Us this morning is jon fortt and good morning to both of you. Regulators are ordering apple to pay back taxes to ireland. Lets get to Julia Charter will i in brussels with the latest. Julia . Thanks, kate. As you quite rightly said, apple has been ordered to pay over 14. 5 billion, the irony is ireland doesnt want the money as the irish finance minister, they say they believe apple owes nothing and they want to protect the relationship they have with Companies Like apple and other u. S. Firms apple has hate back, saying they ultimately believe this ruling will be overruled, but i think the statement cuts to a bigger issue, which is what does this mean for other companies trying to invest in europe . Their statement says it will have a profound and harmful effect on sleismt and job creation in europe and apple follows the law and pays all the of the taxes we owe wherever we operate. This is a point i think the competition commissioner made to me, that this is not really about the tax rate that apple is paying here, less than 1 in this case, but actually about the deals that countries like ireland are cutting with countries that means its unfair on others. This is a company who makes lots of properties by selling wonderful products to european customers. Apple has set in ways themselves are completely in their good right to do, but ireland is not in that good right to give them tax benefit which has elected only to this company. So one body that isnt buying this is the u. S. Treasury. They have also come out and said this is going to have a negative impact on investment in europe and negative impact on the relationship between the u. S. And europe as they try and tackle global tax avoidance. This is a critical issue, guys, but there is one body that might be cheering this, and this is the uk government. There are reports already that the uk government is saying to apple here, you know what . If brussels doesnt want you, youre welcome to come to the uk. So there to be some benefits to brexit here. Julia, thank you. Were joined from pal eight by Elevation Partners cofounder roger mcnammy, and tony sacconaghi. Roger, we ask your opinion on apple quite often. Does this look like a simple revenue share, or does apple have a target on its back in europe . I think what were looking at is potentially a major, major shift in how governments in view the ability to grow their economies. For 35 years weve had an environment where theres been a genuine effort to grow the pie using tax incentives to lure companies, lure jobs, get lots of growth. Thats been generally accepted around the world. To me this is like brexit in the sense that what the European Competition committee is doing is not arguing over how to expand the pie, but rather saying the pie is really big, and you should be taking a larger share of it. You know, this is a political problem. Its not going to resolve itself in the stock market. The stock market will just have to react to whatever the outcome in, but it does strike me that we are going into a period of time where the rules are changing. When the rules are changing, thats bad for valuation. To toni, you know, perhaps this is an exemplary type of case. Analysts had expected from anywhere from 200 million fine to a 19 billion fine. Does the number we got today look like an opening salvo . It looks like about the right number. I think if you go back and say, look, if apple had to pay full irish tax, which is about 12. 5 invite of the 0 to 3 tax it paid throughout that period, you would come up with a number around 15 billion, so i think the number is certainly based on tax law, and one can compute it. That said, this will inevitably be a negotiation between companies, a political negotiation, as roger alluded to. Its going to take a long time to play out in the courts. I think the market is largely saying that they believe it will take a long time, because the stock is only down about half a percent today, because there is uncertainly about really what that number might be, and more importantly uncertainly about whether there will be ongoing tax legislation that may maybe apple future tax rates higher going forward. Toni, apple has used very strong and direct language about how it feels when european regulators are trying to do here, calling the number that they computed as far as the tax percentage a made up number saying it strikes at the industry issue of sovereignty for the countries to determine their tax rates. It doesnt sound like theyre gearing up for some kind of negotiation about how much theyre going to pay up. It certainly sounds like theyre either going to completely fight this or wait for the eu to figure out with the countries involved, new rules, new law that is will not be applied retroactively. Do you get a different sense . No, i dont. Sorry, i referenced the negotiation really being the European Commission setting a number that might be negotiated president i think historically apple has been unwilling to negotiate historically on many different fronts, whether it be with the suppliers, rather the privacy issue we experienced arier in the u. S. Apple is pretty steadfast in its principles. Quite frankly i agree. They basically said, look, we were given tax incentives to bring people to ireland. We have several those people in ireland. We create millions of jobs in the eu. Were playing by the rules, and then a body is superseding those rules saying, hey, there are different rules, you werent supposed to be able to play by these rules, and i think thats very difficult for a company to accept, and apple historically has been quite strident in both its principles and its determination to fight things. My guess is it will be the same this time around as well. Well, there have been discussions on either side of the atlantic for years about apples taxes and the rate that it pays. In fact here is ceo tim cook on capitol hill just a few years ago. Take a listen. We pay all the taxes we owe, every single dollar. We not only comply with the laws, but we comply with the spirit of the laws. We dont depend on tax gimmicks. We dont move intellectual property offshore and use it to sell our products back to the United States to avoid taxes. We dont stash money on some caribbean island. We dont move our moan from our foreign subsidiaries to fund our u. S. Business in order to skirt the repatriation tax. In a sharply worded letter to customers, cook, david faber, said they have 6,000 employees across ireland. This is not like the conversation we have about inversions, but you asked the irish finance minister last hour, if they had cut a sweetheart deal, and he said we dont do that. That testimony was when the senates perme subcommittee on permanent was the first they talked about they had cut a special deal or a quietly negotiated 2 rate when, as toni pointed out, its usually a 12 rate. The irish finance minister said no, thats not the case and went on to say he believes he used breach of International Tax practice where Tax Liability follows Economic Activity, and the Economic Activity on which theyre raising a tax assessment in ireland didnt occur in ireland. Roger, the tax law pieces of this can make your head spin. What it comes down to for me is this 200 billionplus sitting in overseas cuts. When apple is asked about it in the u. S. , the response sounds like thats money that apple made on products sold overseas. It doesnt make sense to tax it here. When its challenged by european regulators about that money, apple is saying, well, it belongs to the jurisdiction where the intellectual property was created. Thats in cupertino. Basically the money is earmarked to be repatriated to the u. S. , because they dont want to repatriate it at 40 . They want a lower tax rate. When it comes down to it, is there something that apple needs to clarify here . Do you think theyre completely in the clear . Is it just the way it works . I think thats a lovely question. At the end of the day what youre pointing out is that the global tax infrastructure is crazy, right . Its really hard to explain it in ways that a make sense to everyone in the pie. I think it exists because we had a political culture that favored growth, and was willing to give tax benefits in order to cause that. It was willing to give them in convoluted ways, as you just pointed out. Whats going on in europe right now is politically that the temperature has shifted. People are less willing to subsidize those who can contribute to their growth and much more focused on maximizing the share of the pie they get from taxes. I look at this and go, thats a different environment from the one weve been in. Brexit is part of the same trend. I think it causes me as an investor to look at the world differently. I look at apple and go the irony is the numbers at apple are such that it really doesnt make any difference, but as toni said by the time its gone, the numbers arent going to matter that much, but oddly i think it matters for the market as a whole, because apple is an honorable really hardworking company, does great stuff and is amazingly profitable. But if you look around some of those things wont happen because of the change in politics. Bake. It looks its going to be years before we get a resolution to any of this, or how it may play on you. For now, roger and toni, or thanks to both of you. News alert. Twitter announcing big changes for some of its content creators. Julia boorstin has the details. Hey, david. Twitter has a new way of trying to boost by luring content creators to post videos on twitter by giving them an easy way to earn money. Twitter is expanding the amplified Publisher Program beyond companies to allow individual content creators to check a box to have preroll ads run before their videos. A source tells me that creators will get 70 of the ad revenue better than youtubes split with creators. Twitter says its targeting the 35,000 content creators who are part of niche, the start upbrought last year which connects influencer on, with brands. This shows that theyre trying to compete with youtube as well as facebook for start content creators. Facebook takes it a step further in addition to that revenue split. It pays more than 50 million in total to 140 million companies, and influencers to lure them to experiment on the platform. Twitter announcing this move to catch up with its rivals amid concerns about disappointing revenue guidance stagnating user growth and harassment. Well have to see if getting more content creators to publish on twitter even if the content is not exclusive, draws more ad dollars and users. Thank you very much, julia. Youre going toss in just a moment that the s p is down about a quarter of 1 , the nasdaq comp also in the red along with, of course, as you might expect, the dow. Watching shares of mondelez and hershey, as mondelez said they were done negotiating after months of on and off again talks between the two. Hershey is down, one of the its worth performances in a have i long time, mondelez getting a bit of a boost, proves that it was not willing to go to numbers that and give the it shares of abercrombie fitch, talking about another big loser this morning, down as you see almost 20 , they posted a 14 consecutive quarter of falling sales. Thats not the way its supposed to work. They want it to go way. All right. When we come back on squawk alley a shakeup at uber. While one longtime investor is leaving. And while some are calling colorado home despite some red tape. Eu, as you know by now ordering apple to pay up. How this could impact other u. S. Tech companies. Well be right back. Guys, whats happening here . Hey nicole, this is my new alert system for whenever anything happens in the market. Kids a natural. But thinkorswim already lets you create custom alerts for all the things that are important to you. Shhh. Alerts on anything at all . Not only that, you can act on that opportunity with just one tap right from the alert. Wow, i guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. A shakeup. Drummed leaves Corporate Development at alphabet and heads the investment arm gv. Joining us is vanity fair special consultant who said ubers very existence is talk to us about the conflict. Isnt there a chinese wall between going the alphabet and Google Ventures . There is and there isnt. There probably certainty Many Companies that hes not competing with. This is very reminiscent with what happened with apple and google when eric schmidt was on apples board, and then it started getting into mobile phones and so on. I think youre starting to see the same thing where its a bit of the opposite where, you know google was working in Driverless Cars and now uber is doing that. I just dont think it makes sense for drummed to be on the board, especially as uber is also working on mapping solutions, and theres lots of Different Things where theyre competing, and i think it only will become large as they move forward. Cant they only help each other, google, uber and ford all launched a coalition together to develop selfdriving cars, so it appears they want each others help. I think they want each others help right now, but not in the future. I think that, you know once they start to make these Driverless Cars that are truly autonomous, which its up to debate when that will happen, these companies will all be competing with each other. Its not just uber and google and forte. Its startups. Its every car company. Theyre not going to kind of say were going to give uber or revenue if someone calls a car service. I think whats really interesting is how it plays out in the short term. We know whats going to happen in the long term. In the short term, you go to google maps, you can order an uber. Are they going to remove that now . I think its interesting that you say the existence is at risk because of Driverless Cars. If and when we reach that future in our lifetimes, isnt it going to be competition based on an operating system for logistics knowing who needs a ride, where theyre likely to need a right, what the most efficient route is . There will still by the capital involve in buying that car or deploying it, and the companies ability to do that efficiently will be at an enormous advantage. Wouldnt that be their argument . First of all theres no if, but a matter of when. Its not in our lifetime. I truly do believe the next five to ten years where these things will be on city streets en masse. In addition, you are completely right. One of the most different parts will be who owns the infrastructure, who says when does this car come to this person . And if a ford car or tesla or uber or google . Uber could say, you know, thats the business were going to go after, but i dont think its big enough to uber when you call for a taxi, what if there was an app. Its not connecting people and cars, and people its connecting people in drivers. What does uber do . It connects you with a driverless car. Well, youre right thats not going to happen for another five years, so it sounds like they have time to figure it out. Its a compelling read. Coming up, united poaching a Top Executive from rival american airlines, the details are next. But first phil lebeau is in. Jon, were talking about the dream chaser, this prototype build be sierra Space Systems division, but where would it land . Well talk about that when squawk alley returns. The next frontier might be in a small city just outside denver, colorado. Thats where we find phil lebeau, who gets to do all the cool stuff. Back here is what they call the dream chaser, a prototype for a spaceship that eventually will be able to take cargo, even people up to the space station and quickly come back to earth, where would it large . Po temple at a spaceport like here. Get ready for space ports, where spacecraft will be able to take over perhaps even horrid zonely and land just like airplanes at a regular airport. What were looking for is a location where these activities can be safely conducted and at the same time are responsive to the neither of the users. The faa has approved ten space ports in the u. S. Most near coasts and away from cities where rocket launches are safer, still the folks at front range near denver say they have a perfect space. We can provide a way to space for Companies Operating in the colorado area. Thats a real plus not only for the state of colorado, but also for the country. Spaceport launches are farley infrequent, but the head of the f. A a sees it changing. I think its exciting. Were very close to seeings exactly what youre talking about. This becoming a much more routine and i wont say everyday, but certainly not infrequent occurrence around the country. Reporter well see over the next several months if colorado does get that state port designation. Phil, also want to get your take, of course, on another story youre following closely. Scott kirby, america telling me they terminated him, and then the next day he shows up at united. Reporter amazing how that happens. Nobody wants to say this, but it was clear that united was recruiting scott kirby to come over. Basically hell be reporting to oscar immune i dont see the ceo. United has been improving its performance. David, you know this, they have lagged the rest of their competitors when it comes to things like revenue, all of those things that they need to improve. Theyre starting to do that better. With scott kirby, now that they have brought him in as president , they they think they can do much better in that regard. Phil lebeau in lewisville, colorado today. Meanwhile, were just about to get the close, hey, kayla, markets mostly higher with i hadly leading the pack. Its u. S. Oneday performance in almost a week. Interesting enough, european banks. Rising on the prospect of a hike, keep in mind, though the european stock 600 index still done about 30 below its 52week high. But again, in todays session they are higher. Switching over to miners, the possibility of a rate hike, the possibility that mining stocks are taking a hit. Thats one of the london ftse ended lower. Analysts believe the fall in the pound has been overextended, down about 25 this year. The other Major Political risks are the Upcoming Elections in germany and france. According to report, Emanuel Mac Ron is resigning as he prepares to potential run for president and challenge the current lead er francois hollande, and nick lard sarkozy. Were sending a