tv Bloomberg Technology Bloomberg November 21, 2017 5:00pm-6:00pm EST
regime. the penalties will impact shipping and transportation companies that have. engagedin large-scale trade with north korea engaged in large scale trade with north korea. grantedafort will be travel for thanksgiving provided they announced for they are going and abstain from alcohol. french counterterrorism police have arrested three people in connection with the january 2015 attacks in paris that left 12 people dead. a judicial officials said two men and a woman were taken into custody as part of an investigation into who supply weapons to the attackers. celebrations erupted in zimbabwe's capital following the resignation of president robert mugabe.
the 93-year-old leader gave into overwhelming pressure from the military and from lawmakers who were preparing to vote on a motion of impeachment. mugabe is stepping down after 37 years. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ emily: i'm emily chang, and this is "bloomberg technology." hpeing up, 83 announces meg whitman's departure. plus, the former chair of the fcc, tom wheeler, slams the plan to roll back net neutrality. he joins us to discuss what he calls a shameful sellout. apple says its new home pot smart speakers will not be ready for the holiday shopping season.
first to our lead and a bloomberg scoop. bloomberg covered up a massive hack attack affecting 57 million accounts. the datahackers stole of 50 million customers and 7 million drivers. uber including the former ceo kept the breach concealed for over a year. this week, the ridesharing company ousted the chief security officer in another executive for their role in keeping the hack under wraps rather than report the breach. they pay the hackers $100,000 to delete the information. joining me now, the men who broke the story, eric newcomer, who else? eric, yet another story that is hard to believe coming out of uber. what do we know in terms of what happened here? eric: it is so crazy. heardhan a year ago, uber from these hackers that they found a way to get information, names, telephone numbers, that sort of information on 50 million riders and information
on 7 million drivers and most apparently, drivers license numbers for 600,000 drivers. the concern here is that is information that uber was required to disclose and did not. so now more than a year later with a new ceo, the company is deciding to come forward and say that they should have disclosed this information and here is what happened. emily: so he said none of this should have happened.we are changing the way we do business . has been negotiating with regulators over privacy issues for a long time. what makes them think that they can get away with something like this? eric: while they were talking to the federal trade commission and just after negotiations with the new york attorney general, the faced the question of what to do about this hacking. it is hard to imagine this
engenders any trust with regulators. you already saw the instance with london where regulators there revoked uber's license. they just did not trust issue and the company had not represented very clearly what has gone on. this is yet another sign that uber was willing to go to great lengths to hide information that it now believes it was required regulators, and that certainly will give cities, states, and national governments all over the world serious pause. emily: how can we be sure that this information did not get into anybody else's hands and that the hackers did indeed delete this information? eric: right. normally, hackers will wait and sit on information, so that is certainly a concern. uber's belief is they paid the $100,000. they have evidence perhaps that the files were actually deleted. we do not know who the attackers
were, but they refer to them as these two individuals. i think right now there is a belief that that information is not out there in the public, and of course, uber is offering data protection for the drivers affected by the most serious information bridge here -- breach here. emily: what did the former ceo whennd will -- know and did he know it? asc: has not been ousted part of this along with another senior attorney. he certainly knew in november 2016 that this hack had taken place. he knew the company had been negotiating with the attorney general's office in new york and the fdc. there are questions about how much he knew the legal reasoning and legal obligations behind this decision, but he certainly knew about the hack and the scrutiny that they would face from regulators and attorney general's office is. emily: so what kind of penalty
can uber face here? can they face some sort of consequences from regulators? could they be hit with a lawsuit, in fact? eric: yes. anything is possible.as we reported before faces ongoing criminal probes that have touched and at least five different areas to this is a company that over time regulators and law enforcement officials are looking at. there are dozens of civil suits against uber soviet certainly would not be surprising that something like that could happen but we have to wait and see what the actual consequence is. but you have to imagine that some sort of monitor or attempt to make sure that uber is doing what it says it is doing is something that regulators or law enforcement is going to be thinking about after these revelations. emily: now i know it may be hard to keep track of all of the open investigations, but what do we know about the status of those, and what are we likely to see, any kind of penalty?
eric: we have not heard a lot new since my big story last month saying that there were these five investigations.one interesting fact here is joe sullivan , who has been ousted as part of was at the center or at least his organization was at the center of some of those things. you hear about the software meant to help in some cases uber drivers of avoided law enforcement -- evad lawe enforcement. there are some any questions. the ceo has to keep playing cleanup, and he knew that was what he was coming into. maybe he did not know quite the extent of it. the data breach is a total surprise. so many problems and the idea that there is a new one is shocking. emily: so joe sullivan was formerly chief security officer
of facebook.he also worked at paypal and ebay . a long tenure for him in the tech industry. eric newcomer, thank you for joining us.great scoop by you. tesla is spending an average of $8,000 permanent as it ramps up production on its all-important model 3 sedan. that would put the company on track to exhaust its current cash pile by early august so the pace is not expected to continue. tesla said it has implemented to meet its target of producing 5000 model three' by the end ofs march. fourthup, hpe releases one owner earnings and announces a major leadership departure. meg whitman wraps up six years. bloomberg technology is live streaming online. this is bloomberg. ♪
major leadership changes enterprise.-packard meg whitman will step down from her role effective february of next year but she will stay on the board. antonio neri will succeed meg whitman as the ceo. the something was announced with the company fourth quarter reports. shares are dropping as much as 7%. seven point $5 billion in revenue for the quarter, missing estimates. joining us now is the executive vice president of research product for ibc. you just got off the phone with meg whitman. what did she have to say? >> right. i mean, that is why governance has been a top -- emily: looks like he is having
trouble hearing me. can you hear me? you just got off the phone with meg whitman. what did she have to say? ok. cory johnson luckily is standing by with me right here in studio. you did not space to meg whitman, but you know the news. impossibleook on an job, which is to turn hewlett-packard into a bigger and better business than it had been in the past and restore the once been thed leader in silicon valley. the high-growth software services business, the router business, as well as the low growth printer and pc business, spun that off on the other side. she was supposed to be the ceo of the high growing business but way.d not turn that
it continued to shrink and spend billions of dollars in acquisitions and they are still taking write-downs.the restructuring charges in this quarter alone , they spent $10 million a week in restructuring charges. the one-time restructuring charges go back to 2001 with this company. not all her fault, but she could not find the right direction for this company to resume its years of growth. the number they put up show some growth, but if you pull back the numbers, the important divisions were not growing or not going with any kind of size. a lot of leasing.they could not get the right product mix for today's world of technology. emily: president antonio neri will be taking over for her. back.ke to him a wild i asked him about his name being touted as a successor to meg whitman. take a listen to what he had to say. >> as you know, i have been with the company for 22 years. always in many different areas of the business. and i am very excited about the future of this company. emily: crawford is now with us. crawford, we were
listening to antonio, who will be succeeding meg whitman. you spoke with meg whitman, just got off the phone with her. what does she have to say? crawford: obviously we talked about the quarter and also her legacy. what she feels like is hewlett-packard is innovating in a way that they were not intervening when she arrived. if you look at the situation the company was in when she arrived, they were in a real haphazard of --ion with the exit if you look at the playbook they are running out, they can innovate and they do innovate, but they still participate in a lot of relatively low margin tightness, but this company was irrelevan, heading to irrelevance 3, 4 years ago. the playbook of value areas of the infrastructure that they can
add to their portfolio and sell through their channel is showing revenue growth. that revenue growth is something we have not seen for a number of quarters. now we see it in the second sequential quarter. relatively, meg and i talked about the business is performing better than it has been ever performing or at least in recent history. i think separate from that, you have to look at how is the job done, and i think that is the open question. emily: so tell us who is antonio neri, and what kind of leadership is he expected to bring to the company? crawford: i have had the pleasure of knowing antonio for a long time, over 10 years. r, pretty compact merger. -- pre compact merger. knows everyone.
jobs. had so many he climbed the corporate ladder and is extremely well-regarded in the company. when she joined, 60% of the top managers were from hewlett-packard. now that number is completely reversed.here we have the ceo having climbed the corporate ladder . he is really well regarded within hewlett-packard, and he will go back to the roots of climbing the corporate ladder and taking his bumps internally and knows the organization in a unique way. emily: crawford, executive vice president of research product at ibc and our editor at large cory johnson, thank you so much. we will continue to follow the headlines as they come out of call.e earnings the trump administration is taking steps to end the net neutrality protections. we speak to the former fcc chairman, tom wheeler, the man who saw the implementation,
emily: the federal trade commission is investigating cap advisor' business practicess. this comes from the milwaukee journal in which travelers and their warnings of harassment and injuries were being blocked by the company. one example, of advisor blocked a woman's wanting on a hidden bathroom camera. at&t is telling the trump administration, we will see you in court. the justice department filed suit to stop at&t's $85 billion takeover of time warner. ceo randall stephenson says this in such as the idea of anti-trump law beyond the breaking point.he is vowing not -- whether the deal was influenced by president trump or not. speaking to reporters this afternoon, president trump had
this to say about the deal. president trump: i am not going to get involved in litigation, personally, i always felt that is a deal that is not good for the country.pricing will go up . i don't think it is a good deal for the country, but i will not get involved in litigation. emily: the company's vision has taken a big step to putting the obama era net neutrality regulations. a december 14 vote will be held on overturning the protections those regulations are intended to prevent broadband providers from favoring their business partner offerings or other content. he spoke with bloomberg radio today to defend his decision.take a listen . the fcc would require that all internet service providers be transparent about their business practices if they are blocking or throttling content, they have to disclose that. the ftc would have the ability to police providers if they are behaving in an anti-competitive way.
we would be able to protect consumers going forward and promote investment in the networks that are necessary to promote digital opportunity. emily: joining me now to discuss this, the man who let the fcc during the obama administration when the protections were instituted. i would like to welcome former fcc chairman tom wheeler. thank you so much for joining us. tom: hello. emily: you have said it is shameful, a sellout why. why? tom: you just have to listen to that explanation that chairman bpai just had. transparency is the solution? so all that is necessary to do something evil is to tell you that i am about to do something evil. that does not make any sense. and then, ok, what do you do once you have that information? to there's only household in america have no other choice --
thirds of the household in america have no other choice. to somehow claim this is some kind of consumer protection is a fraudulent representation. emily: they say their proposal is more fair, more proconsumer. what makes you think it is the opposite? in the name of consumer protection, they say they are not going to protect consumers. in the name of better regulation, they say they will turn it over to the ftc, but yet an fcc commissioner this afternoon tweeted that even if they do that, the ftc does not have the authority. they are running away from their responsibilities. emily: the big concern here is how this impacts the haves and have-nots, the folks who could increase future innovation, be responsible for future innovation. the halveshis impact
of the moment, google, facebook, netflix? tom: i think the important thing is, how does it affect everybody and their ability to get on the internet? and for consumers to reach providers and for providers to reach consumers. what we are seeing here is the ofle is -- cablization the internet. if you like your cable company and in the way they can choose what you see and they continue raising prices, you will love what happens under this repeal because suddenly the people making the rules are the networks. and the consumers cannot survive without the networks. and the service providers cannot survive without the networks. emily: so how can we hold isps accountable? tom: well, that is what we did in our open internet rules.
we said there are some bright line rules. you have to provide information to the consumer and we will put a referee on the field to look at what your continued actions are as technology evolves and so the flag if necessary -- throw the flag if necessary. the trump fcc is turning its back and walking away and giving the network companies everything that they have asked for. emily: this is unfolding against very interesting political backdrop. we just mentioned earlier what is going on with at&t' proposed merger with time warners. the doj now suing at&t. how much of this is politically motivated? tom: i cannot answer that question. i do find it shocking that the
trump s.e.c. -- the trump fcc from day one has gone right down the line what the big companies want when they are supposed to be representing consumers, not the companies. the fcc continually turns their back on their congressional mandate to protect consumers. accounts,, it all appears this will happen in december. for you, what is it like to watch your work be undone? i have had better things -- thanksgivings. the answer is this is a long process. it appears they have the votes to overturn it in december.
then it will be up to the court. the decision we made twice went through the court and was twice confirmed by the court. and i hope that the court will look at this and say, hey, wait a minute. this has been in effect for 2.5 years and there have not been bad things that resulted. why are they turning around and going the other direction? emily: tom wheeler, former fcc chairman who live the efforts in the adoption of net neutrality. think you for joining us. later, we will be speaking with another fcc chairman who will bring us the other side of the argument. this is bloomberg. ♪
to aim the media, democrats, and judge moore's accusers. >> all you people run around yelling stuff that judge moore, asking these ridiculous questions every time they yell something like that, just think, it's a "jerry springer" show. we believe judge moore. we don't believe these women. it is just that simple. alison: president trump weighed in on the upcoming election and told the people of the state not to support republican roy moore's democratic rival doug jones. the president said, we don't need a liberal person in the senate. the house ethics committee says it has begun an investigation into sexual-harassment complaints against congressman john conyers. the longest-serving member of the u.s. house has acknowledged
settling a sexual harassment complaint against him but denied the accusations. "in your times" has reported that state department officials have accused secretary of state tillerson of violating federal law. officials say he excluded myanmar, iraq, and afghanistan from its annual list of countries that use or fund child soldiers. any nations on the list are prohibited from receiving aid from the u.s. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg. 6:30 in the morning in hong kong. we are joined by the oc, ruin and with a look at the markets. what a record day we had on wall street. sophie: what a record day, and it looks like the stock rally is set to hum along in asia after those fresh highs for u.s. stocks. with these lofty levels, stocks with high growth technology --
potential,, like tech. let's show you what is going on with the dollar. it is losing ground, while the treasury yield curve flattens further. commodities are climbing with crude extending gains after rising to its highest level in more than a week, and gold is recovering from its biggest drop in nearly two months. kong.phie, rudin in hong coming up next, more of "bloomberg technology." ♪ emily: this is "bloomberg technology." meg whitman is stepping down from her role as hp ceo. antonio near he will succeed her.
whitman is on a call with analysts and says there is no chance she will work for a competitor. another latebreaking story from uber -- the ride hailing company covered up a massive hack, affecting 57 million accounts. stole theackers personal data of 50 million customers and 7 million drivers. uber kept the breach concealed for a year, and instead of reporting the breach, the company paid the hackers $100,000 to delete the information. we are staying on top of both of these stories. the trump administration's efforts to rollback back the obama-era net neutrality protections -- fcc chairman object pie was on bloomberg radio to say that another federal agency, the ftc, will be there to step in and protect consumers in a more deregulated internet environment. >> the ftc has great expertise in this issue. they applied a uniform set of
rules to everybody in the internet economy. i'm confident they will be a will to perform their consumer competition -- consumer role. emily: we just heard from tom wheeler, the fcc chairman who oversaw the adoption of net neutrality. now we are going to hear from somebody on the other side, former fcc chair robert mcdowell who served under both presidents bush and obama. your successor came out very strongly against the potential rollback, calling it shameful, calling it a sellout. how do you respond to that? >> you are talking about tom. he didn't succeed me. it's a tough day probably for tom emotionally as he sees one of his legacy items become a raised. what is happening is where we are going back to what happened in 2015. putting back is into place was clinton-gore policy.
the internet ecosphere was exploding beautifully before 2015, before these 1934 rules were put on internet access, so -- youe section five have a lot of protections. you have the terms of service by each broadband internet service provider, which is a contract with consumers. if they were to discriminate in that harms consumers, there would be an avalanche of class-action lawsuits. there are so many protections that were already in place in 2015 before this thing called title ii was entered into the internet ecosphere. the sky is not falling. there is not going to be some internet dystopia. it's going to be a better place as we look to invest $300 billion in new mobile technology, five g technology --
5g technology. it's going to be a great decade coming up. emily: we just got a question from a viewer who asks, how does this actually help consumers? since 2015have seen is a stutter step in investment in broadband networks. a number of independent studies and market analyses have found that has been curtailed in this space. right regulation has been swinging over isp's. was created for a monopoly in 1934, and it has 1000 different requirements. agency ofcame the mother may i. forfcc was this bottleneck innovation and experimentation
in the marketplace. keep in mind that over 90% of consumers have a choice of four mobile broadband providers, contrary to what tom was saying. broadband speeds are much faster than they were just 10 years ago, and they will be 100 times faster after we wirelessly connect with 5g the internet of things. isp's how do we hold accountable when this is mostly honor system-based? honor-system-based. there are many longs in effect. what prevented isp's prior to tom's order from behaving in an anti-competitive way? the federalon v of trade commission act, the clayton act, state attorneys general, but it was also economic incentives. you have a competitive marketplace for broadband, at it is primarily mobile broadband. we see cord cutting and cord shaven.
my kids are watching their video with devices like this through mobile broadband connections. you have market pressure. you have other laws already on the books prior to 2015 that protected consumers, protected entrepreneurs, and it gave us this great internet ecosphere that we enjoy today. it's a myth that somehow consumers are protected -- unprotected after what the fcc is doing. emily: we talked about the doj suing at&t over its attempts to acquire time warner. we were talking about how much all of these issues are politically motivated. i'm curious of your thoughts on that given that you worked with both a democrat and republican administration as fcc chair. >> i was just a commissioner, not chair, but i worked very closely on a lot of deals.
i worked on serious xm or at&t's and we to buy t-mobile, worked closely with the department of justice and sometimes the federal trade commission. what we are seeing is a reinvention of antitrust law and an attempt to do so with this complaint. there's a reason the government hasn't challenged a vertical deal where a distributor is buying a supplier in nearly half a century, and that's because they tend to fail or there is no competitive harm. right now, the jurisprudence is stacked against the government. the government has the burden of proof here, and we are going to see an interesting case. get the popcorn out. there are two companies in america that know the most about antitrust, exxon and at&t. at&t was willing to go to court merger in a horizontal where they were buying a competitor, t-mobile. they were willing to go to court.
they were more than willing to go to court and win. has a huge burden to overcome and would be creating a new dime and .recedent get the popcorn out. it is going to be an interesting couple months. emily: the popcorn is out in deed. former fcc commissioner robert mcdowell, think you for joining us. coming up, e-commerce giants are gearing up for huge holiday spending sprees. how to protect her self this online shopping period, next. this is bloomberg. ♪
including the nfl's dallas cowboys versus the l.a. chargers, this due to a fee dispute with cbs. cbs and local stations in 18 cities were discontinued as of monday. cbs blamed dish for punishing customers instead of negotiating a new contract. with the thanksgiving weekend, the holiday has more to offer than just food and football. it's infamous for black friday and cyber monday stores. while brick and mortar stores might still be the hit, many are looking to hit the web for theous deals, but with convenience of online shopping comes the threat of cyber security. can people protect themselves? joining us from washington, chief security officer phil quaid. thanks for joining us. what is your advice to people who are going to be shopping online over the next few days looking for deals when it might be prime time for hackers to catch someone unaware?
>> you are spot on. its prime time for cyber criminals, not just prime time for finding good deals. there are traditional things that are good to keep repeating. use strong passwords. nature when you are registering, you are not giving out more information than you should. make sure you are giving your business to websites and vendors to practice good cybersecurity practices. there's also some advice for vendors, as well. this is the time of year where cyber criminals try to hide in the noise and take advantage of the high-volume companies are not used to. now more than ever is the time to turn on those automated analytics to look for evidence of abnormal spending behaviors. emily: what about consumers? what should consumers be doing differently? there is no free lunch or the
first thing i would say is, if you see a deal that is too good to be true, it probably is too good to be true. don't fall for it. another example of that, there might be examples of where someone signs a link, and it's called a tiny url. don't click on tiny url's. it's not simply about email. to look out for sms texts on your cell phone, which are being used as a threat vector. those links are indeed malicious. emily: i'm curious to get your thoughts on this in uber story we have been covering. uber covered up a massive hack attack on its network, hackers stealing the information of 50 million riders, 7 million drivers, and uber hid this for more than a year. what is your take? >> there is no cookie-cutter approach to vulnerability discover or compromise recovery,
but based on the fact that i know now, this doesn't look like a page out of anyone's cookbook. chances are when you have an inevitable vulnerability or compromise, you need to have a practice that involves responsible disclosure, quick remediation, and give consumers confidence that you are doing the right things to make sure things like that would be prevented in the first place and won't happen again. , instead of reporting it, paid the hackers $100,000 to delete the information. is there anyway to be sure that the information was actually deleted, and the information never got into the wrong hands? > i think we know by now that once something is digitized and placed on the internet, that has a life of its own. it is seldom in one place either intentionally or not. it would be a hard argument to say that stolen information was
in fact deleted and not resold a number of times. driverif you are in uber or uber customer, what should you do? you don't know if you are one of those 57 million. >> you don't, but it goes back to one of your questions earlier. as a consumer, give your business to companies that exhibit good cybersecurity behaviors and advertise what those behaviors are. the consumer, pick companies that will be responsible with your information, but in the meantime, i will be looking for the days ahead, to provide information on what was disclosed in order to give consumers some options to figure out what they need to do in order to protect the information that has been exposed. emily: thank you so much. back on the earnings front,
salesforce has reported a quarterly profit thanks in part to an expanded lineup of cloud-based programs. revenue rose 25% in the fiscal quarter, but forecasts for fourth-quarter profits of missed estimates. shares are relatively flat. ceo marc benioff has been looking to newer products offering marketing and e-commerce to increase growth. coming up, it is a race between alexa and siri. is it too little too late? we will discuss. this is bloomberg. ♪
emily: a story we continue to watch -- there is a report that apple's iphone x was being built with high school students illegally working overtime. according to "the financial main supplier in china foxconn had the teenagers working 11-hour days in an effort to catch up with demand. foxconn says it has taken action to correct the situation. in a battle of voice-activated be losing, apple may to amazon. the homepod is set to make its debut early next year more than three years after the launch of , but it isecho not just about timing. apple's device lacks many of the capabilities that make the echo such a hit. mark, you brought us the scoop earlier that apple would be delaying the homepod until next year. now you are diving into the features that the homepod doesn't have compared to the other products.
what should we be looking at here? >> in terms of the time between a competitor launching a new category and apple following up, apple typically does this, come out with something that leapfrogs the competition, but with what we are seeing the homepod situation is a product of not only come years amazon, but it totally misses the point in terms of what amazon is hitting at. they are going after another category that people are not necessarily asking for. people want a cloud-based device like the echo that can do everything for you, everything from ordering groceries to ordering lunch and dinner, making appointments, calling on uber or lift. what apple has brought to the table is a great loudspeaker, something that other companies like so no have established a footprint for. emily: when i spoke to tim cook, i asked specifically, does this mean apple is getting into e-commerce?
he said, no, i don't think so. you should look at this as an audio device. that is where they think they are adding value. take a listen. is a company that deeply cares about music and wants to deliver a great audio experience for the home. we feel like we reinvented it in the portable player area, and we think we can reinvent it in the home, as well. emily: is he right that there is a desire to reinvent the audio experience in the home, or is that not what customers want? >> let me take us through some history. 2006, steve jobs at the time, the late apple cofounder, revealed a product called the apple hifi. it was 300 $50, and the pitch was to reinvent home audio and sound good although this was 10 years ago, the product was a massive flop for the company.
it was discontinued less than two years after it came out. with theple coming out same approach, an audio device that sounds perhaps better than the competition and integrates with apple's products better, but it's not a true leapfrog product. it's not an advanced like the iphone or i watch -- iwatch.' want, what do customers and is it e-commerce, and can we expect siri via the home pod to offer any of these features? has been ad the echo smash hit for an e-commerce giant like amazon, and it can do everything through voice. it can control your music. the home pod won't be able to do much beyond that. in terms of e-commerce come into the homepod, one of the key differences between the homepod is acho is that the echo
product or the homepod is next engine of the iphone. there are thousands of apps for the echo, whereas the homepod relies on the iphone for third-party applications. the iphone apps that work with it are limited to three categories, text messaging and ih apps like wechat message and facebook and skype, but the other apps are notetaking apps and to do list apps. it is a subset of applications that are limited to working with siri that are going to work with the homepod. this thing has a processor and chip in it of comes straight from an iphone. it should have all of these enhancements in it. remember, apple had all the tools to come out with a killer product like the echo. it has had i think -- itunes since the early 2000's. obviously, apple has been the king of the hardware industry in terms of making cool-looking products for several decades.
>> 7:00 a.m. in hong kong. we are live from bloomberg's asian headquarters. i'm it yvonne man. welcome to "daybreak asia." asia-pacific markets are set to continue gains. janet yellen, also speaking this hour. there is cloud on the horizon. it's in china. >> from bloomberg's global headquarters, i am betty liu in new york where it is just after 6:00 p.m. on this tuesday. sackinging headlines, staff after paying to conceal a hack that compromise the