Down on account sharing. And, antitrust allegations. An online merchant accuses amazon of using expensive the just six to move good, a tactic that could be driving up consumer prices, but first to our top story. One of teslas detractors just got twitter burned by elon musk. After he lashed out, the tesla chief offered him to take a tour on the companys facilities. To discuss, dana hull joins us. Give us a little of the backstory. This has been a longrunning attle. Every quarter he puts out an investor letter and e line loves this, looks for this and sent a tweet expressing sympathies. Teslas stock is on a tear, 40 over the last month. They have to explain to investors how they got the thirdquarter wrong. Tesla stunned everybody with a rofit. Now theyve got Upcoming Product launches. Maybe im remembering something that happened earlier, but didnt elon musk signoff twitter . Like monday or tuesday . Last friday he said he was taking a break. It is important to know that einhorn has clapped back. He responded and said i will take your offer of a tour of facilities. Lets start in buffalo. Buffalo is where tesla builds ts solar panels. Its been a huge controversy , how he state of new york much tax money went into that, the state of new york just wrote down the value of the investment ast month. How likely is that to happen . We should all go to buffalo, but i think it is just like testosterone fueled. You said elon musk vice to njoy harassing the shorts . Havent they gotten ur7bd his collar over the years . I think he enjoys it when he can burn them. They have the ability to shape perception, you talk about urning the shorts, he is offering to send them again. This is sport for him. Einhorn basically said we will see. E linked to a website that seems to be chronicling elis exaggerations. Who gets the last word . Tesla had this amazing quarter. What does the Fourth Quarter look like . How are sales in the u. S. . Thank you for joining us. A coalition that includes netflix and cable titans, is going to crack down on password sharing. Its a loophole that could be costing them billions. To discuss the measures theyre considering taken, were joined by lucas shaw. A great article by your colleague gerry smith about this topic. Talk to us about account sharing and how big of a hit is it for netflix and Cable Companies . It costs the tv business somewhere between 5 billion in 10 billion. If you think about netflix, there are estimates that at least 10 of users are using someones password. You do the math and you are looking at billions of dollars in just netflix alone. Pay tv feels the same where you have young people using their parents subscriptions of using their friends. The challenge here is fixing this in a way that is consumer friendly so youre not asking customers to enter in their passwords every day or every week. What are the techniques available to these companies were they dont end up harassing eople . A couple of the techniques are making you change your password pretty regularly to make sure friends cannot just store the password. I have a password to someone elses service that ive had for years and it has not changed. If they changed it regularly, i might not be able to access it anymore. They also talked about twofactor identification, so in addition to the password you need a text message to your phone so only the person with that phone could use it. There are extreme measures like using your fingerprint that would be cumbersome for the user. Netflix, they see an account they think is violating, theyll send an email saying, is this really your account . A gentle reminder that youre breaking the rules. I remember a couple years ago Reed Hastings said password sharing is something they have to live with because there are so much legitimate sharing. Has netflix changed its tune . They have been fairly onsistent in that they dont they want to judge newsers to not share the password but they dont want to upset users, they want to expose their shows to as many people as possible so more people will come back and eventually someone who is sharing will sign on. But netflix reached a point in certain markets, especially in the u. S. , where their growth is slowing and they can squeeze out extra growth if they go after people who are sharing. To what extent will this push people to using illegal methods . I think its a big risk in other countries and to some extent of the u. S. Ou have seen it drop in places youve seen piracy tend to drop in places where paid Video Services like netflix are popular. One substitutes for the other, youre getting a good service with lots of tv shows, whereas piracy remains high in markets across the Asian Pacific and latin america. If they get too extreme you could see a spike because if theres a new popular show, game of thrones has ended, it was one of the most pirated shows in the world, but therell be more, if people cant access it without paying for cable theyll find an inlegal way to watch it. Who has access to the Lucas Shaw Netflix account . Nobody other than my friends. Other than one of my friends but i do have friends who use any showtime and hbo log in. I will similarly condition fess my mother son our netflix account. Lucas shaw, thank you for joining us. Coming up, we head to wired 25 to catch up with wired editor nick thompson. And if you like Bloomberg News check us out on the radio. Listen on the bloomberg app, bloomberg. Com and on sirius xm in the u. S. This is bloomberg. Facebook employees repeatedly chafed at what they viewed as unethical practices by the company, internal district of columbia qumets showed. Those concerns voiced in 2012 and 2013 were overruled by senior managers including Mark Zuckerberg who argued the survival of the social network as more important. Were joined by wired editorinchief nick thompson. From wired 25, the companys conference here in san francisco. Thank you for joining us. Glad to be here. So much to discuss and you have written some great features about facebook other the last few years. Lets start with political advertising and the companys position that private companies should not be policing public speech. Do you agree and do you think it will sustain . There so many layers to that question and my opinion is complicated on that. I think in general political advertising on social platforms is a net good and it creates the opportunity for upstart campaigns to challenge incumbents, so i think you should start with the principle hat it is a good idea. I like that political advertising exists. I think facebooks policy which is that politicians can lie, but citizens cannot in their organic content is very weird. Why would you give politicians more of these rights than citizens . I think it is backwards and strange. What i think facebook should do, they should allow political advertisements, but check them just like they do organic content. Jack dorsey was very public in disallowing political ads on twitter, making the argument that it was not prepared for the ways that politicians and their campaigns are abusing free peech. Did twitter take it too far in your opinion . If theres anything that our political discourse is not prepared to handle this twitter, ot the advertisements. The biggest challenge for dorsey is making sure we clean up and figure out how to solve the problems on twitter. On the question of advertising, i understand the position and respect the position. It is a clean position. I dont think it is entirely the ight decision. Speaking of facebook, the company is rolling out a news tab. High wers can view more quality news rather than what appears in their feed, do you think that will make a difference . I dont think it will make a huge difference. What we have seen with those tabs features, people will continue to read in the Central Place they read. In general, i think the news tab is a good thing for users. Unless it becomes an excuse for removing news from the main feed, i think the overall net ositive, but a small net positive. Bloomberg is part of the news tab. Will you remind me if wired or conde nast is as well . And is this a game changer or needle mover for the News Business . They are both part of the news section, it is neither a game changer or needle mover, the needle is moving only a little bit. Earlier, i referenced another asset of facebook which is that a trove of internal communications were leaked and they show the executives disagreeing back in 2012 and 2013 over the extent of which facebook would allow competitors, at that point it included whatsapp to advertise on the social network and Mark Zuckerberg was saying no, why would we allow our competitors to do that, but some of his top lieutenants disagreed that it looks bad. What impact does this have . I think of this point we are immune to old facebook documents shocking us. I think they dont paint facebook and the most attractive light. But theyre not indefensible. Zuckerbergs position that the platform should not be a tool for competitors is something that some engineers will disagree with, but i dont think his position is a terrible one. Here will be where we poll lieutenants and then it will disappear. Hat i think it shows you about facebook is the thing that stuck out the most for me is they were quite cynical about privacy. What we have seen is facebook saying lets make a decision that is in our business interest and justify it by saying it is in the user interest and that weirds me out. You are celebrating the magazines 25th anniversary. I saw you asked patrick an interesting question on stage. You asked him if he was still optimistic on technology and i want to put that question to you because wired has typically been ptimistic. Are you optimistic . I am optimistic. I think one of the things discussing today is the power to actually make things better, but i think there is a fundamental difference between the way i see wired and the way our early founders saw wired. I dont think the role of the magazines to celebrate and promote the industry because the position in society has changed and the role is to investigate. To show the world what is happening, for good and ill. To show the advances and critique the problems. Thats the role of wired. I will stay cey about that moment with patrick, patrick, the fastest talker and one of the smartest people wed ever converse with. My goal going in was to make him pause for one second and i think he paused for four. It was a wonderful moment. Give us one more highly coming today this afternoon or tomorrow. I am talking to the ceo of slack. They are an Interesting Company because the whole philosophy is to make organizations more agile and so one of the things im looking forward to asking him is doing have any evidence of that working . Or is it just another way to organize workplaces . One that give or take is mostly the same . Also tomorrow morning, a run with marathoner nick thompson. I give my regrets on that, but i wish you luck on that. It is not just me. Olympian shannon roberry will be there too join us, brad. Brad good luck. Theres been a ruling about subpoenas for President Trumps financial documents. Late friday, lawyers from the president said they will file papers with the u. S. Supreme ourt to take up the issue. Theyll file the paperwork by november 25. Coming up, Sun Microsystems cofounder says people should accept that they have no data privacy, next. This is bloomberg. China is considering further cuts to subsidies for allegedly ago purchases. Regulators have been discussing the proposal, but holding off until they can look at sales data the next few months. It could deal another blow to a once burgeoning industry that is ealing with a slump. One of the few friends of President Trump in silicon valley, the cofound over sun microsystem, is concerned about how congress is approaching regulation of the tech sector. He discusses his views earlier today with david westin. The government here to help, cringe. Ive become more of a small government person the older i get. Ive watched the federal budget go from 0 billion when i was born to 4. 7 trillion next year. I think we need to cut back on regulation. I think Congress Moves at the speed of congress and not the speed of the internet. I think theyll get it wrong. I dont want to see private companies being managed and free speech being managed by the government, so im not a favorite of breaking up facebook, thats not the issue. That is not the issue. I said a long time ago you have no privacy, get over it. Thats the truth. I dont believe if youre getting a free product like facebook that youre the customer. You are the product in that space. You shouldnt have an will ation that your data be safe. I said anything that gets captured digitally is a digital tattoo and very hard to erase. The only people who have been able to erase anything are the clinton 30,000 emails. Thats the only thing thats gotten erased on the internet. Breaking it up is not going to be the problem and trying to regulate, i always get frustrated with the phrase hate crime. How do you define that . A crime is hateful no matter what. Theres Different Levels of that. I dont want the government we have freedom of speech, we need to get the political discourse off of social and onto a more neutral site. I suggested to multiple people we need to create the equivalent of npr, public broadcasting political that conversation. Something that is a dotorg. We are talking to the cofounder of Sun Microsystems. Lets put aside that and talk about innovation. One of the things that has been expressed is if you get too big actually it really curtails innovators from competing with you. That was expressed in the old trust, if you go back to standard oil, that was the concern. Theres no opportunity. Are you seeing any of that . Are you seeing curtailing of innovation and success . That is a great question and a pertinent question because what does facebook keep me from doing in my life . Theres lots of ways to take a picture of my dinner and share that. Im not feeling like i have loss of choice in where to post my dessert. I have lots of ways to have communicating to people. The people that might be upset that they have very little choice are advertisers. Because Digital Advertising is threefourths of it is google and facebook and theyre gaining share. They might have a beef but the consumer, you dont have to use facebook you dont have to use twitter. You dont have to use google products. I dont use a google browser, for instance. You can survive, i dont think innovation is stopped in biotech or in Autonomous Vehicles or anything because of those companies. I think innovation continues. I dont think thats a big issue. That was scott mcnealy. Coming up, the week in tech. Uber investors fleeing lockup. That is next. This is bloomberg. Brad this is bloomberg technology. Im brad stone in san francisco. Now to our weekly look at the top stories in tech. A terrible week for softbank. Their investment down to wework and uber triggered a 6. 5 billion loss, but ceo Masayoshi Son is sounding hopeful about the office space provider. Time will solve the wework problem. We will make money once the weworks building portfolio is allowed to ripen. How . Stop the new Building Development and profitability will improve and we will expect a cost to go down by half or more. It is that simple. Brad part of a plan to profitability for wework is to sell off the noncore businesses. The plan was confirmed friday. Joining us from new york, rana foroohar, author of dont be evil how big tech betrayed its founding principles and all of us. Thank you for joining us. Rana thank you for having me. Brad Masayoshi Son sounding embarrassed, saying he made mistakes with wework. But then you see a cfo doing interviews, saying nothing will change with the vision fund. What is happening at softbank and what kind of lessons have they learned . Rana it feels like 1999 to me. It feels very frothy. I think the fact a fund as big and bloated as softbank exists in its current form is kind of a marker of where we are in the Technology Sector at the moment. There is so much debt out there in the books. Softbank, a lot of people think this maybe should have been bigger. I dont think just saying we are going to cut some costs and wework is suddenly going to become profitable is really realistic. Its interesting because wework is actually taking Collateral Damage where the real estate was located. You are seeing property prices in london and parts of new york being affected by this. I see this really as a Tipping Point for the sector in general. I think it is part and parcel of company staying private for a long time, having their valuations bid up and up by larger venture capitalists. It is amazing to me these large funds are still being aised. I think at this point, investors are looking around and saying we kind of like the idea of rofit. This whole idea of grabbing market share and worrying about profits later is over. Brad lets talk about another company that has been affected. Uber. Shares after the lockup period expired are at an alltime low. What is happening to uber . Is it fundamentally the same story or is it the struggle of dara and the Management Team to move this company to profitability . Rana uber has had governance issues specific to that company, no doubt, but i think it is a fundamental Business Model question. I think the Business Model for a lot of big tech unicorns has been to go in, grab as much marketshare as possible, get data as much as possible and worry about the profit model later. Once you go public, that logic does not really work anymore. What worries me is i think that Business Model has distorted the entire tech sector. I think not only is it raising questions of regulators in terms of antitrust issues what you are hearing more and more about from the right and left, but it is really killing innovation. It is really hard when you are coming up against a firm like uber or wework or any of the big players that have eaten there sector to compete. It is a real problem for nn