click live from pier three san francisco, welcome to "bloomberg west." here's a check of your bloomberg top headlines. troops in pakistan ended a taliban attack on an army run school in the northwest and city .f pasha walk the majority of those killed were children in what is being called the countries deadliest terror attack since 2007. authorities say that all 10 terrorists were killed during the operation. jeb bush has taken another step towards running for the republican presidential

nomination in 2015 -- 2016. anna facebook post he wrote "i have decided to actively explore the possibility of running for president of the united states." according to a recent poll he leads the early primary fields if mitt romney does not run. find sprintlan to $105 million for billing phone customers for unwanted services. agency officials told bloomberg of the penalty was proposed by the fcc chairman, tom wheeler. sprint is the third carrier to come under through a for the billing practice that is being called cramming. customerss allowing to roll over high-speed data allotment in their latest marketing push to lure subscribers. for up to one year customers will be able to utilize unused data from prior months to prevent exceeding their allotment and incurring penalties. this is part of their strategy including perks like phone financing and money for new customers who switch from other

service providers. though, with breaking news, a jury has reached a verdict in the apple ipod monopoly lawsuit. apple has prevailed. a potential $1 billion in damages on the line here, apple has apparently avoided those. jurors began deliberating earlier today over whether the evidence at trial showed that the changes to itunes were genuine product enhancements or if the company wanted to kill the competition. joining me now with more in the studio, tim higgins. they did not deliberate for a long. just a few hours or so. >> they have gotten around to the idea of -- did apple make these changes to kill their competitor or improve their? -- their product? they argued that the record products they go before itunes require them to make changes because of concerns over hackers. >> the plaintiffs said that the changes at apple made it more

like an addictive candy bar and customers just had to keep coming back, but here it seems that the jury ridley decided that apple did not do anything -- quickly decided that the jury -- quickly decided that apple did not do anything wrong. >> they even lost some of their plaintiffs at some point for various reasons. it was a complicated case that they were trying to make. this idea that changes were made to hurt a competitor that a lot of people were not even very familiar with. but it is interesting that this is a case that dates back like 10 years. what are the cases for apple today? >> one of the cases will be -- how much were they found guilty? liable? upwards of billions. really blackeye where the plaintiff was able to get video deposition of steve jobs, something the company really did not want to be shown. >> tell us more about the video.

what did we see? >> it was about six months before he passed. thin, talking hoarsely. he said almost 30 times that he did not remember this issue back in the day. defensive of the company's position. they were concerned about hackers. >> how much does this actually impact apple now? is it still a blackeye? technology we are talking about from back then is not in newsed in night -- itunes songs. >> we are actually joined on the phone now by william markham, a san diego antitrust attorney. i know you have been following this case closely. what do you make of the fact that in a few hours a jury came back saying that apple did nothing wrong? >> there is an old adage about litigation that is that an appellant is often the party who made things very complicated at trial.

jury is obliged to endure an overly long, complicated trial. in the end they have not been persuaded, they might have been bored and did not grasp what it was the plaintiffs were trying to say. >> do you think that they had no case here? >> actually think that they had a good case, but what antitrust laws require them to state, clearly and compellingly, is that apple introduced this to their software, not to improve their offerings or offer security, but simply to make it impossible for competitors to sell music that could be carried on its lap form and it did so to try to establish and preserve a monopoly position. in its market. which would be the sale of music they can be played on these ipods. like i have been speaking with

our bloomberg news apple correspondent. have one, howey does this reflect on them today going forward? is this still a blackeye on the company? >> you are asking me? sorry. a victoryat this is for apple. but apple is involved in another case, the e-book pricing case in which they were found liable at trial. this was in new york, for conspiring with book publishers to fix and raise prices for e-books. i don't think that they have as all true mystic or competitive as they do not engage in antitrust, but it is clearly a good day for apple that they have not been found liable in this case. >> apple has also faced a series of patent challenges from

companies like samsung. you mentioned the pricing trial. even though they have one today, would you say that there appears to be something wrong with the way that apple does business? from a legal perspective? >> that is a great question and i think it is not just apple. there appears to be a distinct business culture in silicon valley. many of those seem to think that they are somehow immune from antitrust laws, from ordinary laws of business valuation. and from other business precepts . it is not just apple. more spectacularly, there is the uber company. there was the employee poaching case that involved all of the big companies in silicon valley. i think that their conduct does raise serious antitrust concerns and other concerns as well.

it seems to be characteristic of a certain business culture that we sometimes see in the silicon valley. >> what kind of records will if, indeed, they are not above board? >> it depends on the particular conduct. i think that the department of justice and the states attorneys and private litigants have successfully pursued apple for coordinating a conspiracy to raise the prices of e-books. -- theys made aggressively enforced the favored nation classes to raise the prices of different products. i figure we have seen successful actions challenging that. i think the best remedy is that perhaps within apple the directors and officers of the company will say that they don't need this bad publicity. they don't need the expense of these antitrust actions. let's make sure that we are not

engaging in conduct that appears to subvert competitive processes. those principal purposes seem to be to undermine their competitors, not improve offerings. that was the hallmark of antitrust. >> william is the -- how much of this is the responsibility of tim cook? a lot of these cases date back to the days that steve jobs was in charge. do you expect things to be done differently? >> yes. jobs was at steve visionary. an inspired designer. he had extraordinary insight into how he participated in the markets as no one seemed to be able to do. he also seemed to lack an interpretive grasp -- a grasp of what could be characterized as

blatantly anti-competitive. >> one last question for tim higgins, here with me in the studio. what are you watching? any other legal issues coming up? >> we will be watching e-books, definitely. will be a window into what apple was like one decade ago. these record companies were willing to deal with apple because they were the monopoly, but we are seeing the evolution of the company now. >> are you saying that they will be behaving differently? >> you are starting to see that with tim cook. he is being more open. his communication style. more so than steve jobs. markham,ggins, william thank you both for joining us. news blowsgoogle open the doors in spain.

is it spanish newspapers that have more to lose? we discuss. ♪

>> google news is closing its virtual doors in spain. the shutdown comes ahead of a new spanish law requiring spanish publishers to charge aggregator services for every snippet of articles they see in display online. after the newspaper publishers association spent months advocating for the law, the organization is now opposed to the shutdown, fearing it could hurt the bottom line of the publisher. joining me now to discuss it over skype, and electronic media law expert and from philadelphia, the vice president of search engine optimization and social media.

i will start with you. what went wrong here? why were the newspapers first advocating for this and then change their minds? think that nothing has really changed. what the newspapers have always look for is a fair deal from google and google services. the publishers thought they were not getting a fair deal for the journalism services they were providing. a lot of journalists go through a huge amount of work to prepare their articles and they felt that google benefited from the use of this or this and that this should be reflected in an appropriate copyright law. labeling it as a kind of google tax appears to be a total was number. the publishers were looking for a fair deal on their payment. has taken place, extraordinarily, is google has

refused to even come to the table to negotiate on what price it would pay. they have claimed that they would make no money off the service and have walked away, cutting off these publishers completely from the internet and the global media market. to the's take a listen google position. "a service that many users love, creating real value for publishers. the new law requires google news to be charged for such -- for showing even the smallest snippet of their coverage, whether they want to be charged or not. as google news itself makes no revenue from ads, this is not a sustainable approach." adam, you have done some research. how important is google news to these spanish publications? what have you found, how much traffic does google news early drive? >> absolutely. for any news publisher, search engine traffic from google news

is still a tremendous opportunity in terms of visibility and overall traffic. on average we will see anywhere from 20% to 40% of the news sites total traffic coming from search. within that it is a good 15%, 20% or more of that search traffic coming specifically from google news. in spain the numbers tend to be a bit smaller, smaller market, not as big of an audience, but thee spanish publishers, top 10 or 11, score ratings, they are looking at 5, 10, some close to 16% of their search traffic coming from google news. >> what are the implications of this happening in spain? something similar happening in other countries? i understand there has been a similar situation going on in germany. is there a precedent being set here?

is déjà vu over here. in germany we had a similar situation where the publishers obtained an act from the german parliament going back to copyright. the difference, from what i can see, is that the german analogy required payment. that the option for the content holders to basically provide their content for free, that is not available under the spanish laws, as i understand it. again, when push came to shove the german publishers, after trying to get paid for their valuable journalistic content, were rebuffed i googled. i am to -- we were told that if you do not follow the google way, you will be cut off. all the german publishers fell into line and caved in to the google demands, although reluctantly, as they feared what may happen if they did not

comply. what we are seeing is happening now, the situation in spain. >> well, something that we will continue to follow. the european parliament recently called for google to unbundle its services. the headaches for google are not ending anytime soon. adam, thank you. -- ben, adam, thank you. still to come, we will tell you about the warning that sony got one year ago and how a previous hack might have been worse than previously thought. ♪

back to "bloomberg west." security problems continue to pile up that sony.

ex-employees have filed suit for failing to protect their data, calling the epic breached a nightmare, more suited to a cinematic thriller in real life. just the first ha in real life. just the first of what could be many legal headaches for the company. we have also learned that sony was not -- warned late last year that hackers had infiltrated their network. according to persons familiar with the investigation, they were stealing gigabytes of data several times per week. for now we are joined by one of the reporters behind this latest revelation, mike riley, with us from washington, d.c.. this story just keeps getting better and better and worse and worse for sony. all, what, exactly, did sony know one year ago about what was happening? bigt turns out they had a hole in the network and they were losing gigabytes of data weekly. basically, the hackers every two days or so were stealing

gigabytes of data and removing it from the network. byy sort of stumbled on this sending data around for analysis that had raised some concerns. experts said that you had a huge hole in the network. i think that what we are seeing is a pattern of security failures that go all the way back to the 2011 breach that they never really got ahold of in terms of controlling the problem until he got to the point of the latest breach. >> right, sony playstation was breached in 2011 by what appeared to be a separate group. so, they were investigating that particular breach. once they learned, one year ago, that all his data was being stolen so quickly, what did they do and what did they not do? >> we don't have a really clear sense of what they did. they did see was a cultural problems. they hired a new chief security officer to kind of get a handle

on the problems after the 2011 reach. they did spend a lot of money and time trying to patch the holes around the playstation network, specifically. what appears to have happened is they did not go much beyond that. the company that was supposed to help them do this left two months before the latest breach happened. i think that sort of the up evil of the personnel, the continuing problems that happened for literally years after the breach showed that they never really got awful lot done around what was happening. >> what are we going to learn about sony tomorrow? what secrets do they have left? >> hackers by all accounts have taken a tremendous amount of data and they are basically just trickling it out, taking advantage of the way the media deluge ofhat each new

data creates a new series of stories. a much different strategy and probably more effective at really damaging the company that had they just let it all out at once. it doesn't really show any signs of stopping. from the point of view of sony, this is a nightmare. in part because the hackers really do want to damage the company and have figured out a very effective way to do it. >> well, michael, you and our other colleagues have been doing a fascinating, wonderful job covering the story. absolutely gripping stuff. we will continue to follow this and see what we wake up to tomorrow morning. we will be right back with more "bloomberg news," next. ♪ >> 26 minutes after the hour, meaning that bloomberg television's on the markets. let's get you caught up with where stocks are currently trading. with a look at how the s&p is just a, we did dip in

10th of a second ago, now we are pretty much flat. again, most of the stocks going back to career session losses.

>> you are watching "bloomberg west," where we focus on future, technology, innovation and business. amc has agreed to a pilot partnership to create the netflix of movie theaters. movie passes a subscription-based service that lets people watch for monthly fee. the pilot program starts in boston and denver and will allow people to submit once per day for about 35 to $45 per month. additional cities are expected to be added later. movie pass ceo and cofounder is with us from new york.

first of all, how exactly is this going to work? how did you come up with this particular pricing structure? >> the way it will work is we already have a 2-d plan in the marketplace, so this is a premium product that is one step above that. the 2-d 3-d imax, any type of the premium is just being layered on top of what we currently have. there is a price point that we will test to the market and see how it looks. >> i am all about creative business models, but i can barely get to a movie once every six months. who are these people that can go to the movies three or four times per month and make this worth it to them? >> on average our average person signs up and usually goes at least one to two times per month. when you think about oscar believend the holidays, it or not people can get to the movies pretty often if they want.

there are about 40 million people who go to the movies almost every weekend. >> nielsen has released some data that shows moviegoers, younger moviegoers, 1224 years old, they are dropping. 15% fewer 12 to 24-year-olds went to the movies in the first nine months of this year. how much do you think that something like this can reverse that trend? are these the audience you are targeting? >> what is exciting about ours makes up 75% of our base. we are actually attracting the younger demo because they are growing up with subscription models and they like access to-based economies versus, say, pay per view economies, so we are finding that that group is more attracted to the service. some movieoking at pass options near our office. there are not an abundance of them. i believe there are only three

different ones in the san francisco area. how does this partnership help you expand nationwide and get more theaters out there? >> right now we are more than 90% of all theaters nationwide, including alaska and hawaii, which is a fairly substantial for rent. so, we will increase that even more, but having 90%, pretty much wherever you are you will be a will to go to the movies. >> i know that you guys have been around since 2011, but what kind of challenges have you run into when it comes to supply and working with studios in particular? >> everyone has been wonderful. we have had no challenges whatsoever. i think that there is an education to anything that is new and different. so, we have had our moments where we had to sit down with people and show them real data. what has been exciting is that when someone joins, they

increase their moviegoing by about 60%. so, if you take 18 to 34, increase 16%, you add up the numbers and you start to get an exciting story. >> are your theaters going to be showing "the interview," the movie should -- the movie that so manyed sony headaches? >> i assume that if it gets shown in theaters, people would be able to go. >> all right, the movie pass ceo and cofounder, thank you so much for joining us. as consumers rush to buy last-minute gifts, we have more coming up. you can watch a streaming on your tablet, bloomberg.com, apple.com -- apple tv and amazon fire tv. ♪

are rushing to pick up and shipped last-minute -- last-minute gifts for relatives this week. what kind of customer service hikes you expect to see? we know exactly what these companies are in for, they help over 40,000 around the world with support features. the ceo joins me here in the studio with more of how online customers are being held this holiday season. i have been remarkably surprised at how well the customer service experience has been so far this holiday shopping season. but i started early. what are the biggest challenges that retailers run into? >> so many. it will be such a busy season. holiday seasonhe

business. if there is one piece of advice i could give, it would be not to be a scrooge to employees. there is a correlation between employee satisfaction and customer satisfaction. keep your agents, keep your customer service representatives happy and excited. they will be more excited, happier, and more satisfied, you can see that directly and customer satisfaction. >> what are some of the most common complaints? >> the typical things. they don't feel the power. they don't have transparency. it doesn't get there fast enough. be proactive, get the information out there and up front. so that they can empower and service themselves. that is basically the best way to help customers. >> what are you doing to help? >> we help them to be proactive and fill out the knowledge basis for their community. and then we help them and being super, super reactive, whether

it is through e-mails, through telephone, to chat, everything. of shoppingne a bit and physical real retail stores and i am still shocked that they are not crowded. the sales online or just so good, too good to be. what sort of trends are you seeing when it comes to online? >> we all know that everything is going online. so convenient. as consumers, we like the convenience of being able to shop from our couches and have it delivered the next day. that sets a very high bar for anybody. many retailers are doing an amazing job at having a fantastic customer experience online, delivering to customers almost immediately. that sets a very high bar. alwayssical world will make sense, it is nice to go out there, it provides a different experience and we get a real feeling for the product that we

cannot get online, but you have to make these things work together. >> do you advise retailers to make different kinds of deals in stores as opposed to online? i went to a store thinking that i would get something better and it was actually worse and i could've stayed at home. >> exactly. i think a lot of businesses have seen the opportunity to give special experiences in the store. the apple store is a great example, they made their physical goods very, very -- and that you could come, see, play with, have experience with. for retailers giving that experience is a great idea. >> tell me about the latest developments. i know you are offering a new product that involves embedding customer service features into websites. >> that is how we see the future. thatwant to provide customer service is not supposed to be a destination. it tends to be part of the

product experience. it is embedded in the application, the website, the apps, your devices, and in the things that you are selling so that the customer service is right there in front of you and it is what the customers are telling us they want. >> you actually just came out with a new book, startup land, about how you turned a boring idea into a big business. i don't think that this conversation has been boring, but really we are talking about customer service. what is the main take away? i am from denmark. i came to san francisco five years ago. >> everyone wants to be you. [laughter] >> you know, it has been a fantastic opportunity for us and a real privilege to build the business year. we have almost 50,000 customers today and almost 800 employees.

like coming to america with nothing and building all of this, it has been such a privilege and i love sharing that story. >> but how do you do it? how do you sell the idea of improving customer service to investors? and taking care of your four kids? [laughter] >> we all want good relationships. that is deep in us. we want real relationships with the people and businesses around us. with the communities we are in. i think that providing a great experience -- customer service is so central to that. a deep belief and need in all of us that we are being taken care of and our customers are responding well to that. >> what is next? >> we are very excited about the s, that will be a big theme for us next year, we can see a lot of great things coming

. >> baby number five? >> i think my wife is hesitating. [laughter] >> thank you so much for joining us. happy holidays. "bottom line," coming up at the top of the hour. what have you got for us today? >> we will be examining the economic climate for women in business. eileen fisher at her namesake ram launched with intercompany, campaign that launches as recognizing 30 up-and-coming businesses run by women. it examines the issues faced by female entrepreneurs, seeking to empower women through collaborative efforts. i will be joined in the studio by eileen fisher and by melissa joy manning, a 2013 eileen fisher grant recipient. i will see you in a few minutes. >> love it. very important story. thank you, we will be watching. beer,computers, airfare,

the list of products and services that you can purchase with bitcoin has joined by leaps and bounds. microsoft guys know microsoft has joined the crypto currency trade. ♪

>> this is "bloomberg west." the point has plunged 44% this year, but that has not stopped the currency from attracting attention. microsoft is just to come the largest company to adopt the crypto currency. partnering with digital currency processors to except bitcoin payments for their games, apps, and other content. their commercial officer joins me now. how did you get the deal done? >> it was great. microsoft is a great company to work with, they work fast and efficiently. we were all very impressed. >> get more specific about how you were campaigning with various companies? usmicrosoft reached out to about three months ago. they said they were starting to take bitcoin very seriously. adding ill gates and made some comments.

it as a -- they saw cutting-edge technology that they wanted to be apart of. i said, honestly, guys, how are you going to get this off the ground? he said it was top-down driven. that is what they said. up, move fast and indicating that. >> rate from the top. what are the major companies that except bitcoin right now? life there are about 15 to 20 over $1 billion revenue companies. microsoft is the biggest. there is also dealt, new way, warner bros., expedia, and some others, like virgin galactic. >> give me an example of how much -- how many transactions over bitcoin between these companies? i wonder how much of this is a gimmick. hey, we are forward thinking and innovative. how much of this is really

actually being used? >> we get that a lot. depending on the merchant that the biggestoin, adopter is 18 to 50-year-old male dominated. if you are selling something like microsoft digital goods, they have the very strong with that. however, in america credit cards are very ubiquitous.

[no audio] they don'tr them, care about the price. the consumer pays the price at the time and microsoft gets hit for usb or other credit card payments. worryporters say not to about the price, but really the price is what is going to hold back adoption. how do you continue to make the case that if the price falls that bitcoin should be invested in? >> it is made as a currency for the internet. a currency to be used and spent. often it is speculative. two years ago the price was it isless than $200, now down from a high of 1200. we don't know where the price is going to end up, but merchants do not care that much about it and the people that use it now think of it as a stable currency and are not focused on the price . that is just the speculators.

three months ago we announced partnership with paypal and the currency went up 30%. last week to the price did not go up that much, showing that the currency is stabilizing and a lot more institutional's are starting to treat it as a real currency rather than last years start up. >> it certainly has been an eventful year for bitcoin. bitcoin?n store for certain companies would never have started to except bitcoin, they really raised the bar. i wanted to take even just the next step with companies like adobe. >> apple? autodesk. someone from the middle east can go and purchase one of those autodesk's and they might not have a credit card. it saves the interchange credit

card fees on that. a lot of cost savings open up a new market. >> apple is not on board yet. what about getting a company like apple on board? >> they are a progressive and innovative company. we would love to work with them. they are obviously busy with their other initiatives. getink that as people focused on different products you will start seeing them as they come in more. they are just busy with apple pay right now. one step at a time, i think. >> all right, thank you so much for joining us. has just learned, speaking of apple, that apple is halting online sales in russia likely due to a freefall in the russian ruble. managing editor of bloomberg news from new york joins us now. what is the latest? >> tim higgins is breaking the

story as we speak. out, apple is halting online sales. this is a function of a western company responding to the cratering of the russian ruble right now. a lot of foreign companies right now have to be asking themselves the question -- how much worse does it get in russia? how concerned are we about our operations? do in response? companies like apple have already raised the prices. mcdonald -- mcdonald's has done the same. right now people are saying that the next step for russia may be capital controls. you have to ask the question, as a western company, what do you do with your assets, your people , can you bring it overseas. it is certainly harder to make money in russia right now.

>> as you mentioned leading up to this, they rose prices over the phone. how big of an impact is something like this going to but what about another huge country that is russia? >> keep it in perspective, right now russia is nowhere near china for companies like apple. keep it in perspective. russia is not a super material country for many of these companies. the problem that you have to it comes towhen financial turmoil in countries like russia and how much of a , all on effect it has -- has.om giles >> all right, thank you all for

watching this edition of "bloomberg west." we will see you later. ♪

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>> from bloomberg world headquarters in new york, i am mark crumpton, this is "bottom line." latest news and business economics with the mainstream perspective. here in thers united states and to those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines this tuesday. review ofn has it darden earnings for in the search for a new ceo. emily chang