Los Angeles Times - 09.08.2019

L ATIMES.COM/BUSINESS FRIDAY, AUGUST 9, 2019C3

A month after a flight at-
tendant was bitten by an
emotional support animal,
the U.S. Department of
Transportation told the air-
line industry Thursday that
carriers can’t bar certain
dog breeds because airlines
deem them dangerous,
handing a victory to pit bull
fans.
But the federal agency
gave airlines the green light
to require passengers to pro-
duce records on vaccina-
tions and training to deter-
mine if a specific animal
poses a threat on a plane.
And bans on certain species
—snakes, for instance — will
be allowed to stand.
The effort by the Depart-
ment of Transportation to
clarify its policy on fauna in
planes is the latest chapter
in the long-running saga
over emotional support ani-
mals. An increasing number
of airplane passengers have
been bringing animals, some
quite exotic, contending
that they were needed for
emotional support during
flights; airlines suspected
the passengers were merely
trying to save money.
To control the prolifera-
tion, Southwest, JetBlue
and United, among others,
last year began tightening
restrictions on animals, par-
ticularly unusual species.
Delta Air Lines’ ban last year
of all “pit bull-type dogs” as
service animals or emo-
tional support animals
proved especially controver-

sial.

An airline trade group

and a flight attendants

union voiced support for the

federal agency’s efforts to

clarify its rules regarding an-

imals. The Department of

Transportation is expected

to begin enforcing the guide-

lines later this year after

they are published as part of

a formal “notice of proposed

rulemaking.”

Sara Nelson, president of

the Assn. of Flight Attend-

ants-CWA, called the new

guidelines “an important

step to address what has be-

come a mess of animals

loose in the aircraft cabin.”

Airlines for America, a

trade group for the country’s

largest carriers, said that

many fliers have been

fraudulently passing off

their pets as emotional sup-

port animals to avoid having

to pay animal transport fees.

“With over a million pas-

sengers bringing [emotional

support animals] on flights

last year, airlines and air-

ports saw a sharp increase in

incidents such as biting and

mauling by untrained ani-

mals,” the group said. “The

DOT’s guidance is an impor-

tant step toward addressing

this growing problem and

ensuring a safer and healthi-

er travel experience for all.”

United Airlines, one of

the country’s biggest

carriers, reported a 75% in-

crease in emotional support

animals on flights in 2017

compared with 2016. The in-

crease has come with a rise

in incidents of animals uri-

nating, defecating, biting

and barking on planes.

A passenger was mauled

by a 50-pound dog on a Delta

flight in 2017, and a flight at-

tendant on an American Air-

lines flight in July had to get

five stitches on his left hand

after being bitten by an emo-

tional support dog.

Federal law says that any

airline passenger who relies

on an animal to help quell

anxiety or other emotional

problems must be allowed to

bring the emotional support

animal on flights without

charge. But the 1986 law fails

to provide procedures for di-

agnosing a person who

needs to be accompanied by

an emotional support ani-

mal and doesn’t address

what type of animals fliers

can bring aboard a plane.

Service animals must

complete training to be as-

signed to aid someone who is

blind or has some other

physical disability.

Without clarity on what

kind of animals are permit-

ted, several airlines adopted

their own restrictions.

JetBlue announced last

year that it would allow only

cats, dogs and miniature

horses as emotional support

animals. American Airlines

banned several types of cre-

atures, including hedge-

hogs, goats, ferrets, chick-

ens, birds of prey and

snakes. Southwest Airlines

said it would allow only dogs

and cats on leashes to be

emotional support animals.

Delta’s pit bull ban came

after a pit bull bit two Delta

employees on a plane. Pit

bull owners and their sup-

porters collected tens of

thousands of signatures on a

petition asking the Atlanta-

based carrier to reconsider

the ban.

Such a restriction ap-

pears to violate the latest

guidance by the Depart-

ment of Transportation.

“While the Enforcement Of-

fice is aware of high-profile

cases involving pit bulls, air-

lines have not presented evi-

dence that any particular

breed is inherently more

dangerous than others,” the

agency said.

Still, the federal agency

also said airlines can require

passengers to produce docu-

mentation related to an ani-

mal’s vaccination, training

and behavior to determine if

a specific animal that is

scheduled to fly is a “direct

threat to the health or safety

of others.”

A Delta Air Lines spokes-

woman said the airline is still

reviewing the new guide-

lines.

Certain breeds can’t be barred from flights

Federal transportation

officials issue new

rules on emotional

support animals — a

win for pit bull fans.

By Hugo Martin

ASERVICE DOGstrolls through a United Airlines jet as part of a training exercise. Airlines for America, a

trade group, says many fliers have been passing off pets as emotional support animals to avoid transport fees.

Julio CortezAssociated Press

The most profitable cor-

ner of the booming U.S. solar

industry isn’t making — or

even installing — panels. It’s

building the components

that keep electricity flowing

to the power grid.

They’re called inverters,

and the two companies that

make the vast majority of

premium ones in the United

States reported their high-

est revenue ever in the sec-

ond quarter, propelling their

shares to record levels.

Enphase Energy Inc. has

gone from trading at less

than $1 a share in 2017 to

ranking among the world’s

most valuable solar stocks

with a market capitalization

of $3.8 billion. Its slightly

larger rival, SolarEdge Tech-

nologies Inc., has rallied

130% this year.

The systems Enphase

and SolarEdge supply are

crucial to making solar

power work. Panels produce

direct-current electricity

that needs to be converted

to alternating current so it

can be carried into homes or

to power grids. That’s what

inverters do. The ones En-

phase and SolarEdge make

are so specialized and cost-

effective to manufacture

that the companies have

bigger profit margins than

most other segments of the

solar business.

“They’re better than any-

thing in the industry,” said

Jeffrey Osborne, an alterna-

tive energy analyst at Cowen

&Co. “There’s nothing out

there that I’ve seen that can

compete” in terms of profit-

ability.

On Tuesday, Israel-

based SolarEdge reported

its second-quarter results —

record revenue of $325 mil-

lion and profit that beat ana-

lysts’ estimates — and its

shares jumped 25%. Last

week, Fremont, Calif.-based

Enphase posted $134 million

in revenue, up 77% from a

year earlier, and said third-

quarter sales may total as

much as $180 million.

The two companies sup-

plied 89% of the total U.S.

market for module-level in-

verters last year, said Wood

Mackenzie Power & Renew-

ables analyst Lindsay

Cherry. They’ve kept their

edge in the United States

even as China’s Huawei

Technologies Co. and Sun-

grow Power Supply Co.

dominate the global market.

That’s in part because

Huawei canceled plans this

year to enter the U.S. market

after lawmakers suggested a

ban on its technology.

SolarEdge and Enphase

each gave earnings projec-

tions that beat analysts’ es-

timates as demand for solar

rebounds. Wood Mackenzie

Power & Renewables and

the Solar Energy Industries

Assn. projected that photo-

voltaic capacity installa-

tions in the United States

would rise 14% in 2019 after a

two-year slowdown. A global

index of solar stocks main-

tained by Bloomberg has

surged almost 30% this year

after declining in four of the

previous five years.

Inverters represent just a

fraction of the total cost of a

rooftop solar system. For a

typical $15,000 panel instal-

lation, an inverter may cost

about $1,500. But they’ve

proved to be the source of

many breakdowns, and buy-

ers have grown comfortable

with the quality of Enphase

and SolarEdge products,

Osborne said.

The type of “smart” in-

verters that Enphase and

SolarEdge make has also

given the companies a leg

up. These components iso-

late issues on an individual

panel so they don’t affect the

output of an entire system.

And they can be easier to in-

tegrate with batteries, an at-

tractive proposition for in-

stallers trying to sell solar-

plus-battery combinations.

The biggest threat facing

the two manufacturers may

be each other.

“Investors have been

fiercely debating whether

Enphase is taking or will

take market share from So-

larEdge in the U.S.,” Philip

Shen, an analyst at Roth

Capital Partners, said in a

research note. “We believe

the global growth of distrib-

uted solar is big enough for

both.”

Martin writes for

Bloomberg.

Two companies

shine as demand

for solar climbs

A California firm that

makes inverters and

its Israeli rival report

soaring profits, driving

shares to record highs.

By Christopher

Martin

Facebook Inc. has failed
to undo a ruling that allows
millions of its users to band
together in a lawsuit accus-
ing the social network of
gathering and storing bio-
metric data without con-
sent, potentially exposing
the company to billions of
dollars in damages.
A federal appeals court in
San Francisco on Thursday
rejected the company’s re-
quest to block the privacy
suit from proceeding as a
class action on behalf of Illi-
nois Facebook users going
back to 2011 whose photos
were tagged and collected in
a company-controlled data-
base.
The decision exposes the
company to potentially huge
penalties under the Illinois
Biometric Information Pri-
vacy Act of 2008, which pro-
vides for fines of $1,000 to
$5,000 each time a person’s
image is used without con-
sent. The appeals court said
the lower court “did not
abuse its discretion in deter-
mining that a class action

was superior to individual

actions in this case.”

Facebook said it planned

to seek further review of the

ruling.

“We have always dis-

closed our use of face recog-

nition technology and that

people can turn it on or off at

any time,” a company

spokesman said.

The appeal delayed a tri-

al that had been set for July

2018 before a judge who was

unsympathetic to Face-

book’s arguments for lim-

iting its legal exposure. Now

that Facebook has lost the

appeal, the case will once

again move closer to a court-

room.

A high-stakes trial could

hardly come at a worse time

for Facebook, which has

been under siege by activ-

ists, regulators, lawmakers

and prosecutors over its pri-

vacy practices.

Facebook launched a fea-

ture in 2010 that allowed

users to identify people they

recognized in photos using a

tool that automatically

matched names to faces on

pictures uploaded to the so-

cial media site.

The company was sued in

2015 over claims that it “se-

cretly amassed the world’s

largest privately held data-

base of consumer biometric

data.” Citing an Illinois law,

one of only a handful in the

U.S. regulating biometrics,

subscribers alleged they ne-

ver gave Facebook permis-

sion to use their faces as bio-

metric identifiers, while the

company countered that all

users could opt out at any

time.

Google won dismissal of a

similar case in December

2018.

Rosenblatt writes for

Bloomberg.

Facebook loses a court appeal

Federal ruling brings

company a step closer

to privacy lawsuit that

could result in billions

of dollars in damages.

By Joel Rosenblatt

FACEBOOK USERSin Illinois say the firm’s facial recognition software, demoed

above in 2017, violates the state’s Biometric Information Privacy Protection Act.

Eric RisbergAssociated Press

Honda Motor Co. is
pumping more marketing
dollars into competitive vi-
deo gaming to protect its
status as the dominant car-
maker among young, first-
time buyers.
The Japanese auto giant
is becoming the official au-
tomaker of Riot Games
Inc.’s League of Legends
Championship Series, one of
North America’s biggest es-
ports leagues. The news
comes eight months after
Honda signed a partnership
with Team Liquid, a three-
time league champion.
Honda’s goal is to meet
young consumers on their
own terms. The global
esports audience is more
than 450 million people,
accordingto analysis firm
Newzoo, and North America
represents the largest mar-
ket. That group is largely

young, tech-savvy consum-

ers who don’t interact with

marketing in the same way

as their older peers.

They’re also a valuable

commodity in the automo-

tive world. Millennials and

Gen Z are the only genera-

tions increasing their share

of car sales right now, and

Honda is well positioned

with those groups. Its Civic

and Accord models are the

top-selling vehicles for first-

time buyers, according to

the company.

Unlike traditional sports

leagues, which make the

bulk of their money from me-

dia rights and ticket sales,

corporate partnerships re-

main a major source of in-

come for esports teams and

leagues. Honda joins a grow-

ing list of sponsors for Riot’s

North American league, in-

cluding Mastercard Inc.,

State Farm Life Insurance

Co., Walmart Inc. and

Quicken Loans Inc.’s Rocket

Mortgage.

“We really try to find

brands that are investing in

this space, and don’t just see

esports as checking a box,”

said Matthew Archambault,

Riot’s North American head

of esports partnerships and

business development.

“Honda is looking to invest,

commit resources and go

into storytelling.”

The partnership will

launch this weekend with

the league’s Summer Split

playoffs in Los Angeles. Riot

and Honda will work to-

gether on a digital behind-

the-scene documentary se-

ries, plus traditional on-site

advertising that will feature

wrapped cars outside the

venue. Honda, which has

been investing in gaming

since 2014, is also paying for

naming rights to the cham-

pionship series’ most valu-

able player award.

The announcement

comes just a few days after

the esports and gaming in-

dustries reacted vocifer-

ously to politicians —

includingPresident Trump

—referencing violent video

games as a potential inspira-

tion for mass shooters in the

U.S. Though League of Leg-

ends is more fantasy game

than shooter, Archambault

said he didn’t believe video

games were part of the prob-

lem.

“I’m not speaking on be-

half of Riot as a whole, but I

don’t believe there have been

any credible studies that

have linked video games to

bad behavior,” he said. “In

fact, we’ve seen studies

about it helping camarade-

rie and communication, and

I know for a fact that a lot of

veterans play games to over-

come PTSD. There are a lot

of positives that gaming in

general can bring.”

Novy-Williams writes for

Bloomberg.

Honda courts buyers via esports

By Eben Novy-Williams