That does it for whatd you miss . Now to Bloomberg Technology with emily chang. This is bloomberg. Emily im emily chang. This is Bloomberg Technology. Zuckerbergs politicking. Why he is handing over information to congress on political ads bought by russians ahead of the u. S. President ial election. Plus, google bets bigger on hardware. We break down the reasoning and the timing behind the billion dollar venture. And nest refreshes its product line with a focus on the Home Security market. Our exclusive conversation with the ceo. Lede, Facebook Says it will cooperate with congress and handover information on the political ads that were paid for by russians ahead of the u. S. President ial election last year. Mark zuckerberg took the Facebook Live to address the companys next step to protect the integrity of the democratic process. Mark not only will you have to disclose which page paid for an ad, but we will also make it so you can visit an advertisers page and see the ads they are currently running any audience on facebook. Emily this week, several democrats called for facebook and other social networks to face new advertising disclosure requirements. Facebook is expected to be called before the Senate Intelligence committee for a public hearing in october with Panel Leaders demanding a full accounting. Joining us, our editor at large and our bloomberg tech reporter. Whats happening . Zuckerberg is trying to take this and move it in a direction that is positive for facebook. They have been under so much pressure. Congressional leaders have said we demand more transparency, more cooperation. Now facebook is saying, yes, we will quiet operate with you, but we will also do more for transparency in political advertising on our site and work with governments around the world. He mentioned germany. To make sure this doesnt happen in the future. They are trying to build that trust with the government so that they are not under so much fire anymore. Emily its fascinating that political ads are not subject to disclosures that Television Ads are. What do you make of facebook attempting to take a proactive approach . Cory there are two reasons that Television Ads are monitored by the government. One is concerned about political spending. This notion that its good for our democracy to know who is spending money to try to push their issues, the notion of not seize and racists of nazis and racists and antisemites pushes that to another level of political discourse. When radio or television were first invented, the biggest signal always won. Was established established. They said here is a slice, here is a slice. We will let you use these slices if you abide by these rules. It created some order in the chaotic world of broadcast. With those rules came the requirement to disclose certain things. The internet is the wild west. There are an unlimited amount of channels. As a result, its not been legislated. What we dont know is the role of russian money and russian hacking on the u. S. Election. What we also saw was that facebook was willing to give over a lot of information with a search warrant to Robert Mueller , but giving a lot less to congress. Facebook has suggested they are sharing the same amount now, but we dont know. Emily facebook is suggesting that congress decide how much the public should know. Who knows what, and what do they know . Facebook wants to be the one saying, listen, we did a very stringent review of our privacy policies, our legal rights. We are going to give this information to congress in a way that we feel will honor that. They dont want to give it to the public because they dont want to set any precedent for having to make peoples private stuff public in the future. Of course, there are always investigations where people are asking for cooperation from facebook and whatsapp and instagram, and the Company Pushes Back on those pretty hard. Whats interesting here is the company is trying to figure out how to present it self as even more transparent than tb in the future than tv in the future. Our colleague pointed out to me, even if you could do what zuckerberg says, ok, all these ads are paid for by cory johnson or by russia, how do we know its not a bot . How do we know who this is . Caroline its possible cory its possible they dont know how much russia or others are involved. Sarah they are not being sold through salespeople. They are being sold through this selfserve advertising system on the platform. Emily they found connection between these ads and russia, but they dont know who in russia. Sarah and they are continuing to look into this. They are looking into other state actors and other potential russian groups. This story may not be over yet. Cory sorry to interrupt. They were caught in this bind they wanted to say we did not have that much effect, it was only 100,000. But there were 3000 ads. As if the number wasnt 299 or 30,000. They put a big number out there. They put a small number out there. They are trying to play both sides of this. Emily you are out with a new story about Mark Zuckerbergs political aspirations, of which he tells you there are none. Hes not running for office, even though it looks like he is. Whats your take away that go your takeaway . Sarah only he knows. There are a host of political andes and societal issues issues with facebooks power around the world that he has to deal with. He is doing this also to educate himself, but mostly to present this vision of the future of facebook as this nonthreatening, very helpful for the future of society he wants to paint a picture of this company as something that is going to be a force for good. Its kind of good timing. As he is doing this, all of these things are coming out, the russian ads. Racists onng against facebook ads. This is all coming out as zuckerberg is doing this Charm Offensive around the country. Its all very curated. Its a very complicated face for zuckerberg right now. He certainly doesnt want us to think that its at all strategic, at all curated, beyond what he envisions for the future of facebook. Emily sarah frier, who covers facebook for us. Cory johnson, our editor at large. Thank you. Read this weeks cover story on Mark Zuckerberg in the new issue of bloomberg businessweek. Amazon is set to open a large new office in new york city and create 2000 highpaying jobs. The ecommerce giant has already got several locations across the city, but will expand its presence. The new office will employ people across finance, marketing, and Information Technology earning an average of 100,000 annually. Amazon will invest 55 million in the building project. New york is bidding to be the location for amazons second headquarters. Coming up, google is making a big push to beef up their pixel line of phones and products. How is it doing . A bigtime by of hcc talent. Htc talent. This is bloomberg. A pushgoogle is making to get more control of phone hardware and software by agreeing to buy a piece of htcs hardware and design teams. Google will have more control over the design and production of the pixel as well as other devices. Aydin me to discuss, senkut, one of googles earliest employees. Also with me from new york, bloombergs mark bergen, who covers all things google. Explain how this deal is going to work. Mark it is sort of third time is the charm. Google has done hardware before. They bought motorola. Big purchase for nest. This one is a little smaller, a little like a talent acquisition. They have 2000 engineers who were working on the google pixel device from htc, who will now be working primarily on google hardware, not just the pixel device, but their speakers, their vr devices, whatever is in the portfolio they are planning to put out. Emily some people are worried that this is deja vu. Google spent 12. 5 billion on motorola mobility, then sold it to lenovo. Whats your take . Aydin i think its a big competitive battle right now around consumer devices, especially phones. Experience engineers is not going to be that easy for them to get. I think its a great move. I think its interesting that it shows they have learned from the motorola experience that they are actually getting the 2000 engineers. This is not an allout acquisition of htc itself and the manufacturing facility. Google is much larger now. From a risk perspective, im not sure its quite in the same profile as the motorola move was for them. Given how important br has become vr has become and these nextgeneration mobile phones, i can see why this is strategic for them, not to mention other consumers devices, given the importance of google home. Emily we will talk to the ceo of nest a little later in the show. What does this deal signal about googles commitment to hardware and phones in general . The relationship between this Hardware Division and nest and other parts of the company . Mark google has signaled a lot of commitment of things, then changed their mind. They signaled a big commitment to hardware with motorola, then to google fiber and broadband. They pulled back on both of those. I think this is google looking out maybe two to five years in the future and being terribly paranoid, seeing the world in which some of the bigger handset makers, the really successful ones, dont need google as much anymore. Samsung is moving with its digital assistant to its own software services, sort of away from google. That terrifies them. When they are competing with apple. Offensive ended is it a defensive move . Aydin google has really great economics. I think its a strategic move. There are only a few companies in the world that have this kind this scale of engineers. Google has always been a software company. For them to have more knowledge inside the company with respect to hardware, i think its a good move in the sense that i can see the influence of we want the engineers, but we dont want the cost of hardware and facilities and all the things. I think its going to be an important area and could be a couple applicable to different things, phones, ar, vr, google home. I think its a strategic move. In terms of whats coming up from china, i think software has been the driver. Google has the monetization engine. Thats why i feel like google has some great strengths to rely on. Emily you were one of the first super angels coming out of google. The industry has changed a lot. There are a lot more people angel investing. How would you describe the Competitive Landscape today . Aydin its so different. When i left google, angel didnt exist. Y combinator was just starting up. A lot of these organizations in terms of fostering the growth of startups and the funding, there were maybe a handful of really known angels. Maybe 40 to 50 angel investors. Only, fastforward, not are there thousands of angel investors, but there are hundreds of c funds. On the one hand, its really great. It bodes well for entrepreneurship, but it also means the number of startups has increased by a factor of 10s and 100s. Its harder for companies. On the other hand, its interesting times. We had a conversation years back , mostly around consumer internet, technology booming. Now we have areas that we are making investments anywhere from liquid biopsy to curing cancer and enterprise customers, not to mention thin tech fint ech. Its very exciting times. Emily we have about 30 seconds. You just made your biggest investment to date in a company which helps Small Businesses offer retirement plans, 401k plans. Why are you so bullish on this market . Aydin i think this is a one dollar trillion market 1 trillion market. This company is the first. Company that is trying to take advantage of the fact that this is a key benefit. Retirement is really important, yet only one out of three employees are using it. We found that its a great opportunity to get involved in a company that can make a fundamental difference here in a market where we have not seen as much innovation. We are very excited to be involved. Emily thanks. Its been too long. We will have to have you sooner than the next five years. Coming up, the eu wants to make sure its citizens private data is protected. The face of the Privacy Shield, next. This is bloomberg. Emily now to the euu. S. Privacy shield, which is up for its first annual review. The privacy she shield Privacy Shield is meant to protect the data of eu citizens that is stored on u. S. Servers. There was uncertainty over the shields continued existence when President Trump signed an executive order. Whats going to happen . I spoke with the eu commissioner for justice, who spent a week in the u. S. To speak with commerce secretary wilbur ross and Tech Companies, about the status of the shield. I met mr. Ross for the second time. I came with a little bit of we need to clarify and make sure that we understand the protection of privacy in the same way. To do theh my team review. We had a lot of detailed legal technical questions. Work wasy that all the ongoing in a very good working atmosphere. Mr. Ross, personally, assured me he has a very strong commitment for promoting the shield and keeping it running. Emily what are the main points of contention or differences of opinion . Vera we have to make sure that the american state authorities have Privacy Shield under full control, that they monitor the companies which transfer the data from the eu to the United States, and are fully compliant with the conditions, and also that there is no mass surveillance collection of data authorities. This needs to be checked. Privacy shield is a trust and check exercise. We trust, but we need to check. Emily what happens to the Privacy Shield of the Trump Administration changes its stance . It would be very bad news, bad message for businesses on both sides of the atlantic, because its important not only for the american companies, but also for a number of european companies. It would be a bad message for europeans because they rely on Privacy Shield to protect their privacy and their private data. If there is a radical change of the stance, i never hide that i am ready to propose a suspension of the system, but we are not there. I am cautiously optimistic that we will keep Privacy Shield running. Emily youve been meeting with Tech Companies here in Silicon Valley this week. You met with Sheryl Sandberg at facebook. What are their main concerns . Shield, because most of the companies i spoke to are under the shield and they appreciate it as a good, legal way of transferring data. The datad topic was protection reform in the European Union. His is a big change we emphasized very strongly the need to protect privacy of people. The third topic was how to handle the problem of illegal content on digital platforms, because this is of high importance for us as europeans. We want to have this fully in place. Emily you are coming out with the paper that covers how Tech Companies deal with illegal content online, how it is dealt with in the United States versus europe. Whats your main takeaway . Vera i spoke to google and facebook, out of the four companies which are under our code of conduct. Facebook, google, twitter, and microsoft they have committed themselves last year to delete within 24 hours hate speech which has been notified to them. We agreed on the need to continue this. I also committed myself to invite more companies to do the same thing, because we want in the European Union to have internet which will be hate free and which will not open the hatred a highway for and for inciting violence. Emily are they acting on that commitment . Have you seen them act more quickly in terms of getting the content down . Vera im a very strong promoter of enhancing their social responsibility. Emily do you think the u. S. Needs to handle this more strictly, like you do in europe . Vera its a big issue here. We discussed it a lot. The first element of the constitution, which ensures unlimited freedom of expression it will be up to america, to american politicians and people, whether they recognize that some speech is so dangerous that the society should prevent. Emily that was the eu commissioner for justice. Coming up, after going for almost a year without introducing a new device, nest is rolling out a slew of new products. We will speak with the companys ceo about what is ahead. This is bloomberg. Mark im mark crumpton, and you are watching Bloomberg Technology. President trump issued a new executive order expanding the treasury departments ability to cut off from u. S. Markets any bank that does business with north korea. Ambassador nikki haley spoke to reporters at the united nations. Ambassador haley it only impacts those who continue to do business with north korea. If china does business with north korea, yes, it will impact them. So, really, it depends on countries that choose to continue to support north korea. Mark a mexican official says there is no missing child that that collapsed that became the focus of a rescue effort after this weeks deadly earthquake. They believe an adult may be alive in the rubble. More than 50 people have been rescued. The death toll is at least 245. Puerto rico has been declared a federal disaster area after Hurricane Maria battered the u. S. Commonwealth. President trump plans to visit puerto rico to assess the damage. He spoke about the devastation during a meeting with ukraines president. President from puerto rico is in very tough shape. Their electrical grid is destroyed. It wasnt in good shape to start off with, but their electrical grid is totally destroyed. And so many other things, so we are starting the process now and we will work with the governor and the people of puerto rico. A 10thfficials say patient from a florida nursing home that lost its air conditioning during