He wants facebook and google to peak when lawyer s it comes to tracking user data. And later, bill gates on how being seriously hampered by u. S. China trade tensions. His comments from the Bloomberg NewEconomy Forum. But we begin this hour with apple. The company made news on two fronts this week. The first president trumps visit wednesday to apples austin, texas factory. Cook at the president to discuss keeping macs and iphones free from tariffs. The other news involved the way apple tests software. It is changing after a series of bugs marred the latest iphone and ipad operating system. Mark gurman and tom forte kicked off the conversation thursday. So, basically apples ios , software has been bugging the past few years. This particular release cycle, catalina, it mac os has been especially buggy. What apple is doing is going to make it so that engineers, earlier in the process, can determine what is working in order to hopefully come up with a much more stable operating system when they ship each september. Taylor tom, i know that you cover the fundamentals of the business. In your opinion when you analyze the company, at what point do you have to start to take a look at these Software Glitches and incorporate them into your analysis . Tom welcome i think to the it point has a dampening impact on unit sales for the company. When you think about apple, they have had some snafus over time with their technology. And it is not unusual for them to have issues with their software. The challenge here, though, is that if you think about both new iphone users and then old iphone users who upgrade to the latest software, it is really part of that, you know, feel for the consumer of having the latest and greatest apple technology. So it is definitely something they need to improve. But when it has an impact on unit sales, that is when i get real concerned about it. Taylor so mark, i am curious in your opinion, you have seen apple come out with these glitches and have to quickly issue new updates. Is it better to do that, to get it out to the customer first, as o, or woulduding t you prefer to see the company sit back and roll it out right the first time . Mark they really dont have an option but to get it out at the proper time each year, right . They have to introduce it every june, and they have to release it every september. To toms point, selling new devices is the most important thing. The way these new devices are developed is they are built concurrently with the software updates. So would be impossible to, lets say, ship the iphone 11 without ios 13. So they really have no choice. So it is not a matter if they should or if they should not. There is really no option here besides adding fewer features, which, of course, they are not going to do, because the features are what drives sales. Taylor tom, i want to switch gears and talk about tim cooks visit with trump yesterday at apples new factory in austin, texas. Broadly, if you take a look at apple and tim cooks relationship with trump, is tim cook and apple doing the right thing by getting in front of the president , getting the president s ear, showing off new factories, even though it is small, in apples terms . Tom the answer to that is absolutely yes. I would argue that no publicly traded ceo has done a better job managing the relationship with with a company and the president than tim cook has for apple. You see that in the recent tariffs to the extent that they adjusted to the timing of it, which essentially gave apple an opportunity to sell its new iphones one more time without the full impact of tariffs. So i think tim cook has done an amazing job. It is interesting to do a compare and contrast, if you want to, on how he has done versus jeff bezos and amazon. Most recently, if you look at that loss, itact suggests tim cook is doing a much better job. Apple is doing a great job managing its relationship with the president , and tim cook is leading that charge. Taylor mark, react to that. Is tim cook doing the best of all the big tech ceos . Mark i would agree that tim cook is doing what he needs to do from a bottomline perspective, from a financials perspective. Like tom said, he did get tariffs on the iphone delayed, and we will see if this dog and pony show plays into apple getting either a waiver or a further delay on smartphone products. At the end of the day, what they showed yesterday was not new in any way. They framed it as some sort of big launch. It is important to note, this factory, those engineers, everything you saw yesterday, everything you see in this green now, has been in place since 2013. So this is not new by any means. This is a sevenyearold existing infrastructure that has basically been portrayed as a new thing. And they are going ahead and thanking the Trump Administration for this. On top of that, this is not the iphone, the ipad, the apple watch. This is apples lowest volume product that they sell. So the impact this would have had on apples bottom line, if this was a tariff product they produced in china, would have been so slim anyways. So it is unclear what apple is winning by doing this other than getting in this pr situation with the Trump Administration in order to prevent tariffs on other products, like iphones, moving forward, which, of course, is a Smart Business decision but a bad pr move in the interim. Taylor well, tom, within the pr machine that is apple, is the political savviness of tim cook an undervalued asset . Is that not being reflected in the share price . Tom with the rebound in shares, it is hard to indicate what is not in the share price. So i do think the company, again, tim cook at the charge, has done an amazing job as the Smartphone Market has matured, in starting to diversify his revenue base. You think about what they are doing with all their other hardware devices, including wearables, the watches. And what we look at in particular is either proprietary content or things they are doing in financial services, like apple pay and apple card, and also health care. So i do think it is reflected in shares, and it is warranted. I think they have done an amazing job managing the current administration, and it should be positively reflected in price. Taylor tom, what is your base Case Scenario when it comes to tariffs . Tom great question. I will give a quick example of sonos, which another company i covered. They indicated they are moving all of their production into malaysia and out of china. So i think the base case is you are going to see more companies that are going to move their manufacturing operations out of china. In the case of apple, apple may never be able to move its smartphone manufacturing out of china, but it may be able to have more of its Parts Manufacturers move their own supply chains out of china, which could help it avoid some of the tariffs, in addition to tim cooks efforts to manage the administration there. Taylor mark, i want to switch gears a little bit as well. We saw some technical glitches when disney was trying to become a tech company and had to keep up with passport thieves and passport hackers. We have had apple tv plus have some glitches when it comes to the rollout of their films, one of which they had to pull back. Is apple tv prepared to be a Media Company . Mark yes. I think apples infrastructure for video streaming, the Application Development that it has had for a number of years has been there. So, i think apple their Cloud Infrastructure on the consumer side is not normally great, but i think there have really been no glitches. It has really been problemfree in terms of rollouts of new shows. I have seen this myself on my apple products, every time a new episode hits on midnight, friday eastern time, you get a buzz on your phone, and a new episode is available. It is ready to stream immediately. I think there screens in the app store and distribution, itunes movie rentals, has really prepared them for this. Password management has been a big focus for apple for the last few years. Apple tv is tied directly into family sharing. So you can use tv on that subscription either free or for 5 a month with four other family members. From a technology perspective, tv has been problemfree. Taylor that was bloombergs vidsonsman and d. A. Da tom forte. Coming up, senator josh holly is hawley is making his mark by taking on tech. We hear from the senator on how he plans to make sure Companies Like facebook and google respect your privacy. That is next. And if you like Bloomberg News, check us out on the radio. You can listen on the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor google is severely limiting how political advertisers can target people online, a decision made after weeks of debate over how Online Platforms handle campaign messages. The tech company said, on wednesday, it will stop allowing election ads to be targeted based on political affiliation on google search, youtube, and across the web. It is also banning misleading information on ads. However, at targeting ad targeting based on age, gender, and location is still allowed. Senator josh holly josh hawley may be a junior senator from missouri, but he is making a name for himself by being one of the most outspoken critics on big tech. He has tried to ensure u. S. Consumer data is not sent and stored in countries deemed a National Security threat. He spoke with the senator, josh , wednesday, about taking on big tech, starting with the letter he sent to facebook demanding they explain their Data Tracking policies. Sen. Hawley facebook has said to its users now that they can turn off location tracking, but as it turns out you cant. ,even if you say you do not want to be tracked by facebook, facebook on your phone continues to scan all of the wifi in your area. It continues to use your cellular location, and it continues to transmit that information to facebook. So this is another misrepresentation, frankly, and i would like to know why is it that facebook is telling its users they can stop tracking when, in fact, they cannot stop tracking. Google does the same thing, by the way up it i think this is just one more instance of these Big Tech Companies not being honest about the data they are collecting. Taylor so you think they are purposefully misleading users . Sen. Hawley i do not know how to read it any other way. You read the post facebook put up for all of its users, saying you can stop facebook from learning your precise location. A very a lawyerly phrase, as it turns out. I think the normal consumer would never imagine that, if they say they want to turn off their Location Services, that facebook is still tracking them. Still tracking the wifi, still using the cellular data, the cellular network, to pinpoint their location. I think it is very misleading. Taylor what would you like to hear back in response from facebook . Sen. Hawley i would like to hear the facts. I want to hear the explanations for the difference between where they have told consumers and users and what they are actually doing. There is a huge gap there, and i would like to hear them explain it in their own words. Actually come clean, be honest, and set out the facts. This just gets to why we need to pass legislation, Congress Needs to pass legislation, to give every single american the right to opt out of being tracked, period. No back doors, no workaround, every american should say i dont want to be tracked. Taylor are you also planning on writing a letter to apple and google, given it runs on the apple ios software and the Google Android system . Sen. Hawley google is already as isware my concerns, apple. Google has similar problems. Google testified to me, under oath, that their users can turn off Location Services and not be tracked. That is also not true. The Android Phone constantly scans for wifi networks, constantly monitors your cellular network, even if the Patient Services are off, and it transmits that information to google. As i say, the Tech Companies are really doing the same thing. Mr. Present in their positions to consumers while collecting information. They need to stop. Taylor to be fair, we have heard a lot about data privacy. We have seen a few existing privacy legislation come out. They have not gone anywhere. Why does yours have a chance to go somewhere . Sen. Hawley for one, it has bipartisan support. Take the do not track bill, which is a significant move for consumers, which gives every american the right to say i do not want to be tracked. I do not my location to be tracked. I do not want google or facebook or twitter or anyone to scoop up information about me. It would give every american the right to that. It is sponsored by senator feinstein from california and senator warner from virginia. So we have got bipartisan support. It is a common sense measure and something consumers deserve to have. Taylor i wants to fold in your concerns about data privacy to big tech and antitrust. The doj has sort of hinted those two things are the same issue. Is this a concern about data privacy . Or do you have antitrust concerns . Sen. Hawley one of the reasons data privacy concerns are so pressing is because these companies are monopolysized. If we had a viable alternative to facebook that was not skipping up our data, was not selling our information without telling us i would be less , concerned. But the truth is there are not really viable competitors to facebook or google, and so thats a big problem. So i am concerned about their anticompetitive conduct. Im concerned it is making the data privacy issues worse. Taylor i think critics, to be fair, would say the big competitors are in china. China tech is massive. If we break up u. S. Tech, how do we take on china . Sen. Hawley i dont understand why promoting more competition and getting more innovation in the market would hurt our standing visavis chinese competitors. But listen, i have introduced legislation that would stop Chinese Companies from entering this market if they are going to abuse our data collection. I have a bill, for instance, that would stop Companies Like tiktok, a Chinese Owned Company, from collecting all of this data and sharing it with the beijing government, because that is also a major privacy concern. So we can address the threat from china and the background threat they are, which is beijing, getting our information while also asking American Companies to actually compete, innovate, and be honest with consumers. Taylor senator, im going to take the bait lets talk about tiktok and apple. I want to know more about your solution. Because we cannot keep apple out of china, and we cannot really keep tiktok out of the u. S. How do we solve the problem . Sen. Hawley with tiktok, it is a simple solution. That is to prohibit tiktok, which is a Chinese Owned Company they do not advertise that to consumers from transferring any data of americans to china. We should make that illegal. There should be a firewall. And in the future, anytime a Chinese Company wants to acquire an american data company, the state department should sign off beforehand. There should be preclearance requirements. When it comes to apple or any company like apple, they should not be storing data in china and Encryption Keys in china. It is too much of a security risk. Taylor so tiktok should be under review . Sen. Hawley tiktok is already under their review, but should have been done on the front end. My bill would change that. It would require it to be signed up before a company or a russian company, for that matter when it comes to security none of those companies in those countries should be able to buy an American Company without preclearance. Taylor what does a realistic tech bill look like . That has a chance of getting past . Sen. Hawley i think we could start with do not track. I think it is a huge protection for consumers. It has broad bipartisan support. It addresses data privacy issues. And it is procompetition. It goes to the very Business Model of google and facebook and twitter, for that matter. I would start there. And i have said over and over that i do not think the goal of comprehensive privacy legislation, whatever that may look like, we should not let that stand in the way of actually taking steps right now that will be good for consumers. So i would start with do not track and protections for children. Big tech should not be able to direct ads to kids, should not be able to track kids, and every parent should have the right to have that data deleted. Europe and on this, the European Union has been much more strict than the u. S. Why have they been able to pass legislation and we havent . Sen. Hawley because i think big tech has purchased a lot of friends here in the capital. They have expanded their network of influence for years now. They deployed it strategically. Give facebook and google credit they know how to play this game. But the truth is consumers are impatient. Parents are impatient. They are fed up with their kids being exploited online, being tracked online. Consumers are fed up with being tracked and not having anything wayay about it, having no to opt out of it. I think the American People will demand action by congress, and that is why this body needs to act. Taylor senator, i want to address another bill you have been talking about, which is ending support for internet censorship, which is intended to address claims of anticonservative bias within big tech. The Heritage Foundation said that if that bill was enacted, it regulates online content but ofdoes risk eroding a lot the free speech. How do you respond to the Heritage Foundation . Sen.