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tv   Best of Bloomberg Technology  Bloomberg  March 31, 2019 5:00pm-6:00pm EDT

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emily: i'm emily chang, and this is "the best of bloomberg technology," where we bring you the top interviews from this week in tech. coming up, lyft officially hit the public markets this week, the biggest listing of the year so far. we will break it all down. plus, apple meets hollywood. after months if not years of speculation, the iphone maker unveiled its streaming plan with a star-studded event from steven spielberg to reese witherspoon and oprah. a lot of excitement but also still a lot of questions.
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plus, securing the vote. a congressman is sounding a call to protect the 2020 election. we will discuss his plan about getting it right next year. first to our top story, in the biggest listing of the year, lyft hitting the public markets this week. now officially trading on the nasdaq under the ticker lyft. and investors are watching closely. in the roadshow leading up to the ipo, investors packed a standing room only luncheon to hear the company's pitch and the offering was oversubscribed. we parsed through all of the details right after the company listed. >> i think it is important to have a context that we are going after the trillion dollar market opportunity. every year in the u.s., americans spend $9000 owning and operating their cars but only use it 5% of the time. so this massive market shift, just like entertainment has gone streaming, it is happening with car ownership, and we are investing to take advantage of that. our economics are improving and we are very confident in the path ahead.
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emily: so, logal, in your risk factors, you say you may never be profitable. how do you convince investors that they should be betting on the optimistic here? logan: if you dig in on the numbers, every year, the economics of the business improve. and we are confident that the business will be very profitable. there are, of course, risk factors, but we are making tremendous progress going after this once in a generation shift where this entire industry, potentially, a $1.2 trillion market could flip from an ownership model to a service model. and we are leading the way. emily: let me put it this way. if you focus on margins, does that give uber an opportunity to claw back? john: we are not focused on competition, with focus on what we can control. every day, we're thinking about how to serve drivers and passengers and build a long-term
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model, pushing down our operating costs. that is what has allowed us to go from over 20% market share to nearly 40%. we don't focus on market share, we just execute and serve our constituents. emily: is getting to 50% market share in the u.s. more important than expanding internationally? logan: our focus is always on taking care of our customer. so we don't set market share goals, we focus on delivering the world's best transportation to our customers. and so, we do think about international. every year, we sit down and we make the trade-off. can we go deeper on this $1.2 trillion market in the u.s. and deliver better transportation to our customers here, or is it time to go abroad? and so a little over one year ago we launched in canada and that has been a great experience for us. we will continue to consider international opportunities. we think it is a great call option. emily: what do you mean by a great call option?
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logan: there are many future growth opportunities in this business, whether we are going deeper in north america or going international. so we look at that as a call option for the business, and we may choose to do that some day, but we don't have current plans. emily: let's talk about founder control. you have a lot of voting power, almost 50% voting power, but you hold 5% of shares. there was some backlash. what is your argument that that the best way to govern this company? john: we put a lot of thought into this with the board and investors wanted to set the company up to go after the long-term and make the right investments to seize this long-term opportunity. we think that will be necessary to deliver the largest shareholder returns over time. and so, dual class was an important piece of it. john and i together still have less than a majority control. we have selected an independent chair, sean has stepped in as independent chair on the board. we have an incredible board from
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a diverse set of backgrounds set up to guide the company. we think collectively that is the right package. emily: but there are concerns, john, that this will not lead to the appropriate checks and balances you need on a public company. and we have seen situations at google and facebook where founder-led made decisions were made that were maybe not the best. how do you respond to that? john: i would respond by saying we have been balanced in how we put this together. we have an independent chair, a diverse, broad set of shareholders. when we talk to investors, we let them know that we care deeply about their views and incorporating them, and our track record shows that. emily: you have been investing heavily in self-driving technology. how much and how fast do you think self-driving technology will bring your costs down? logan: i think we are still years away from self-driving. emily: how many? logan: i wish i knew myself. i don't. but i think there's kind of a
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session that there is going to be a magical self-driving vehicle that will appear one day. but the way we see it playing out from all of our work is that the first generation of vehicles will only be able to do a subset of the rides. so, i think it will be critical that they are rolled out on a platform like ours where you can out on drivers to fulfill every request. it may be a long time for security reasons before empty, autonomous vehicles are allowed to pick up at an airport, let alone drive in extreme weather, drive at night, drive at certain ands, through bridges tunnels. there are also the restrictions the first generations of vehicles will have. i think a network application for self-driving cars will be the majority case. emily: in the meantime, i know you are focused on changing transit and car ownership, but in many cities where lyft and uber and big operators, you are
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seeing an increase in cars on the road. you're actually seeing more car ownership. what evidence have you seen that car ownership trends are changing? john: we have seen peak car ownership. if you look at national numbers of people purchasing or deciding not to purchase, if you look at millennials that are coming of age and not getting their license, and if you look at our growth, i think there is a pretty obvious trend. last year, over 300,000 lyft customers got rid of a car. and so, some families are going from two cars to one car, but it has begun. emily: in your roadshow, you really talked about how you don't do food deliveries, you don't do trucking. lyft is are about focus. that said, you are getting into new businesses. what is going to be your biggest source of new revenue in the future? will it be scooters, will it be international expansion or will it be something that we do not know about? logan: we compete with car ownership.
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when you open up the lyft app, we want to provide you every possible option you can be trading on. whether that is public transit or connecting you with a lyft to public transit. whether it is a bike or a scooter, a shared ride. a regular lyft, a luxury ride. we want to provide you with any possible options. so we see competing with the car parked in your driveway as your primary goal. emily: speaking about the future of drivers, i know self-driving technology is very important, it is long-term, as you say. but so much of lyft has been about the values of treating customers and drivers well. if you are investing in self-driving technology, does n't that undermine the jobs? john: i don't think those jobs go away, we will need many more drivers. think about today. the entire rideshare market is just 1% of miles traveled. if that goes to 10% of miles traveled, you would need either 10 times the number of drivers. if we were at nearly two million
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drivers now, we talking 20 million drivers. obviously, there is room for both increasing the number of work opportunities, and adding autonomous vehicles. emily: where is lyft in five years? john: in five years, we want you to be subscribing to a package of miles. similar to the way you have a cell phone and subscribe to a number of minutes, we want people to completely get rid of their car and jump into the world of transportation as a service and subscribe to miles. so that you don't have to think about each trip, you are just fully on board with the lyft ecosystem. emily: like lyft prime? is this like a monthly thing? a yearly thing? logan: it will have to take shape, but i think people will be subscribing to miles. emily: boeing says they were very close to a software fix for its 737 max 8 jetline when the ethiopian airlines jet crashed on march 10. the plane maker has spent months working with regulators and
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refining the plane's software. flight data from an october crash in indonesia has showed the system repeatedly tip of the nose down before pilots lost control. the boeing update says the update proved more complicated than the manufacture initially estimated. lawmakers pressed the acting administrator of the faa at a hearing this week about its oversight as the plane maker remains under scrutiny. coming up, apple goes hollywood. its plan to take on netflix and amazon and disney in the streaming world. and if you like bloomberg news, check us out on the radio. this is bloomberg. ♪
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emily: after weeks, months, and actually years of chatter, apple finally revealed it is all-in as a services company monday. they unveiled a news and magazine service, a video gaming platform, and with a parade of hollywood elite from jennifer aniston to steve carell and yes, oprah, a new premium video service to rival the likes of netflix and amazon. take a listen to ceo tim cook. tim: our vision for apple tv is to bring together your favorite shows, movies, sports, and news, and make them available on all of your devices. so you can spend less time looking for something to watch and more time enjoying it. emily: and perhaps the key to it all, apple's brand-new credit card in partnership with goldman to facilitate payment for all of these new monthly services. the card is tied to apple pay,
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which a marketer claims has been adapted by 39% of mobile payment users, just behind the starbucks app. to discuss all of this news from cupertino, bloomberg's mark gurman who covers apple joined us monday along with research president bob o'donnell. >> we knew which shows were coming every time that a new show went in development or was closing on filming, apple or the producers would a very publicly announce these deals. we knew that this was going to be some sort of subscription service. we knew it would be premium, we knew it would be high-end. what we did not know were two basic things. how much would they charge for, and which devices it would be supported on. apple did not come out and say it, but my sense is it will be available on android in addition to roku boxes besides apple devices, but no word on if they will be available on amazon or android tablets. we also do not know the price.
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they did not talk about the price. they did not really discuss pricing for the apple channels, and by the way, same name as the amazon channels. will be waiting on those. that is what investors care about, prices. emily: apple is also offering a bundle of tv channels which will include hbo, showtime, starz. they obviously pulled out all the stops with this announcement. it was really cool and it shows the amount of priority they are putting on these new services. bob: absolutely, and it was a big, splashy event, which apple is good at. they do demo reeget you excitede question is how are we going to feel tomorrow? tomorrow, were going to go wait a minute, what exactly are we going to get from this? because there are plenty of other options to get everything except apple's original content. really it is going to boil down to how compelling can they make this total package not just from a feature perspective, but a pricing perspective. so the lack of pricing to me was
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very disappointing, and to many others as well. in ironically, i don't think the tv service was the biggest or best announcement. i think it was the credit card. emily: that is kind of a big deal. let's take a listen to jennifer bailey, the vice president of apple pay, who unveiled the credit card in a partnership with goldman sachs. listen up. jennifer: any time you pay using apple card, you get daily cash. not a month from now, but every day. so every day you spend, cash is added to your apple cash card, which is also in the wallet app. and it is cash, like real cash, so you can do anything with it. any time you pay with your iphone or apple watch, you'll get 2% of the purchase amount in daily cash. emily: so aside from oprah, that was my favorite line. it's cash, like, real cash. this is something that we were not necessarily expecting, apple
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is getting into the credit card business, trying to chase the credit card business, and a lot of things they are offering make a lot of sense and consumers are probably going to be pretty excited. i mean, no late fees? mark: they hit a lot of the pain points. foreign transaction fees, late fees, annual fees. i am a credit card buff and you can cycle through tons of credit cards to get the best bonuses in different cash back percentages. what we are seeing here is 2% flat rates through apple pay, and that is actually the highest in the industry i believe from a flat rate, but that is only from using it with your phone. two places where you have the physical card, which looks like it comes right from apple with the titanium and laser etching, that is only 1%. if you are in an environment with lots of apple pay around you and you want high cash back i don't think there is a better card on the market for this. but there are other cards with
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with better optimizations. emily: how impactful do you think this card could be given the hope is you are charging a lot of new apple services on this card? bob: i think it will take a while. people have to get used to paying with their phones still. that's why we see adoption still relatively modest. but the joke i made with a couple of folks is that the credit card proves that apple is still the best that hardware, because that was the coolest thing. the actual hardware. having a card with no numbers, it totally reshapes the way you think about credit cards and the app that goes with it. that, to me, was apple at its very best, taking something that is hard, has pain points and making it simple through the apple magic. the question is how many other industries and capabilities are we going to see apple do this on down the road? to me, that will be a bigger story long-term. but i thought they did a great job of showing off how you deal with paying off things, and things that people want to know. real world people. emily: let's talk about the news subscription service, $9.99 a month, which of course is
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building on what apple has already done in news but attempting to make it bigger. vicea listen to apple's president of apps, roger rosner. roger: over 300 great magazines, wall street journal, l.a. times, those great, premium digital subscriptions, there has literally never been an offer like this before. if you were to subscribe to all of these individually, it would cost you over $8000 per year. but with apple news plus, you pay $9.99 per month. emily: now, if you look at the subscription price for the wall street journal alone, it is over $20 a month. so, make sense of this for me, mark. mark: yeah, there is some debate online. apple is telling some people that you get full access to the wall street journal, whereas the wall street journal sent out a memo earlier today from its ceo earlier indicating the subscription service would not cover the journal in its
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totality, that some business news would be exclusive to people paying higher subscription rates. so until that is sorted out, i cannot comment completely on that. but i think apple will probably get its way here. if that is what they are telling people i think that's what is going to happen. emily: so, bob, these magazines, they look amazing on the ipad, but you are talking about an industry that is already resource starved. do these magazines and newspapers have the resources and staff to build out an entirely new apple app experience to make it worth it? bob: that's a great question. like you said, they showed some great demos, as apple does, with the floating city video on the cover of national geographic and all these cool things that brought the magazine to life. but there's a lot of work involved in making those happen. people have had the opportunity to get digital magazines before, and it has not become a huge business. so i think this is a good thing that apple is doing, i think it is interesting. i'm not sure is a huge hit in terms of economic impact.
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emily: the idea of it is certainly attractive. bob it is attractive, but apple bought a company that was essentially offering the service before. mind you, they were not apple. and that does change things quite a bit, but there's a question mark of how much they really will get from the wall street journal and from other magazines, how long they can sustain the interactive version s of their magazines, and frankly, how many are willing to pay for that despite the supposed value. because at most, you will read a couple anyway. that is all anyone could possibly do. emily: that was bob o'donnell and bloomberg's own mark gurman. meantime, youtube is said to have canceled its plans for a slate of high-end dramas and comedies. the move is a step back from the companies designs on a paid service that features hollywood quality shows. bloomberg has learned this is reportedly due to the high cost it would take to compete with the deeply entrenched players now.andflix and apple
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-- netflix, amazon and now apple. without it, youtube is still making a lot of money the old-fashioned way. we will stay on apple ahead of this week's conflicting decisions in the long-running dispute between apple and qualcomm. this is bloomberg. ♪
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emily: just one day after apple's big services event, the iphone maker barely escaped a possible import ban on its iconic smartphone. the international trade commission rejected a patent infringement claim filed by qualcomm tuesday. apple is not out of the woods. that decision coming just hours after a separate judge says they have infringed a different qualcomm patent and recommended an iphone ban. that case is subject to review by the full commission which is expected to complete the
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investigation by july. on tuesday, we spoke with the cofounder of the ventures right after the decisions came out. >> it will play out over the small bumps in the road country by country, unfortunately. i think, to put some context on this, these headlines sound most concerning. sound is, i think, the important word there. the substance is purely noise. ultimately, to answer your questions, how will this play out? we will see varying degrees of announcements for qualcomm and apple, but that does not change where the trajectory of the relationship between them is going. that relationship is moving in a different direction where they will eventually be separate. and you can point to some of the hires that apple has had recently in san diego, similar to an acquisition they did about a decade ago when they started to build their own chips internally and vertically integrate. they want to do the same thing
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around technology they are in dispute with qualcomm. they have an option of moving in that direction. so the big picture, the simple reason why this is noise is that, in the future, apple will not be dependent on qualcomm. and this irritation that is going on in the courts only accelerates that move for apple. emily: the iphone has been banned in other countries in other rulings pertaining to qualcomm. i know that it mostly involves older models. so, even if it is just older models potentially being banned, you think that is still just noise? gene: it is, and i think there is some dispute about which models under this most recent announcement are going to be banned. apple uses intel chips for their most recent phones. to your point, it's going to be the older phones. if you think about the simple exposure, say iphone 7's are
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banned in the u.s. and those customers do not buy any products, that probably has a 5% headwind to the overall business. it is a measurable piece of the business, but importantly we come back to the central theme. these customers likely are not going to make a decision based on a price point that is unavailable for them, for $50 or $100 to jump to an android phone. apple has retention that has been steady for the iphone between 90% and 95% over the past five years. i think that availability, or lack thereof, of certain models, is not going to materially change the number. emily: loup ventures cofounder gene munster. coming up, can the u.s. government safeguard the 2020 presidential election from foreign influence, and what is silicon valley's role? we will hear from congressman ro khanna about his plan to make them work together. that is next. bloomberg technology is livestreaming on twitter.
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check us out at technology, and be sure to follow our breaking global news network tictoc on twitter. this is bloomberg. ♪
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welcome back to the best of bloomberg technology, and emily chang. robert mueller's investigation of interference in the 2016 collection is wrapped. clinical fights may continue. there is plenty of work to do the big 2020 presidential vote. when is to be done in a washington post op-ed, writing that really preventing the injection of one propaganda into our due course is impossible. we can ask our tech industry to work quickly detect for an influence efforts to u.s. officials.
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r patterson joins us on tuesday. >> as bob mueller found, the russians hacked into our emails, the manipulative social media, they want to donald trump to win. we need to make sure that whether it is the russians or , theyher foreign country never do that again. technology companies can for -- form a consortium and so they can share information about that actors and make sure those actors are removed from those platforms. our law enforcement agencies can better cornet with tech companies. they don't have all the resources to do all the intelligence work. the need to work with law enforcement and a third point, we need to label these ads. a consumer needs to know if they are saying and add that is being paid for by a foreign entity and -- behind these online as
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ads. >> is anything that the government can do? it seems like a lot is falling through the cracks. rep. khanna: we can give funding to these law enforcement agencies to specifically help private companies with cybersecurity and with fighting foreign interference. we do this all the time. we do not expect facebook to be responsible solely for their security. they have private security, but they still have the protection of our military and police. they should also have the assistance from our intelligence agencies that help them identify who the bad actors are on their platform, then they have a responsibility to remove those bad actors or make sure they are not spreading propaganda. this is also a bipartisan issue. i have talked to other people -- to people on the other side of the aisle about the need for congress to step in so it does not happen again. emily: we just saw this live
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video of a mass shooting in new zealand go up on facebook's platform and nobody caught it for 17 long minutes. it certainly diminishes faith in the ability of the tech industry to take strong action on these things. do you think we are better prepared now then we were in 2016 to prevent this kind of interference from happening on tech platforms? rep. khanna: i think we are better prepared. i have spoken to many tech leaders, and they take this very seriously. they have instituted far greater safeguards into their platforms to make sure they are ready to act. you mentioned the new zealand shooting, which was atrocious and awful, and it took a few hours to remove the video from every site, but it is a hard
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problem. once the video is out there, it is not easy for anyone to remove it. we have to understand this is a difficult issue and will require investment in artificial intelligence, it will require better coordination. i do think many of the leaders understand their responsibility. emily: do you think big tech gets how big an issue this is? and do you think there is truly the will to invest the human and technological resources to make this happen? rep. khanna: i do. they are citizens of our democracy and they understand and want these platforms to enhance democracy. when you speak to them they will talk about how proud they are of the black lives matter or parkland kids having social media as a platform to get their voice out, or how excited they were about the arab spring. they also understand these platforms have been of use for hate crime's, suppressing votes, and human rights violations. so they want to solve this. but what they say is they cannot do it alone. they need the help of law enforcement agencies and the help of the government to invest in resources.
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that said, they have a responsibility and there are things they can do themselves, such as disclosures of ads and making sure they limit the virality of propaganda or hate speech. emily: big tech is getting bipartisan scrutiny as of late, senator elizabeth warren calling for the breaking up of big tech and senator ted cruz supporting her. is that the way to go? rep. khanna: i do not agree with them on that. i do not want china to have the only big tech companies. it would be an irony if alibaba, tencent, and baidu were dominating the world. i think we need stronger antitrust protection. the paradigm should be the microsoft case. the government said microsoft could not privilege its own product, it could not tie internet explorer and they prohibited that, but they did break that up. we see in technology that the
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giants of the past like aol or yahoo! are often not the giants of the future. so strong antitrust protection, yes. breaking up big companies, no. emily: what kind of antitrust protection would you advocate? on google, amazon, apple, facebook? rep. khanna: you should not have anticompetitive platform privilege. simply, that means you should not be able to prioritize your own product. let's take a concrete example. amazon should not be able to say that when you search for a detergent, the first thing you see is amazon basics. they need to make sure every competitor has equal access to their platforms. those type of reasonable's -- reasonable steps and strengthening antitrust laws is a good thing. that does not mean that we break up these companies into multi-parts and then allow
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alibaba to succeed and become the world's platform. emily: you represent silicon valley. have any of the tech giants or executives in the companies reached out to you personally to express their concerns about government interference or regulation? rep. khanna: we have conversations all the time, and there are times they think i am going too far with my internet bill of rights, or talking about stronger antitrust enforcement, but ultimately, they respect about because it is intellectually defensible. what they do not like is painting with broad brushes a politics of demonization. ultimately tech remains very popular when you go around the country. people like using tech products and want tech jobs. they want smart regulation. i think tim cook said it best, that we need well-crafted regulation. emily: the mueller investigation
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has wrapped and we have the attorney general summary. are you satisfied, or do you want the full report to be released to the public? and do you think congress should move on? rep. khanna: we definitely need the full report released to the public. the american taxpayers paid for it. we should see the report. we especially need the report on obstruction of justice. bob mueller did not make a conclusion as to whether the president obstructed justice. who is bill barr to make that conclusion and 36 hours? if mueller wanted barr to make that conclusion, he would have put that in his report. robert mueller wanted the american people to make that conclusion and congress to make that conclusion. we need to see the full report. emily: that was congressman ro khanna of california. amazon plans to hire an additional 800 engineers in
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austin, texas. it is the company's first major office expansion after backing out of a canvas in new york. -- corporate campus in new york. amazon says it will distribute the 2500 jobs formally bound for the big apple among 17 offices in north america. coming up, regulating google. the ceo met president trump to ease concerns over the search giant and its practices. but is it enough to keep individual stakes happy? we ask the attorney general of louisiana. that is next. this is bloomberg. ♪
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♪ emily: president trump met with google's ceo on wednesday and talked about work with the u.s. military, a meeting the president tweeted went well. despite the positive sentiment, google and alphabet are still being targeted by lawmakers.
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senator elizabeth warren has called for google's breakup, and senator ted cruz says google silences conservative voices. and bloomberg previously reported a group of state attorneys general are laying the groundwork for a probe into google on the basis of antitrust and privacy concerns. we talked about all of this with the attorney general of the state of louisiana, jeff landry. a.g. landry: i was not privileged to the discussion the president had and i would guess it mainly surrounded google's activity in china. i have not heard that they discussed any of its practices as it relates to data mining, the use of data mining, the manipulation in the digital ad space, and content suppression. all of which you mentioned earlier. what we have here are different layers of problems surrounding big tech as a whole.
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these are issues attorney generals around the country on both sides of the aisle have been discussing for quite some time. this is not new to us. this is a discussion we have been having as we not only are the chief legal officers of each of our states, but we are tasked with protecting consumers. emily: what are the issues you are most concerned about, and what kind of action needs to be taken? a.g. landry: i think all of the issues that have been brought up concern me equally. i would tell you that each of them have a different take. some of them have an antitrust avenue and others have an unfair trade practices avenue as well. we were scheduled to discuss these issues with the ftc last week, but that meeting has been postponed and my understanding is they are rapidly trying to reschedule that particular meeting. when it comes to the digital
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advertising space, as an example, that could be both an antitrust and an unfair trade practice area. emily: are you part of this inquiry i mentioned where attorneys general are looking into whether google warrants a probe on antitrust and privacy issues? a.g. landry: look, we have had a number of discussions with additional attorney generals on both sides of the aisle. each of us are looking at some of the same things and some additional issues. you mentioned content suppression as well. we are looking at big tech as a whole to determine what avenues may be appropriate to ensure our consumers are protected. emily: google has responded to this preliminary exploration saying privacy and security are built into our products and we will continue to engage
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constructively with state attorneys general on policy issues. republicans and conservatives have historically not wanted to regulate big business. how serious do you think conservatives are right now about regulating big tech, and what makes the situation different from historical situations? a.g. landry: let's not confuse what google said. of course, google, as well as everyone out there in the industry that collects data on consumers, is concerned about the privacy of that data. that is not at all what the bigger picture of what attorney generals around the country are looking at. the question to google is, what are you doing with the data you are collecting? does the consumer know what you are collecting? are they getting a benefit? is there a quid pro quo in that, and should consumers be getting more out of what you collect from them? on top of that, is the data that
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google is collecting from the consumer proprietary to the consumer? that is one field. the next question is whether or not google is manipulating the digital ad space. are they controlling it in a way that would be unfair? when you look at the big picture in the digital advertising space, the question i would pose is with the ftc allow chase or goldman sachs to own the nasdaq? the answer is absolutely not. yet that is exactly what google does in the digital advertising space. emily: what do you think about privacy in particular and what role states should play in enforcing a federal privacy bill? a.g. landry: again, when you talk about privacy, that is a very broad subject. are you talking about how individual companies protect the
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data that they already have, or are you talking about being openly transparent with the consumer as to what you are collecting from them? emily: when it comes to political bias, attorney general jeff sessions, when he was attorney general last year, called a meeting of you and your peers to talk about conservative bias on tech platforms. do you believe some of these tech platforms are deliberately subverting conservative voices? a.g. landry: some of the actions i have seen on the big tech platforms raise that issue. we have seen it time and time again where they have suppressed conservative content. we reported to them and take action or inquiry, and it is always an apology from their standpoint.
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at some point in time when the mistake is made again and again, there is evidence of content suppression. the concern that senator ted cruz has raised could be real. that is what we are hoping to find out. emily: speaking of senator ted cruz and senator elizabeth warren, elizabeth warren advocated for the breakup of big tech and ted cruz said she has a good point. what you just said about not wanting goldman sachs or jpmorgan to own the nasdaq reminds me of that. what do you make of their arguments to break up big tech? a.g. landry: it is certainly a possibility. i think it may be a road that may have to be traveled on. attorney generals are leaving all the tools in the toolbox to cure some of the problems we are seeing. we are talking about a virtual marketplace that the average consumer has a hard time wrapping their heads around.
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when you go to the digital ad space, i will give you an example. i was trying to purchase a cover for a dog bed i have. i have a launch -- a large dog and he destroyed his bed. i did not need the mattress, i just needed the cover. i went in the field and searched dog cover and the manufacturer. what i got on the first page is the covers were out of stock and i had to buy the bed. i went to the second and third page and found the cover i was looking for. the question is, is google purposely doing that? are they driving consumers to more expensive that they are not exactly looking for? consumers have come to have an expectation that when you search for a particular product, what they are getting is quality and maybe quantity and service. that is what we are trying to determine, whether or not the consumer's expectation is meeting what comes out of the
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search. emily: that was louisiana attorney general jeff landry. coming up, another federal agency targeting facebook. this time it is housing and urban development alleging their ad platform is discriminatory. that is next. this is bloomberg. ♪ ♪
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emily: facebook is already the target of the federal trade commission for privacy violations, and on thursday, housing and urban development said they are charging the social network with allegedly violating the fair housing act. hud said facebook did so by restricting those who view housing related ads on things like race and religion. here is what secretary ben carson said in a statement. "facebook is discriminating on people based on who they are and where they live. using a computer to limit housing choices can be just as discriminatory as slamming a door in someone's face."
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we discussed this with selina wang and naomi nix. selina: this caught facebook off guard. last week facebook settled lawsuits, saying they would overhaul their ad platform so that ads will not be able to do this micro-targeting on areas like gender and sex. hud is arguing that does not go far enough and they are charging that facebook still allows discriminatory ads to exist. they allege there is the ability for advertisers to target based on where they live, drawing a red line around these areas. they also alleged facebook could enable off-line data to enable machine learning what the characteristics part of these people based on protected groups. even if they are not explicitly allowed to target those groups.
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emily: facebook's statement -- "we are surprised by hud's concerns and have taken steps to prevent ad discrimination. last year, we eliminated thousands of targeting options that could potentially be misused. we are disappointed by today's developments that we will continue working with civil rights experts on these issues. -- these issues." facebook a couple of weeks ago changed a bunch of their ad targeting practices because of complaints around the issues. they said they worked with civil rights groups to make the changes, which is part of why facebook seems caught off guard. why is hud taking this action? naomi: i think it is just another symptom of a washington regulator continuing to ask questions about the social media company's target advertising. democrats taking control of the house have made it clear they are intending to seek more answers to questions about whether targeting ads
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discriminate against minority communities. i think it is clear that washington, as the hud secretary made it clear, washington is putting the heat on facebook around this issue. emily: when you look more closely at the categories that advertisers were allo-christiann accessibility, hispanic culture. it is interesting thinking about what was going into these product decisions by facebook and why they thought this was a good idea. selina: it is interesting because these policies are only as good as their enforcement. facebook is not required to hand over their algorithms so clearly
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there was some sort of data mechanism that told them these are interesting targets to group that would be beneficial to advertisers and get them more clicks. emily: the government has reached out to google and twitter about their ad targeting practices. we have a statement from google saying, "we have had processes in years that prevent the targeting of certain categories. race, disability, financial standing, etc. our policies are designed to protect users and make sure advertisers are using our platforms in a responsible manner." is there any indication that google's targeting practices are vastly different from facebook, or how the government may proceed in these other cases? naomi: google says it is not discriminating in the same way, but it is clear that google has not been as open with its algorithms and behind-the-scenes mechanisms it uses to determine advertising. more access to that information has been a top concern in washington, so it remains to be
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seen whether there are ways that google is not certifying internally that those advertisements are compliant with housing discrimination laws. emily: nasa's historic all-female space walk has been put on hold for a lack of fitted space suits. astronauts were scheduled to swap out batteries outside the international space station this week to conclude women's history month, according to the agency, both need a medium-sized spacesuit and only one is readily available. nasa spokeswoman stephanie shireholtz told "the washington post" an all-female spacewalk is inevitable. it better be. that does it for this edition of "the best of bloomberg technology." we will bring you all the latest in tech throughout the week. you can tune in every day, 5:00 p.m. in new york, 2:00 p.m. in san francisco. we are live streaming on twitter.
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be sure to follow our global news breaking network at tictoc on twitter. this is bloomberg. ♪
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>> welcome to daybreak australia. i am heidi -- haidi. so we are counting down tophia -- tohie: we are counting down bloomberg asia's open. these are the top stories we are covering in the next hour. more signs of ability -- stability in china. theresa may us conservatives prepare for a snap election. the eu's pa

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