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The Morning Risk Report: EU Lawmakers Approve Sweeping Digital Regulations
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Good morning. European lawmakers approved two sweeping new pieces of digital regulation, paving the way for clashes between regulators and some of the world’s biggest tech companies over how the rules should be applied.
The European Parliament on Tuesday voted its stamp of approval for the two laws—one focused on anticompetitive behavior, the other on content deemed illegal in Europe—after reaching an agreement on them with European Union member states in the spring.
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Content from our Sponsor: DELOITTE
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Legal Leader’s Journey to the Boardroom
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Chief legal officers with a big picture perspective of business opportunities can transform legal thinking into strategic advice, according to independent director Sara Hays. Read More ›
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The laws, which are backed by the threat of noncompliance fines in some extreme cases of as much as 20% of a company’s annual world-wide revenue, are the most far-reaching Western efforts to rein in technology companies in at least a generation. They build on the EU’s effort to expand its role as a global tech regulator and offer what proponents say is a road map—and what detractors warn will be a cautionary tale—for digital legislation in the U.S. and elsewhere.
“The EU is the first jurisdiction in the world to set a comprehensive standard for regulating the digital space,” said Thierry Breton, the EU’s internal-market commissioner.
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From Risk & Compliance Journal
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U.S. State Department Names New Global Anticorruption Coordinator
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The U.S. State Department has named a sanctions and nuclear weapons expert as its coordinator for global anticorruption efforts, a position created after the Biden administration pledged to fight more vigorously against corruption.
It will be a return stint at the State Department for Richard Nephew, who most recently was a senior research scholar at Columbia University’s Center on Global Energy Policy in New York, the department said on Tuesday.
Mr. Nephew’s appointment comes after President Biden made anticorruption a central pillar of his administration’s national security agenda, first issuing a directive in June last year that ordered a range of departments and agencies to report to the White House within 200 days on how they could strengthen their efforts to fight corruption.
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A court ruling found that the Securities and Exchange Commission had exceeded its authority under federal law. PHOTO: ANDREW KELLY/REUTERS
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A federal court partly rejected a Securities and Exchange Commission plan to loosen the control that stock exchanges have over public market-data feeds, handing a victory to Nasdaq Inc. and the New York Stock Exchange.
In a ruling released Tuesday, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit found that the SEC had exceeded its authority under federal law when it issued a 2020 order overhauling the governance of the data feeds.
The ruling vacated a key provision of the order, in a blow to the agency’s efforts to rein in the fees that exchanges charge for market data. Brokers and trading firms have long complained they pay too much for such data, and they say exchanges exert monopolistic powers to keep prices high. Exchanges reject such arguments and have fought back in court at the SEC’s attempts to shake up the data business.
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A federal judge in California threw out Trump-era changes to the Endangered Species Act, including one that allowed economic factors to be considered on whether to list a species as threatened or endangered.
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Women’s professional basketball star Brittney Griner made a direct plea to President Biden to work to free her and other Americans detained abroad, in a handwritten letter delivered Monday to the White House.
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A special grand jury in Fulton County, Ga., is subpoenaing Rudy Giuliani and other advisers to former President Donald Trump, representing a new development in a Democratic county prosecutor’s investigation into efforts to overturn Georgia’s 2020 election.
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The funeral of Viktor Ruban, 50, a volunteer who joined Ukraine’s territorial defense at the beginning of the war and died in shelling in Donbas. EMANUELE SATOLLI FOR THE WALL STREET JOURNAL
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Russian artillery pounded Sloviansk, one of Ukraine’s last lines of defense to protect the remaining Kyiv-held strongholds in eastern Ukraine, while the North Atlantic Treaty Organization on Tuesday advanced plans to add Sweden and Finland to the alliance.
Vadim Lyakh, the mayor of Sloviansk, reported “massive shelling” of the city in a Facebook post and said the central market was on fire. Pavlo Kyrylenko, head of military administration in the eastern region of Donetsk, said on Telegram that at least two people died and seven were injured.
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These are boom times for the Russian oil-and-gas industry. High energy prices are keeping the country’s economy afloat and funding the war in Ukraine. How long it lasts will depend in part on a massive Arctic oil project that Russia promised would save the world from an energy crunch.
Vostok Oil, a vast oil patch spread across inhospitable terrain in Russia’s far north, is supposed to produce a premium, easier-to-refine type of crude that would account for as much as 2% of daily global output at the end of the decade.
But the development relies on Western cash and imported technology. At least two important Western financial backers are planning to pull out of the $180 billion project, while sanctions have delayed or restricted everything from drilling equipment and software to ice-class tankers, according to people familiar with the matter, companies involved in the project and energy consultants.
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A flight to the U.S. dollar pushed currencies around the world to their lowest levels in years, as economic prospects in Europe and elsewhere darkened under the cloud of soaring energy prices.
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Chinese Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen spoke by videoconference about topics including American tariffs on Chinese goods amid expectations that the Biden administration could roll back some of the duties on more than $350 billion in Chinese imports this week.
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Accelerating inflation is rippling through the Asia-Pacific, stoking expectations that policy makers will need to keep ratcheting up borrowing costs to cool climbing prices.
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Slowing demand and recession fears helped bring the benchmark U.S. oil price below $100 a barrel Tuesday, continuing a rapid turnaround from soaring levels in recent months.
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British Prime Minister Boris Johnson suffered a potentially fatal political blow Tuesday as his treasury chief and health secretary resigned from his cabinet saying they no longer had confidence in his leadership.
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The head of the United Nations nuclear agency gave a sharp warning Tuesday about growing nuclear risks, saying that Iran’s activities risked a regional nuclear arms race and that Russia’s occupation of Ukrainian nuclear sites threatened to imperil the agency’s ability to ensure nuclear material wasn’t being misused.
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Storage tanks at a Kinder Morgan facility. The energy infrastructure company paid PwC last year for assurance services. PHOTO: BING GUAN/REUTERS
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Firms that verify businesses’ climate data are at odds over who is qualified to perform the work, a pivotal and potentially lucrative task under a proposal from the Securities and Exchange Commission that would require new disclosures on the topic.
The U.S. securities regulator in March said it wants companies to seek independent certification of certain new disclosures, including estimates of greenhouse-gas emissions from their operations and from the energy they consume. The assurance requirement would apply to companies with at least $250 million in publicly traded shares.
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Multifactor authentication is a relatively simple defense against hackers. PHOTO: KATIE DEIGHTON
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Too many small and medium-size businesses rely on usernames and passwords alone to secure their systems, leaving them vulnerable to cyberattacks that could otherwise be prevented, government officials and cybersecurity chiefs say.
Multifactor authentication, in which a login attempt is verified by additional layers of protection such as the use of codes sent by text messages, phone calls or dedicated apps, is a relatively simple defense against hackers.
Yet a survey of around 1,400 small and medium businesses globally conducted by the U.S.-based nonprofit Cyber Readiness Institute, and published today, finds that 55% of companies haven’t set up multifactor authentication. Of those that have, only 28% require employees to use it.
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PricewaterhouseCoopers raised pay 5% in January and is offering additional raises this month. PHOTO: RICHARD B. LEVINE/LEVINE ROBERTS/ZUMA PRESS
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It’s a summer of pay increases at many big U.S. companies.
To address inflation and to retain workers in what many executives say remains a tough labor market, some large employers are raising salaries or doling out special bonuses. Exxon Mobil Corp. gave U.S. employees a one-time payment in June equivalent to 3% of their salaries. PricewaterhouseCoopers LLP says it will hand out raises in July to reflect its performance in its fiscal year that just ended. Microsoft Corp. told employees this spring it planned to nearly double its global budget for merit-based raises.
The moves, often planned months in advance, come at an unusual time for American businesses. Some executives have expressed concerns in recent weeks about a possible economic slowdown. Even so, many corporate leaders say business is strong and that higher pay is needed to reward employee performance, keep up with pay at rivals and to reflect that staffers are paying more for gasoline, groceries and other daily living expenses.
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Walmart Inc. said it would charge some of its suppliers a new fee to transport goods to its warehouses and stores in response to rising fuel and transportation costs, according to a memo viewed by The Wall Street Journal.
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After years of companies emphasizing the potential of artificial intelligence, researchers say it is now time to reset expectations.
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The pandemic period has been a boon for the trio of companies that dominate cloud computing. Now as the economy enters another tumultuous phase, Amazon.com Inc., Microsoft Corp. and Google appear poised to extend their strength.
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Nexo, one of the larger crypto-lending platforms, has agreed in principle to acquire Singapore-based crypto services firm Vauld, the latest of a spate of deals as the market consolidates in the wake of a brutal downturn.
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Scandinavian airline SAS AB has filed for bankruptcy protection in the U.S., saying a move by about 1,000 of its pilots to go on strike would worsen its already fraught finances as the carrier becomes one of the first casualties of a difficult recovery in air travel.
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