
U.S. blocks Philips' $3.3B sale of Lumileds to Asian buyers - nkurz
http://www.reuters.com/article/us-philips-lumileds-sale-idUSKCN0V02D4
======
vonklaus
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...](http://www.lighting.philips.co.uk/systems/connected-
lighting.html)

[0][http://arstechnica.com/tech-policy/2014/05/photos-of-an-
nsa-...](http://arstechnica.com/tech-policy/2014/05/photos-of-an-nsa-upgrade-
factory-show-cisco-router-getting-implant/)

~~~
cowsandmilk
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
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
Any company could pivot to anything in the future. Why would that be relevant
to a national security intervention like this?

~~~
emn13
Not to mention - if the US was afraid of chinese ASICs in general, well...
it's a little late to get picky.

------
johansch
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?

~~~
chaostheory
> 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.

~~~
johansch
"'Former' means first and 'latter' means last."

Did you confuse the two? I'm confused by your comment. :)

~~~
chaostheory
Sorry, you're right. I meant the latter. (slightly dyslexic apparently)

------
pmontra
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
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
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
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.

~~~
DrScump
<You can't just pick up your company and move it from one country to another>

This has happened several newsworthy times in the past few years via the
"inversion" mechanism, e.g. Medtronic, Pfizer, Applied Materials...

~~~
progressive_dad
What's stopping this becoming a new business model for SeaLand? Registering
corporations as international entities undercutting the most favorable
combinations of incentives from all current countries?

~~~
culturestate
SeaLand isn't recognized by any nation, and corporations can't operate as
stateless entities.

------
lumberjack
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-
sc...](http://www.bloomberg.com/news/articles/2016-01-22/philips-scraps-
lumileds-sale-to-go-scale-on-u-s-opposition)

------
venomsnake
How can lightbulbs be national security issue?

~~~
nsns
national [ _economic_ ] security

~~~
gaius
They are the same thing, as Russia will shortly re-learn. I guess they have
forgotten why they lost the Cold War.

------
personjerry
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.

~~~
pm90
The US is like any other country in that it will act on its own self-interest.
That is basically all there is to it. Now, whether the policies that it
pursues to that end are meaningful or not depends on a lot of things,
including, but not limited to, the State Department, White House, CIA etcetc.
So, there will be some amount of inconsistency in US policy over time,
depending on the nature of people who run the ship.

~~~
skissane
The US is hardly the only country to block foreign investment / sales/mergers
with foreign corporations on "national security" or "national interest"
grounds. Here in Australia we have the Foreign Investment Review Board (FIRB)
which does much the same thing. I guess one difference is that the US is a
much larger population and economy than Australia's, so when the US does it is
more likely to be newsworthy on a global scale. Also, there are many high tech
firms headquartered in the US, relatively few in Australia; most of the
similar stories in Australia tend to revolve around mining, agriculture, and
public infrastructure such as ports (and are thus less interesting to a site
like HN).

------
johansch
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
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
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
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
I think Elon Musk's ideas around VW were more sane:

[http://www.huffingtonpost.com/entry/elon-musk-volkswagen-
emi...](http://www.huffingtonpost.com/entry/elon-musk-volkswagen-emissions-
scandal_us_5674686de4b014efe0d56bba)

(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.

~~~
pkaye
I can see why Musk would like this alternative remedy.

~~~
johansch
Yes, but the point is that we would all benefit.

Now all that happens is that the other traditional car manufacturers get a leg
up. They are all businesses run by profiteers rather than technologists. They
have no interest in dramatically changing the scene.

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

~~~
johansch
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.

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

