January 2012

Last July, China’s biggest state-run television broadcaster accused a luxury retailer named DaVinci Furniture of passing off low-quality goods from a factory in southern China as premium imports from Italy and other foreign lands. Now, DaVinci has pointed the cameras and microphones back at the broadcaster, according to a report in current issue of the weekly magazine Caixin.

The magazine is regarded as one of the most authoritative business publications in mainland China. DaVinci says that it has video and audio evidence that the big state broadcaster, China Central Television, known as CCTV, distorted and even fabricated evidence against DaVinci, and that people close to the television program might have tried to extort money from the company. The CCTV broadcast in July, on the program “Weekly Quality Report,” became a public relations fiasco for DaVinci, which was founded in Singapore and had established itself in China as a leading retailer of European brands like Versace and Fendi Casa. It was also a coup for CCTV, which demonstrated that the official propaganda arm of the Communist Party could also engage in muckraking journalism using hidden cameras. But according to Caixin, Doris Phua, DaVinci’s chief executive, said that after the initial television allegations against DaVinci last July, she agreed to wire about $150,000 to the Hong Kong bank account of a middleman whom she said she understood to be acting on behalf of the CCTV journalist involved in the investigative program. Phua said the payment had been intended to stop the state broadcaster from continuing to accuse DaVinci, Caixin reported. She also said that the middleman once asked her to pay the CCTV journalist directly, according to Caixin. DaVinci said it had reported the incidents to the Chinese police, CCTV executives and the State Administration of Radio, Film and Television, which regulates the industry.

Apple has said it will appeal €900,000 in fines imposed by Italy’s competition authority for allegedly selling consumers protection plans for its products without adequately informing them of a statutory two-year warranty.

The Antitrust Authority said Italy's consumer code gave buyers the right to two years of free care for their products, but three Apple divisions in Europe had been less than clear about this in information given in Apple stores in Italy and on its website. Instead, Apple had emphasized its own one-year guarantee for its products and had been selling extended protection through its AppleCare Protection Plan to buyers, meaning the protection bought overlapped with the extra year provided by law. “We believe our warranty policy in Italy complies with local requirements and respects consumer rights. We plan to appeal the decision,” said an Apple Europe spokesperson when reached for comment.

The State Department should investigate whether Huawei Technologies Co. and other telecommunications companies broke the law by supplying sensitive technology to Iran, six lawmakers said.

Huawei, China’s largest maker of phone equipment, said Dec. 9 it would voluntarily restrict business in Iran because of that country’s “increasingly complex situation.” The Shenzhen, China-based company said it wouldn’t seek new customers in Iran and will limit the scope of business with existing clients. While calling Huawei’s decision on Iran a “positive step,” the lawmakers in a Dec. 22 letter to Secretary of State Hillary Clinton said the company’s “previous actions and continuing service of existing contracts with Iranian clients may violate” an Iran sanctions law passed in 2010. Representative Sue Myrick, a North Carolina Republican, released the letter; it was also signed by Sens John Kyl (R-AZ), Jeff Sessions (R-AL), James Inhofe (R-OK), and Sheldon Whitehouse (R-RI), and Rep Frank Wolf (R-VA). The law, the Comprehensive Iran Sanctions, Accountability and Divestment Act, prohibits the U.S. government from “entering into or renewing a contract with a company that exports sensitive telecommunications technology to Iran,” the lawmakers wrote.

Google began testing targeted ad placement in AdWords accounts to those spending more than $500,000 or $6 million annually for products other than AdWords tools.

The first ads began to appear for one marketer in late December, after spending $1 million in paid-search ads on behalf of a client. Calling it a notification, rather than product ad, a Google spokesperson said the company communicates with its AdWords clients through in-product notices. "We have recently informed them, via an in-AdWords notice, of the newly rebuilt DoubleClick Search, which is helping many clients run their search campaigns on Google and elsewhere, even more effectively." Some marketers don't see it that way. The text -- whether ad or notification -- running at the top of the page provides information about a 90-day free trial for DoubleClick Search V3, aimed at advertisers that meet the minimum ad-spend requirement. Marketers, calling it an "unfair playing ground," said the DoubleClick ad only showed up in accounts with "sizable spending." It appears that Google uses what it knows about a company to promote the product with targeted ads, which is not an unusual practice for any company. It's the first time that marketers have begun to see cross-promotional notifications or ads for other Google tools in the AdWords user interface. Some marketers that are familiar with the text ads seem a bit uneasy about being served the notices because it appears that account information and spend levels trigger the ads.