tv Best of Bloomberg West Bloomberg September 3, 2016 6:00am-7:01am EDT
we will discuss the regulations. -- first, to the week european regulators slammed apple with a $14.5 billion tax bill, the largest tax penalty in the eu." crackdown on sweetheart deals. these are arrangements which a company moves profits to where they're taxed advantageously. their corporate tax rate is the lowest in western europe and it is attracting more than 700 u.s. companies to set up shop, including google and facebook. apple employs 6000 people in ireland. pay ad allowed apple to tax on it european profit then 2013 --2003. that gave apple and unfair to manage. here she is in an interview with bloomberg tuesday. >> the tax rate in ireland is
for .5% in most companies -- 12.5%, and most companies, they pay corporate tax rate in ireland. they have to look at some ies penne tiny fraction of the tax that they pay. that is not fair competition. it is not a level playing field. >> we also spoke to the irish finance minister and we will bring you his comments in a moment. take a listen to matt larson and alex webb on apple." 's response. apple defense -- apple's defense, this agreement has been put into place since 1991 and it was all legal. the agreement was above board.
>> we got a letter from tim cook. they included the original picture of steve jobs at the ireland factory. >> he opened a 60% plant in court. -- cork. one of --what are the next steps for apple and a legal battle? >> apple and ireland will appeal this decision to the european general court in luxembourg. it is the same court hearing the ,ppeals in the starbucks netherlands investigation and the fiat chrysler case. it could give some indication of how this appeals court may take the decision. this whole process is going to take, ballpark, two years to determine. after that, there are for the
opportunities to appeal to higher courts in europe. to this leading up point, the u.s. has been stepping up its defense of apple calling the eu a supernatural tax authority indicating the are overstepping their bounds. what do we hear from yet if it's government today? >> they are not happy. you have to be careful calling them a defense of apple. they are interested in is insuring the tax is paid in the u.s. every dollar that apple pays in tax overseas is deducted from the taxing me have to pay in the u.s. should they ever repay trade their funds. $14 million going to ireland, that is $14.5 billion not going to the irs. >> we mention that apple is fighting this ruling and ireland is fighting this as well. collect --reland 12 why would ireland want to collect from the richest country
in the world? they point out the opposition party would like to see just that. >> why don't you just accept the money and shut up? 13 billion euros plus interest is a lot of money. minister ofs a finance, i have a responsibility of advising the government on these matters. this is a government that a rescued ireland from the verge of bankruptcy from 2011 on. ours fundamental to economic policies, and we stand by our economic policies, and we are going to protect our economic policies. we're not going to get into a situation of short-term gain for long-term damage of the economy. >> standing his ground there, alex. what kind of long-term damage by we talking about? >> this is, as we heard yesterday, people were saying on
a scale from one to 10, 10 being extremely damaging, a two to three. thousands of people employed by tech companies -- ireland has thousands of people. employed by tech companies. from the flipside, arlen is 80 billion euros in debt. youou are a german citizen are thinking why should i subsidize apple to have 5.5 million jobs in ireland? at the tax records that other companies have, do any of them have similar arrangements? >> a lot of companies make use we consider its austin, texas of europe.
developed favorable tax laws, specifically relating to transfer pricing. as a result, you got a lot of companies that have organizations, subsidiaries set up in ireland that have these transfer pricing arrangements in place. you also have a big content enough life signs pharmaceutical companies. that has significant operations in ireland, both because it is a good place to be, there are favorable tax laws and favorable treatment and how their tax system treats these transfer price agreements. it is a little bit of a warning shot from the european commission and it may encourage some companies to take a second look at whether they have negotiated to sweet of a tax deal, articulate a corporate structures and how they are multinational. >> our conversation with bloomberg intelligence analyst matt larson from washington and bloomberg news reporter alex webb covers apple.
don't know it is just a place to write stories and ideas, and is tont to be open for anyone find her audience. an update on blogging and social media, but it is focused on things that can be longer. president hasthe published on it, to individuals who just have personal stories to tell. emily: president obama, bono, hillary clinton? . what do you see is the balance between amateurs, influencers, and publishers? >> we think the mix is really important and makes a conversation better. of medium,point unlike a stand-alone website, if you publish on medium, you are in the mix. it is -- your ideas bounce
around with other people and you can respond. people can find you. mottos is great ideas can come from anywhere. many professional journalists and creators and writers creating all the time, but especially when it comes to writing, there are tons of individual that have unique perspectives and ideas and the ability to articulate them. we offer a place to do that do find your audience. the mix is what makes it work. it is where a business leader can respond, can write something and their customer can respond to them, or vice versa. because there is that diversity of voices, you get much more inside. emily: it is simple, elegant. where are your monetization? how do you maintain that experience and make money at the same time? growing therking on monetization piece right now. we just started it in the spring
after working on the platform for a couple of years and making it work for a couple of individuals. we are working on enabling professionals, means getting them paid. we have advertising is part of the problem -- as part of it were brands are publishing on medium and working on the publishing side. implementingrs are our subscription program as well, so you can create a membership program for your content. clinton usedy medium to disclose her bp pick. how does that come about? do you have a team of people trying to get hillary to post on medium? what is the play-by-play? team inve an outreach
d.c. that is a white glove service team. they help get the ball rolling. it has taking on its own momentum. you can see medium has become the default if whether you are d.c. or has something of substance to stay. medium has become the default for that. major political professionalts of journalism, etc., it has gotten this momentum. people from that world read it. emily: it is interesting because these are things that would be publishing traditional newspapers. one person who has not published on medium is donald trump. any effort to get him? aree her happily open -- we happily open to what he has to say. we are happy to add him to the mix.
emily: he has taken find advantage of twitter. [laughter] he seems to express himself in 140 characters. what is it like watching trump takeoff on twitter? >> the same as everybody else, i guess. a mr. of the wildermuth and fear -- a mixture of bewilderment and fear. tweets -- you can distinguish his tweets from his staff. years ago when we built in that ability to see the source, we did not picture that particular use for that, but i am glad that is theire. >> the title was silicon valley created donald trump. do you think silicon valley created donald trump, or twitter created donald trump? without twitter, donald trump
would not be where he is? >> i would hate for us to take the credit for the blame for that. i think it is a result largely of our media ecosystem now that has tremendously good and bad things. working on the internet, i was very excited that anyone could put their voice out there, and i really thought, the world is going to be smarter, wiser, more intelligent when the truth is out there unfettered. we are stilleason working in this area, i realized it is not as simple as that. the tremendous amount of noise has not made us smarter in many ways, it has made us dumber. soy're ours -- there are much we have to do to stay on top of this free flow of information to take it and of the society. we have a lot of work to do. emily: you have had plenty ceos saying the are against trump.
do you think he would be good or bad for innovation? >>* i am firm against trump. firmly against trump. emily: how do you balance your ?ersonal and political views foraw this with facebook prioritizing stories. >> i am not firmly against all republicans. what i am proud of is on twitter and medium, we built platforms that are neutral and work hard to give an equal. size on medium -- equal size. we have an even mix on both sides. on our outreach team, we employed in equal number of people who reach out to the right and left.
there is nothing in our system and biases one side over the other. that has created a very healthy exchange. i read and recommend viewpoints from both sides. because they are on the same platform, again, people are more .pen to them higher emily emily: we will continue our interview. that is next. this is bloomberg. ♪
i asked evan williams in part two of our conversation. >> it is a little bit scary for a knowns, especially if source of money is fighting unit. while i wasn't a fan of , freedomg gawker did of the press is critical. prevail in the appeal. it would be a bad thing if random media sites can be taken out for people who don't like what they say. emily: it is an important question that you deal with behind-the-scenes --what is free speech and what counts as fair? what is going to far? blogger, thered was online harassment. seems like nothing has changed. >> it has gotten worse for sure.
the early days of the internet, it was a little better and we started felt -- and we felt like there is a big club and if you are there, you are welcome. to use the metaphor, we had dinner parties with our front door open. so much of the internet has evolved with that same default framework. the idea that anyone can join any conversation is not something we expect in the real world. because so many wonderful things ise from that online, there a lot of desire to hold onto that ability, and yet, it causes so much problems when you open it up to the masses. emily: why is it so hard to quiet the trolls? >> because the line is always fuzzy. when you dig into these issues, it seems easier from the other side when you look at the details. there is a lot of stuff, a lot of the rhetoric would give you the impression that twitter and
other services don't do anything. there is a huge team focused on this issue and delete stuff all the time. where it is tricky is where the lines get blurry, and if you have a philosophy of we want to defend free speech, and we want to allow people the principle of you have to. free speech, even if you do not agree with it. even though it is not a legal agreement because twitter is a private entity, it is a value that we hold that people should be able to get out. even if they are unpopular, and therefore, there is a judgment call all the time. --arelicies are involving evolving. emily: do you think twitter should have taken this down sooner? >> the acknowledgment a couple of years ago. and myself, even from the
earliest days, we would have thought about a different architecture for the service had sitter ofwn how the an issue this would get. it has gotten worse in terms of , anditriol and the level the severity of the attack some suffered. a lot of the architecture of the service of what allows really great things, does allow the bad things. i met with the team recently working on this. there is a bunch of smart people who are going to be improving this. emily: you are cofounder of twitter one of the biggest shareholders of twitter, and the biggest champion of twitter. this is a company that had a market cap of $25 billion and now is at $13 billion. could it get back to those heights? >> i cannot make any does real
statements being a board number of twitter. i think very abstractly speaking, it is a large service and a valuable service. -- the thing that twitter provides to the world is incredibly valuable. it can be more valuable. it is a matter of innovation and development. there is not an asset like twitter in the world in terms of and world individuals leaders, and entertainers, and the information created on a daily basis. there is so much more that can come out of that. know, i am anou optimist in general. emily: what is your faith in jack? >> i fully support jack. >emily: do you see twitter
remaining an independent company? >> no comment on that. we are in a strong position right now. as a board member, we got to consider the right options. --ly: last was it out last question. medium is a most opposite of twitter. -- medium is almost opposite of twitter. reason for working on medium is in the few years while twitter grew and facebook evolved and instagram and all of the social media platforms, it took an increasing amount of attention and energy and innovation of our technology development. they still all talked about nonsocial media. articles, tex, journalism was
still incredibly important. much. not evolved as at least on my publishing had not evolved as much over those years. that is why they are incredibly complement three, even though -- incredibly complementary even though they are different. twitter is more of a distribution vehicle with more substantive content then it is somewhere where you expand on ideas, or offer more complex arguments or stories. twitter and medium are complement three -- complementary. evan williams, twitter cofounder and medium ceo. coming up, some call it a silent revolution. could the adoption of digital health care disrupt the economy?
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you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. emily: welcome back to the best of "bloomberg west" i'm emily chang. this week, we spoke to stephen kraus who heads up the firm's health care investing. after regulators found problem with the way they were gathering patient data. this came after the sanctioned theranos. take a listen. you have been investing in the
space longer than newer investors. i wonder if you seen anything like this? >> it is amazing. for someone who cares deeply about putting products and services in the hands of patients and doctors, it is maddening. anyone who is serious as a health care investor, another is enough. the company had to pull back test results. they have had partners leave them. another zika result proves they do not operate the clinical trial well. it is frustrating. it overshadows a lot of the great work that is happening in health care. if you talk to most helped investors, she did not pitch to anyone who had health care experience. it is a complex industry where you think you would want folks who have health care experience. i hope we can talk about a lot of other great promising companies.
it proves if you try to put valuations ahead of patients, you're going to get burned. emily: where do you see potential? there are a lot of newer investors getting into the space. you have been doing this a long time. >> it is a great time in health care. this is an industry for too long has been pretty archaic and behind other modern industries in terms of technology. we are in the 1990's of enterprise software and health care. only five years ago, 50% of doctors did not use software to capture your clinical information. that is shocking. emily: pretty sure my doctor still write things down. 1 >[laughter] >> that is a problem and that is changing. if you want to manage a population's health, and you don't have that information, you can change health care for the better or lower costs or improve quality. that is where we are sitting
today. five years later, you 500% of doctors using digital health records. you can do complex data analytics. where do you see the most disruption? >> you have companies like flat iron catalyst health that have raised attractive rounds. i think consumerization of health. there are many things that are happening in the healthcare ecosystem. you see individuals having to pay thousands of dollars or more. years ago, 10% of patients had to pay 10% of the double-doubles. -- of deductibles. consumerism in health care is an interesting thing in terms of apps. emily: apple bought a company in
this area. they have barely scratched the surface. could they become a big player here? >> apple is making the moves. glimpse is really interesting. we all should want to own our health data and want to know about our health data. the idea of a personal health record has been around for a decade. glimpse is a personal health record and apple has the interface and the dominant market share with their devices that may the integration of the personal have -- personal health record -- emily: how do you see the exit environment for biotech and health care companies? apple has made an acquisition. ibm has been very inquisitive. what is the environment like right now? >> they require a lot of
capital. when you think about biotech and health care, they are very different. they look a lot like consumer technology companies. there are innovative technologies, like ibm and google will come in and acquire them. they have to have exposure to the largest sector of our economy. it is an economic exposure play. the large software companies will make those acquisitions. pharmaceuticals, it is different. they are most shots. -- moonshots. they are making those acquisitions well. emily: the company you invested in, it was so fascinating and exemplifies what you do. they went public very fast. they are focusing on reproductive technology where there has not been a lot of --
about making a bet on this company where there is so potential, but a lot is unproven. >> having a child is one of the most important things people can do. is trying to help couples facing infertility, give them technology that gives them hope to have a child. thatechnology was finding reverse scientific dogma, that women are born with a certain number of eggs, and that depletes overtime. it turns out that that may not be true. -- n have stem cell like the eggs can refurbish and you can harnish that technology to help women become fertile and have a child. i cannot imagine of a greater company to invest in. the founder is awesome. we invest in a huge dream that changes peoples'lives.
how would you not want to invest that of a public or private investor? emily: what is your take on this mylan epipen? >> outrage. an unfortunate time with kids going back to school. the company has had to react. their stock price has taken a hit. it's a good thing when the market has morals, too. mylan is simply marketing a generic. company should not be regulated the same. they should have much greater pricing product. clinton will provide stability in the markets.
you are making long-term bets in public policy. emily: last question, stem centrex was a recent biotech deal that had huge acquisition for $2.2 billion. how do you make sure -- >> we always make sure we can get the next one. emily: it was not just deal. -- it was not just you. >> it is an interesting scenario. stem cell technology is early. it could be a moonshot. we miss some and we get some. emily: so fascinating. --if it works, it could mylan, which is not a very innovative company, produces -- these are highly profitable companies when you develop a drug and they work. up, cleared for
♪ emily: thousands of would-be thrown pilot everything to get licensed on their new regulations that went into effect. it removes having getting special privileges, a process that took months. the faa is estimating the number of joan operators will exceed the nation's private pilots in a year. thatught up with a company provides on the demand joan insurance -- drone insurance. >> before you could fly a drone commercially, but you had to get a special exemption and it took quite a while. they streamlined it. you had to be a licensed pilot. now you can do it as a matter of course. you have to get a license, but it is much easier. you just have to pass a
knowledge test. 3000 people signed up to take that test already. it takes about 10 days to get a license going, but once that happens, you should be able to fly pretty much at well after that. --re are a few restrictions you cannot fly over people, daytime only in the altitude. otherwise, it is really opening up this to a lot more people. emily: what do you like about these new roles? what don't you like about these new rules? >> what i like is that for the anst time, you can go to apple store and buy a phantom 4 and take a test at one of 600 test centers and get vetted, get insurance, and get your certificate to be able to be a remote pilot. and to make the money back that it costs you to buy that drone in a number of weeks. that is exciting for the industry. emily: is there any area that you wish these rules went
farther? >> i continue what our customers think. they have been talking about their nervousness around the waiver process. almost every provision of this new rule has the ability to submit a waiver online that you should have the right to fly near a certain airport, or in line of sight, or other types of conditions that are normally pivoted. they are nervous about how much time it will take. time will tell. emily: talk about rules for hobbyists or the lack thereof? if you are i want to buy a drone and use it for fun, we don't have any rules to follow? >> yes and no. there are no specific rules, but you are supposed to follow the safety requirements of a community organization. what that means is it is very much similar to the commercial role that you are not supposed
to fly over people, go to high, go near airports. there are silly questions about how well that is enforced and we have seen hundreds of reports of drones flying airplanes and whatnot. but, essentially, the rules are very similar. they: i was speaking to secretary of transportation, anthony foxx last week about this very issue in the fact that rules are hobbyists could go further. what is your take on whether more regulation is needed in that area or what? >> we do not think more regulation is needed. we think more education is needed. it is about letting people know what they can or cannot be doing, rather than any form of regulation. that seems to be working very well and the industry.
really making sure there is material and every box to let people know what they should or should not be doing. it emily: enough secretary fox, take a listen about these new rules and what sort of industries they could help open up when it comes to drones. take a listen. >> it will open to many more uses, commercial uses. wethe other hand, i think as have commercial uses, hobbyists, airplanes, the integration of all those different uses into a single system is going to be the most complicated part of this. emily: so, let's talk about jd industries --the industries that it will affect most? what do you see? ground, an imaging is the number one vertical. that would be things like real estate photography, even
photography, wedding photography. anybody who is a photographer or the other for is basically a drone photographer and will be going out to get a license. areremaining large areas inspections, and that could be anything from roof inspections, cell tower inspections, any number of things that people inspect, and a more safely done with drones. emily: what about amazon? amazon drones an delivering packages to my doorstep? >> amazon is doing most of its testing in cambridge and the u.k. right now. we don't really know exactly how far they have gotten. from a regulatory point of view, that are stumbling blocks they and google wish had gone further. but the potential to obtain waivers -- we have to see how the technology develops and how the process develops around these deliveries. emily: allen, as the person who
is reporting on these issues, what do you think is the next frontier? the next development when it comes to drones and drone regulation? >> it really does feel we are seeing a critical mass here of change. we are going to see, by the end of the year, rules that will allow drones to directly fly directly over people and will be simple at first. just covering the drone with foam, so if it falls, it will not hurt anybody. the next step will give broader permission to fly long distances , so railroads, power companies want to be able to fly these things miles and miles over infrastructure to inspect them and use video links. once that happens, we will see some tremendous growth, and then, after that, probably the deliveries we're talking about. emily: that was verify ceo jay brackman and bloomberg's allen. doctors are examined the effect
♪ emily: to another technology taking off. forget morphine, hospitals are turning to virtual reality as an effective treatment from everything to intense pain to alzheimer's to depression. with the price of hardware falling, br is offering an affordable option. we take a look at the effects of virtual reality and how it could impact our minds. >> virtual reality is a spotlight. mind beingnce of the in this environment when it is immersed in this peaceful, positive environment. the rest ofost like your experiences are unable to be noticed because it recruits so much of the brain to focus on that spotlight, that everything outside of that environment falls to the wayside during that
experience of virtual reality. cedars-sinai tonelli is a handful of hospitals experimenting with a surprising new treatment people suffering pain. >> how long have you been here? what brought you here? >> i have been here for days now from chronic back pain. medications,ome and possibility of an epidural soon. >> i have an artificial heart. last week, it had a failure. i have been on a heart medication for pain for five years. i am trying to get off of it. in my left,ng pain upper quadrant and my left lower quadrant. i cannot relax. i have read every test possible -- i have had every test possible. if there was a surgery, i would do it today. >> chronic pain is more than just a physical experience, but
experience. i decided to try something different, something new. >> all right. ready? >> every time they sent us a new one, it is a little bit lighter. >> are you afraid of heights? >> no. >> perfect. undoubtedly,ality, has an effect on the human mind. it hijacks the brain and can be used for evil, but it can be used for good. >> it was like ice formations. it makes you look like -- it looks like you can grab them. honestly, and the 18 years i
have been practicing medicine, i cannot think of anything i have done that is more effective and you can physically see their body language change. they often look straight ahead like the are looking at a still image. the moment that they turned their head, that is a magical moment. >> it really is like totally panoramic. >> 360. >> it does no harm and has the potential to cut down on the need or drugs like morphine and make patients more relaxed, and have them wanting to go home sooner. >> with this be something you might reach to instead of morphine? >> i am sure i will try this first followed by the rest of it. years, i never would have thought they would have brought it to a hospital. >> it helps me relax. when the muscles relax, the pain goes away. seems to take patients out
of their pain, at least for a wild> but it also seems to take them out of the confines of their hospital bed while they have the headphones on. it may be a welcome relief and help mitigate some of the stress of being in a hospital. >> it is kind of like a jail cell. i can get out and walk in every thing else, but you still end up in this four by 10 room. >> we need a virtual reality pharmacy. shelves of vr content that is evidence-based that i can map to my patient's needs. the more we had that, the broader the opportunities we can have to engage patients in virtual reality. it is about when and whether we should interact technology with a compelling, human experience of being patient. it is not an engineering science, it is a social science. that does it for this
>> i'm carol massar. david: i'm david gura. plan tomazon's dominate same-day delivery. and how one small american company successfully faced down stiff competition from china. david: all that ahead on "bloomberg businessweek." ♪ with an editor and you have a great story about the controversy involving mylan epipen's pricing.