'Bloomberg Technology' Full Show (08/22/2022)
from the heart where in silicon valley innovation money and power collide and beyond that is
technology with emily chang i'm emily chang in san francisco and this is
technology coming up in the next hour could dorsey say this will help musk would get out of the deal we're going to discuss, and big-tech regulation was up for a big vote in Congress but has since been sidelined amid a deteriorating economy and a war against Ukraine at the top Crusaders to take on the power of tech joins us this hour representative david cicilline chair of the house antitrust subcommittee digital medicine goes real the maker of an fda-approved video game for the treatment of adhd goes public by spec today the ceo of akili will be here all that in a moment, but first i want to take a look at the markets a see through them all the reds behind me down day on wall street the s p 500 and the nasdaq 100 both down more than 2 percent but it was the semiconductors that really bore the brunt of the selling pressure you see the stock index down almost a 4 or so and of course Bitcoin back to around 21,000.
A coin I remember standing at 24 last week seems like a long time ago as we count down to Jackson Hole. Of course, how hawkish is Jerome Powell actually going to sound on Friday when he speaks around 10am, that's the investors question, mine, but it's not all macro. We made some gains in the form of Zoom earnings after the bell and weren't too well received by the market. Zoom stock down eight percent, of course that's disappointing sales forecasts after disappointing sales Of course, this is a company that's grown so fast, so fast during the pandemic, and maybe paid a little bit for it.
Zoom shares are already up 47 percent for the year on its way to today's close. We'll see as we open tomorrow and it hasn't been a great day for meme stocks either that last week's meme frenzy seems like a distant dream at this point and the gamestop bed bath and beyond amc has its today Preferred stock actually didn't appear to be helping the stock at all, but it was a bed bath and beyond was the big underperformer. Remember, that was the big story last week. Emily, alright Katie, thanks for the recap on Monday's latest attempt to get out of that $44 billion deal has accused the company of misrepresenting its bot accounts and hiding the names of employees responsible for the treatment of bot issues here to give us the latest update
Bloomberg Wagner covering Twitter for us of course so why would Musk subpoena Jack Dorsey?
Well, he was the company's CEO for six years. He was on the board for the entire existence of the company up until May, so you'd think if anyone knows the growth of the company, how they handle metrics, who reports, you know, at the earnings conference every quarter, it was jack dorsey, so this is someone who knows the company inside out, but also as a product person, he knows how the company is growing and how they probably calculate things like that, we realize that twitter subpoenaed a bunch of mosk's inner circles. Various entrepreneurs and investors remind us of the interaction that took place between Musk and Dorsey. this is documented in the files which led to uh musk being offered a seat on twitter's board of directors and then leading when he offered to buy twitter they were friends too so the relationship goes back further but what we'll see below saw was that shortly after Elon got his share of Twitter, Elon contacted Jack Dorsey to start the conversation about how he could get involved in the company, which resulted in a board seat offer, which he accepted, and to In what appeared to be another phone call where Jack had at least some sort of contact, Dorsey told him, "Hey, you know, I think Twitter would actually work better as an independent company." A few days later, Elon says, "I don't want to be in join the board, i want to buy the company instead, now we don't know for sure of course what was said in that conversation but it seems so important that Elon you maybe changed his mind and thought I should take this company private so we think Musk thinks Jack has something to say that would help him Come out of this deal just fine I would expect the twitter Page Jack Dorsey also wants to subpoena because remember he's a key player in this whole thing.
I don't think that's so crazy that they would say, "Hey, we do". To see your communications, we'd like to see what you've said about this deal. It could be important, and I imagine both sides want that information right, so it's not super crazy that he would do that, even though they're friendly. I don't know if he thinks you k Now Jack's going to have to get him out of there, but it seems important. Musk subpoenaed everyone else. He subpoenaed other people Head of Revenue Product at Twitter You may recall these two guys were actually fired by CEO Parag Agarwal shortly after he joined the company, so they don't work at Twitter now, they still did subpoenaed by Elon Musk, so where are we now?
I learned something new about the bot issue or lack thereof. What is the next phase? We're told that a lot of people are being summoned right now and that there are a lot of people both sides want to talk to. We're not getting any information about what's strictly in a lot of these subpoenas, a lot of them, you know, are edited or being edited, um, and a lot of the evidence is closed, it's not public to us, so we know at this point, who th they want to talk to us we don't necessarily get a lot of information as to what they are talking about and are they going to talk properly and who will be present at this process in person presumably jack dorsey could be one of the people we can't tell certainly, but he would certainly make sense to be a witness at some point, and we expect Elon Musk to testify Not being there By now you know this has obviously dragged on.
According to your sources on Twitter, how does this continue to affect employees at the company? day you deal with the tweets from elon about your product and your policies and your executives i think at that point a lot of the people who really hated that may have gone by now, certainly some of them and at one specific point While you still have to do your job, I think there's still that cloud of uncertainty. It's not a very fun place to work right now when you just don't know what your future will be like in a few months Well thanks for this update seems like a long few weeks between now and mid-October okay Kurt Wagner from
Bloomberg thanks that you come the us government i'll be joined by congressman and antitrust subcommittee chairman david cicilline all that and more next is
bloomberg i think just because they've been successful in a few different deals doesn't mean that somehow, having unnatural market power just means you've been successful on a few different customer experiences.
I'm looking at the opportunity we're offering. I look at the skills people learn through YouTube. You know I feel it everywhere, when I talk to people and give them access to information and knowledge I think will end up on the right side of the story too. I don't think big is bad in itself or that competition is good and any business, especially the companies that are big and have big unintended consequences at your scale cannot be dealt with as an afterthought, they must be dealt with as you scale. Regulation will play an important role here. I think privacy regulations are important in areas like AI regulation.
Some thoughts on this from my interviews with various big tech CEOs over the past 18 months, when antitrust scrutiny has been the most talked about piece of legislation, the bipartisan American innovation and voting online law targeting big tech and companies like Amazon would prevent Meta Alphabet and Apple from penalizing competitors to improve their own products and services, it seemed on track to be scrutinized by the Senate this summer, but more pressing bills like the Anti-Inflation Act and the Chips Act were pushed first How the antitrust bill is in limbo Where's the momentum Now let's take Congressman and Antitrust Subcommittee Chairman David Cicilline for more Congressman Cillini.
It's so great to have you with us again. Thanks for taking the time I have enough votes to pass the House and need more Republican votes to do well. Thank you for having me back. Great to see you again Both bills, the Apps bill as well as the uh Innovation Online Act you just referred to, have been non-partisan since they were introduced. As you know we had a 16 month bipartisan investigation that produced a 450 page report and then came up with legislative solutions is one of them, we have the votes in the House and Senate but as you pointed out we have in told the business press a lot of things with both the Inflation Reduction Act and the Assault Weapons Ban Act that we needed to address ss my expectation is that when we come back in september we will deal with this bill first in the senate and then in the house and on send the presidential desk so you are optimistic then senator schumer will set a date in september and that will happen before the midterms well senator schubert said publicly and i know i have worked very closely with senator klobuchar there is a bipartisan faction by people in the senate and in the house who strongly support this legislation en and understand that they are small businesses from the monopoly power of these big
technology platforms we need to restore competition to the digital market that is good for consumers good for small businesses good for competition and strongly supported by the American public polls
show that 75 of Americans believe Congress needs to reign in Big Tech and restore competition so it's good for small business.
The public wants it, our constituents want it, and I expect nator uh schumer to get the bill on the floor in september, then we'll take it in the house and send it to the president's table, which by the way was the most pro-competitive president we've ever had both in his executive order and in his appointments in his administration, and someone who genuinely understands that competition is at the heart of making our economy work for all, there's still concern that you know this bill, even among Democrats could be used as a weapon to prevent big tech companies from moderating some of the most extreme content, does the bill need to change everything to address these concerns, and if the bill changes, can you keep or keep these Republicans on board?
I don't think the bill actually needs to be changed, as long as the policies that a platform put in place to protect against certain types of speech, er, particularly dangerous speech, or speech that they deem inappropriate, as long as they adhered to the same standard becomes a They do not say that for liberal viewers this is a test for more conservative purposes. As long as there is an established standard that applies to everyone, there is no concern that you have the ability to moderate content, but the truth is that these platforms don't want to change anything they want in order to preserve an ecosystem that Has generated profits that have never been seen in world history because they prefer their own products and services, they collect a tremendous amount of data from consumers and monetize that data and they have no interest in competing, they want to stay in the Be able to acquire or crush or block their competitors so they can expand their market power and dominance and increase their profits they have spent over $120 million killing this bill knowing it will bring competition , which is bad for our economy because competition is the biggest driver of innovation when we do To become a global economic power e.g u stay, we need to have competition in this space, and right now we don't, so keep using the word you, and I assume you mean, uh, meta-apple alphabet, Amazon, here we are, you know the exit of the pandemic is here One of those companies that