Foreign media took stock of the top ten business scandals in 2017: Apple, Samsung, etc. were listed

Foreign media took stock of the top ten business scandals in 2017: Apple, Samsung, etc. were listed Source: Fortune Chinese Although on the surface nothing big happened to shareholders in 2017...

Source: Fortune Chinese

Although on the surface nothing big happened to shareholders in 2017, in fact there were endless cases of scandals and public relations failures.

This year, Samsung was embroiled in a bribery scandal, the Weinstein Company was accused of sexual harassment, and United Airlines "drags" passengers causing bloodshed, but other companies have generally been relatively calm.

> Here are some of the biggest scandals in the business world in 2017:

United Airlines dragged a passenger off the plane causing injuries

On March 2, 2017, at the 2017 Aviation Summit hosted by the U.S. Department of Commerce in Washington, D.C., United Airlines CEO Oscar Munoz delivered a speech. Kristoffer Tripplaar?Sipa USA via AP

In April 2017, a United Airlines flight was overbooked. Two security personnel forcibly dragged a passenger who was unwilling to get off the plane, causing bleeding and injuries. This also triggered global criticism of United Airlines. The video shows that during the argument, 69-year-old David Dao hit his head on the armrest, his sweater was pulled up to his chest to expose his stomach, and his glasses were tilted to one side. He finally lay on the ground and was dragged out of the aisle by security personnel and got off the plane.

Consumers around the world were shocked when they saw this scene and quickly launched a boycott. Later, when the CEO of United Airlines apologized for the incident, he appeared to be white-washing it. He only said that "this incident saddens all United employees." However, he underestimated the negative impact of the video on viewers and the huge dissatisfaction of passengers with the aviation industry. To add salt to the wound, media reports showed that Muñoz called Du Chengde a "saboteur and deliberately provocative" in a letter to employees.

Although the incident did not have a significant impact on United Airlines' profits, the incident focused on the resentment that passengers have had for air services for many years.

Although Du Chengde and United Airlines settled out of court, the huge dissatisfaction with the aviation industry caused by this matter has not stopped. U.S. Department of Transportation data shows that aviation-related complaints increased by 13% in the six months after the incident.

21st Century Fox and Bill O'Reilly

In 2017, many companies were involved in sexual harassment accusation scandals, including the entertainment giant 21st Century Fox.

> Fox’s troubles began in 2016, when former host Gretchen Carlson accused Fox News CEO Roger Ailes of sexual harassment. But it didn't stop there. In April, it was reported that celebrity anchor Bill O'Reilly had paid five women millions of dollars to settle sexual harassment accusations. After the incident came to light, advertisers immediately suspended advertising for "O'Reilly Facts." O'Reilly left the network that month.

Investors were very angry when they found out about this, because the sexual harassment scandal represents a serious problem with the company's culture. Later, reports emerged that Fox was considering hiring Oles for a job in January after learning of the charges against him, adding fuel to the angry public opinion.

Therefore, Fox agreed in November to pay $90 million to settle investor accusations related to the O'Reilly and Ailes scandals, and also established an internal committee to ensure a normal working environment.

O'Reilly refused to admit wrongdoing, and Foxx did not admit wrongdoing.

Alphabet and Facebook

In the year since the presidential election, both Congress and the internet giants are rethinking their role in the democratic agenda.

Many people speculate that fake news on social media may have affected the 2016 election, but industry giants such as Facebook and Google have refused to admit it.

That changed in 2017, when Facebook and Google, which generate most of their revenue from internet advertising, said they had discovered accounts linked to the Russian government. Facebook said it found about 3,000 Russian-related ad purchase orders on the platform, with the purpose of splitting the United States. Google found that companies with ties to Russia purchased tens of thousands of ads on YouTube and Gmail. Twitter also said that Russia Today, a Russian government-backed media outlet, purchased $274,000 in advertising on its platform in 2016.

It seems that the problem cannot be completely solved yet. Twitter, Facebook and Google are still investigating Russia-related activity on their platforms. Parliament has become increasingly tough on the field, and some have begun to question the way giants attract users. The giants' troubles are far from over.

Uber has been in accidents again and again

If the previous legal disputes that Uber encountered were like driving over a bumpy speed bump, then what happened to Uber in 2017 was like a 10-car rear-end collision on the highway. There were sexual harassment accusations before, and later there were questions about founder Kalanick’s leadership, and even criminal investigations.

In February, former employee Susan Fuller accused Uber of frequent sexual harassment. In May, the Justice Department announced a criminal investigation into Uber over allegations that it used software called "Greyball" to circumvent local regulators when operating illegally in certain areas. As a result, Kalanick left in June, leaving his successor, then-Expedia CEO Dara Kosloshahi, with a huge mess to restructure the company.

What happened next made cleaning up the mess almost an "impossible task": Shortly after Korosashi took office, London, England, announced a ban on Uber. In November, it was reported that Uber's database was hacked, and about 57 million user data were at risk of being leaked.

Unlike flying on United Airlines, Uber users actually have many choices, and they can choose luxury taxis right away. And due to Uber's repeated mistakes, its market share was also taken away by competitor Lyft. Uber's market share was 84% ​​in the previous year, and fell to 74% in 2017.

Uber’s valuation was once as high as US$68 billion. But after so much happened, the valuation had dropped to US$48 billion when Japanese bank SoftBank acquired its shares.

Harvey Weinstein has been accused of multiple sexual harassments

When it comes to Weinstein’s story, even the most twisted Hollywood movies can’t tell it.

Since October, more than 100 actresses have accused Hollywood tycoon Weinstein of decades of sexual harassment. Weinstein apologized, but the Oscar-winning producer was forced to leave the Weinstein Company. And even after the apology, the public was still furious that Weinstein could have behaved unscathed for decades.

It is alleged that Weinstein hired a former agent from the Israeli intelligence agency Mossad to track his accusers in order to avoid confronting the charges. But it was later discovered that Weinstein had been able to hold power for many years not only through spies and various threats. He also had many billionaire friends to protect him, although there were signs that Weinstein had misappropriated company funds for personal use in 2015. Weinstein later agreed to repay the company $7 million.

Perhaps the biggest impact of the series of accusations is that many silent men and women later spoke out about their past experiences of sexual harassment.

Weinstein made it clear that he had not participated in any "non-consensual sex."

Acify data leakage

The credit rating company Ecosystem makes profits mainly by selling private information, often sensitive private information, to financial institutions and banks.

But in September, Economy said it had suffered the most serious data breach in history, involving approximately 145 million people, accounting for half of the U.S. population.

It was reported that Ikefy knew about the existence of the vulnerability that was later exploited by hackers in March. In an uproar, CEO Richard Smith announced his resignation, and the chief information officer and chief security officer also announced their resignation. What's even more disgusting is that after learning about the data leak, Aikefei waited two months before announcing the news.

In addition, because Ecosystem executives sold about $1.8 billion worth of stock before the data leak was announced, the Department of Justice also began investigating whether there was insider trading.

Samsung Bribery Case

In 2016, Samsung was troubled by the explosion of the Note 7 mobile phone battery. 2017 was even worse, with Samsung in chaos.

Samsung Group has always been run by the family. The heir Lee Jae-yong is about to take over. Unexpectedly, he was involved in the political scandal of former South Korean President Park Geun-hye and was imprisoned. Samsung is facing a serious problem of successor vacancy.

Lee Jae-yong is now accused of bribing Park Geun-hye, embezzling public funds and concealing overseas assets. He may face five years (or up to 12 years) in prison.

In October, Samsung Electronics co-CEO Kwon Oh-hyun also announced his resignation, saying that Samsung's leadership is currently facing a serious crisis.

"Right now, we are facing an unprecedented comprehensive crisis. Now the whole company should cheer up and start anew, using young leaders to deal with various new challenges faster in the rapidly changing IT industry," Kwon Oh-hyun said in the statement.

Although Samsung's long-term development is questionable, there seems to be no crisis in the short term. The third quarter financial report showed that Samsung’s profit reached a record US$12.8 billion, almost three times the previous year.

Kobe Steel, Mitsubishi Materials, and Japanese corporate governance issues

By the third quarter of 2017, Japan's GDP had achieved sustained growth since 2001, setting a record. But behind the steady recovery of the economy is a wave of scandals involving product quality fraud by major Japanese companies, which has also raised questions about Japan's status as a manufacturing powerhouse.

In October, Kobe Steel admitted that it had falsified information on some materials sold to Boeing, Ford, Toyota and other companies since 2007. Mitsubishi Materials admitted that it had fabricated data on automobile and aircraft parts sold to about 274 customers. Manufacturing giant Toray also admitted that data on reinforced tire ropes sold since 2008 were inaccurate.

In 2017, car companies Nissan and Subaru recalled 1.2 million and 395,000 vehicles each because for decades they had used unqualified inspectors to inspect new cars before they left the factory.

Although the scandal does not involve large-scale quality problems, it has a very negative impact on Japanese manufacturing. Today, Chinese and Korean manufacturing industries are developing rapidly in the market with low costs, while Japanese manufacturing has always relied on excellent quality to compete in the high-end market.

However, some analysts said that the reason why quality scandals have appeared one after another in recent months may be that the quality standards of Japanese companies are too high.

>Wells Fargo's Big Trouble

> Since losing consumer trust due to tens of millions of fake accounts in 2016, Wells Fargo has promised transparency and promoted reforms in the hope of regaining users.

But Wells Fargo's problems became more serious in 2017 when it admitted that it had charged 570,000 customers for auto insurance when they didn't need it. The move resulted in about 20,000 customer vehicles being repossessed. Wells Fargo said it would pay $80 million in compensation. Later, the head of Wells Fargo's personal banking department and about 70 senior managers in its retail banking department were also fired.

Also in 2017, Wells Fargo also admitted to opening 1.4 million fake accounts without customers' knowledge. The previous year, it had admitted to opening 2.1 million fake accounts.

Apple's "Slowdown Gate"

Near the end of the year, the technology giant Apple encountered a huge crisis because of reports that Apple deliberately slowed down the running speed of older iPhones to solve the problem of battery aging.

This also confirms the long-standing conspiracy theory of some Apple users: that every time a new version is released, Apple will deliberately slow down the running speed of older mobile phones to force users to upgrade. Already, users are suing Apple for slowing down their devices without prior notice.

Apple's response was first to apologize for slowing down the old iPhone, calling it a "misunderstanding", and then announced a price reduction for users to replace the battery. The previous price was US$79, but now it is reduced to US$29. Apple says the phone will run faster after replacing the battery.

>Author: Lucinda Shen

Translator: Pessy

Reviewer: Xia Lin