Apple Supplier Foxconn Adjusts Production to Avoid Holiday Blues

The logo of Foxconn is pictured on top of a company's building in Taipei, Taiwan October 31, 2022. REUTERS/Carlos Garcia Rawlins
The logo of Foxconn is pictured on top of a company's building in Taipei, Taiwan October 31, 2022. REUTERS/Carlos Garcia Rawlins
TT

Apple Supplier Foxconn Adjusts Production to Avoid Holiday Blues

The logo of Foxconn is pictured on top of a company's building in Taipei, Taiwan October 31, 2022. REUTERS/Carlos Garcia Rawlins
The logo of Foxconn is pictured on top of a company's building in Taipei, Taiwan October 31, 2022. REUTERS/Carlos Garcia Rawlins

Apple Inc supplier Foxconn said on Thursday it expected smartphone revenue to fall this quarter and is adjusting production to prevent recent COVID-19 curbs at a massive iPhone factory in China from impacting holiday orders.

Foxconn has grabbed headlines in recent weeks, with tight virus restrictions at its Zhengzhou plant, the world's largest iPhone factory, disrupting production and fueling concerns over the impact of China's virus policy on global supply chains. The plant in China's industrial hub employs about 200,000 people.

Speaking on an earnings call, Chairman Liu Young-way said the Christmas and Lunar New Year holidays are "very important."

"We will definitely work all out to adjust our production capacity and output, so there is no impact on demand for these two holidays," Liu said. He did not give details.

The cost impact of the COVID controls, including offering bonuses to retain workers, will be short term and Foxconn has been working with the government to resume normal production as soon as possible, he added.

On Wednesday, Foxconn said it would continue production in Zhengzhou under a "closed loop" system, where staff live and work on-site in a bubble isolated from the wider world.

Many employees have fled the factory over the rigid controls which have limited people's movement and seen enforced quarantine, with stories of food and medical shortages circulating on social media.

If disruptions persist, it could hamper Foxconn's ability to ship iPhones in what is traditionally the peak season for Taiwan tech firms as they race to supply cellphones and other electronics for the year-end holiday period in Western markets followed by the Lunar New Year in East Asia.

When asked if customers are pushing for production to be distributed to other Chinese cities or outside of China, Liu said that geopolitics is more likely to play a role in restructuring Foxconn's production footprint than the pandemic.

"Of course there may be other factors that require the reconfiguration of production capacity, such as geopolitics," Liu said.



States Sue TikTok, Claiming its Platform is Addictive and Harms the Mental Health of Children

This photograph taken in Mulhouse, eastern France on October 19, 2023, shows the logo of the social media video sharing app TikTok reflected in mirrors. (AFP)
This photograph taken in Mulhouse, eastern France on October 19, 2023, shows the logo of the social media video sharing app TikTok reflected in mirrors. (AFP)
TT

States Sue TikTok, Claiming its Platform is Addictive and Harms the Mental Health of Children

This photograph taken in Mulhouse, eastern France on October 19, 2023, shows the logo of the social media video sharing app TikTok reflected in mirrors. (AFP)
This photograph taken in Mulhouse, eastern France on October 19, 2023, shows the logo of the social media video sharing app TikTok reflected in mirrors. (AFP)

More than a dozen states and the District of Columbia have filed lawsuits against TikTok on Tuesday, alleging the popular short-form video app is harming youth mental health by designing its platform to be addictive to kids.

The lawsuits stem from a national investigation into TikTok, which was launched in March 2022 by a bipartisan coalition of attorneys general from many states, including California, Kentucky and New Jersey. All of the complaints were filed in state courts.

At the heart of each lawsuit is the TikTok algorithm, which powers what users see on the platform by populating the app’s main “For You” feed with content tailored to people’s interests. The lawsuits also emphasize design features that they say make children addicted to the platform, such as the ability to scroll endlessly through content, push notifications that come with built-in “buzzes” and face filters that create unattainable appearances for users.

In its filings, the District of Columbia called the algorithm “dopamine-inducing,” and said it was created to be intentionally addictive so the company could trap many young users into excessive use and keep them on its app for hours on end. TikTok does this despite knowing that these behaviors will lead to “profound psychological and physiological harms,” such as anxiety, depression, body dysmorphia and other long-lasting problems, the complaint said, The AP reported.

“It is profiting off the fact that it's addicting young people to its platform,” District of Columbia Attorney General Brian Schwalb said in an interview.

Keeping people on the platform is "how they generate massive ad revenue," Schwalb said. "But unfortunately, that's also how they generate adverse mental health impacts on the users.”

TikTok does not allow children under 13 to sign up for its main service and restricts some content for everyone under 18. But Washington and several other states said in their filing that children can easily bypass those restrictions, allowing them to access the service adults use despite the company's claims that its platform is safe for children.

Their lawsuit also takes aim at other parts of the company’s business.

The district alleges TikTok is operating as an “unlicensed virtual economy" by allowing people to purchase TikTok Coins – a virtual currency within the platform – and send “Gifts” to streamers on TikTok LIVE who can cash it out for real money. TikTok takes a 50% commission on these financial transactions but hasn’t registered as a money transmitter with the US Treasury Department or authorities in the district, according to the complaint.

Officials say teens are frequently exploited for sexually explicit content through TikTok’s LIVE streaming feature, which has allowed the app to operate essentially as a “virtual strip club" without any age restrictions. They say the cut the company gets from the financial transactions allows it to profit from exploitation.

Many states have filed lawsuits against TikTok and other tech companies over the past few years as a reckoning grows against prominent social media platforms and their ever-growing impact on young people’s lives. In some cases, the challenges have been coordinated in a way that resembles how states previously organized against the tobacco and pharmaceutical industries.

Last week, Texas Attorney General Ken Paxton sued TikTok, alleging the company was sharing and selling minors' personal information in violation of a new state law that prohibits these practices. TikTok, which disputes the allegations, is also fighting against a similar data-oriented federal lawsuit filed in August by the Department of Justice.

Several Republican-led states, such as Nebraska, Kansas, New Hampshire, Kansas, Iowa and Arkansas, have also previously sued the company, some unsuccessfully, over allegations it is harming children's mental health, exposing them to “inappropriate” content or allowing young people to be sexually exploited on its platform. Arkansas has brought a legal challenge against YouTube, as well as Meta Platforms, which owns Facebook and Instagram and is being sued by dozens of states over allegations its harming young people's mental health. New York City and some public school districts have also brought their own lawsuits.

TikTok, in particular, is facing other challenges at the national level. Under a federal law that took effect earlier this year, TikTok could be banned from the US by mid-January if its China-based parent company ByteDance doesn't sell the platform by mid-January.

Both TikTok and ByteDance are challenging the law at an appeals court in Washington. A panel of three judges heard oral arguments in the case last month and are expected to issue a ruling, which could be appealed to the US Supreme Court.