6 ms·

U.S. blocks Philips' $3.3B sale of Lumileds to Asian buyers

120 points by nkurz 11y ago

venomsnake 11y ago
How can lightbulbs be national security issue?
- deleted 11y ago
  [deleted]
  - lumilumes 11y ago
    Laugh, but LEDs by their nature are semiconductor devices capable of very high speed modulation, and the complexity of what's being built into the LED packages is increasing. Subversion of these low-level components to create a data exfiltration vector is a legitimate concern, even if it may not be the deciding factor in this case.
    - notalaser 11y ago
      A LED is also, inherently, a photodiode (albeit a bad one). You can use it to build useful, if basic, detection circuits.
    - johansch 11y ago
      "to create a data exfiltration vector" That sounds interesting, could you expand please?
      - noir_lord 11y ago
        You can modulate an LED at a very high frequency and with the correct receiver send data[1] theoretically you could put a passive receiver into a light fitting (or something as low tech as a high gain microphone), have it record data and then play it back via the LED's, someone walking through the building with the correct receiver could then download the data. It's a long shot but intelligence services have done strange things (fake rocks, bugging devices in typewriters, setting up cameras over copy machines etc etc) [1] https://en.wikipedia.org/wiki/Li-Fi https://en.wikipedia.org/wiki/Li-Fi
        johansch 11y ago
        Calling it a long shot is almost like an over-estimation. And vetoing the sale of a billion dollar company because of the super niche spy case? Yeah, no, that isn't credible.
        galtwho 11y ago
        Why? do you think USA national security isn't worth more than a billion? How can you have a doubt after all that we have known post-Snowden
- nsns 11y ago
  national [economic] security
  - rubberstamp 11y ago
    free market
  - gaius 11y ago
    They are the same thing, as Russia will shortly re-learn. I guess they have forgotten why they lost the Cold War.
  - JoBrad 11y ago
    Exactly. It's very hard to argue that a strong economic risk is not also a national risk.
- gaius 11y ago
  One word: Lifi.
- walshemj 11y ago
  well France declared a yogurt maker in the national interest
  - johansch 11y ago
    I agree, this is the same kind of egregious misuse of this kind of law.
  - DrScump 11y ago
    was it a critical repository of culture?
- justinclift 11y ago
  Maybe the further development of the LED tech could be useful for creating militarily useful lasers?
personjerry 11y ago
Please excuse my ignorance as I am but a student starting to learn more about the world, but it seems as though the more I learn about the power and policies of the US government, the more I see potential (and indeed realization at times) of an abuse of that power and law for money. For example things like the Iran Contra and war on terror seem awfully protracted and conveniently secures oil while selling weapons. At the time it might've merely been suspicious but certainly looking back we should be wary of the excuses of "security" and "democracy". Now, it seems quite convenient for the US to deny sales of resources (such as this technology, but also in positions such as Canadian gas) to China, with nebulous "security" reasons. Well, perhaps tying US involvement in the Middle East with this sale is speculative. But I am wary that the US tends to exercise powers such as military and "law" in what should otherwise be a "fair" global economic system.
- dba7dba 11y ago
  There will never be a "fair" global economic system. Have you been "fair" when it comes to dating life? Like letting someone else date that someone you like because you want to be "fair"? Simply put, the pie is not big enough for everyone (never will be) and someone will always want to game the system so that he/she can get more of the pie than others.
  - spacehome 11y ago
    Uh, not the best example. I don't "let" or "not let" other consenting adults date.
    - dba7dba 11y ago
      Wrote it at 2am so not the best example yes. But how about giving up your job because you want to be fair? Or not accepting a job opening because you want to be fair?
- hellbanner 11y ago
  23 things they don't tell you about capitalism http://www.amazon.com/gp/product/1608193381 http://www.amazon.com/gp/product/1608193381
pmontra 11y ago
I understand that the USA have a lot of leverage against any global company and you don't want to displease them, but what are the actual legal foundations for the USA to approve that deal? I mean, the headquarters are in San Jose but the company is Dutch and Lumileds have other offices around the world.
- culturestate 11y ago
  The key issue is that Lumileds itself is organized as a U.S. corporation; its current ownership is inconsequential, whether it's a U.S. citizen or a Dutch conglomerate. CFIUS has had the legal authority to investigate -- and the president to block -- any transaction involving control of a U.S. company by a foreign national since the 1950s. It's worth noting that while (as far as I'm aware) there are relatively few CFIUS-equivalent organizations worldwide, most countries have some kind of mechanism for similar actions. That they rarely use them is a different issue entirely.
  - tormeh 11y ago
    They can always just change nationality. That's a pretty common thing for companies to do. So nationality doesn't matter; it's a flag of convenience at best. The real issue is that the US government has the final say on which products are legal to sell in the US. If the USG says that no lumileds or products containing lumileds can be sold or imported in the US, then Lumileds is fucked. You don't want to lose the US market. Same goes for the EU.
    - culturestate 11y ago
      You can't just pick up your company and move it from one country to another, especially when you're the size of Lumileds. The process for changing domicile is called inversion, and to make it work the U.S. corporation must either be acquired by or merge with a foreign corporation -- and that transaction would, again, be subject to review by CFIUS. Market access is a big carrot, yes, but it's not the stick in this case.
      - 11y ago
JoneyKing 11y ago
Good news!
hokkos 11y ago
Great move by the US, Europeans wouldn't even dare to do such thing.
vonklaus 11y ago
Philips partners with Cisco to install distributed hardware and lighting into corporate institutions and high end hotels. Cisco[0] is a known entry point for embedded surveillance techniques. The lighting system, on top of being entirely contolled via remote, is networked into the buildings infrastructure. Also, as a focal point[1], it connects with cellphones and other networked sensors to provide the amount of lighting, temperature, occupancy and other data which it uses to automate functionality. The temperature sensors map the entire building, as likely would motion sensors. This tech provides realtime data about who and where people are within a building, control of the actual lighting, and mappings of every structure they are installed in, some of which are high end hotels, corporate offices, research labs and medical facilities. [1]http://www.lighting.philips.co.uk/systems/connected-lighting.html http://www.lighting.philips.co.uk/systems/connected-lighting... [0]http://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa-upgrade-factory-show-cisco-router-getting-implant/ http://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa-...
- cowsandmilk 11y ago
  Lumileds, the division of Philips for sale, does not make connected lighting. That is made by Philips lighting. That is, Lumileds makes LEDs. Philips lighting makes light bulbs, that have LEDs inside. Any other sensors and connected portion of the product are also built into the bulb, but not by Lumileds.
  - djcapelis 11y ago
    For now maybe, but as we've seen with most LED lighting, the trend is to incorporate ASICs into the LED packages. So Lumiled's products would presumably be capable of all kinds of interesting things. If not immediately, than in a year or two.
    - johansch 11y ago
      Any company could pivot to anything in the future. Why would that be relevant to a national security intervention like this?
lumberjack 11y ago
Not a reliable source but more plausible then what is being speculated ITT: >The sale stalled over the transfer of semiconductor technology involved in making LEDs, a device that emits light, one person familiar with the situation said last year. http://www.bloomberg.com/news/articles/2016-01-22/philips-scraps-lumileds-sale-to-go-scale-on-u-s-opposition http://www.bloomberg.com/news/articles/2016-01-22/philips-sc...
johansch 11y ago
This obvious overstep (LEDs? really?) will give the EU some serious (internal) ammunition in future trade deal negotiations. It also makes the US a less attractive region for foreign investment.
- adventured 11y ago
  The EU's increasingly aggressive attacks on US tech giants has given the US some serious ammunition. It's going to get a lot uglier yet. The US just nearly bankrupted VW. The DOJ is seeking up to $48 billion in their lawsuit; settling for a likely fraction of that will hammer VW. They could have easily let them off with a modest slap on the wrist, and instead chose to put on the full-court press. It's retribution and likely just the start of a back and forth between the US and EU.
  - johansch 11y ago
    The EU might have started it (Microsoft, Google - I felt that was a measured response though), but the US is currently stepping up the game with a 10x magnitude difference in force. This feels somewhat aggressive to us Europeans. The VW stuff seems way too aggressive. Particularly with the very recent history of bailing out US car makers in mind.
    - bronson 11y ago
      Your comparison is clumsy. US car makers didn't intentionally break the law to increase the amount of poison gas entering the environment. The GM ignition switch or Taketa air bag cases would be more apt.
      - johansch 11y ago
        I think Elon Musk's ideas around VW were more sane: http://www.huffingtonpost.com/entry/elon-musk-volkswagen-emissions-scandal_us_5674686de4b014efe0d56bba http://www.huffingtonpost.com/entry/elon-musk-volkswagen-emi... (His idea was essentially: societal rehabilitation rather than the electric chair.) I brought up the bailout because it establishes an anti-competitive pattern. Yes, I am aware that various European nations have done various similar bailouts as well, but I'm proud that my country (Sweden) resisted that when Volvo and SAAB were in financial danger a few years ago.
hammock 11y ago
Perhaps Lumileds are components in the assembly of vulnerable military equipment? Or Don Fanucci didn't get his action yet?
- johansch 11y ago
  There's an easy way of safeguarding against that: Estimate the amount of units you (Lockheed Martin, Boeing?) will need during the next ten years. Triple the amount. Order that amount from mouser.com. :) Seriously - LEDs are commodities nowadays.
johansch 11y ago
Just a note: There is an obvious, non-technological bias in this thread at the moment of posting. The top-voted commented is objectively proven to be incorrect and dissenting opinions are being downvoted. I would like to call on the HN users to think and vote on this on a technological, rather than a selfish nationalistic perspective. The alternative discussion to be had is: Is Hacker News thought to be a global site or a US site with foreign guests? What would the consequences be if the conclusion was that it is the latter?
- nothrabannosir 11y ago
  This sounds interesting but I have absolutely no idea which conments you're talking about ("first" is variable), and why they would or would not be false. I say this because every ZH story on hn is rife with astroturf (or just lowest common denominator patriotism), whose comments reek of "but, but, usa this, usa that." Im not from either country, but Ive learned to tread the comments section with extreme care as soon as "china" appears in the title. Yet, maybe you have a point. I just can't tell. So, would you care to elaborate?
  - johansch 11y ago
    This comment is currently at the top: https://news.ycombinator.com/item?id=10957933 https://news.ycombinator.com/item?id=10957933 OP: "LEDs are being built into systems that deal with surveillance of buildings." Replies: "Lumileds only build the actual LEDs. No surveillance/data gathering."
- chaostheory 11y ago
  > Is Hacker News thought to be a global site or a US site with foreign guests? What would the consequences be if the conclusion was that it is the latter? It feels like it's the former, but I dont' have the data to actually back that up. Most stories seem US-centric with occasional posts about China and Japan. Either 1. there's not much going on in the EU (or HN users aren't interested in it), or 2. I'm not able to notice the origin of many of the companies and projects.
  - 11y ago

120 points by nkurz 11y ago

venomsnake 11y ago

How can lightbulbs be national security issue?

deleted 11y ago
[deleted]
- lumilumes 11y ago
  Laugh, but LEDs by their nature are semiconductor devices capable of very high speed modulation, and the complexity of what's being built into the LED packages is increasing. Subversion of these low-level components to create a data exfiltration vector is a legitimate concern, even if it may not be the deciding factor in this case.
  - notalaser 11y ago
    A LED is also, inherently, a photodiode (albeit a bad one). You can use it to build useful, if basic, detection circuits.
  - johansch 11y ago
    "to create a data exfiltration vector" That sounds interesting, could you expand please?
    - noir_lord 11y ago
      You can modulate an LED at a very high frequency and with the correct receiver send data[1] theoretically you could put a passive receiver into a light fitting (or something as low tech as a high gain microphone), have it record data and then play it back via the LED's, someone walking through the building with the correct receiver could then download the data. It's a long shot but intelligence services have done strange things (fake rocks, bugging devices in typewriters, setting up cameras over copy machines etc etc) [1] https://en.wikipedia.org/wiki/Li-Fi https://en.wikipedia.org/wiki/Li-Fi
      - johansch 11y ago
        Calling it a long shot is almost like an over-estimation. And vetoing the sale of a billion dollar company because of the super niche spy case? Yeah, no, that isn't credible.
        galtwho 11y ago
        Why? do you think USA national security isn't worth more than a billion? How can you have a doubt after all that we have known post-Snowden
nsns 11y ago
national [economic] security
- rubberstamp 11y ago
  free market
- gaius 11y ago
  They are the same thing, as Russia will shortly re-learn. I guess they have forgotten why they lost the Cold War.
- JoBrad 11y ago
  Exactly. It's very hard to argue that a strong economic risk is not also a national risk.
gaius 11y ago
One word: Lifi.
walshemj 11y ago
well France declared a yogurt maker in the national interest
- johansch 11y ago
  I agree, this is the same kind of egregious misuse of this kind of law.
- DrScump 11y ago
  was it a critical repository of culture?
justinclift 11y ago
Maybe the further development of the LED tech could be useful for creating militarily useful lasers?

personjerry 11y ago

Please excuse my ignorance as I am but a student starting to learn more about the world, but it seems as though the more I learn about the power and policies of the US government, the more I see potential (and indeed realization at times) of an abuse of that power and law for money. For example things like the Iran Contra and war on terror seem awfully protracted and conveniently secures oil while selling weapons. At the time it might've merely been suspicious but certainly looking back we should be wary of the excuses of "security" and "democracy". Now, it seems quite convenient for the US to deny sales of resources (such as this technology, but also in positions such as Canadian gas) to China, with nebulous "security" reasons. Well, perhaps tying US involvement in the Middle East with this sale is speculative. But I am wary that the US tends to exercise powers such as military and "law" in what should otherwise be a "fair" global economic system.

dba7dba 11y ago
There will never be a "fair" global economic system. Have you been "fair" when it comes to dating life? Like letting someone else date that someone you like because you want to be "fair"? Simply put, the pie is not big enough for everyone (never will be) and someone will always want to game the system so that he/she can get more of the pie than others.
- spacehome 11y ago
  Uh, not the best example. I don't "let" or "not let" other consenting adults date.
  - dba7dba 11y ago
    Wrote it at 2am so not the best example yes. But how about giving up your job because you want to be fair? Or not accepting a job opening because you want to be fair?
hellbanner 11y ago
23 things they don't tell you about capitalism http://www.amazon.com/gp/product/1608193381 http://www.amazon.com/gp/product/1608193381

pmontra 11y ago

I understand that the USA have a lot of leverage against any global company and you don't want to displease them, but what are the actual legal foundations for the USA to approve that deal? I mean, the headquarters are in San Jose but the company is Dutch and Lumileds have other offices around the world.

culturestate 11y ago
The key issue is that Lumileds itself is organized as a U.S. corporation; its current ownership is inconsequential, whether it's a U.S. citizen or a Dutch conglomerate. CFIUS has had the legal authority to investigate -- and the president to block -- any transaction involving control of a U.S. company by a foreign national since the 1950s. It's worth noting that while (as far as I'm aware) there are relatively few CFIUS-equivalent organizations worldwide, most countries have some kind of mechanism for similar actions. That they rarely use them is a different issue entirely.
- tormeh 11y ago
  They can always just change nationality. That's a pretty common thing for companies to do. So nationality doesn't matter; it's a flag of convenience at best. The real issue is that the US government has the final say on which products are legal to sell in the US. If the USG says that no lumileds or products containing lumileds can be sold or imported in the US, then Lumileds is fucked. You don't want to lose the US market. Same goes for the EU.
  - culturestate 11y ago
    You can't just pick up your company and move it from one country to another, especially when you're the size of Lumileds. The process for changing domicile is called inversion, and to make it work the U.S. corporation must either be acquired by or merge with a foreign corporation -- and that transaction would, again, be subject to review by CFIUS. Market access is a big carrot, yes, but it's not the stick in this case.
    - 11y ago

JoneyKing 11y ago

Good news!

hokkos 11y ago

Great move by the US, Europeans wouldn't even dare to do such thing.

vonklaus 11y ago

Philips partners with Cisco to install distributed hardware and lighting into corporate institutions and high end hotels. Cisco[0] is a known entry point for embedded surveillance techniques. The lighting system, on top of being entirely contolled via remote, is networked into the buildings infrastructure. Also, as a focal point[1], it connects with cellphones and other networked sensors to provide the amount of lighting, temperature, occupancy and other data which it uses to automate functionality. The temperature sensors map the entire building, as likely would motion sensors. This tech provides realtime data about who and where people are within a building, control of the actual lighting, and mappings of every structure they are installed in, some of which are high end hotels, corporate offices, research labs and medical facilities. [1]http://www.lighting.philips.co.uk/systems/connected-lighting.html http://www.lighting.philips.co.uk/systems/connected-lighting... [0]http://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa-upgrade-factory-show-cisco-router-getting-implant/ http://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa-...

cowsandmilk 11y ago
Lumileds, the division of Philips for sale, does not make connected lighting. That is made by Philips lighting. That is, Lumileds makes LEDs. Philips lighting makes light bulbs, that have LEDs inside. Any other sensors and connected portion of the product are also built into the bulb, but not by Lumileds.
- djcapelis 11y ago
  For now maybe, but as we've seen with most LED lighting, the trend is to incorporate ASICs into the LED packages. So Lumiled's products would presumably be capable of all kinds of interesting things. If not immediately, than in a year or two.
  - johansch 11y ago
    Any company could pivot to anything in the future. Why would that be relevant to a national security intervention like this?

lumberjack 11y ago

Not a reliable source but more plausible then what is being speculated ITT: >The sale stalled over the transfer of semiconductor technology involved in making LEDs, a device that emits light, one person familiar with the situation said last year. http://www.bloomberg.com/news/articles/2016-01-22/philips-scraps-lumileds-sale-to-go-scale-on-u-s-opposition http://www.bloomberg.com/news/articles/2016-01-22/philips-sc...

johansch 11y ago

This obvious overstep (LEDs? really?) will give the EU some serious (internal) ammunition in future trade deal negotiations. It also makes the US a less attractive region for foreign investment.

adventured 11y ago
The EU's increasingly aggressive attacks on US tech giants has given the US some serious ammunition. It's going to get a lot uglier yet. The US just nearly bankrupted VW. The DOJ is seeking up to $48 billion in their lawsuit; settling for a likely fraction of that will hammer VW. They could have easily let them off with a modest slap on the wrist, and instead chose to put on the full-court press. It's retribution and likely just the start of a back and forth between the US and EU.
- johansch 11y ago
  The EU might have started it (Microsoft, Google - I felt that was a measured response though), but the US is currently stepping up the game with a 10x magnitude difference in force. This feels somewhat aggressive to us Europeans. The VW stuff seems way too aggressive. Particularly with the very recent history of bailing out US car makers in mind.
  - bronson 11y ago
    Your comparison is clumsy. US car makers didn't intentionally break the law to increase the amount of poison gas entering the environment. The GM ignition switch or Taketa air bag cases would be more apt.
    - johansch 11y ago
      I think Elon Musk's ideas around VW were more sane: http://www.huffingtonpost.com/entry/elon-musk-volkswagen-emissions-scandal_us_5674686de4b014efe0d56bba http://www.huffingtonpost.com/entry/elon-musk-volkswagen-emi... (His idea was essentially: societal rehabilitation rather than the electric chair.) I brought up the bailout because it establishes an anti-competitive pattern. Yes, I am aware that various European nations have done various similar bailouts as well, but I'm proud that my country (Sweden) resisted that when Volvo and SAAB were in financial danger a few years ago.

hammock 11y ago

Perhaps Lumileds are components in the assembly of vulnerable military equipment? Or Don Fanucci didn't get his action yet?

johansch 11y ago
There's an easy way of safeguarding against that: Estimate the amount of units you (Lockheed Martin, Boeing?) will need during the next ten years. Triple the amount. Order that amount from mouser.com. :) Seriously - LEDs are commodities nowadays.

johansch 11y ago

Just a note: There is an obvious, non-technological bias in this thread at the moment of posting. The top-voted commented is objectively proven to be incorrect and dissenting opinions are being downvoted. I would like to call on the HN users to think and vote on this on a technological, rather than a selfish nationalistic perspective. The alternative discussion to be had is: Is Hacker News thought to be a global site or a US site with foreign guests? What would the consequences be if the conclusion was that it is the latter?

nothrabannosir 11y ago
This sounds interesting but I have absolutely no idea which conments you're talking about ("first" is variable), and why they would or would not be false. I say this because every ZH story on hn is rife with astroturf (or just lowest common denominator patriotism), whose comments reek of "but, but, usa this, usa that." Im not from either country, but Ive learned to tread the comments section with extreme care as soon as "china" appears in the title. Yet, maybe you have a point. I just can't tell. So, would you care to elaborate?
- johansch 11y ago
  This comment is currently at the top: https://news.ycombinator.com/item?id=10957933 https://news.ycombinator.com/item?id=10957933 OP: "LEDs are being built into systems that deal with surveillance of buildings." Replies: "Lumileds only build the actual LEDs. No surveillance/data gathering."
chaostheory 11y ago
> Is Hacker News thought to be a global site or a US site with foreign guests? What would the consequences be if the conclusion was that it is the latter? It feels like it's the former, but I dont' have the data to actually back that up. Most stories seem US-centric with occasional posts about China and Japan. Either 1. there's not much going on in the EU (or HN users aren't interested in it), or 2. I'm not able to notice the origin of many of the companies and projects.
- 11y ago