California is set to become the first US state to require all electronic devices, including laptops and phones, to be charged using USB-C cables under legislation approved by the state Assembly Privacy and Consumer Protection committee. The bill, sponsored by Assemblymember Jesse Gabriel, requires wholesalers and retailers to give consumers the option to buy an electronic product with or without a charging device, and for packaging on the product to indicate whether there is a charging device and other information. The move follows similar action taken by the European Union, which adopted a directive last year making USB-C charging mandatory for phones and all laptops. India has also approved similar standards to be in effect by 2025. Advocates of universal charger policies say reducing environmental and consumer costs is a primary motivation. However, supporters of free-market principles argue that the policy would stifle innovation, as companies would no longer feel the need to develop a better charging technology. Additionally, opponents of the policy warn that it could contribute to more customer confusion and create more waste in the long run by forcing existing charging cables into obsolescence.
Apple's tax agreement with its hometown of Cupertino, California, is under scrutiny from state regulators, potentially leading to a reduction in the amount of money the company pays to the city. The California Department of Tax and Fee Administration is auditing the arrangement, with Cupertino’s finance director set to explain the findings to the city council. The audit revealed local tax revenues will drop 73% in the current fiscal year, from $42.1 million to $11.4 million, and Cupertino may need to return money received in previous years. Apple is not named in the report, but it is the largest source of sales tax revenue for Cupertino. The issue is Apple's treatment of online sales, as the local portion of sales tax goes to the location where the transaction takes place, not the customer’s location. Apple treats all online purchases of products in California as if they were made in Cupertino, setting aside the 1% local portion of the 7.25% state sales tax for its hometown. Cupertino can appeal the tax department’s findings, but the city may have to cut staff and other spending to cover the shortfall.
Ernst & Young's attempt to split its audit and advisory practices has been abandoned due to internal strife, damaged relationships between firm leaders, and distrust between partners in different countries. A major failure of the company's attempt was that economics took over, and strategic benefits lagged behind. The firm is now on a rugged path to carve out its $20bn consulting business. Developing distinct sets of clients for each of the two businesses and rethinking how revenue from those businesses is tracked and reported are among the steps the firm might consider as it attempts another transaction. Interest rates and retired partner debt, perceived future revenue streams and the overall market have challenged the balancing act of spreading out benefits and risks among audit and advisory partners, even retired partners. EY consultants won’t be able to escape restrictions on the clients to whom they can sell. Finally, EY’s Big Four competitors have said they have no plans to follow its restructuring path and have repeatedly said they are committed to their multi-service line offerings, adding market force effect to the disincentive to split.
According to new data from the American Bar Association, the gaps in bar pass rates between white and minority law graduates widened in 2022 for the second consecutive year. The first-time pass rate for white test takers was 83% in 2022, while 57% of Black examinees passed on their first attempt, which is a difference of 26 percentage points. The performance of white first-time bar examinees also declined from an 85% pass rate in 2021 to 83% in 2022, but that decline was smaller than the dip among Black, Hispanic, and Asian examinees. Racial disparities have persisted on “ultimate bar pass rates,” which measure pass rates over two years. No announcements have been made regarding what steps will be taken to ameliorate this disparity, but we’ll be following along closely.
Bankrupt crypto exchange FTX has announced that it has recovered over $7.3 billion in cash and liquid crypto assets, an increase of more than $800 million since January. The company's attorney said that FTX is starting to think about its future after months of effort devoted to collecting resources and figuring out what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried. FTX has benefited from a recent rise in crypto prices, and its total recovery would be valued at $6.2 billion based on crypto prices from November 2022 when it filed for bankruptcy. FTX is negotiating with stakeholders about options for restarting its crypto exchange, and it may make a decision on that in the current quarter. FTX customers in Japan have been the only ones able to withdraw any funds during the bankruptcy case. FTX intends to file a preliminary Chapter 11 plan that would offer the company a path out of bankruptcy, but it acknowledged that many details would have to be worked out as creditors fight for their share of the company's assets. Bankman-Fried and several company insiders have been indicted on fraud charges for their role in the company's collapse.