Google to pay $90 million to settle legal fight with app developers

Google has been accused of using agreements with smartphone makers to shunt most payments through its Google Play billing system with a default service fee of 30 percent. (Reuters)
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Updated 01 July 2022

Google to pay $90 million to settle legal fight with app developers

  • Some 48,000 app developers are eligible to apply for the $90 million fund, if the court approves the proposed settlement

WASHINGTON: Alphabet Inc’s Google has agreed to pay $90 million to settle a legal fight with app developers over the money they earned creating apps for Android smartphones and for enticing users to make in-app purchases, according to a court filing.
The app developers, in a lawsuit filed in federal court in San Francisco, had accused Google of using agreements with smartphone makers, technical barriers and revenue sharing agreements to effectively close the app ecosystem and shunt most payments through its Google Play billing system with a default service fee of 30 percent.
As part of the proposed settlement, Google said in a blog post it would put $90 million in a fund to support app developers who made $2 million or less in annual revenue from 2016-2021.
“A vast majority of US developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose,” Google said in the blog post.
Google said it would also continue to charge a 15 percent commission to developers who make $1 million or less annually from the Google Play Store. It started doing this in 2021.
The court must approve the proposed settlement.
There were likely 48,000 app developers eligible to apply for the $90 million fund, and the minimum payout is $250, according to Hagens Berman Sobol Shapiro LLP, who represented the plaintiffs.
Apple Inc. agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. It also agreed to pay $100 million.
In Washington, Congress is considering legislation that would require Google and Apple to allow sideloading, or the practice of downloading apps without using an app store. It would also bar them from requiring that app providers use Google and Apple’s payment systems. 


 


Saudi commercial banks’ June consumer loans rise 13% to $118.9bn

Updated 09 August 2022

Saudi commercial banks’ June consumer loans rise 13% to $118.9bn

  • Share of consumer loans in total bank credit falls to 19.9 percent, data shows

CAIRO: Consumer loans of Saudi commercial banks increased 13 percent to SR445.8 billion ($118.9 billion) on June 30, 2022, compared to SR394.2 billion on the same day last year, the Saudi Central Bank, also known as SAMA, revealed.

This growth, however, pales in comparison to the 17.4 percent growth between June 30, 2021, and June 30, 2020, the data pointed out.

Moreover, the share of consumer loans in total bank credit has fallen to 19.9 percent on June 30, 2022, the lowest share percentage on record, data compiled by Arab News revealed.

It is worth mentioning that consumer loans do not include real estate financing, finance leasing and margin lending, according to SAMA.

From June 2017-2022, consumer loans have had a positive trend. The value grew 0.5, 0.6, 5.3, 17.4, and 13.1 percent year on year, respectively. The consumer loans stood at SR315.1 billion on June 30, 2017.

According to SAMA, 90 percent of consumer loans fall under the “other” products category.

“The ‘other’ major loan component is related to general consumer bank overdraft short- and medium-term funding as credit card loans are captured separately,” said Mohamed Ramady, a London-based consultant and former professor.

The balance of consumer loans to finance “other” products increased 19 percent to SR402.3 billion on June 30 this year from SR338.2 billion the same day last year.

The remaining 10 percent is distributed among renovation and home improvement, vehicles and private transport, furniture and durable goods, education, healthcare, tourism and travel.

Renovation and home improvement, which makes up 3.4 percent of the 10 percent, saw a 31.4 percent decline to SR15.2 billion on June 30, 2022, from SR22.2 billion a year ago.

Moreover, car loans experienced a 20.6 percent year-on-year decrease from SR15.5 billion to SR12.3 billion during the period under study.

“Consumer loans have decreased in some items, especially in capital home goods and home improvements as well as vehicles as consumers await to take stock of increased input price hikes,” he added.

Furniture and durable goods underwent a 31.1 percent decrease from SR12.6 billion to SR8.7 billion over the same period. In contrast, education loans grew by 33 percent to SR5.9 billion.

Looking at consumer spending during the first half of 2022, the total value of point of sale transactions grew 12.9 percent year on year, reaching SR271.2 billion in June year-to-date compared to SR240.3 billion over the same period in 2021, SAMA data stated.

“POS transactions have gone up over H1 2022 in the items that were expected to increase with the gradual easing of lockdown restrictions such as food and beverages, restaurants and cafes and goods and services,” revealed Ramady while pointing out that this trend was also apparent in other countries coming out of the lockdown.

The most significant change in POS value between the first half of 2021 and 2022 was in “miscellaneous goods and services,” which grew 42.6 percent from SR19.7 billion to SR28.2 billion during this period.

The “others” category in POS, which makes up 21.2 percent of the total value of transactions in the first half of 2022, surged 33.6 percent from SR42.7 billion in the first half of 2021 to SR57.1 billion in the first half of 2022.

“The “others” in POS capture general personal services sales, including home delivery and uber services not captured in the broader items,” specified Ramady.

Food and beverages, another component that exhibits a prominent share of 14.7 percent in POS sales, showed an increase of 14.8 percent from SR35.8 in June year-to-date last year to SR41.0 billion in June this year.

On the other hand, restaurants and cafes increased 31.4 percent from SR28.3 billion in the first half of 2021 to SR37.2 billion in the first half of 2022.

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Flush with cash, Pfizer buys Global Blood Therapeutics in $5.4bn deal

Updated 09 August 2022

Flush with cash, Pfizer buys Global Blood Therapeutics in $5.4bn deal

  • Pfizer’s 2021 revenue of $81.3 billion was nearly double the mark from the previous year, due to COVID-19 vaccine sales.

LONDON: Pfizer Inc. on Monday agreed to pay $5.4 billion in cash for sickle cell disease drugmaker Global Blood Therapeutics, as it looks to capitalize on a surge in revenue from its COVID-19 vaccine and treatment.
Pfizer will pay $68.50 per GBT share, which represents a 7.3 percent premium to its Friday closing price. The deal is at a more than 40 percent premium where GBT was trading before the Wall Street Journal reported that Pfizer was in advanced talks to buy it on Thursday.
Pfizer’s 2021 revenue of $81.3 billion was nearly double the mark from the previous year, due to COVID-19 vaccine sales. With the addition of its COVID-19 antiviral pill Paxlovid, Pfizer is expected to generate around $100 billion in revenue this year, but sales from both products are expected to decline going forward.
Pfizer has been on the lookout for acquisitions that could bring in billions in annual sales by the end of the decade.
“We have very deliberately taken a strategy of diversification in our M&A deals,” Aamir Malik, Pfizer’s top dealmaker, said in an interview. He said the company was focused on improving growth for the second half of the decade, rather than large deals that generate value through cost cuts.
“We think that there are opportunities across all therapeutic areas that we’re active in,” Malik said, noting that the company was also agnostic about size for future deals.
In May, Pfizer struck an $11.6 billion deal for migraine drug maker Biohaven Pharmaceutical Holding and recently also completed a $6.7 billion deal to buy Arena Pharmaceuticals.
With the acquisition of Global Blood Therapeutics, Pfizer adds sickle cell disease treatment Oxbryta, which was approved in 2019 and is expected to top $260 million in sales this year. It will also pick up two pipeline assets — GBT601 and inclacumab — targeting the same disease.
Pfizer said if they are all approved, it believes GBT’s drugs could generate more than $3 billion in sales annually at their peak.
Sickle cell disease is an inherited blood disorder that affects an estimated 70,000 to 100,000 people in the United States.
GBT Chief Executive Officer Ted Love said that Pfizer’s resources and multinational infrastructure will allow the company to launch Oxbryta in additional markets and boost its uptake.
“We really have no infrastructure outside of that (US and western Europe) and it takes time and money to build out those infrastructures and Pfizer already has all of it,” Love said.
Shares of Global Blood rose 4.5 percent following the deal announcement.


GCC needs to secure its investment landscape: Report

Updated 07 August 2022

GCC needs to secure its investment landscape: Report

  • Call to focus on frontier sectors based on emerging technologies to attract FDI

CAIRO: Real and perceived political risks, the lack of focus on non-oil sectors, laxity in regulatory policies and a restrictive business environment are some of the factors impeding the growth of foreign direct investment in the Gulf Cooperation Council region, said a recent study.

According to Oliver Wyman’s recent report titled “De-risking the Investment Landscape: High-impact FDI Policies for the GCC,” the region needs to prioritize regulations and policies to de-risk investment. 

This approach should help them attract additional FDIs, the report recommended.

“The best way to attract FDI may be to focus on frontier sectors, which are based on emerging technology, generate high growth, and have few incumbent players to disrupt,” the report stated.

The policies adopted earlier in the GCC were unfocused and aimed to attract all possible investments in all potential sectors, which proved unsuccessful, according to the report.

Although most Gulf countries have been proactive in developing initiatives to stimulate FDI, few have successfully attracted foreign investment in the region.

“Historically, FDI into GCC economies has fluctuated with the rise and fall of commodity prices,” explained Wyman’s report. “However, it has failed to materialize as a consistent driver of economic opportunity in non-oil economic sectors.”

HIGHLIGHTS

• Oman and Bahrain are the only two GCC economies that saw FDI inflows over outflows in each of the years from 2016 to 2021.

• While Kuwait registered FDI outflows totaling $3.6 billion in 2021, it saw a sharp drop from $8 billion in the previous year.

“With such readily available domestic capital, many GCC states have historically not needed to prioritize FDI as a source of development finance,” it added.

The report further revealed that GCC states are becoming increasingly aware of the benefits of FDI and its potential impact on their economies, which could enhance productivity.

Foreign investment provides a good source of finance, promotes interactions of local suppliers and consumer markets, and stimulates human capital by training local workers and employing foreign ones.

As stated by the report, an increased level of private competition, an enhancement in technological know-how and a surge in cross-border activity are additional favorable consequences that arise from increased FDI.

The UN Conference on Trade and Development recently released the “World Investment Report 2022,” which showed that Saudi Arabia and the UAE, two of the largest economies in the GCC, saw 2021 FDI outflows exceed FDI inflows by $4.6 billion and $1.9 billion, respectively. 

The difference for all GCC members stood at $6.4 billion, although a noticeable improvement from 2019 and 2020, where the differences were $11.1 billion and $8.3 billion, respectively.

Oman and Bahrain are the only two GCC economies that saw FDI inflows over outflows in each of the years from 2016 to 2021, according to the UNCTAD report.

In comparison, FDI inflows to Indonesia in 2021 surpassed the outflows by $16.5 billion. Similarly, FDI inflows to Vietnam and Malaysia trumped outflows by $15.4 billion and $6.9 billion, respectively, UNCTAD data show.    

On the other hand, Saudi Arabia witnessed the highest FDI outflows in the GCC in 2021. It recorded $23.9 billion in net outflows in 2021 compared to only $4.9 billion in 2020. It is worth mentioning the Kingdom’s FDI inflows stood at $5.4 billion in 2020.

 The UAE came in second with $22.5 billion worth of FDI outflows in 2021 compared to $18.9 billion the year before, the UNCTAD data showed.

While Kuwait registered FDI outflows totaling $3.6 billion in 2021, it saw a sharp drop from $8 billion in the previous year, the report stated.


Saudi Arabia targets $3.3tr of cumulative investments till 2030, says deputy minister

Updated 09 August 2022

Saudi Arabia targets $3.3tr of cumulative investments till 2030, says deputy minister

  • Saudi Arabia’s regulatory transformation is directly impacting the base economy, Al-Shahrani says

RIYADH: Saudi Arabia has enacted over 600 economic reforms since the launch of the Vision 2030 blueprint in a bid to attract SR12.4 trillion ($3.3 trillion) of cumulative investment and SR1.8 trillion in foreign direct investment inflows between 2021 and 2030 as part of the National Investment Strategy, said a deputy minister from the investment ministry. 

Speaking to Arab News, Saad Al-Shahrani, the acting deputy minister for investment promotion in the Ministry of Investment of Saudi Arabia, said the Kingdom achieved an 18 percent increase in foreign direct investment in 2020, even as the global FDI declined by 35 percent due to the pandemic. 

FDI flow in 2021 increased by 257 percent compared to 2020 largely driven by a SR46.5 billion infrastructure deal closed by Aramco with a global investor consortium in Q2 2021.

If Aramco's huge deal is excluded, the Kingdom attracted SR5.3bn in Q2 last year.

Al-Shahrani added that the NIS launched in 2021 is a blueprint for turning the Kingdom into a global hub for business and talent. 

Saad Al-Shahrani

During the interview, the deputy minister revealed that FDI flow in the first quarter of 2022 increased 10 percent to SR7.4 billion compared to the same period last year.

He further stated that NIS helped MISA achieve 49 investment deals valued at SR3.5 billion in the second quarter of 2022, creating 2,000 jobs across industries. 

“These figures are a testament to the sound execution of the government’s strategy and the impact of new reforms, initiatives and investment opportunities,” said the deputy minister. 

He added: “The Kingdom has achieved remarkable progress in many economic and investment indicators, ranking third in Ease of Protecting Minority Investors Index out of 132 countries, for the year 2021.”

Fastest growing among G-20 countries

The deputy minister further noted that the Kingdom achieved the top spot among 22 countries in the May 2022 Ipsos’ Global Consumer Confidence Index. 

Citing the International Monetary Fund’s World Economic Outlook 2022, Al-Shahrani said that the Kingdom is now the fastest-growing nation among the Group of 20 countries, with a growth rate of 7.6 percent. 

“Saudi Arabia’s regulatory transformation is directly impacting the base economy. Alongside healthy demand and investor interest in the oil sector, our non-oil economy has shown strong growth,” he added. 

The deputy minister said that flash estimates of real growth in the gross domestic product in the second quarter showed 11.8 percent year-on-year growth, the highest rate since 2011, supported by the growth in real GDP of oil and non-oil activities by 23.1 percent and 5.4 percent, respectively.

Industrial production on the rise

Commenting on the rise in Industrial Production Index, Al-Shahrani said: “The IPI expanded by 24 percent year on year in May 2022, with manufacturing growing by over 28 percent. These figures are a direct consequence of the government’s active diversification efforts.” 

He also asserted that the Kingdom will become one of the world’s most competitive economies and attractive investment destinations by 2030. 

The deputy minister further noted that digital transactions are rising in Saudi Arabia, aligning with the government’s goal of having 70 percent of all transactions are digital by 2025.

“Policymakers have listened to the needs of investors and have responded appropriately to create an investment ecosystem that rivals the best in the world,” he continued.

Saudi Arabia’s future is tourism

The deputy minister further conveyed that tourism will soon become one of the prime drivers of the Saudi economy as the economic diversification effort continues. 

He revealed that the Kingdom has already issued over 3,500 tourism investment licenses, a crucial leap to achieving 10 percent of the national GDP from tourism by 2030. 

Al-Shahrani added that the Kingdom will welcome over 100 million tourists by 2030 and generate one million jobs in the sector. 

“NEOM, The Red Sea Project, AlUla, Soudah, AMAALA and Diriyah Gate are massive opportunities for investors,” he continued. 

The deputy minister further divulged that the Kingdom’s flag carrier SAUDIA will add 94 new destinations to bring visitors to the Kingdom by 2030. 

Apart from tourism, MISA is also signing deals with companies in the renewables, logistics, and pharmaceutical sectors, the deputy minister added. 

“It is quite clear that the headwinds souring global investor appetite are not blowing in the direction of Saudi Arabia. Government strategy, inspired leadership, talent at every level, well-executed reforms and a clear vision for the future have combined to make the Kingdom an investment powerhouse,” Al-Shahrani said.

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Saudi companies to export supply chain prowess to GCC countries

Updated 07 August 2022

Saudi companies to export supply chain prowess to GCC countries

  • We aim to expand our operations to support land services with big companies: SMSCMC’s Ali Alshehri

RIYADH: Five years after Saudi Arabia announced its target to localize 50 percent of its military industries by 2030, companies in the Kingdom are now ready to export their supply chain capabilities.

The Riyadh-based Saudi Maintenance and Supply Chain Management Co. is working on expanding its network with companies around the world.

It is currently in talks with Gulf countries to discuss “the scope of work they can deliver and sign agreements,” Ali Alshehri, head of PR and communication at SMSCMC, told Arab News.

Ali Alshehri

“We have made good progress with some of the Gulf Cooperation Council countries. We can’t disclose anything right now, but we have already established some contact and relationships. Hopefully, in the future, we can announce something specific,” he said due to the sensitivity of the talks and government restrictions.

This move comes after the state-owned Saudi Arabian Military Industries disclosed to Arab News that it is looking at opportunities with allied nations to export Saudi capabilities outside the Kingdom.

SMSCMC has been handling supply chain and logistics for some of BAE Systems’ defense platforms in the Kingdom, including the Typhoon, Hawk and Tornado aircraft.

Aside from the capital, SMSCMC operates in Dhahran, Taif and Tabuk with the same aircraft services.

“We would like to expand our operations to support any technology or land services with big companies in Saudi Arabia, the UK and Europe in general,” Alshehri said.

“We are in a very good position right now to support Vision 2030. SMSCMC has been growing rapidly, and the Saudization of our staff is now 72 percent working in the supply chain, which is a very critical yet relatively new sector in Saudi Arabia,” he added.

Strategic partnerships

Alshehri said they have also worked closely with national partners and bodies specialized in realizing the Kingdom’s Vision 2030 to increase local procurement, including the General Authority for Military Industries — the Kingdom’s defense regulator, and SAMI.

Alshehri also said that SMSCMC, which has over 300 employees and processes more than 12,000 supply chain requests per year, has acquired several high governance standards, including licenses from the International Organization for Standardization and the International Traffic in Arms Regulations.

SPEEDREAD

The Riyadh-based Saudi Maintenance and Supply Chain Management Co. is working on expanding its network with companies around the world.

It is currently in talks with Gulf countries to discuss ‘the scope of work they can deliver and sign agreements.’

SMSCMC has been handling supply chain and logistics for some of BAE Systems’ defense platforms in the Kingdom, including the Typhoon, Hawk and Tornado aircraft.

In addition to Riyadh, SMSCMC operates in Dhahran, Taif and Tabuk with the same aircraft services.

Alshehri said SMSCMC has also received an “establishment permit” from GAMI, which will give them the approval to go beyond the contracts of BAE Systems after previously being under the umbrella of the Saudi British Defense Cooperation Program.

With the Kingdom’s vision at its core, Alshehri said the company had been awarded “golden certificates” in supporting women and youth empowerment and people with disabilities in their working environment and has set up a diversity and inclusion committee to maintain these targets. Among these targets is having women in executive positions within five years.

“We now have females working in our offices in Riyadh in the supply chain operations. We also have some females working in our operations in Dhahran. So we are supporting Vision 2030 not only in numbers but also the culture we are trying to create within our organization and empowering people,” he said.

“We have some targets to increase the number of Saudi nationals in the organization, especially in critical roles like, for example, delivering simulator devices,” he added.

There are 60 executive employees at SMSCMC, including 26 Saudi nationals and 34 expatriates. The target will be to increase the number of Saudi citizens to 40 by 2025 and reduce the number of expatriates to 30. Moreover, 72 percent of the company’s workforce are Saudi nationals and there are plans to increase the number to 75 percent by 2025.

SMSCMC last month signed a defense agreement with General Electric Aviation in Riyadh to further opportunities in Saudi Arabia and beyond, which will include training and technology transfer in supply chain operations in the region and creating jobs for Saudi nationals in the Kingdom.

“Since we have established capabilities at SMSCMC’s supply chain and defense, General Electric would like to sign this agreement with us to utilize our capabilities to support them and increase their operations’ efficiency in Saudi Arabia,” Alshehri said.

Training initiatives

SMSCMC provides a wide range of training programs, some long term, and has also signed agreements with major global training companies to transfer technologies and know-how.

Alshehri added: “Training will be done through SMSCMC and BAE Systems because BAE Systems has a big legacy in the supply chain.

“Some of our employees serve time in BAE Systems’ operations in the UK. They spend a few months there and then return to Saudi Arabia with this knowledge.”

SMSCMC has a bureau in the UK, a registered company with about 80 employees supporting the company’s operations in the Kingdom. It facilitates a lot of the procurement in Britain and Europe in general and can transport the goods to the Kingdom faster.

The negative impact of the COVID-19 pandemic on supply chains and logistics worldwide, Alshehri said, only affected SMSCMC in terms of operations. However, the company managed to deliver all its key performance indicators on time and fulfill its contractual agreements without any issues from 2020 to this year, which was very difficult for many major companies to meet.

“Of course, there were some challenges in the global economy in terms of new business opportunities, but in terms of delivering and continuity and sustainability, SMSCMC delivered the key performance indicators in a very challenging time, which is something we are proud of.”