5 Companies That Had A Rough Week

For the week ending July 19, CRN looks at IT companies that were unfortunate, unsuccessful or just didn't make good decisions.


The Week Ending July 19

Topping this week's roundup of those having a rough week is Sprint, which acknowledged a data security breach that compromised an undisclosed number of customer accounts.

Also making the "Rough Week" list are Huawei for facing proposed legislation that would prohibit it from doing business with U.S. companies and Amazon for being named the subject of a European Commission anti-trust investigation.

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Distributor Arrow Electronics had a tough week when it had to take cost-cutting measures – including shuttering its PC/mobile asset disposition business – in anticipation of lower Q2 sales and earnings. And T-Mobile makes the list for falling to fourth place in the much-watched RootMetrics performance report for mobile service carriers.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's 5 Companies That Came To Win roundup.

Sprint Security Breach Via Samsung Website Exposes Customer Data

Sprint was dealing with the fallout from a security breach this week, disclosing that hackers gained access to an undisclosed number of Sprint customer accounts, including such personal data as first and last names, billing addresses, phone numbers, account numbers, monthly recurring charges, add-on services, device types, device IDs and subscriber IDs.

The telecommunications giant said the attackers gained access to the accounts through Samsung's "add a line" website. Samsung said it recently detected fraudulent attempts to access Sprint user account via Samsung.com using Sprint login credentials that weren't obtained from Samsung.

Sprint said it was first notified of the breach on June 22 and re-secured customer accounts by resetting PIN codes on June 25. The company did not say when hackers first gained access to the accounts or how it learned of the breach. The company said the attackers did not acquire any information that could result in fraud or identity theft.

Huawei Faces Continued Obstacles In The U.S. Including Legislation Blocking Access To American Tech

Chinese telecom giant Huawei had a rough week on several fronts, most notably in proposed legislation in both the U.S. Senate and U.S. House of Representatives that would prevent U.S. suppliers from selling software and component technology to Huawei.

Huawei was blacklisted earlier this year from such purchases, but President Donald Trump recently signaled that he might ease the restrictions. The legislation, called the Defending America's 5G Future Act in the Senate, would prohibit removing Huawei from the Department of Commerce's Entity List and disallow any waivers the Trump Administration would grant to U.S. companies to work with Huawei.

The legislation comes on the heels of a Wall Street Journal report that Futurewei Technologies, a U.S.-based R&D subsidiary of Huawei Technologies, plans to lay off up to several hundred of the approximately 850 people it employs in several research labs in the U.S.

EU Launches Investigation Of Amazon Over Possible Anti-Competitive Conduct

Amazon got the bad news this week: The European Commission, the executive body of the European Union, is launching an antitrust investigation of the online retailer, examining whether Amazon's use of sensitive data from third-party retailers who sell through Amazon is a breach of EU competition rules.

The EC, in a statement, said it will specifically investigate whether Amazon used sensitive data from the independent merchants to gain a competitive advantage over them.

The EC began questioning merchants last year about how Amazon collects their data, according to an CNBC story. If the EC concludes Amazon breached competition rules, it could fine the company up to 10 percent of annual global revenue, the story said.

Arrow Takes Cost-Cutting Measures, Including Winding Down PC/Mobility Asset Disposition Business

Anticipating that its fiscal 2019 second quarter revenue and earnings won't meet expectations, distributor Arrow Electronics said this week that it plans to wind down its PC and mobility asset disposition business as part of an overall set of actions to reduce costs.

On Monday Arrow, in a conference call with analysts, said the PC and mobile asset disposal business was not performing as well as expected and that it had been banned from doing business with a large electronics customer that Arrow did not name.

Arrow has had a long business relationship with Huawei, including selling components to the Chinese telecom giant and distributing a wide range of Huawei products, and the U.S. government has prohibited U.S. technology companies from doing business with Huawei.