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Merger discussions between Japanese automakers Honda and Nissan have fallen apart after the companies failed to reach an agreement on the terms of a $60 billion tie-up. The proposed deal, which also involved junior partner Mitsubishi, was aimed at bolstering their competitiveness in an auto industry increasingly dominated by Chinese manufacturers.

Despite the breakdown of talks, both firms have confirmed that they will continue working together on electric vehicles (EVs), a segment where competition from firms like BYD has intensified.

Disagreements Over Nissan’s Role

The collapse of the deal was not entirely unexpected, according to automotive analyst Karl Brauer, who noted that many auto industry mergers have failed due to differences in corporate culture, strategic priorities, and leadership structures.

A key sticking point in the negotiations was Nissan’s role in the new entity. While Honda entered the talks from a position of relative financial strength, Nissan was seeking a merger as part of a broader turnaround strategy following years of declining sales and leadership turmoil.

Toshihiro Mibe, Honda’s chief executive, had previously stated that any merger would be “based on the assumption that Nissan completes its turnaround action.” However, the companies ultimately disagreed on whether Nissan would be an equal partner or a subsidiary, leading to the collapse of the negotiations.

Jesper Koll, an analyst at Monex Group, said that the Japanese corporate culture strongly favors mergers of equals, making it difficult for one company to take clear leadership. He also noted that Honda risked being burdened with Nissan’s ongoing struggles, adding:
“You’re taking a potentially great company and taxing it with having to bail out an ugly duckling.”

Nissan’s Leadership Crisis and Financial Struggles

Nissan has been battling a prolonged crisis since the 2018 arrest of former CEO Carlos Ghosn on financial misconduct charges. Ghosn, who denies the allegations, fled Japan in 2019 and remains a fugitive in Lebanon.

In the wake of the scandal, Nissan has struggled to regain momentum. The company announced a cost-cutting plan last year, including 9,000 job cuts worldwide and a pay reduction for its CEO.

With the Honda merger now off the table, Nissan faces an uncertain future as it continues to navigate financial pressures and declining market share.

Foxconn and Renault Eye Possible Moves

While the Honda deal has collapsed, potential alternatives are emerging. Taiwanese tech giant Foxconn, best known for producing Apple’s iPhones, has expressed interest in buying Nissan shares to explore a strategic partnership in EV production.

At the same time, Renault, which holds a 36% stake in Nissan, reacted strongly to the failed merger discussions, calling the proposed terms “unacceptable.” Renault has played a crucial role in Nissan’s past, having rescued the company from near bankruptcy in 1999.

The Road Ahead

As the global auto industry shifts toward electric vehicles, Honda and Nissan both face growing pressure to keep pace with Chinese manufacturers and navigate potential U.S. tariffs.

Nissan’s next move will be closely watched, with analysts emphasizing the need for strong leadership and clear strategic direction to overcome its current challenges. Whether through a new investor, a different merger, or internal restructuring, the company now faces a critical period in its long-term survival strategy.

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Apple Removes Advanced Data Protection in UK After Government Demand

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Apple has announced it will no longer offer its highest level of data security, Advanced Data Protection (ADP), to users in the United Kingdom. The decision follows a request from the UK government for access to encrypted user data.

ADP provides end-to-end encryption, ensuring that only account holders can access their online photos, documents, and other data. Not even Apple can decrypt this information. However, the UK government, citing the Investigatory Powers Act (IPA), requested the ability to access this data, leading Apple to withdraw the service.

Apple expressed disappointment in a statement, reaffirming its stance against creating a “backdoor” into its systems, as it could potentially be exploited by malicious actors. “We have never built a backdoor or master key to any of our products, and we never will,” the company stated.

As of Friday at 15:00 GMT, UK users attempting to activate ADP receive an error message. Those already using the feature will lose access at a later date. The number of users who opted into ADP since its UK launch in December 2022 remains unknown.

Masterton Mayor Gary Caffell called the situation “shocking” and “unexpected,” emphasizing the impact on the local community. Cybersecurity expert Prof. Alan Woodward from Surrey University criticized the UK government’s move as “an act of self-harm,” arguing that it weakens online security and privacy. Online privacy expert Caro Robson noted that Apple’s decision to withdraw a product instead of complying with government demands is “unprecedented.”

Criticism has also come from the United States. Senator Ron Wyden warned that Apple’s withdrawal “creates a dangerous precedent which authoritarian countries will surely follow.” WhatsApp head Will Cathcart echoed concerns on social media, stating that a global backdoor would compromise security for users worldwide.

Apple acknowledged the privacy and security risks associated with this decision but stated its commitment to offering robust data protection in the future. The company hopes to reintroduce ADP in the UK if circumstances change.

Meanwhile, child safety organizations such as the NSPCC have voiced concerns that end-to-end encryption could hinder efforts to detect and prevent child sexual abuse material (CSAM). However, Emily Taylor of Global Signal Exchange argued that encryption is essential for safeguarding consumer privacy, emphasizing its everyday use in banking and secure communication.

The debate highlights the ongoing tension between privacy, government surveillance, and online safety, with global implications for technology companies and their users.

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Apple Halts Advanced Data Protection in UK After Government Demand for Access

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Apple is removing its top-tier data encryption feature, Advanced Data Protection (ADP), from UK users following a government request for access to user data. The decision means that Apple customers in the UK will no longer be able to activate ADP, which ensures that only account holders can access their iCloud-stored content through end-to-end encryption.

The UK government made the request earlier this month, seeking the ability to access encrypted data under the Investigatory Powers Act (IPA), which mandates that companies must provide information to law enforcement agencies upon request. While Apple has consistently resisted creating encryption backdoors, citing potential misuse by cybercriminals, the company confirmed it would disable ADP activation in the UK starting Friday at 3 p.m. GMT. Existing users will also lose access at a future date.

“We are gravely disappointed that UK customers will no longer have access to this security feature,” Apple said in a statement. “We have never built a backdoor or master key into our products and never will.”

The Home Office declined to comment on the specific order, stating, “We do not comment on operational matters.”

Cybersecurity experts have criticized the government’s move, arguing that it undermines online privacy. Professor Alan Woodward of Surrey University called the decision “an act of self-harm” that weakens security for UK users. “It was naïve of the UK government to think they could dictate terms to a US technology company on a global scale,” he added.

The development has sparked backlash from privacy advocates, who describe the order as an “unprecedented attack” on individual privacy. Concerns have also emerged in the United States, where two senior politicians warned that the UK’s demands could jeopardize intelligence-sharing agreements between the two countries.

Despite the removal of ADP in the UK, the feature will remain available to users in other countries, raising questions about the global impact of the UK’s IPA order. In its statement, Apple emphasized its commitment to user privacy and expressed hope that it could restore ADP in the UK in the future. “Enhancing the security of cloud storage with end-to-end encryption is more urgent than ever before,” the company stated.

This latest dispute highlights growing tensions between governments seeking access to encrypted data and technology companies prioritizing user privacy, with potential implications for international regulatory frameworks and cross-border data security.

 

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European PMI Data Reveals Mixed Economic Signals

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February economic data across Europe showcased divergent trends, with the UK’s services sector seeing growth, Germany’s manufacturing hitting a two-year high, and France continuing to face challenges.

The flash estimate for France’s HCOB Manufacturing PMI rose to 45.5 in February from 45 in January, according to S&P Global. While still indicating contraction, this was the mildest decline since May 2024. The services sector, however, fell more sharply, with its PMI dropping to 44.5 from 48.2, driving the composite PMI to 44.5—the steepest contraction since September 2023. Economist Dr. Tariq Kamal Chaudhry of Hamburg Commercial Bank noted that shrinking order intakes and subdued future activity expectations remain key concerns.

In contrast, the UK’s services sector expanded, with its PMI rising to 51.1 from 50.8, surpassing analyst expectations. Despite this growth, new work fell at the fastest rate since November 2022 due to weakened business investment and budget cuts. The UK manufacturing sector continued to contract, with its PMI falling to 46.4 from 48.3, missing market forecasts.

Germany’s manufacturing PMI climbed to 46.1, its highest in two years, supported by slower declines in factory output. Meanwhile, the services sector experienced a slight dip, with its PMI at 52.2 compared to 52.5 in January. Overall, Germany’s private sector remains affected by manufacturing challenges, though the pace of contraction has slowed.

Across the eurozone, the composite PMI held steady at 50.2, signaling marginal growth but falling short of expectations. The manufacturing PMI rose to 47.3 from 46.6, while the services PMI dropped to 50.7 from 51.3. Kyle Chapman, FX markets analyst at Ballinger Group, noted that while modest growth is preferable to contraction, consumer caution due to political and economic uncertainty continues to limit recovery.

In the UK, Chapman pointed to the impact of rising payroll taxes on employment, with one-third of surveyed companies linking lower staffing levels to the October budget. Weak demand and stagnant productivity levels are further hindering the country’s economic performance.

The latest PMI data highlight the complex economic landscape in Europe, with some sectors showing signs of resilience while others grapple with ongoing challenges, influenced by both domestic policies and broader global conditions.

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