Did T-Mobile sell my personal data?

How much is my personal data really worth? I can surely sell it for a good hundred quid! This week a T-Mobile employee was allegedly caught selling personal details of thousands of mobile phone customers. The sale of personal details is not an old issue. I think it is the ethical responsibility for companies to protect your data. Can you trust a company to protect your personal data? Why can't it be stopped?

There now is a strong push by Information Commissioner, Christopher Graham to change the way a person is prosecuted for stealing personal information. It is absolutely ridiculous that customers are subjected to cold calls from random people at random hours of the day when their contracts are to expire. I think it is a highly unlawful practice of selling personal data for financial gain. The 'substantial amounts of money' sold to brokers working for other mobile phone companies are able to take advantage of your information with the only fear of prosecution with a fine.

According to the BBC, T-Mobile had been asked to keep information of the breach secret to 'avoid any criminal prosecutions being prejudiced'. It would definitely not be good PR for the company as the story could certainly dampen their Christmas season sales.

But in an interesting turn of events saw the information become public. I think the Government would not also like to destroy their PR coming close to election time. It was case of deducing which phone companies were not subject to investigation. The company remaining was T-Mobile.

As a mobile customer I think I would like to know if my data was sold to a third party without my permission as soon as possible. I would also expect some compensation for the time and annoyance of these callers. But there is a zero probability that a company will be willing to give compensation nor would they be able to stop the calls.

The Information Commissioner's Office (ICO) has said that “The number of records involved runs into the millions, and it appears that substantial amounts of money changed hands”. It is good to hear that the ICO is pushing for jail sentences for breaches of data protection law, section 55. The sale of contract details included information on names, addresses and contract expiry dates.

The press this week have been on the side of tougher penalties. And who wouldn't. There is no suggestion that the a jail sentence would not be justified and that idea has been reinforced by the ICO.

The Financial Times reported the story early. The article was short and factual with very limited comment except for the news from the ICO. There was no mention of the company who was breached since the Information Commissioner had refused to name the company at the time of the interview.

But the other press articles published later in the day do mention T-Mobile.

The Reuters article focuses on the statement from T-Mobile and also mentions the breach of the Data Protection Act Section 55. The article is also has quotes from the ICO. I thought that this article was the most unbiased story for the time it was published.

The BBC however, always reports the story but with a governmental opinion included. The article states quotes from the Conservative Justice Spokeswomen Eleanor Laing and Liberal Democrat Home Affairs Spokesman Chris Huhne both obviously criticising the Government's failure. The length of the article was longer than the Reuters article and I thought gathered opinion from all parties.

The Daily Mail was the shortest of them all and was the most easiest to read. The reporter included the same information from the ICO and at the end of the article there were 25 comments. The general public expressed their hatred of cold calls and other phone companies. The Daily Mail definitely is a paper for the people.

We interact more with government, public authorities and businesses more than ever before. Our personal information is at a greater risk of being used for unlawful activities. The only way to stem the problem is to introduce harsher penalties. Jail is a good punishment. I think it is absolutely essential that our personal information is protected so we don't get annoying phone calls at crazy times of the day. Lucky I am not with T-Mobile!

Sources

Financial Times

http://www.ft.com/cms/s/0/8b859cfa-d38f-11de-9607-00144feabdc0.html?nclick_check=1

Reuters

http://www.reuters.com/article/technologyNews/idUSTRE5AG4N920091117

BBC

http://news.bbc.co.uk/1/hi/uk/8364421.stm

Daily Mail
http://www.dailymail.co.uk/news/article-1228605/Thousands-mobile-phone-customers-details-stolen-sold.html#

Guardian

http://www.guardian.co.uk/uk/2009/nov/17/t-mobile-phone-data-privacy

Murdoch vs Google

Rupert Murdoch would not surely sue Google right? I think it would be a mistake to bite the hand that feeds you bread. His proposal to charge online customers for news and block Google from using headlines and paragraphs of news stories in search results is very interesting.

This week in a 35 minute interview with Sky News Australia (a third owned by Murdoch), Murdoch indicated that he would use legal means to prevent Google and other search engines from taking his newspaper material.

It is a very topical issue since many readers, including myself are used to online newspapers being free and searching for new stories. I think it would harm the ability of Google and News Corporation papers to generate advertising revenues. However, it would be more detrimental to News Corporation as I believe that people will easily shift their reading habits and view other free online sources. Google can generate money from other sources but News Corporation cannot. It’s a two way street.

But as quoted by Murdoch “What’s the point of having someone come occasionally who likes a headline they see on Google? We’d rather have fewer people coming to our web sites and paying”. Paying for news has been successful for the Wall Street Journal but I do not really expect people to pay to view The Sun. It is not worrying for Murdoch?

Google has been quoted in the Australian “its news listings service and web searches were a tremendous source of promotion” for news organizations, sending them about 100,000 clicks every minute”. I think Murdoch might be wrong.

This issue is not only blocking searches on Google search service but the fact that Murdoch believes search engines are breaching copyright law. This is where search engines are using the legal justification of ‘fair use’ for reproducing excerpts of news stories online.

I do not know much about copyright law but am beginning to get an understanding that the internet is a domain that has a cloudy area between breaching copyright law or not. There are so many different types of opinion on the issue. However, to avoid expensive legal action Google has the ability to remove content from Google News at a publishers’ request. It will save everyone a lot of time and money.

In the press this week the headlines for this story was dominated by the name ‘Murdoch’. His influence in the media is far-reaching. It is interesting that Sky News Australia granted the interview as I believe it could have been more impartial. However when I watched the interview I felt it was slightly subjective since I wonder what was the motives of the interview. Was it to scare Google or for self promotion.

The Australian reported a response from Google and the ability to take off stories from search results. It was very factual. I found that the language of the article was very colloquial since it contained a lot of quotes. I think that was a good way to produce the article considering The Australian is a News Corp paper.

The Financial Times was a short article however it focused more on Murdoch attacking the BBC. The content quoted the Sky News interview and was very UK centric. But I suppose that can be expected from a UK paper.

I also read an article from the BBC. The interesting thing about this article was that it failed to mention Murdoch’s criticism of the BBC and the way they handle taxpayer funds from TV licenses. It was very concise and direct. It failed to give any background information but I suspect the article was written with the intention for a response from the BBC in another article.

The Guardian I felt was the most opinionated. It uses words to describe Murdoch’s staff as ‘lieutenants’ and challenges Murdoch on the other ways to access the Wall Street Journal without a subscription. The article also chose quotes that made it seem Murdoch was an angry man. However, the Guardian was the only news source that embedded the Sky News interview into their article. It was a good form of reference to understand the context of the article.

In my opinion I think News Corporation should not remove its papers from search results since I enjoy browsing for different news. I also highly believe that it would be difficult for Murdoch to get subscribers to pay for tabloid papers such as the The Sun or The New York Post. It also seems there is going to be some difficulties in implementing the online pay model since it has already been delayed. The test will be the money. Who will get more advertising revenue, News Corp or Google?

Sources

Youtube
http://www.youtube.com/watch?v=M7GkJqRv3BI&feature=player_embedded

The Australian
http://www.theaustralian.com.au/news/world/news-corporation-stories-can-be-taken-off-google/story-fn3dxix6-1225796268717

Financial Times
http://www.ft.com/cms/s/0/ab874200-cd28-11de-a748-00144feabdc0.html

Guardian
http://www.guardian.co.uk/media/2009/nov/09/murdoch-google

BBC
http://news.bbc.co.uk/1/hi/business/8351331.stm

Sydney Morning Herald
http://news.smh.com.au/breaking-news-world/murdoch-stories-can-be-taken-off-google-20091110-i7nb.html

Daily Mail
http://www.dailymail.co.uk/news/worldnews/article-1226559/Rupert-Murdoch-threatens-sue-BBC-stories-stolen-newspapers.html#

CNBC

http://www.cnbc.com/id/33811171

M&S: Big Brands or Big Numbers

Marks & Spencer (M&S) this week made two significant announcements. I believe the most important news was better-than-expected profits. The second announcement was plans to sell ‘big brands’. One set of news focuses on the past while the other ensures the future profitability of the company. Which is more important? Or was this a good publicity ploy by M&S?

Based on the M&S website two press releases were released. First, was the press release to ‘Sell Branded Grocery and Household Products’. Secondly, the press release for financial results.

But not unsurprising ‘Big Brands’ was the leading story in most press headlines and journalists pounced on the story. The financial data was a worked-into the story or later updated, and I believe saturated the financial news. As an investor I would like to know the financial data first but as a shopper this is great news.

However, the better-than-expected profit before tax of £298m did lead to analysts raising their full-year estimates and according to the Financial Times ‘shares in M&S rose 6.5 per cent in early trading’. Analysts were predicting profits of £285m. This highlights the importance of future earnings growth for a company and the reaction from the market. Analysts were right to believe that the stock was undervalued.

But the decision to offer selected branded goods was a good way to hide the fact that M&S will be facing intense competition from Waitrose, a threat to future earnings growth.

It is a pre-emptive strategy since figures show, stated from Times Online: ‘M&S is losing market share in food, falling from 3.7 per cent to 3.5 per cent in the quarter’. Since Waitrose plans to open up to 300 smaller stores it would be necessary for M&S to keep their customers in their stores instead of wandering off to their local Tesco for other products. However, it is a strategy that may harm a 125 year old brand.

M&S selling other brands in its stores could likely devalue the brand of M&S products since it puts M&S in the league of convenience stores such as Tesco. But M&S is smart by introducing products from brands they could not replicate or compete with, such as Marmite and Kit Kat. I think falling profitability and lower market share is more likely to devalue M&S to shareholders and opinion varies greatly.

News coverage for this story this week was very diverse with some papers offering a Retail Correspondent article and a Journalist article separating the content of the announcements.

The Financial Times (FT) offered both stories. The article by O’Doherty provided an objective and financially relevant story with quotes from Sir Stuart Rose, the Chief Executive and an analyst opinion from Oriel Securities. The article summarized the financial reports and gave details on the future strategies of M&S. As an investor I would be happy to read this article to help support my justification to invest in M&S.

The other FT article was written by the Retail Correspondent. It was very brief but concise story which highlighted the need for M&S to adopt brands to its product line. Felsted made reference to Waitrose which was good for the reader to understand the potential threats to M&S.

Bloomberg was different to the FT. They combined the story of profits and branded products. The article was more optimistic with headings like ‘Good Start’ and highlighted the 21 percent growth in profit from its overseas stores. The FT was more domestic. I like to know how overseas factors affect the UK operations.

Times Online was another news service which provided two articles. The Lindsay article did not contain as much financial data as the FT or Bloomberg articles. It was made up of quotes from Sir Stuart Rose and John Dixon, Executive Director of Food and made the article seem more colloquial.

The other Times article by Lenoux was subjective as it described the impending ‘war’ with Waitrose. I liked how the journalist mentions how the M&S boss down played the threat of Waitrose last month. Seemingly contradicting that view by implementing a new business strategy.

The Mail Online was the most subjective of them all. The journalist liked the idea of M&S selling the ‘big brands’ and the table in the article shifted attention to the ‘Big names they will stock’. I think this article is a good read for the average consumer as it gives them an idea what to expect in the stores. The article mentions very little financial data. But I suppose readership of the Mail are not likely to invest in shares of M&S but instead help boost profits.

As a poor student I do not look for ‘premium’ M&S products preferring the convenience and lower price for well known branded products at Tesco or Sainsbury’s. It depends on your taste. The same applies on what types of information you seek from the media. Do you want financial data? Or do you want to know about what they are now putting the shops? I surely would not be reading the Mail for investment tips. Anyways, I do enjoy the ‘M&S 3 for £5’ dinner deals!

Sources

M&S Press releases

Branded Products
http://corporate.marksandspencer.com/page.aspx?pointerid=0a05aa5dd72143379c87f017699c0e39

Financial Results
http://corporate.marksandspencer.com/page.aspx?pointerid=c07f5ecb589140148d3bf76fbd85f0b0

Financial Times
http://www.ft.com/cms/s/0/96a146be-c8a6-11de-8f9d-00144feabdc0.html
http://www.ft.com/cms/s/0/a90f9d30-c911-11de-b551-00144feabdc0.html

Bloomberg

http://www.bloomberg.com/apps/news?pid=20601102&sid=agojR18RjINc#

Times Online

http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article6902369.ece

Reuters

http://uk.reuters.com/article/idUKTRE5A31JO20091104

Daily Mail

http://www.dailymail.co.uk/news/article-1225081/After-125-years-M-S-stores-start-selling-brands.html#

Guardian

http://www.guardian.co.uk/business/2009/nov/04/marks-and-spencer-profits-higher

The 'Good' and the 'Bad'

The EU Competition Commissions’ decision to approve the UK government break-up of Northern Rock into a ‘good’ and ‘bad’ bank is likely to leave fewer scars than initially thought. Maybe in the short-term yes but in the long-term the UK taxpayer will be left with the left-overs. Is it fair for the taxpayer to be left with the costs of risky lending practices?

Bailing-out Northern Rock in 2007 was a good decision from the UK government as its failure would have caused greater instability in the UK mortgage market and the economy. However, splitting the bank in 2009 still has its consequences. These questions need to be answered: Will the split create more competition? Will the customers in the ‘bad’ bank be disadvantaged? How much more will the UK taxpayer need to pay?

The split allows for the ‘good’ bank to be bought by new entrants into the banking sector such as the Virgin Money, Tesco or private equity groups. The new bank will hold all of Northern Rock’s retail deposits and a portion of its low-risk mortgages and is subject to several EU constraints. According to the Times “The bank will have to limit new lending to £4bn this year…it will also have to ensure its retail deposit balance does not exceed £20bn”. The constraints will be a deterrent to any new buyer. It will increase the number of banks in the industry but I think the new bank will still need to be very competitive to break the market dominance of established banks like Lloyds TSB and Barclays. Limits are not a good way to increase competition.

The ‘bad’ bank will then hold the remaining mortgage assets and remain under government control. The issue, according to the Mail is that four in five Northern Rock borrowers will be consigned to the ‘bad’ bank which will eventually be privatised. Are they going to face higher interest rates and uncertainty with their mortgages? The future for those customers is uncertain but I fear the worse. It is highly likely that any new owners will adjust the price of their products to maintain the viability of their business and ignore public demands.

What is certain is that the UK taxpayer is likely to make a loss from the restructuring and will be left with a bank with toxic assets in the long-term. The sale of the ‘good’ bank is also a highly politically sensitive topic as the Brown Government is likely to sell in a fire-sale that would not likely maximise value to the shareholder or taxpayer. The UK government is also injecting another £8bn into Northern Rock to fund the break-up making a total debt of £27bn to the state. The bail-out has cost the government and the taxpayer billions of pounds but it is necessary to allow the banking sector be rid of government control.

But I feel the involvement of the EU Competition Commission has created more problems for the UK banking sector. In the short-term it forces governments to sell valuable assets to new entrants at a cheap price, leaving toxic assets for the taxpayer in the long-term. The taxpayer has got the raw bargain.

In the Press this week:
The Financial Times reported the story with objectivity and with sourced information from the EU Competition Commissioner Neelie Kroes. I liked how the article was concise and set the foundation for future reading.

The Bloomberg article was a more colloquial piece with more information. It was more enjoyable to read due to the statements from the Treasury and the CEO of Northern Rock. It also made greater reference to the governments’ involvement in the bail-out and sale of Northern Rock.

The Times Online and Mail Online used the same figures found in other press and focused on statements from Gary Hoffman in regards to the ‘decade’ to repay the state-support. £27bn was a number that was more prevalent in the articles.

The Times reported the story with a sense of victory, “People close to the company said that Northern Rock had achieved a victory”. It is interesting choice of words since the CEO of Northern Rock did not reveal a ‘victory’ in his statements and CEO is also very close to the company I think?

The Mail Online decided to present the article in a more politically motivated way. They interviewed Treasury officials and the opposition. As a reader I felt that the article was written with political point-scoring in mind. The reporter was also very critical of the cost of the restructuring plans and was more sympathetic to Northern Rock customers.

Overall the press this week seemed to expect the approval of the break-up. However throughout the media this week journalists seem to be waiting with anticipation the outcome of the Lloyds Banking Group and RBS decisions from the EU Competition Commission. This will be a greater shakeup of the banking sector and the consequences for the taxpayer may also be as huge. It seems the taxpayer will be pulling out their wallets again very soon.

Sources
Financial Times
http://www.ft.com/cms/s/0/7a16e9d2-bf4f-11de-a696-00144feab49a.html

Bloomberg
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aihLIBx29J7w

Business Week
http://www.businessweek.com/ap/financialnews/D9BK32680.htm

Guardian
http://www.guardian.co.uk/business/blog/2009/oct/28/northern-rock-uk-banks-live-blog

Times Online
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6894551.ece

Mail Online
http://www.dailymail.co.uk/news/article-1223400/Northern-Rock-Brussels-approves-plan-split-Northern-Rock-good-bank-bad-bank-ahead-RBS-Lloyds-carve-up.html