The daily business briefing: February 14, 2020

1.

Prosecutors accuse Huawei of stealing trade secrets

Federal prosecutors have filed new charges that were unsealed Thursday accusing Chinese telecommunications gear maker Huawei of stealing trade secrets. Huawei already faces charges of stealing intellectual property, wire fraud, and obstruction of justice. In the new case, Huawei USA and Futurewei, two subsidiaries that were located in the U.S. at the time, allegedly took technology from six American companies by breaking confidentiality agreements it had with them. The theft allowed Huawei to "drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage," prosecutors said in a press release. Andy Purdy, the chief security officer for Huawei in the U.S., said the charges were part of a "campaign to carpet bomb Huawei out of existence." [The Hill, The New York Times]

2.

Judge halts Microsoft's JEDI contract due to Amazon lawsuit

A federal judge on Thursday temporarily blocked Microsoft's JEDI cloud-computing contract with the Pentagon. The move marked a win for Amazon, which has filed a lawsuit against the Defense Department, accusing President Trump of "repeated public and behind-the-scenes attacks to steer" the Pentagon's Joint Enterprise Defense Infrastructure contract toward Microsoft in order to "harm his perceived political enemy," Amazon CEO Jeff Bezos. The contract, which aims to create a centralized computing system for U.S. military agencies, is estimated to be worth up to $10 billion over 10 years. Microsoft won it last October, but Amazon claims Trump used "improper pressure." The judge ordered work on the network to be halted due to the ongoing lawsuit. Microsoft said it was "disappointed." [The Washington Post]

3.

Tesla says coronavirus fallout could hurt profitability

Tesla on Thursday acknowledged in an annual financial filing that China's coronavirus outbreak could hurt its business. "Gigafactory Shanghai was closed for a brief time as a result, before it reopened in February 2020 and rejoined our U.S. factories, which had continued to operate," the electric-car maker reported. "It is unknown whether and how global supply chains, particularly for automotive parts, may be affected if such an epidemic persists for an extended period of time." Disruptions caused by the virus could saddle the company with "expenses or delays" that are "outside of our control," Tesla said. For example, a week-and-a-half delay in ramping up the Shanghai built Model 3 due to a government-required factory shutdown could slightly hurt profitability this quarter, Tesla said. [CNBC]

4.

Newspaper publisher McClatchy files for bankruptcy protection

Newspaper chain McClatchy said Thursday it had filed for bankruptcy protection. The company, which publishes 30 newspapers including The Miami Herald and The Kansas City Star, is struggling to pay down its debts as readers and advertisers move online, hurting its revenue. McClatchy said its papers will keep operating normally, and it hopes to emerge from the bankruptcy process in a few months as a private company controlled by its largest shareholder, hedge fund Chatham Asset Management. That would mark an end to 163 years of family control of the company. McClatchy also is trying to shift its pension obligations to a federal corporation that guarantees the retirement programs, to avoid depriving employees of benefits they earned. [The Associated Press]

5.

Stocks struggle as China's coronavirus figures stoke confusion

U.S. stock index futures edged higher early Friday in a sign of caution as questions surfaced about the accuracy of China's reports on the spread of its flu-like coronavirus outbreak. Futures for the Dow Jones Industrial Average were up by less than 0.1 percent several hours before the start of trading, while the S&P 500 and the Nasdaq had slightly higher gains. The Dow dropped by 0.4 percent on Thursday as a surge in the number of new coronavirus cases skyrocketed after officials in Hubei province, the epicenter of the outbreak, changed the way they confirm infections. The change dampened hope that the spread of the virus was slowing and the danger of economic fallout was decreasing. [CNBC]