TIME Companies

T-Mobile to Refund $90 Million for Unwanted Charges

A T-Mobile banner in New York City on Sep. 27, 2014.
A T-Mobile banner in New York City on Sep. 27, 2014. Daniel Bockwoldt—Daniel Bockwoldt/picture-alliance/dpa/AP Images

The mobile phone company had originally called the complained “unfounded and without merit”

T-Mobile agreed to refund its customers at least $90 million for placing unwanted third-party charges on phones, the Federal Trade Commission announced Friday.

If approved by a U.S. District Court, the wireless carrier’s agreement to refund customers for so-called “mobile cramming” would resolve a FTC lawsuit that was initially filed in July, when the company was accused of billing customers for unwanted charges, including horoscope, love tip and celebrity gossip services. T-Mobile allegedly received 35% to 40% of each charge, the FTC said in its July lawsuit, and it was reportedly difficult for consumers to get the refunds they were seeking from the company.

Along with T-Mobile resolving the lawsuit, the phone carrier will also pay additional fines, including $18 million to attorney generals across the U.S. and $4.5 million to the Federal Communications Commission, according to the FTC.

“Mobile cramming is an issue that has affected millions of American consumers, and I’m pleased that this settlement will put money back in the hands of affected T-Mobile customers,” said FTC Chairwoman Edith Ramirez.

A representative from T-Mobile was not immediately available for comment on Friday.

But the company’s top executive has previously commented on the case. After the complaint was filed by the FTC on July 1, T-Mobile’s CEO John Legere made the following statement on the company’s website: “We have seen the complaint filed today by the FTC and find it to be unfounded and without merit. In fact, T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want.”

He added, “We believe those providers should be held accountable and that the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded but also misdirected.”

This article originally appeared on Fortune.com

TIME apps

Picture This: Instagram Could Be Worth $35 Billion

The Instagram logo is displayed on a smartphone on Dec. 20, 2012 in Paris, France.
The Instagram logo is displayed on a smartphone on Dec. 20, 2012 in Paris, France. Lionel Bonaventure—AFP/Getty Images

Photo-sharing service owned by Facebook could be worth that whopping amount, according to a new estimate by a Wall Street analyst

Instagram, the photo-sharing service owned by Facebook, could be worth a whopping $35 billion, according to a new estimate by a Wall Street analyst.

Citi’s Mark May issued a new valuation estimate for the popular app, far above the bank’s prior $19 billion valuation, a loftier view on the asset that May attributed to Instagram’s announcement last week that it had reached more than 300 million total users.

“While Instagram is still early in monetizing its audience and data assets and its financial contribution to Facebook is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2 billion in high-margin revenue at current user and engagement levels if fully monetized,” May wrote in a research report.

The sky-high valuation makes Facebook’s 2012 acquisition of Instagram look like a slam-dunk. The social-media giant only paid $1 billion for Instagram in a cash-and-stock deal.

And Facebook’s move to make money off Instagram is just getting started. Instagram began to roll out ads in its photo stream in late 2013, with video ads debuting on the platform roughly a year later. Citi’s May expects that 2015 will be the first year that Facebook begins to develop “more meaningful off-Facebook revenue streams,” and that includes efforts to make more money off Instagram.

Even with Instagram’s likely higher valuation, it is still a relatively small piece of Facebook, which is overall worth more than $220 billion. But the photo-sharing service’s new valuation estimate by Citi would suggest it is worth more than Twitter, which has fewer monthly active users and a market capitalization of almost $24 billion.

That valuation gap could potentially widen. May said that he expects Instagram could continue to rapidly add users and expects the gap in total viewers between Instagram and Twitter will continue to widen. By the end of 2015, May forecasted that Instagram could have 420 million users verses Twitter’s 319 million.

This article originally appeared on Fortune.com

TIME Companies

Hellman’s Maker Unilever Drops Suit Over ‘Just Mayo’

Hampton Creek CEO and Founder Josh Tetrick poses with a bowl of a species of yellow pea used to make Just Mayo, a plant-based mayonnaise, at Hampton Creek Foods in San Francisco.
Hampton Creek CEO and Founder Josh Tetrick poses with a bowl of a species of yellow pea used to make Just Mayo, a plant-based mayonnaise, at Hampton Creek Foods in San Francisco. Eric Risberg—AP

(ENGLEWOOD CLIFFS, N.J.) — Hellman’s mayonnaise maker Unilever says that it has withdrawn its lawsuit against the maker of “Just Mayo.”

Unilever had filed suit against Hampton Creek earlier this year claiming false advertising for Just Mayo, an eggless product.

Unilever argued that “Just Mayo” has no eggs and therefore doesn’t meet the definition of mayonnaise. Unilever had said that the word mayo implies that the product is mayonnaise, and that Just Mayo was stealing market share from Hellman’s.

Unilever said Thursday that it decided to withdraw the lawsuit so that Hampton Creek can address its label directly with industry groups and regulatory authorities.

Hampton Creek says it marketed its product as “mayo” to meet labeling regulations.

TIME stocks

Cruise Line Shares Sail Higher as U.S., Cuba Relations Improve

Carnival's Breeze cruise ship stands docked prior to departure in Miami, Florida on March 9, 2014.
Carnival's Breeze cruise ship stands docked prior to departure in Miami, Florida on March 9, 2014. Bloomberg—Bloomberg via Getty Images

Investors place bet on cruise operator shares even though tourism is still banned

Shares of cruise-line operators sailed to big gains on Wednesday as investors placed a bet that improving relations between the U.S. and Cuba could lead to new opportunities for tourism.

Shares of Carnival, Norwegian Cruise Line and Royal Caribbean all rose in early trading Wednesday, outpacing the Dow Jones Industrial Average, after the Obama administration said it plans to lift many of its existing travel restrictions on Cuba.

The new regulations will make it easier for Americans to visit to Cuba under the 12 categories of travel that are currently allowed, The Wall Street Journal reported, though it isn’t immediately clear if or when the island will be open for mass tourism. Some kinds of tourism are still banned, according to various media reports,.

Still, Cuba is appealing to companies with the most to gain from the increased travel. The tropical island’s attractive beaches and proximity to the United States makes it a potential vacation hotspot. The Caribbean is already the largest cruise line market in the world, and Americans hop on the industry’s bulky ships more than any other nation.

Some of the cruise line operators already have strong links to the Caribbean. For example, nearly all of Norwegian’s ships serve the region. The Caribbean also makes up roughly 35% of Carnival’s passenger capacity, more than any other region. That means that if the U.S. were to allow its citizens to freely visit Cuba, many of the cruise industry’s ships are already in prime position to dock at Havana and other Cuban cities.

This article originally appeared on Fortune.com

TIME Companies

Bacardi, Exiled From Cuba in 1960, Is Hopeful for Change

A limited-edition bottle of BACARDI Superior rum on Dec. 18, 2013 in Miami, Florida.
A limited-edition bottle of BACARDI Superior rum on Dec. 18, 2013 in Miami, Florida. John Parra—Getty Images/2013 John Parra

The rum maker says it supports the restoration of human rights in Cuba

Bacardi, the spirits maker that was founded in Cuba and later exiled from the country in 1960, says it hopes for better lives for Cubans following the Obama Administration’s decision to normalize diplomatic relations with the Caribbean island.

“We hope for meaningful improvements in the lives of the Cuban people and will follow any changes with great interest,” Bacardi said in an e-mailed statement. “In the meantime, we continue to support the restoration of fundamental human rights in Cuba.”

Bacardi says it’s taking a wait-and-see approach on Cuba after the United States on Wednesday said it would open an embassy on the island nation following the release of a U.S. government subcontractor from prison. It marked the most significant change in the U.S.-Cuba relationship in decades.

Bacardi, which makes rum, Dewar’s Scotch and Grey Goose vodka, has close historic ties to Cuba even though it hasn’t operated there for more than five decades. The company was founded in Santiago de Cuba in 1862, and in 1910, became the nation’s first multi-national company when it opened bottling operations in Spain.

When Prohibition started in 1920, Cuba and Bacardi benefited from increased influx of Americans to the island for a stiff drink.

But relations between the company and Cuba soured greatly in 1960, when Bacardi’s operations were nationalized by the government following the Communist takeover there. At that point, Bacardi had operations in five other countries, including the U.S. and Mexico, and was able to bounce back. The company is now headquartered in Bermuda, but still touts its Cuban history.

“Bacardi is proud of its Cuban roots,” a company representative said in a statement on Wednesday. “We have the utmost respect and sympathy for the Cuban people with whom we share a common heritage.”

This article originally appeared on Fortune.com

TIME Companies

China’s Baidu Inc. Confirms Investment in Uber

Uber CEO Travis Kalanick (L) and Baidu Chairman and CEO Robin Li at a signing ceremony and press conference in Beijing on Dec. 17, 2014.
Uber CEO Travis Kalanick (L) and Baidu Chairman and CEO Robin Li at a signing ceremony and press conference in Beijing on Dec. 17, 2014. Greg Barker—AFP/Getty Images

The ride-hailing app will have to work on a new maps system and faces a stiff challenge from local rivals

China’s Baidu Inc. confirmed Wednesday it had taken a stake in ride-hailing app Uber Technologies Inc., but still refused to say how much it had invested, and what kind of stake it had got in return.

Chinese public radio had speculated that Baidu’s investment could be up to $600 million, representing half of the $1.2 billion it raised in a new round of funding earlier this moth.

At a joint press conference in Beijing, Baidu’s founder Robin Li and Uber CEO Travis Kalanick said that they would work together to build a presence in the Chinese car-booking market, which is growing fast from a low base but is currently dominated by Baidu’s biggest internet rivals, Alibaba Group Inc. and Tencent Holdings Ltd.

In a joint statement, the two companies said Baidu will connect its map and mobile-search features with Uber’s service. The Google map app that Uber runs on across the rest of the world is banned in China.

“The goal of this agreement is not for the sake of investment alone, it is more for strategic cooperation and commercial cooperation,” Bloomberg reported Li as telling a joint press conference in Beijing. “Some people think that for investments, Baidu only goes for the full acquisition or taking a controlling share and that Baidu would not take a minority investment. This is a misunderstanding.”

So far, Uber is only present in nine Chinese cities and focuses on the premium segment of the market. It said in July it would expand to 14 cities in the near future.

The start of what could be a major new departure for the U.S. company is a welcome break from the governance scandals and regulatory problems it has been embroiled in recently across the world.

Kalanick told the press conference that Uber is working “pretty well” in China today and doesn’t have any pressing regulatory issues in the nation, according to Bloomberg.

This article originally appeared on Fortune.com

TIME russia

Apple Stops Online Sales in Russia As Ruble Plunges

People wait to exchange their currency as signs advertise the exchange rates at a currency exchange office in Moscow, Dec. 16, 2014.
People wait to exchange their currency as signs advertise the exchange rates at a currency exchange office in Moscow, Dec. 16, 2014. Alexander Zemlianichenko—AP

The tech giant fears the currency is too volatile

Apple halted online sales of its iPhones, iPads and other products in Russia after this week’s “extreme” ruble fluctuations. The Russian currency lost over 20% this week and bonds and stocks also tumbled.

“Our online store in Russia is currently unavailable while we review pricing,” wrote Alan Hely, an Apple spokesman, in an email to Bloomberg.

Apple had earlier tried to deal with the fluctuations by increasing its prices in Russia by about 25%. Apple doesn’t have any of its own stores in the country, so the online store is its main outlet for Russian consumers. But now with the ruble’s value at an all-time low, Apple believes the currency is too volatile to set prices.

[Bloomberg]

Read more: Putin watches Russian economy collapse along with his empire

TIME Companies

Sony Hit with Another Lawsuit by Two Former Employees

An entrance gate to Sony Pictures Entertainment at the Sony Pictures lot is pictured in Culver City
An entrance gate to Sony Pictures Entertainment at the Sony Pictures lot is pictured in Culver City, Calif., on April 14, 2013 Fred Prouser—Reuters

The suit says the company “failed to effectively encrypt sensitive information”

In a suit similar to one filed on Monday, two former Sony employees are suing Sony Pictures Entertainment for not only failing to protect their private information but also putting employees at risk by moving forward with The Interview while knowing it would cause backlash.

In Tuesday’s suit, Susan Dukow and Yvonne Yaconelli claimed that executives had “expressed apprehension” about The Interview, which depicts the assassination of North Korean leader Kim Jong-un. The suit claims that the original script included a fake villain, but that Sony “specifically” changed the script to make that villain Kim Jong-un.

Dukow and Yaconelli’s lawyer, Neville Johnson, claims that Sony was aware that there was “real and imminent risk of backlash” if they decided to move forward with The Interview, pointing to the Center for Korean-American Peace leader ‘s public criticism of the film, and North Korea’s U.N. ambassador equating it to “an act of war.”

They say “Sony’s actions and inactions related to the forthcoming release of The Interview created an unreasonable risk” that employees’ private information would be exposed.

The suit also addresses the company’s failure to protect private employee information, including their Social Security numbers, salaries, and medical history. It claims that the company was warned “multiple times” that its security policies were inadequate, pointing to several prior instances when the company was hacked, including 2011’s hacking of PlayStation Network.

“Upon information and belief, prior to the Breach, Sony was aware of reports that it was vulnerable to a security threat and that it could do more to reduce specific attacks,” the suit claims. It adds that the company stored thousands of passwords in a file named “password” and “failed to effectively encrypt sensitive information.”

The suit claims that Sony Pictures Entertainment violated the California Data Breach Act, the Constitutional Invasion of Privacy and the California Confidentiality of Medical Information Act. Dukow and Yaconelli are seeking unspecified monetary damages.

A rep for Sony did not immediately return EW’s request for comment.

This article originally appeared on EW.com

TIME Companies

Starbucks CEO Howard Schultz Sounds Off on Racism in America

Schultz talks with employees after grand jury announcements in Michael Brown and Eric Garner cases

Howard Schultz, the CEO of Starbucks, is well known for taking a stand on political issues, from veterans rights to overcoming political gridlock (remember those Come Together cups during the debt ceiling debacle and government shutdown?). Over the last few days, he’s stepped into the tricky terrain of racial issues and police brutality, with an impromptu Open Forum at the Starbucks Support center in Seattle, in which he offered Starbucks employees a chance to sound off about their own experiences with racism and racial issues. On Tuesday, he released the highly emotional video from that meeting to all 135,000 Starbucks employees in the U.S., along with a letter (below) provided exclusively to TIME in which he outlined his concern about the economic and political effects of racism and increasing social polarization in America. “I’ve watched with a heavy heart as tragic events and unrest have unfolded across America, from Ferguson, Missouri to New York City to Oakland, California,” wrote Schultz. “I’m deeply saddened by what I have seen, and all too aware of the ripple effect.”

Indeed, it’s an issue I’ve spoken about in depth with Schultz. As I wrote several days ago, Starbucks is a perfect retail proxy for the American economy, which is increasingly bifurcated, a nation of latte buyers and those who sell the coffee. The minute-by-minute data that Starbucks gets on consumer spending is perhaps the most sensitive indicator of U.S. consumer confidence around, so it was startling to hear from Schultz that coffee sales took a hit during the riots in Ferguson, which is something that concerns him not only from the point of view of the economy and U.S. consumers — whom he calls “fragile” — but from a political stability point of view as well. “I don’t want to go into specifics,” Schultz told me the day after riots in New York City, following the announcement that a grand jury would not indict a police officer in the chokehold-related death of Eric Garner, “but I can tell you that the volatile situation in Ferguson and the situation in New York had an immediate negative effect on consumer behavior across the country.” What’s more, Schultz says he believes there’s a growing despondency amongst the public that government officials simply aren’t up to the task of dealing with these issues, something that will have an effect on business and the economy, even in the midst of a so-called “recovery.”

“I talk to other people who are running national retail companies,” says Schultz. “We’re at the heart of the holiday season, and there are protests going on throughout the country, but aside from that, the American people have a fractured level of trust and confidence in government today. That’s a fact. Over the last year, if you track the bar graph of where that [trust] was a year ago and where it is today, it has continued to go down,” he adds. “So I think every consumer business, no matter who you are or what you do, is fighting against the cloud that is hanging over the American people, about how they’re feeling about the country, how they’re feeling about their future — and all of that is directly linked to their lack of faith and confidence and trust in the leadership in Washington.”

Those sentiments mirror some of the political statements Schultz made during his investor conference in Seattle a few days ago, leading to speculation that he may be considering a push into politics, or even contemplating a run as a third-party candidate (Schultz has stopped giving personal political donations out of disgust with both parties). While sources close to him say he’s considered politics in the past, Schultz tells me he feels he can “do more to effect change where I am right now” and isn’t considering a run at the moment.

That said, he won’t shy away from political discussion, and from sounding off on his own experiences. (Schultz, now a billionaire, grew up in the projects in Brooklyn.) He’s planning more Open Forum meetings in the coming weeks to discuss race issues, and beyond that he also has big plans to do more around veterans hiring, youth employment and student debt issues in the coming months.

“If I feel like I can sincerely attack a problem and make a difference, I’m going to jump in and try and do it. There are clearly such significant and substantive problems that need to be addressed, and this long tail, which has been going on for years, is getting to the point where it’s going to have a systemic effect on — forget the national economy, on the country [as a whole]. The conscience of the country. The ability of the country to continue to succeed at the level it once did,” Schultz says. “I came from a family that lived on the other side of the tracks and the American promise and the American dream was available to me; what I think about and what I’m concerned about is, is that going to be possible for those kinds of young people who grew up on the other side of the road today?” It’s a question that even in the midst of an economic recovery is becoming more and more pressing, for citizens, business people and politicians alike.

The full text of Schultz’s letter is below:

To: Starbucks partners; managing directors for company-operated and joint venture markets

Date: December 16, 2014

Re: Message from Howard: It Starts with Conversation

Dear partners,

Like many of you these past weeks, I have watched with a heavy heart as tragic events and unrest have unfolded across America, from Ferguson, Missouri to New York City to Oakland, California. Personally, I am deeply saddened by what I have seen, and all too aware of the ripple effect.

I have asked myself what it means not to be a bystander, as a citizen and as a Starbucks partner. What are our individual and collective responsibilities to our country, as well as to our own company?

Last week, one thing became clear: we cannot continue to come to work every day aware of the difficult and painful experiences facing our nation, and not acknowledge them, together, as a company. Indeed, despite the raw emotion around the events and their underlying racial issues, we at Starbucks should be willing to talk about them internally. Not to point fingers or to place blame, and not because we have answers, but because staying silent is not who we are.

On Wednesday, December 10, the morning after the protests in Berkeley, California, I called an impromptu Open Forum at our Starbucks Support Center in Seattle. The meeting was strictly internal, solely for Starbucks partners. There was no planning and I did not announce the meeting’s topic. All I knew was that we needed to come together, in a safe space, and have a conversation about what was happening in our nation.

For an hour a microphone was passed from partner to partner. People spoke with grace and emotion. Many shared personal experiences going as far back as childhood, and offered ideas about how to move the conversation, our company and our country forward. People spoke with such conviction and vulnerability. Everyone demonstrated compassion and personal courage. The Forum was at times uncomfortable, yet overall it was enlightening. It provided many of us, myself included, with a deeper understanding around issues of race and the realities facing our country.

What struck me most was how open our partners were to one another. Despite differences in life experiences, people showed civility and respect for the subject matter as well as for each other. I was not surprised, but I was incredibly proud. Wednesday’s Open Forum was the most powerful I’d ever attended in the 25 years that Starbucks has been holding them for our partners around the world. As you watch the video from that Open Forum, you too may agree.

The dialogue did not end once we returned to our work. In an unprecedented outpouring of emails, in our hallways, in my office, in our partner networks, many of you shared more thoughts. Most significantly, you expressed gratitude for having the opportunity to share, to listen and to learn. That sentiment alone made it clear to me that Starbucks could continue to do something we’ve always done: foster community and conversation.

That is why the Leadership Team and I have decided to expand opportunities for civil discourse within Starbucks, among our partner communities. We plan to host internal-only Open Forums around America and will begin in January in Oakland, St. Louis and New York City. Details about these events will be shared in the coming days.

I’ve always believed that core to our success has been our commitment to achieve the balance between our social conscience and responsible commerce. This is one of those times. Starbucks is far from perfect, and we do not claim to have solutions to our country’s complicated social issues. However, doing what is right for society and doing what is right for business cannot be mutually exclusive endeavors. While it is always safer to stand on the sidelines, that is not leadership. Today more than ever companies such as Starbucks must use their platforms and resources to create opportunities for their people, as well as for the communities they serve.

So today, we choose to act in a way that is authentic to us, by nurturing a sense of community and bringing people together through the lens of humanity. At this trying time, it is important for all of us to be open and to be present.

Onward,

Howard

Read next: Inside Starbucks’ Radical New Plan for Luxury Lattes

TIME Companies

American Apparel Fires Dov Charney, Names New CEO

Dov Charney, former CEO of American Apparel.
Dov Charney, former CEO of American Apparel. Keith Bedford—Bloomberg/Getty Images

American Apparel has fired CEO Dov Charney six months after suspending him for alleged misconduct.

The clothing retailer said on Tuesday that it had appointed Paula Schneider, a veteran fashion executive, as his replacement. Schneider has previously worked at clothing group Warnaco and women’s apparel company Big Strike, will take the reins of the struggling clothing retailer on January 5, 2015.

American Apparel says it has terminated Charney, who was removed from the CEO role in June after the company alleged he had misused corporate money and violation of sexual harassment policies. Over the years, Charney has faced repeated accusations of sexually harassing employees and of discriminating against less attractive staff on the grounds that they undermined the corporate aesthetic.

Charney had been serving as a consultant to the company in recent months, but American Apparel said on Tuesday that he has been terminated for cause.

Charney, who founded American Apparel 25 years ago, was initially replaced by interim CEO John Luttrell, who also served as the company’s chief financial officer. But, Luttrell was removed from both roles in September, when turnaround expert Scott Brubaker of restructuring firm Alvarez & Marsal took over as the new interim CEO. Brubaker will continue in that role until Schneider takes over in early January.

David Danziger, co-chairman of American Apparel’s board, said in a statement that the retailer “needs a permanent CEO who can bring stability and strong leadership in this time of transition, and we believe Ms. Schneider fits the bill perfectly.”

Once one of the trendier, youth-focused retailers in the industry, American Apparel has seen its sales fall off in recent years. The company’s same-store sales declined 7% last quarter and it reported another net loss.

In a statement, Schneider said “My goal is to make American Apparel a better company, while staying true to its core values of quality and creativity and preserving its sweatshop-free, Made in USA manufacturing philosophy.”

This article originally appeared on Fortune.com

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