One of the key differentiators in Tematica’s Cybersecurity & Digital Privacy investment theme and the Foxberry Tematica Research Cybersecurity & Data Privacy Index has been the recognition of the evolving data privacy regulatory landscape. One of those key pieces is the GDPR regulation, which includes consent for processing an EU citizens’ personal data must be informed, specific and given freely and confers rights on individuals surrounding their data, including ability to receive a copy of their personal information. It’s against that regulatory backdrop that Oracle and Salesforce are lawsuits in the UK and Netherlands.
The high profile nature of these companies and therefore these lawsuits along with the impact on third party cookie usage for ad tracking and targeting and the potential size of the fines to be had make these cases to watch.
The use of third party cookies for ad tracking and targeting by data broker giants Oracle and Salesforce is the focus of class action style litigation announced today in the UK and the Netherlands.
Non-profit foundation, The Privacy Collective, has filed one case today with the District Court of Amsterdam, accusing the two data broker giants of breaching the EU’s General Data Protection Regulation (GDPR) in their processing and sharing of people’s information via third party tracking cookies and other adtech methods.
The Dutch case, which is being led by law-firm bureau Brandeis, is the biggest-ever class action in The Netherlands related to violation of the GDPR — with the claimant foundation representing the interests of all Dutch citizens whose personal data has been used without their consent and knowledge by Oracle and Salesforce.
A similar case is due to be filed later this month at the High Court in London England, which will make reference to the GDPR and the UK’s PECR (Privacy of Electronic Communications Regulation) — the latter governing the use of personal data for marketing communications. The case there is being led by law firm Cadwalader.
Discussing the lawsuit in a telephone call with TechCrunch, Dr Rebecca Rumbul, class representative and claimant in England & Wales, said: “There is, I think, no way that any normal person can really give informed consent to the way in which their data is going to be processed by the cookies that have been placed by Oracle and Salesforce.
“When you start digging into it there are numerous, fairly pernicious ways in which these cookies can and probably do operate — such as cookie syncing, and the aggregation of personal data — so there’s really, really serious privacy concerns there.”
Source: Oracle and Salesforce hit with GDPR class action lawsuits over cookie tracking consent | TechCrunch
Whether it’s the comments from companies over the last few months or the monthly Retail Sales reports of late, there is little question over the accelerated shift to digital shopping as a result of the pandemic. New data shows this adoption is rather widespread, and in what may be surprising to some includes Boomers. Chalk it up to Mother Necessity, we see this as the intersection of our Digital Lifestyle and Aging of the Population investing themes. And we suspect that like most others when the Boomers realize the ease of digital shopping they may only selectively go back to brick & mortar shopping.
Social distancing and stay-at-home measures have upended the shopping habits of US consumers across generations, including older cohorts. In May 2020 data from CouponFollow, nearly half of US boomer internet users said they increased their digital spending since the coronavirus pandemic.
Source: Nearly Half of Boomers Have Increased Digital Spending Since The Pandemic – eMarketer Trends, Forecasts & Statistics
In a recent interview, Danone (DANOY) CEO Emmanuel Faber shared his view that the current pandemic is increasing polarization in the food sector and the middle class is about to disappear. He sees it this way – as the divide between rich and poor grows, which will be reflected in what they eat, everyone in the middle class will either move up or down to an extreme. Faber zeroes in on the trade down effect that is a key part of our Middle-class Squeeze investing theme here at Tematica Research.
The ‘new normal’ will start to settle in from next year, Faber tells FoodNavigator, and polarisation will only increase. The food giant sees two contrasting trends: an economic and social crisis on one hand, and a growing interest in healthy foods on the other.
“There won’t be a middle class any more in a way, the food medium quotes Faber: “Some of that middle class is going to go down and have to make trade-offs… downtrading…” Conversely, many people “are going to be very demanding on health and quality. The relationship between food and health has never been as clear now for this generation”.
Source: Danone CEO: “Middle class about to disappear” | RetailDetail
To say consumers have embraced our Digital Lifestyle would be a huge understatement. That structural shift in how we conduct our lives, transact, consume content, pay bills and so forth has led companies to respond with new services and points of connection while others have sought to leverage all the data crumbs to be collected and monetized along the way. We recently discussed the growing threat of cyber vulnerabilities but there is also the growing concern over digital data privacy. So much so, that we are seeing data regulations being enacted across the globe, and the fines associated with these regulations can not only do serious financial harm to a company found in violation, but they also open up a new attack incentive for bad actors.
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During the June 2020 quarter — in a bid to stop the cash bleed and to shore up balance sheets among uncertain times — a number of companies suspended their quarterly dividend payments.
This injected fresh uncertainty into divided investors, given the unwritten rule that investors expect companies will continue to pay those dividends and in some cases increase them. But as we all saw, the pandemic brought a dynamic that few would have dreamed of last year. From the dividend investor’s perspective, nothing crystalized this better than the data that dividends on net fell $42.5 billion in the second quarter from a year earlier, marking the worst decline since the financial crisis. Included in that total was $29 billion associated with 50 S&P 500 companies that either decreased or suspended their forward dividends.
One of things we learned during the June-ending quarter earnings season is that, generally speaking, the cadence of activity tended to improve throughout the quarter. This commentary was also backed by the rebound in a number of economic indicators including the closely watched ISM Manufacturing and Services indexes. We also know from those companies ranging from Chipotle Mexican Grill (CMG) to McDonald’s (MCD) that improvement continued in July. Against that improving backdrop, we’ve seen some companies reinstate their quarterly dividend while others, such as SuRo Capital (SSSS) , Procter & Gamble (PG) , Skyworks Solutions (SWKS), The Hershey Company (HSY) and J.M. Smucker (SJM) among others have announced dividend increases.
But from time to time there are situations that remind us we need to verify the information that is being reported. This pertains to dividends as well. Let me explain….
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Disclosure: McDonald’s (MCD), The Hershey Company (HSY) are constituents in the Tematica Research Dividend All Stars Index.
It seems a day doesn’t go by that we don’t hear of another digital or data privacy concern. A reminder that we need to be careful and mindful with our digital footprint, but also a positive driver for the Foxberry Ltd Tematica Research, LLC Cybersecurity & Digital Privacy Index and the corresponding ETF from Rize ETF.
Today’s latest Signal is below and its and it raises potential questions for potential TikTok suitors such as Microsoft (MSFT) and others. It also likely means privacy focused Apple (AAPL), which had been reportedly talking to TikTok will take a hard pass on the company.
France’s data privacy watchdog CNIL said on Tuesday that it has opened a preliminary investigation into Chinese-owned video-sharing app TikTok after it received a complaint.
TikTok, owned by China’s ByteDance, is already under investigation over privacy concerns by U.S., European Union and Dutch authorities.
“A complaint about TikTok was received in May. This complaint is now under investigation,” a CNIL spokesman said, confirming a Bloomberg report.
In the United States, officials have said that TikTok poses a national security risk because of the personal data it handles.
In June, the European Data Protection Board (EDPB) said it would set up a task force to assess TikTok’s activities across the bloc after a request from an EU lawmaker concerned about its data collection and security and privacy risks.
Source: French privacy watchdog opens preliminary investigation into TikTok
History books and record books will study the first half of 2020 with intense interest. From an investor’s perspective alone, we’ve had a number of major market events that we’re still grappling with, and ongoing issues have injected huge amounts of uncertainty into the markets. A global pandemic, caused by the coronavirus, led to the brutal severity of the early spring pullback and the widening disparity between the equity and bond markets. The global economy went into free-fall; the staggering number of jobs lost in so short a time is without precedent, and many small businesses are under strain. And what happened next? A record-breaking market rebound despite a resurgence in virus cases and no vaccine as of yet.
That sharp rebound is reflected in the CNN Money Fear and Greed Index, which jumped into Greed territory compared to Neutral several weeks ago, indicative of the emotion driving the market. Times of Greed or Extreme Greed can be a precursor to more volatile times ahead, but since one data point can’t paint a full picture, it’s wise to examine a multitude of data points for confirmation.
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According to Barracuda Networks, cybercriminals are increasingly registering accounts with legitimate email services, especially Alphabet’s (GOOGL) Gmail and Verizon’s (VZ) Yahoo, to use them in impersonation and Business Email Compromise (BEC) attacks. Another data point that speaks to the ingenuity of attackers capitalizing to compromise on defense weaknesses, especially during the COVID-19 pandemic, and the growing demand profile for cybersecurity and data privacy solutions that are propelling the constituents in the Foxberry Tematica Research Cybersecurity & Data Privacy Index.
In their most recent threat spotlight report, Barracuda researchers observed that 6,170 malicious accounts that have used Gmail, AOL and other email services, have been responsible for over 100,000 BEC attacks which have impacted nearly 6,600 organizations. What’s more, since April 1, these ‘malicious accounts’ have been behind 45% of all BEC attacks detected.
Essentially, cybercriminals are using malicious accounts to impersonate an employee or trusted partner, and send highly personalized messages for the purpose of tricking other employees into leaking sensitive information, or sending over money.
The preferred choice of email service for malicious accounts is Gmail, which accounts for 59% of all email domains used by cybercriminals. Yahoo! is the second most popular, accounting for just 6% of all observed malicious account attacks.
Source: 6,600 organizations bombarded with 100,000+ BEC attacks – Help Net Security
While the July Employment Report showed 1.8 million jobs were added during the month, well ahead of the expected 1.6 million, it was a hefty drop compared to the 7.5 million jobs created in May and June. In examining the data, we find despite the rebound in manufacturing and services data, so far less than half of the jobs lost due to the pandemic have been recovered.
While this points to companies being more productive with existing workers, it’s a headwind to consumer spending, a key ingredient for the domestic economy. And with incremental unemployment benefits, at least for now, having expired, it means consumers feeling the pinch of our Middle-class squeeze investing theme will be cutting back on spending both discretionary and non-discretionary. Per the latest Household Pulse Survey it looks like rent payments are one such area.
An estimated 27% of adults in the U.S. missed their rent or mortgage payment for July, according to a nationwide survey conducted by the U.S. Census Bureau weekly over the last three months. Among renters alone, just over one-third (34%) said during the waning days of July that they had little to no confidence that they could make their August rent payment, a stark measure of the ongoing economic devastation for households stretched to the brink by coronavirus pandemic.
The Household Pulse Survey paints a picture of a nation veering toward widespread financial precarity. Over the last 90 days, the Census Bureau conducted this weighted survey by polling Americans weekly on their financial, physical and mental well-being. The responses show large shares of Americans foregoing medical care and many struggling with food insecurity. During the week of July 21 — the final week of the census survey — an estimated 35% of Americans said they expected to lose employment income due to the pandemic. One-third of respondents reported feeling anxiety most days or every day of the week.
Source: Survey Exposes America’s Looming Rent Crisis – Bloomberg
During the March and June quarter earnings seasons, constituents in the Foxberry Tematica Research Cybersecurity & Data Privacy Index reported an upswing in demand due to a variety of issues associated with the COVID0-19 pandemic. The United Nations has only recently confirmed what those companies and others shared about the March 2020 quarter as it found a 350% increase in phishing attacks.
With the pandemic response that included lockdowns and sheltering in place growing in the first half of the June quarter, particularly in the US, as businesses contended with the coronavirus, we suspect the UN’s eventual findings for the June quarter will reveal a similar year over year increase in cyber attacks. As we have seen before, an individual’s or a company’s pain, is an opportunity for cyber attackers.
A 350% increase in phishing websites was reported in the first quarter of the year, many targeting hospitals and health care systems and hindering their work responding to the COVID-19 pandemic, the U.N. counterterrorism chief said Thursday.
He said the U.N. and global experts don’t yet fully understand “the impact and consequences of the pandemic on global peace and security, and more specifically on organized crime and terrorism.”
Undersecretary-General Voronkov said the discussions showed a shared understanding and concern that “terrorists are generating funds from illicit trafficking in drugs, goods, natural resources and antiquities, as well as kidnapping for ransom, extorting and committing other heinous crimes.”
He said U.N. member nations “are rightly focused on tackling the health emergency and human crisis caused by COVID-19,” but he urged them not to forget the threat of terrorism.
Source: UN Reports Sharp Increase in Cybercrime During Pandemic – The New York Times