antitrust lawsuits against Google—and are well into planning for litigation, according to people familiar with the matter.
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Much of the states’ investigation has focused on Google’s online advertising business. The company owns the dominant tool at every link in the complex chain between online publishers and advertisers. The Justice Department likewise is making Google’s ad technology one of its points of emphasis. But it is also focusing more broadly on concerns that Google uses its dominant search business to stifle competition, people familiar with the matter said.
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Changes to the Paycheck Protection Program are expected to include giving businesses more flexibility to spend the money, according to lawmakers and others following the deliberations. Under the original terms, 75% of the funds were required to be spent on employee salaries for the loans to be forgiven.
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Energy companies and industry groups in Mexico said new rules for operation of the power grid favor the country’s state-owned electricity utility over private developers and dial back the opening of the power market to foreign investors.
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A tracing contact brigade in France is responsible for advising by telephone the people who have been around a coronavirus patient. PHOTO: FLORENT MOREAU/MAXPPP/ZUMA PRESS
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Europe, which helped lead a backlash against Silicon Valley’s appetite for personal data, is increasingly aligning itself with technology built by Apple and Google to blaze a path out of the coronavirus pandemic.
The embrace of Apple and Google protocols by some European countries building contract-tracing apps is being driven in part by the same officials who previously have gone after U.S. tech giants over privacy concerns and other issues. European privacy regulators say they have a preference for systems like one being developed by Apple and Google because they use a decentralized approach to data gathering—collecting little of it centrally and keeping most of it on users’ phones.
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‘In the long run, and even in the medium run, you wouldn’t want to bet against the American economy,’ Fed Chairman Jerome Powell said in an interview with CBS. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
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The U.S. economy could take more than a year to recover from the coronavirus-induced shock, Federal Reserve Chairman Jerome Powell said in an interview broadcast on Sunday.
Mr. Powell, in a rare television interview on CBS News’s “60 Minutes” program, said it was reasonable to think the unemployment rate would keep rising through June and then begin to decrease as businesses reopen. But he cautioned that the public would need to stay vigilant to avoid a second wave of infections. “That would be quite damaging to the economy and also to public confidence,” he said. “That’s a risk we really want to avoid.”
He cautioned that it would be hard for the public to be “fully confident” until there is a vaccine for the new coronavirus. Economic activity that depends on large public gatherings, including entertainment and travel, could be especially challenged, Mr. Powell said. As authorities have begun to lift restrictions, more Americans are coming into closer contact again.
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Cyber insurers, leery of security risks created by remote working and other effects of the coronavirus pandemic, are stepping up scrutiny of policyholders’ security arrangements. These efforts could result in costlier policies, or even coverage denials for companies.
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Google set up its takedown system to comply with the 1998 Digital Millennium Copyright Act. PHOTO: AMY OSBORNE/AGENCE FRANCE-PRESSE/GETTY IMAGES
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A Wall Street Journal investigation identified hundreds of instances in which individuals or companies, often using apparently fake identities, caused Google to remove links to unfavorable articles and blog posts that alleged wrongdoing by convicted criminals, foreign officials and businesspeople in the U.S. and abroad.
Google took them down in response to copyright complaints, many of which appear to be bogus, the Journal found in an analysis of information from the more than four billion links sent to Google for removal since 2011. Google’s system was set up to comply with the Digital Millennium Copyright Act, or DMCA. The 1998 law gives tech firms immunity from claims in copyright cases as long they quickly take down copyrighted material once alerted.
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Box co-founder and CEO Aaron Levie at a conference in San Francisco last October. He says work has been proceeding smoothly at the company even though staff haven’t been in the office for two months. PHOTO: MICHAEL SHORT/BLOOMBERG NEWS
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Changes the business world is considering to workplaces in response to the coronavirus pandemic offer a radical rethinking of a place that is central to corporate life. There will likely be fewer offices in the center of big cities, more hybrid schedules that allow workers to stay home part of the week and more elbow room as companies free up space for social distancing. Smaller satellite offices could also pop up in less-expensive locations as the workforce becomes less centralized.
Few industries have been as closely identified with their workplace as technology. Twitter recently notified employees that most of them could continue to work from home indefinitely. Canadian information-technology provider OpenText expects to eliminate more than half of its 120 offices globally.
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Auto makers and their vast network of parts suppliers are determined to get back to work. But like businesses across the country, they are facing both complications and costs around worker safety and depressed customer demand.
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Amazon said it plans to begin reopening its warehouses in France, after resolving a dispute over working conditions with workers’ unions. The deal, under which Amazon’s six French warehouses will reopen progressively beginning on May 19, brings a close to a dispute that has slowed Amazon’s business and fueled disputes in France, the U.S. and elsewhere over whether it is doing enough to protect the safety of workers during the coronavirus pandemic.
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Grocer Koninklijke Ahold Delhaize NV says it is accelerating development of robotic technologies because Covid-19 created an urgent need for technology to help workers clean stores and process orders. “All the researchers said this Covid situation is so urgent, we see a direct application for our work right now because there’s scarcity of people who can work in stores,” said Bart Voorn, the Dutch grocery giant’s director of data, artificial intelligence and robotics.
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Imerys Talc America was sued along with Johnson & Johnson, the prime target of litigation linking talc to cancer. PHOTO: MATT ROURKE/ASSOCIATED PRESS
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France-based Imerys SA is offering to sell a bankrupt North American unit that was historically a major supplier of talc to Johnson & Johnson in an effort to escape litigation linking its products to ovarian cancer and mesothelioma.
Only a few product-liability lawsuits had been filed against the U.S. business in 2011 when it was acquired by Imerys, but by the time the unit filed for bankruptcy last year, Imerys Talc America Inc. was swamped by roughly 13,800 claims tied to ovarian cancer and 850 related to mesothelioma, a form of lung cancer.
Imerys Talc America had supplied talc to Johnson & Johnson, the prime target of this litigation. Johnson & Johnson has said its products are safe and not contaminated, and has offered to defend Imerys Talc America in the lawsuits where both companies are named as defendants.
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Uber Technologies and Grubhub continued their merger discussions over the weekend, with the companies’ chief executives trying to hash out the price of a deal that would reshape the meal-delivery business. Grubhub Chief Executive Matt Maloney spoke to Uber Chief Dara Khosrowshahi Sunday and indicated that Uber’s latest offer of 1.9 of its shares for each Grubhub share is too low, according to people familiar with the matter.
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Jack Ma’s Alibaba attracted an investment from Masayoshi Son when it was a young internet company. PHOTO: KIYOSHI OTA/BLOOMBERG NEWS
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Alibaba Group co-founder Jack Ma is stepping down from the board of technology investment company SoftBank Group, the latest confidant of SoftBank Chief Executive Masayoshi Son to depart.
SoftBank said Mr. Ma, who has served on the board for 13 years, would resign June 25, when the company holds its annual shareholder meeting.
The departure marks a turning point in a longstanding relationship with Mr. Son. In 2000, Mr. Son put $20 million into Alibaba, a then fledgling internet company, based on what Mr. Ma called his “shared vision” with the Japanese tech billionaire. It is now SoftBank’s most valuable holding.
Meanwhile, SoftBank is in talks to sell a significant portion of its T-Mobile US stake to controlling shareholder Deutsche Telekom as the Japanese technology conglomerate scrambles to raise funds.
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