Oracle challenges the bidding process with the u. S. Defense department. Will it force the process to stop . San francisco is expected to be the first city to ban cigarettes. They will hold a final vote to ban the distribution and manufacturing of ecigarettes, making them illegal to sell in stores or online. If approved, it will be signed into law. It could pit the city against juul labs. It is backed by big tobacco and brought in more than 500 illion in revenue. To discuss this with us are our uests. What is the status of this right now . We are waiting for the city to vote on whether to take this step. We are expecting it in the next couple of minutes. Juul has become a really controversial company. San francisco doesnt like them. The main reason is kids are using their products. Emily the health risks are largely unknown. You are inhaling heated liquid nicotine. The longterm risks we dont know. Critics argue it is better than traditional cigarettes. The sale of traditional cigarettes and marijuana will still be allowed, but people are saying because we dont know these risks that it is too much to let kids in schools to use them. Juul has said it is trying to prevent underage use of these products. Emily she makes a good point. Alcohol is legal, marijuana is legal, ecigarettes everywhere else are legal. Does it make sense for San Francisco to ban a legal product . It is a very San Francisco move. It is brimming with technology, but the City Government from the tech perspective does not always feel super friendly to it. It is also a city that has put a soda tax in place and is on the forefront of the straw debate, so the city is happy to tax and restrict products in ways they see that are to the benefit of itizens. That is clearly the case here. There is the risk that juul is leading children to take up smoking when they wouldnt, pitted against people who otherwise will buy cigarettes hile they are legal, who would use ecigarettes to try to mitigate the danger to them and consuming nicotine. Emily right. Some of the concerns have been around the flavors. Hy have a bubble gum flavor if youre not targeting a younger demographic . Juul says the prohibition will not effectively address under 18s and leave cigarettes on the shelves as the only choice for adult smokers. If you look at statistics. The use of traditional cigarettes is way down, but vaping has spiked. The number in the United States has gone from 2 to 20 of u. S. Teenagers who have tried ecigarettes. What is San Francisco really concerned about . They say one in four High Schoolers and one in one in four middle schoolers have tried ecigarettes. I think San Francisco understands that it might not have a huge impact on juul itself by putting through these measures, but theyre hoping other cities will follow suit and it could have an impact on the use in the country overall. Emily what are we hearing from investors . This company is making money hand over fist. International sales are exploding. There is an indonesian giant about to sign with juul. Shares are skyrocketing because of that one deal with an ecigarette maker. You have investors think this is the lesser of two evils. You saw one investor pour into this company when it was controversial, then altria did he deal. The fact of the matter is nicotine is addictive and there are lots of people hooked on cigarettes who like ecigarettes, and that is a very profitable business. There will be this fight between the history of nicotinebased products making Companies Money and regulators who want to protect their citizens from addiction. Some investors are certainly happy to profit, and some would argue this is a technology that will help people move a wave for more dangerous products, but certainly juuls history with flavored Tobacco Products will hang in anyones mind when they think about the company, someone who started off with a product that really appealed to teens. Emily San Francisco has paved the way with controversial rulings before, legalizing samesex marriage, the first state to do that, banning grocery bags, the first city to do that. We dont know what the right side of history will be in the situation, but juul is stuck between a rock and a hard place. This looks like it will overwhelmingly pass. What is their plan b . They are moving to get on the November Ballot measure that would ban the sale of ecigarettes to anyone under 21. That would be more of the restriction than there is right now. That would supersede the ban should it pass. Emily there is also this potential ban on real estate and operating here. Correct. Juul is headquartered on city roperty up the road. The city is looking at passing a measure that would ban the sale, distribution, and manufacturing of ecigarettes on city property. Juul would probably be grandfathered in, but they have bought a new building and they will start moving employees there. That is a way around that. Emily we will be watching and bring you the results of that vote as soon as we have it. Thank you both. Now to micron, the largest u. S. Maker of memory chips reporting profit that Beat Estimates in the third quarter, a sign the company has been weathering the fallout of the trade war better than expected. Huawei was one of microns previous customers. Coming up, whatsapp and messenger have more than one billion users yet generate no cash, how the Cryptocurrency Libra could change that. If you like bloomberg news, check us out on the radio, the bloomberg gap, and in the u. S. On sirius xm. This is bloomberg. Emily facebook hopes its new cryptocurrency will change industries, but if its likely to change anything, it will be its messaging business. Mark zuckerberg could be taking a page out of wechats playbook. It has almost one billion users, but make no money from those essaging services. Will libra be the answer . Ith us we have our guests. Ever since facebook bought whatsapp, the question has been how are you going to make money on it. The same with messenger. How could libra help . There is speculation this could be a payments play. If you have a digital currency, a digital wallet, maybe you will use that to buy goods and services, maybe pay your bill someday . We have seen how wechat has become this master app where you can do all kinds of things. There is some belief facebook could be the same thing and there is a way they could take a slice of that. Emily lawmakers have called a hearing on this in mid july. They are not happy about it. Maxine waters is calling for facebook to stop developing this. Describe the backlash in washington. Ahead of the libra announcement, there was tons of skepticism about facebook in washington with the privacy issues and the holdover from the 2016 election. A lot of this stems from the fact that lawmakers want these hearings because they want to know whether this is about facilitating payments or making facebook more powerful than it already is. And more powerful in no way that lawmakers dont have oversight of. The committees calling for these hearings, they are traditional constituencies are hedge funds, traditional financial companies. If there is major financial activity outside that regulated sphere, it is basically out of washingtons hands, and that is obviously a concern. Emily what is the goal . Hard to believe this is not a play to become even more powerful. Facebook has always had this idea that if it can capture your everyday activity somewhere within the app, it makes it hard to get rid of. You cant abandon facebook if that is your only lifeline to friends and family, if that is how you buy things, pay bills, or send money to your family crossborder. The more utility they can build in, the more they think people will be hooked and stick around. Emily what could be the results of this hearing in july . Could congress forced facebook to stop doing this right now . We have been waiting for regulation out of washington, and to be fair, cryptocurrencies has been around for a while and regulation has been slow to catch up. Lawmakers cant really stop it. They can jawbone, name and shame, but they dont have any power to make facebook hit the pause button. If they have that power, we would have seen Maxine Waters already tried to execute the power, so it is kind of harassment, the go to in washington, and i dont know what kind of impact that has on facebook. For a Typical Company would have to answering questions and being embarrassed publicly would bother him, but the fact Facebook Roll this out when they are already in the doghouse, they may not care about it that much. Emily do they care about it . I was going to say the same thing. They are rolling out a cryptocurrency under investigation, so they are not super concerned this will violate any other issues they are dealing with. Emily there has been brainstorming about how business could work integrating libra. What has been discussed in terms of how they could operate . Facebook one say anything yet. Emily it doesnt exist. That helps too. We all have to speculate. Imagine i buy something online and i getting email with the receipt and a Customer Service number. Imagine that was built into the messaging service you already use. You get your receipt that way. You want to talk to Customer Service, you can do if they are. You can see the potential for the commerce play. I use the word potential purposely because it is not used in the way right now, but that is how we might use it in the future. Emily many unanswered questions. We will see how facebook answers what it can in july. Thank you both. Coming up, in amazons quest for ecommerce domination, a push into beauty. How amazon plans to take on the likes of long time beauty players, next. This is bloomberg. Emily breaking news, San Francisco has become the first major u. S. City to ban the sale of ecigarettes. The board of supervisors has voated to ban the sale of ecigarettes in stores and online to San Francisco addresses. This will have a big impact on juul, the biggest maker of ecigarettes in the United States. They are working on a Ballot Initiative for november that would regulate ecigarettes, but reverse this ban. They just need enough voters to agree. We will continue to cover this. It has to go to the mayor for her signoff. That could take 10 days. Potentially a big move by the city of San Francisco to ban ecigarettes in the u. S. And around the world. Ok, meantime, amazon making waves in beauty. Monday, amazon launched a professional beauty store to offer professional stylists, barbers a customized selection. And ulta took ty a hit. How big can amazons ambitions go . Joining us now is our guest with a buy rating on ulta and amazon. Anthony, what is your take on this . How bad is it for the Beauty Companies . I actually have an hold rating on ulta and buy rating on mazon. This is more of an issue for sally then ulta. Sally is selling Beauty Supplies to barbers, salon owners. Ulta, that is not their usiness. It is a woman coming in to buy her makeup. Really see this as an issue for sally beauty than i do for ulta. Emily how much of an opportunity is this for amazon . Can they step up . Amazon is prioritizing highmargin businesses. If you look at this industry, 87 billion in the u. S. Every year for this industry, one of the highest margin ecommerce businesses out there. They need brands to be matched p with others. That is why they are going with b2b first to establish that. This is a highmargin business. If they are able to penetrate, it can help profit growth. Emily anthony, is this something amazon can pull off . Some makers of Beauty Products would say amazons checkout experience is fairly transactional. When you want to buy Beauty Products, you are looking for more. Can amazon deliver the experience of a beauty product, which can get complicated speaking from the perspective of a woman, or will it be another amazon checkout . I think that is a valid question on the business to consumer side. Amazon is good at replenishment. If i know the type of foundation or lipstick i always buy, i can order that from amazon, but when youre talking about discovery of new products and new brands, i think that is tougher for amazon. There is also the question whether these highend, prestige brands are willing to sell to amazon, which will not necessarily honor Manufacturers Suggested Retail Price and will not offer the instore experience you get at ulta and department stores. Emily i wonder how much ompetition there is there from an upandcoming set of companies. It is a fragmented market. Everybody has their own edges, but ulta beauty have strong physical properties. That is one place where amazon would take time to match up. First they will learn some lessons going through the b2b, doing what they are good at, replenishment. The fragmented market is the opportunity for consolidation, at least from a longterm perspective. Emily anthony, what will you be watching for as this rolls out . The main thing is whether they use the b2b strategy to move into b2c. If they move to b2c, do they get those highend, prestige brands . That is a real risk to ulta beauty. It is less about the massmarket brands. Emily and pricing will be key. Thank you both. Well, the boston pops fireworks spectacular is the largest and oldest fourth of july event. Here is a taste of what to xpect. Emily do not miss the boston pops fireworks spectacular on july 4 right here on bloomberg elevision. Coming up, a new report details how iran is trying to attack u. S. Banks. The companys head of Threat Intelligence joins us next. This is bloomberg. Emily this is bloomberg technology. Im emily chang in San Francisco. Now to following in cyber warfare between nationstates. The Trump Administration is saying russia, china, and iran are all trying to sway Public Opinion ahead of next years election, in some cases through social media. The u. S. Is ratcheting up pressure on iran with sanctions and a cyber strike. According to a researcher, iranian hackers have stepped up attacks against the United States in recent weeks. That includes attempts to infiltrate banks and Government Agencies through their computer systems. For more on these attacks, lets get straight to the source with sandra joyce, she joins us now from washington. What exactly is the new activity you have identified from iranian hackers on u. S. Targets . Sandra were seeing a barrage of attacks targeting multiple sectors, financial, government, and also media, education, and likely several others. Emily what are the objectives here . Sandra the objective of most spearfishing efforts is to establish a foothold in a network. It could be just to collect information or intelligence, but what is disconcerting is that these tools or techniques work precursors toward destructive attacks we saw in 2018 by the same actors. This could be a look at just trying to get information, but it is likely that it is also a precursor to secondary actions. Thats why companies and organizations around the world need to be on high alert with a high level of vigilance. Emily this is just days after the iranians shot down a surveillance drone. The president called it a physical attack in retaliation for iran. But did it prove a cyber attack on irans missile and defense capabilities could that slow some of these other cyberattacks coming from iran . Sandra what we know is that cyberattacks are a means to actually carry out the National Security objectives of nationstates. What we can expect to see Going Forward is iran continuing to use cyber as an asymmetric method in the face of escalating tensions between the United States and iran. Emily in the group, you call out apt33. What do we know about them . Sandra its the same group that launched destructive malware against International Industrial control systems in december 2018. They are a group that has a history of using destructive malware to carry out nationstate objectives of iran. There have been other groups also from iran that are carrying out the same type of spearfishing attacks, things that are going to help them get a foothold into networks to possibly take it to the next level. Emily so how vulnerable would you say u. S. Infrastructure is right now and which parts of u. S. Infrastructure are most vulnerable . Sandra there are 16 Different Industries and each one has strengths and weaknesses. What we are looking at is a warning was put out to all u. S. Institutions saying they should be on the lookout for heightened activity stemming from iran in response to a lot of the tensions that are going on now. Emily we certainly dont know everything that the u. S. Government does in cyberspace, but who has better cyber capabilities, iran or the United States . Sandra clearly the u. S. Has more sophisticated capabilities, but that is not to say that other nationstates with their capabilities could not make a real dent in the infrastructure of other countries. So we shouldnt consider it less of a threat. We are looking at increasing sophistication from our rent and the willingness to use cyber tools for destructive and espionage purposes to carry out their angles. Emily how concerned are you, based on the activity youve seen over the last few days, about escalation, given that we are going into a pivotal u. S. Election cycle . Sandra what we are seeing is a great interest in multiple countries into the outcome of elections, even china has taken steps to look at elections within asia itself, from what we have observed in cyber activity. The intent to keep tabs on election activity is certainly present. Whether or not that ac