Good Tuesday Morning welcome to squawk alley. Im Carl Quintanilla with jon fortt. Its a mixed fwoog day retail earnings, amazon pharmacy, covid19 restrictions, fed speak. Were going to begin this morning on capitol hill as both Mark Zuckerberg and jack dorsey testify before Senate Judiciary on censorship, suppression, and, of course, the 2020 election our Julia Boorstin is monitoring this and can tell us what happened so far. Julia . Well, carl, senator Lindsey Graham focusing on what he sees as a need to revise section 230, thats the rule that protects social media platforms for legal liability for content. He says facebook and constituenter wetwitter were making editorial decisions and far more transparent standards are necessary. He called out the Mental Health risks associated with social media use. On the other side of the aisle, richard bloomenthal, he is calling for breakup of the platforms. Mark zuckerberg supports change to section 230 dorsey pointing out they need to walk a fine line we are facing something that feels impossible we are required to help increase the health of the public conversation while at the same time ensuring as many people as possible can participate and in order to do so, we need to make policies so people feel safe and free and they can express themselves he denied bias and enforcement of facebooks rules and defended the neutrality of the rule he said he would not take down Steve Bannons account and saying the officialive posts that he put up didnt violate the rules. He stressed all the progress that facebook has been making in terms of protecting integrity of the election i believe this was the largest Election Integrity effort by any private company in recent times this is what people expect of us and im glad that from what weve seen so far our systems performed well election interference remains an on going threat that will never fully be solved. So we continue to improve with each election. Dorsey also talking about all the positive steps that twitter is taking in flagging misleading tweets and protecting the integrity of the election. Jon . All right julia, thank you one of many things happening today in tech, lets talk about it with former hp ceo Carly Fiorina and John Chambers. Good morning one of the major things that we got our eyes on this morning is the s1 from airbnb. John, i want to start there. You certainly navigated cisco through some tough times, the d dotcom bust we get to see revenue drop by a third in the first nine months of 2020 compared to 2019 but airbnb is profitable in q3. What does that tell investors about operational discipline there . Well, i think it basically says that these new Startup Companies are running their focus in terms of precash flow and profitability. Theyre here to stay i do not agree that the hightech companies who benefited from the pandemic and reverse way like the zooms of the world, the docusigns of the world will be affected negatively in the long run either so i think it speaks to the next generation of Major Companies in america being on the hightech foundation a airbnb being an example of that. Great to see yall again its a pleasure to be on the show its like were in the 20000s again but in a good way. Carly, you and john both did a lot of m a when you were ceos. John mentioned companies that benefited from the covid19 period doordash comes to mind they just filed an s1 days ago. As you look at results like these, investors are trying to understand them now. What do you look for to understand where the long term value is and i think airbnb, door dash, zoom are all examples of companies that are going to benefit from those changed habits yes, it is true that when we have a vaccine in the pandemic is behind us, people will go back to some things they used to do but what is not going to change is people wanting to eat what they want to eat when they want to eat it. What is not going to change is people wanting to have a meeting without having to get on an airplane and what is not going to change is the fact that people want to go off and barrow someones home for a lovely weekend instead of changing into a big hotel. And a focus not just on top line growth but on what is required to drive bottom line profitability. And i think thats why you have seen investors be quite encouraged by some of these s1s because thats what it looks like these companies are doing carly and john, good morning. A lot of tech news this morning. Were also keeping an eye on that judiciary hearing with jack dorsey and Mark Zuckerberg john, i had to do a double take a few moments ago when i heard zuckerberg say accidehe doesntk the research is conclusive we certainly dont want our products to be addictive first, do you buy that second if you dont, what is the point of the hearings . If were going to let the ceos get away with Something Like this when clearly that is the Business Model thats a challenging question let me break night pieces. First, im a huge believer in the future of our country. Its going to be around tech and hightech in total and its very important as we think through regulation to understand the implications of that the Large Companies in my opinion clearly overstepped. If you would have watched the interviews from two years ago, the ceos were caught off guard. I think you now see tech understanding you have a capitalistic objective and a benefit to society of having that balance carly was on my board for a number of years and thank you, carly, but when john door and i found the tech net 21 years ago to work with government and business, we had no issues for the first 15 years in fact, we worked very close, for example, with president clinton on his infrastructure strategy which generated 34 gdp growth over eight years, 22 million jobs, real per capita growth at 24 . Where im leading you is i think Technology Companies need to work much closer with government for the very legitimate needs and we have to be very careful of the regulation for the unintended consequences no the on the Big Companies they can afford it but on the small startups which literally regulations done wrong can literally destroy. John, thats a goint. What year hearing from zuckerberg certainly to extent dorsey, carly, is their willingness to work with the government but is that genuine . Do you think they truly want regulations the way government may implement them, the lawmakers . Or do you think they just want to set the field themselves because it protectis their Business Model well, what they want and what is wise over the long term are two Different Things i think what they want is a continuation of what is in the past hands off tech in washington, d. C. That is not realistic. Its pretty clear now that both republicans and democrats although they dont necessarily agree on the solutions, they clearly both agree, all agree, that Something Different needs to be done whether its around data privacy or dont management or lack of competition. And so i think john has it exactly right. Ive said this on other occasions as well. These companies are going to have to get together and become part of the solution working with government. Aztec n as tech net tried to do so many years ago. This he cannot say hands off, we no he what were doing thats not going to play anymore. And on the other hand, it is very dangerous to allow politicians, many of whom dont understand the platforms of the algorithms, really, to just devise regulations and so i would hope that these ceos are going to get real now and say, you know what were going to have to pull our industry together. Were going to have to sit down with politicians and regulators of both parties and figure out a set of solutions here that doesnt kill the golden goose. But lays out some rules of the road i was bate heartened to hear we need rules of the road were being placed in an impossible position. There is a lot of truth to that. You know, as usual, carly and i agree on many things if you watch the tech leaders, many of them took very strong stands politically on one party or another and were actually tough in the employees the same Way Technology has to remain neutral. It cannot be tied to one party or another think started saying to us three years ago if, you dont change, regulation and antitrust is coming and it is you see today an example where amazon says theyre in pharmaceutical business. Walgreens drops by 11 so the power of the Big Companies has never been stronger and it has to be focused in a twha is a win for society and understand the impact on jobs across the nation especially on startups. Zuckerberg said that steve bannon did not violate enough policies to get suspended from facebook when he called for the beheading of Anthony Fauci and chris rahe i guess the question, its an unfair question to you we dont have the answer but if thats not cause for suspension, then what is thats exactly what and thats why Mark Zuckerbergs continued insistence that, hey, wee h. Weve got this, weve got this understand control just let us police ourselves isnt going to work anymore. People dont understand what the rules are. Secondly, people are suspicious that the rules are not consistently applied we dont know if thats true or not. If the suspicion is, there then politicians are going to keep pressing i just dont think its realistic for zuckerberg or dorsey or any of the Technology Companies to johns very wise point, when you have this much market power, this is market power that far outstrips the Oil Companies when they were at first regulated or the telephone companies. These companies have enormous market power and to continue to insist that weve got all this under control, isnt going to play again, i hope that these Technology Companies will decide that they are prepared to be part of the solution here. Because politicians on their own arent going to come up with the right rules. Hey, john, lets talk more about section 230 which this hearing is all about i let me tie it to the other news buried in the airbnb perspective, under the risk section, the Company Lists section 230 as a risk. After all, airbnb is a platform. They have come under fire in the past for some perceived discriminate torre effects on it i wonder, how far does this go in terms of lit limiting that or debating that liability shield and could it affect companies beyond the social media platforms that were looking at right now . It absolutely not only could but will its like the general privacy rules that came in place the California Attorney general put the impact on business and at 91 illion. By what a state legislature did. But the companies that got hurt to the point im going to hit again and again is the Small Companies that are responsible with job growth and creating it. So the unintended consequences of regulation often results in a very bad outcome so i would encourage people to work with business and government, hightech very closely with government. Not with a stiff arm, but say how do we address the very legitimate needs of government how do we realize its important to make money . And represent our shareholders but also important to give back to society and if they dont do it, theyre going to be regulated. But with very to get back to this nation be it a startup nation if we come out of the economic down turn, we have to get the startups going at a faster pace and the unintended consequences of regulation on startups are fatal. Id like to see our nation pivot quickly. Lets become a startup nation again. Lets create 25 million jobs through startups carly, finally, were talking about cooperation potentially between tech and government. I cant help but notice in california just now we have this gig economy legislation and then a vote that pushed things the other way. Right now, you know, we got dueling perspectives on exactly what ought to happen with section 230. How do you think we get to a point of even there being clear positions in a process of debate and then legislation around so many of these rules that technology has thrown into a bit of chaos well, its a really great question and i think in california, they put it up for a proposition. The gig economy. I think people were a little surprised in some ways by how the voters responded to that proposition. But i think to johns point, you know, john and i spent a lot of years doing a lot of things together but onest things we worked together on was helping government and the political process understand the unintended consequences of internet taxation. And john and i both and many others spent a lot of time on capitol hill talking through what are the right rules of the road for internet taxation i think there was impact of that so, yes, we are highly divided nation on the other hand, a shred of hope, perhaps, to johns point about becoming a startup nation again. Joe biden, our incoming president elect has an Ambitious Program around climate change. That represents an issue around which startups can and should form and so there are real opportunities, i think for the United States to take a lead around some of these big issues. And it will be vitally important that these big tech ceos decide that they want to be part of the solution here and that they understand that we can walk and chew gum at the same time. That companies can grow and make profit while at the same time meeting the needs of an American Society and doing our part to build a better world the i know that sounds corny but i think technology has always been a driver towards a better world right and it needs to be now as well that would be nice, indeed. Carly, john, thank you thank you very much, carl carly, a pleasure. Likewise. Jon, dhek out shares of walgreens and vcs this morning if you wonder why theyre down big, well tell you next John Chambers talked about it main ago stay with us at fidelity, youll work with an advisor to help you build a flexible wealth plan. Youll have access to taxsmart investing strategies, and with brokerage accounts online trades are commission free. Personalized advice. Unmatched value. At fidelity, you can have both. This was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. Amazon laurnlging an an os line pharmacy today. Sending walgreens and vcs lower in the trade we have more on the pharma play. Bertha, this is a big move by the company. After paying a billion dollars for pill pack two years ago, it was clear that amazon had designs on pharmacy. Building on that today, they launched a full Online Pharmacy that is in network with most ensurers and medicare if youre paying with benefits, can you use your Health Saving accounts or flexible spending account for copays. Can you talk with pharmacist onzline or over the phone. If you need medicine right away, can you print out a card and go to a physical pharmacy they have networks of 50,000 of them prime members get free two day shipping and a prescription savings comparison at checkout if theyre paying the cash price without benefits that puts them direct competition with good rx to get a look at the comparisons, you have to open an account. Though you have to enter, i thought i would have to enter my Insurance Information when i did this but as a prime member with just the last four digits of my social and date of birth, the system automatically generated my insurance membership number which begs the question about personal data. T. J. Parker, the founder of pill pack says that the experience inside the pharmacy is separate and different from amazon. Com and that data will be stored in compliance with Health Privacy rules and not used for marketing unless you opt in. Now good rx taking a big hit on the news the best known of the discount cash price companies, amazon integrating and certainly appears to be a big threat the news hit the drugstore chains hard as well. Though in part anticipating this, theyve been building up their pharmacist in store role and added medical services and certainly play a Critical Role during covid19. The pbns already offer mail order and some discounts walmart also a big player here on this mornings earnings call, Doug Mcmillan reacting to the amazon news, he thinks that Consumers Want an omni channel approach in health and wellness which includes instore services as well as mail order. But, boy, the gauntlet has been thrown this morning. Once again. Amazon likes to do that. Bertha, thank you. Im so glad, guys, that bertha brought up walmart at the end. Were focusing on shares of good rx, rite aid and walgreens i really think this is a move to become more competitive with walgreens. Amazon prime users have typically been more affluent consumers. But over the last few years, we certainly see amazon trying to capture, you know, a broader base of prime users including walmarts customers. But, of course, carl and jon, this isnt guaranteed, right not everything that baez oes or amazon touches turns to gold i think about ambitions in grocery and 14 billion plus acquisition of whole foods, i think the ambitions have still yet to be realized they have a big boost amid the pandemic there is Third Party Data that shows it may be looging