Transcripts For BLOOMBERG Bloomberg Technology 20171101 : vi

BLOOMBERG Bloomberg Technology November 1, 2017

Polluting companies. The separatist leader has been summoned to court on suspicion of sedition, which could see him jailed for 30 years. Hes currently in brussels saying he wants to plead catalonias case to e. U. Leaders. He said he would only return to spain madrid guarantees him a fair trial. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. ,ake a look now at the markets trading just getting underway in hong kong and china. The markets generally starting the month on a positive note, and a look at tokyo, sydney, and singapore. This is bloomberg. Im emily chang in this is bloomberg technology. A deep dive on facebook, google, and twitter, testimony in washington. Each tech giant answer questions on what general called the National Security question of the 21st century. Plus apple and qualcomms legal battle takes another nasty turn. We consider the beef from both sides and the implications for future iphones and ipads. And a watershed moment for bitcoin. Reversing course today, plenty to introduce bitcoin future by the end of the year. First to our lead. Facebook, twitter, and google are having their day on capitol hill. Top lawyers from all three appeared before the Senate Judiciary committee to answer how russia manipulated their platforms to influence the 2016 u. S. President ial election. Facebook, google, and twitter executives told congress they are not sure they measured the full extent of russias manipulation of social networks in last years u. S. President ial campaign, and they do not yet have the technology to prevent it from happening again. We have found that foreign actors used fake accounts to place ads on facebook and instagram that reached millions of americans over a twoyear period and that those ads were used to promote pages that in turn posted more content. People shared these posts, spreading them still further. Many of these ads and posts are inflammatory. Some are downright offensive. We have uncovered more accounts linked to the russianbased Internet Research Industry Based on our review and we determined that advertising by russia today in seven small accounts was related to the election and violated either the policies that existed at the time or that have since been implemented. We believe that the relatively limited amount of activity we found as a result of the safeguard in place in advance of the election and google products do not lend themselves to the kind of targeting or viral dissemination that these actors seem to prefer, but we are committed to continuing to improve our existing security measures to prevent that kind of abuse. Emily joining me now is someone who was at the hearings and also in studio is mark bergen. Sarah, i want to start with you. What were the Key Takeaways so far today . Sarah i think the opening testimony was one of the only times that the Tech Companies had the upper hand. For the remainder of the time, senators just poked holes in their promises. The companies came presenting themselves as prepared and proactive and committed to making sure that this does not happen in the future. The senators were able to gauge from the testimony that they do not currently and may never have the full capacity to prevent this from happening again. It was really a very revealing testimony. Also, i think the scope for which this is a problem became a lot more clear. Emily what are the interesting differentiations googling today is that google is different from facebook and twitter in that they made the claim that the protections they already have in place event at some of the stuff from spreading. They said it spread on social media. Mark i think they google claim has been they identified a much smaller pool of ads than facebook and twitter. You did see targeted questions around youtube, including russia today with congress and senators have been adamant that this is a propaganda tool for the russian government. A very popular youtube channel. The google lawyers evaded questions about that and about how much money google shares with their ad revenue. Emily on top of that, they did not just talk about russia but the threat from foreign actors in general, china, iran and north korea. There was a particularly Heated Exchange between senator kennedy and one of the lawyers. Take a listen to that. How about north korea . I am not aware of other foreign actors running the same sort of campaign. Can you be aware . You have 5 million advertisers, and you are going to tell me that you are able to trace the origin of all of those advertisements . Emily facebook general counsel taking a long pause before attempting to answer that question. How many times with a cut unaware . Sarah in particular, senator franken saying that trying to get him to say that facebook would stop inspecting political ads in north korean currency. Collin said, if we did that, and he for an actor can change the currency they are buying ads in. He would not commit to doing that, and it got pretty hard. A company was talking about the signal. All the companies were talking about how people run currency might be a good signal for them. Senator franken again was like, what do you mean signals . We are talking about illegal activity. For in spending on advertising to influence the u. S. Election is illegal. There are a lot of reminders like that that was the companies in place or at least the senators were trying to present this as a matter of law, not a matter of signals and data mining and what the companies see as their world. Emily which brings us to the question of responsibility and whether companies can deliver on this very big in critical responsibility. Take a listen to another exchange with a senator. You are taking responsibility for a lot of what happened here and trying to make some changes. There would not be an outside enforcer of any of your policies, right . It would just be you. Is that true . Not you personally, but your companys. Can somebody answer . That is correct. Emily that is correct. Mark, talk about the ability of these companies to actually deliver on this responsibility. Can they meet the challenge . Mark a lot of them mentioned we have fabulous Machine Learning tools and we are putting both humans and our ai to these resources. Facebook and google have had big screw ups about measuring metrics were people say they cannot grade their own homework when it comes to court advertising, let alone propaganda, these russian backed attacks. Emily a big question has been, when will these companies, especially facebook, release information on targeting, who these ads were targeted to . Sheryl sandberg said a few weeks ago that facebook promised to be very transparent on this point. We still, however, have not heard from Sheryl Sandberg or mark zuckerberg. Several lawmakers expressed disappointment that they were not on capitol hill today. When are we going to see that information . Sarah well, there were a lot of informations about timeline here and not a lot of answers. The companys overall were saying we will be communicative, we will keep in touch with your staff, we will look into what youre asking about and get back to you. There were a lot of questions about what be targeting looks like, but also who was manipulated, and do we know if people actually make decisions based on this . The company said, well, you know, we are focused on the content on our platforms. We do not know what people decided based on this. The senators did not quite take that as an answer. Emily another round of hearings coming up tomorrow with the house Intelligence Committee. What are we expecting . Sarah this hearing was more broadly focus not just on the russia subject but on others in general. They will ask about whether they know how the Internet Research agency got their data. There was a question about that today, but that is what gives the Intelligence Committee the link to whatever Political Campaign may have been working with them, if any. So i think it could get even more heated tomorrow. Emily all right. Sarah, you will be covering those hearings for us yet again on capitol hill. Mark here in the studio covers google for us. Thank you both. We will have much more reaction and analysis on todays hearing later in the show. Just a reminder, bloomberg is developing a network for twitter. Facebook disclosed a Russian Group spent 100,000 on ads to influence the 2016 election. How do they do it . It is more simple than you might think. Sarah frier file that report. Facebook tells us a lesson group spent 100,000 on ads to influence the 2016 president ial election. How did they do it . Is actually very simple. There are only three things you need to run a very sophisticated advertising campaign. A facebook account, the ad itself, and a credit card. Facebooks website will hold your hand to the rest to selfserving advertising. Lets say you havent you want to show to gun owners in pennsylvania. Civil. Simple. Facebook and reroute the ads of anyone that has posted pages about gun ownership using target at space on race, political affiliation, pretty much anything. Facebook and target specific demographic groups because it has so much information on its users, the articles the quick on, the pages that follow, what they like, all for targeting advertisers. There is information users provide themselves. The ads are meant to spur controversy over immigration, race relations, gun rights, and more. Facebook says that before as our distribution, they are sent for review, but it is a mostly Automatic Process that does not block commercial ads based on content, which means the russians were able to run thousands of ads with actually Incorrect Information and inflammatory political speech, which facebook users could not tell came from russia, and the Russian Group created fake accounts and pages to run the ads, which looked like they were coming from concerned u. S. Citizens. Just a little bit of money goes a long way. 100,000, the Russian Group was able to reach 10 million people. Remember that some states were won by mere thousands of votes. I dont want anyone to use our tools to undermine democracy. Facebook recently said that to prevent election but english in the future, it plans to hire 1000 humans, but they still have not said what exactly the review parameters will be. Emily once again, bloombergs sarah frier reporting. Coming up, the patent dispute between apple and qualcomm heating up. Now they can turn to intel or mediatech, leaving the chipmaker behind. We have all the details. Bloomberg technology is streaming live on twitter. Check us out 5 00 p. M. Weekdays. This is bloomberg. Emily canadian startup shop i reported in earnings beat for the template in a row, and the Company Raised its outlook. They provide merchants product for merchants to sell online. The stock fell in the session on concerns over sustainability. One person called the company a get rich quick scheme. Apple is taking its patent licensing dispute with qualcomm to another level. Apple is designing iphones and ipads that do not use qualcomm components, something the iphone maker has been doing since 2010. However, the product plans are in the early stages and may still change. While still being decided, apple may use modem chips from intel and mediatech instead of qualcomm. Shares of qualcomms sake more than 6 on these reports today. That is the worst in months. There is ian king. There is a threat . How big is the threat they will not be in the next iphone . Ian it depends whether you really believe what is going on here. It is a long way until they have to make that decision. If they are already designing it, it is possible in terms of scaling it. It is about 1. 8 billion of revenue a year to qualcomm. Emily do you believe it, or do you think this is just posturing . Ian qualcomms earnings tomorrow, ask yourself, why did this come out . That is a viewpoint certain people have expressed. You have to rubber the most recently we heard from qualcomm was them dropping the nuclear bomb of trying to ban apple sales of the iphone in china, the manufacturing in china. Just when it seems like they reached the bottom point for their relationship, they managed to find another layer. Emily obviously investors are not excited about this for qualcomm. Take a look at a terminal chart 7413. You can see house since this dispute started, the divergence in apple shares and qualcomm shares, qualcomm shares just thinking. This has not been good news for qualcomm. Ian they have been massacred this year. It is the worst performing chip. The Philadelphia Semiconductor Index Benchmark index, and that is a year when chip stocks have been hot, done really well. Everybody apart from qualcomm has had money pouring in. Clearly people are concerned. If that goes way, they are in trouble. Emily if apple does give it to these other companies, is there quality change . Ian this is why analysts have been cynical about this latest development. Would you really want to dump qualcomms modems . They are best in town when it comes to getting the highspeed data. Why would apple want to take that away from itself . Why would it want the risk that someone says our phones are faster . Emily worstcase scenario for qualcomm, what is their back up plan . Ian to put more money to the research and development efforts. In china, that has been relatively successful. Both samsung and apple have lost market share to these chinese manufacturers. On the shortterm basis coming up he wants to give up apple revenue. Emily what are you expecting to hear tomorrow . Ian there is not really an awful lot they can say other than to say earnings are bad. The strategy they have in place, the legal disputes they have in place will take a while to work out to assert themselves to see whether they can win and he ground back, bring apple to the negotiating table, get is also, and get some licensing revenue get it all settled, and get some licensing revenue. It is probably next year. Emily i know you will keep us prized along the way. Thank you so much. Coming up, the status of bitcoin as a legitimate financial asset may be rising even faster than its price. We will bring you details, next. This is bloomberg. Emily cme group plans on introducing Bitcoin Futures by the end of the year david we could have professional traders and investors get more involved. The contract will settle in cash and be based on the bitcoin reference rate. Earlier this month, terry duffy spoke with scarlet fu about getting into the grip a world. Take a listen. We decided to get into the crypto world and we have them placed here so the margin rules and Everything Else we can apply to it with our distribution, we could be quite successful if a get on that path. Emily its passed another milestone, is total value just over 100 billion. One of the biggest balls on bitcoin said it could triple by 2022. He spoke earlier with the daybreak america team. Is a new core, bitcoin way to maintain a database. Its introducing the concept of the centralization, so that nobody is centrally controlling information, but they achieve this because the encryption, which is personalized encryption. Do you use bitcoin to purchase things . I do not, but i also dont use gold bars to buy things either. The reality is you cannot use, if something is viewed as alternate currency, you cannot dismiss it just because its not easy to spend. The u. K. Economy is roughly 7 trillion. Guess how many pounds are actually in circulation today . Its about 77 billion pounds. That means theres a 100 21 multiplier on every unit of the pound, is multiplied 100 times through leverage. You might say most people are spending pounds digitally. I think people are conflating that issue when they say you cannot spend it, there were its not legitimate currency. Its revolutionary, its different from bitcoin being vehicle for how that is used. Haveats something we heard a lot. Ive been fortunate to spend a lot of time with businesses that have developed in the space. What people have to appreciate is that bitcoin has drawn the most passion among qualified developers. If you look at encoding, there are more people developing bitcoin than block chain. So to me, bitcoin is like chain. On bloombergom lee daybreak americas. Coming up, check us out on the radio and listen on bloomberg. Com and serious xm. More on the hearing with Tech Companies before washington. That is next. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing Xfinity Mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Its 1 30 p. M. Here in hong kong. The man suspected of ramming a truck into cyclists in new york is a driver for uber. A man in a rented pickup drove onto a bicycle path. President trump tweeted he wants tougher vetting, saying being politically correct is fine, but not for this. Shinzo abe is widely expected to be reelected Prime Minister of japan. His coalition overwhelmingly one last months election, strengthening his position in parliament. He has been Prime Minister for five years and is the third longestserving p. M. In postwar japan. Gaming revenue rose more than 22 year on year in october. Easily beating estimates. Earnings top 3. 3 billion. With gains one. Massmarket demand is set to a picked up following the commonest Party Congress in beijing. High onword to a decade a blowout Third Quarter sales and record breaking profit forecast of 5. 6 billion. Since taking charge in 2012, the ceo had restructured sony and invested in key areas. Global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. A check on how markets have been trading in the asiapacific asiapacific, heres Juliette Saly

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