remains the world's preeminent military power. >> we had a very good, and i suspect we'll be meeting in the not-too-distant future to discuss the arms race, which is getting out of control, but we will never allow anybody to have anything even close to what we have. mark: for the fifth time this month a package bomb exploded in taxes and it happened this time at a fedex facility near san antonio. one person suffered minor injuries and an meantime that the eye denied earlier reports that a second bomb had been discovered. two people were killed entire bombings in austin. the school shooting in southern maryland ended today with a gunman getting killed according to a local sheriff who says the suspect was killed at a school resource officer. two students were wounded. education secretary betsy devos defending community's to decide whether to arm teachers.

she also says the federal commission on school safety is being created and will consist of her and three other cabinet secretaries. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. ♪ caroline: i am caroline hyde in london and emily chang is off today. this is bloomberg technology. the fallout spreads that revelation that cambridge analytica had access of millions of facebook users. cambridge analytica is now suspended its ceo and we cover all the angles of the story throughout the hour. gone global,

officials in the u.s., u.k., and europe focusing to take action. meanwhile the criticism is only growing over facebook's response. why haven't we heard from mark zuckerberg and sharon sandberg? now the market continues to struggle amid the facebook turmoil and a large tech selloff. face back has wiped out gates for the entire 2018 plunging as much as 13% in the past two days. for more let's bring in abigail doolittle. 45 billion dollars in market cap. abigail: and it is still evolving, and if we take a look at the heart of the matter, image analytic had access and retained data on facebook users -- 50 million users without their permission. facebook learned of this back in

2015 and they did not do anything to tell those users or to secure the data. facebook is saying this does not constitute a hack or breach but they do not allow that type of data to be sold to a firm. great thaty area, so the ftc is launching a prop to see whether or not this is a violation of the 2011 consent agreement act. if there is some violation it could equal a massive fine. it could be a stunningly large fine and worst-case scenario for facebook could be a big fine. that is also bringing the government into the picture, the u.s. government up unto now had regulated technology very little. a double whammy with the european market as well, and if we look at this chart, we are looking at g #btv 3786. it basically has a higher high and lower lobe than last month and typically the speaks to

white uncertainty volatility for buyers and sellers suggest you could see the more ahead. we could see a equal and opposite reaction down towards between 130 and 140. pretty amazing. caroline: and you bring up some of the technical indicators. let's look at the relative strength indicator -- facebook's talk is below the 50 day moving average. the 100 day and 20 day moving average, and if you look at the lower half of your screen as well, this shows where we start to get close to the over sold indicator for the rsi. this is where we had the oversold mark. 10 -- plenty of other rooms they charts. -- doomsday charts.

abigail: the pressure can continue on because at the end of the day investors take overhang and uncertainty and many analysts say the stock was over but by so many investors and so perhaps a cooling off. if we take a look at tech overall for the date the nasdaq 100 finished higher and lots of other names higher such as amazon, netflix, alphabet finishing down slightly. today,tagion contained but twitter is lower and the social media in general under fire for data use and privacy. ministerel's justice says the company has been ignored requests for legal action to remove online content that was inciting or supportive of terrorism. that could be a ongoing story. , g #btva bullish chart 7472, and this is a longer-term

chart of twitter. bashhat twitter is that back above its ipo price, it is in a confirmed island reversal which suggests stock can climb up towards 50 or higher. contagion maybe this does not affect twitter and we are frequently hearing sources saying this could be a potential buyout candidate. the bloomberg lp does have a breaking news network on twitter, tictoc. caroline: fascinating stuff. abigail doolittle, great as always to have you on. now the impact of the facebook data breach and cambridge and a look at has announced that it has suspended its ceo effective immediately and they are launching a independent investigation into the company's actions. he was caught on tape talking about the dealing with the trump campaign and a investigation.

he is discussing the use of a self-destructing email server to communicate with clients in order to eliminate evidence of their contact. --after day have been read we can do that. caroline: in a statement the company said in the view of the board, his recent comments secretly recorded by channel four and other allegations to not represent the values or operations of the firm and his suspension reflects the seriousness of which we view this violation. we lost dr. alexander taylor, and a independent investigation is launched to view those comments and allegations. for more let's get to sarah frier in san francisco. you have been all across this follow-up. is fascinating that the ceo of cambridge analytica is suspended, and he was bragging

about the power that cambridge analytica had particularly with the 2016 presidential campaign, saying they do all the research and have all the data and analytics and all the targeting. does this mean perhaps they did not use facebook as much as we suspected? how do you read it? sarah: there are a lot of questions here of what cambridge analytica actually did with the data it got from the researcher in question. it could have been used or trashed as useless. we don't know to what extent it theactually put into targeting they are talking about. furthermore, we don't know how much we heard from cambridge analytica's marketing tactics. marketing itself to look very attractive to clients because this is what a lot of advertising entities do with facebook data. they try to reach people based on their own demographics and

likes and that is what facebook is for. the issue here is whether they deleted the data when they said they did, and facebook has said they have been lied to and cambridge analytica certified in 2015 that they had. caroline: we are getting breaking news that facebook is being sued by investors over voter profile harvesting. investors claim facebook failed to disclose the vulnerability and approach shot research data without permission. this is coming out, and we get reaction from the investor base. we don't get much reaction from facebook itself. we have yet to hear from mark zuckerberg or sandberg, what is being said internally at facebook? we know they had a town hall. sarah: the company had a town hall, the vp of the legal counsel that has been handling the situation about facebook's

plan to suspend cambridge analytica. there were questions from employees and the reason we haven't heard from mark zuckerberg or sharon samberg responded to is because facebook doesn't actually know on its own. they haven't confirmed what has happened here according to my sources. they were writing their friday post based on the starting post that was going to come out from news organizations. they haven't independently verified what cambridge analytica actually did here. they are trying to do an audit to look into their servers. cambridge analytica agreed to a audit, but before the company knows for sure, they don't want to overreact so they are back walking from what they said on friday about how strongly they are going to take this. and now they are saying they need more information. caroline: you cover this company in terms of financials. do think this is going to start to hit growth?

we heard this will have reputational damage and a catastrophe, some lawyers are calling it. what do you collect -- what do you call it? sarah: the earnings report said time spent on social networks declined for the first time ever, but they tried to explain that that was by their own design and they wanted people to view less content of low quality. i wonder if they actually keep up that statement in their next earnings report and if analyst investors are going to start looking at it and saying, our people not spending as much time on facebook because they are getting less viral content or are they not spending as much time off is because they don't want to be there? thishave to navigate conversation in a very careful manner and try to figure out how much of this is of their own design, this whole initiative

towards time was spent on the platform that mark zuckerberg announced in january and if facebook users want to remain there. caroline: fascinating stuff and great reporting across the story. sarah frier, thank you very much indeed. we heard that facebook is being sued by investors over voter profile harvesting. investors claim facebook fail to disclose the vulnerability and especially saw the data was taken back in 2015. april trump research firm other data without permission. we turn to cambridge analytica's methods and what the company is truly to figure out facebook users psyche. next. this is bloomberg. ♪

caroline: salesforce has a great the by a company for $6.5 billion, and its shares surged 28% on tuesday following the report the sale was imminent. clients haves content on the cloud, and that is told .711 shares of common stock for each wheel soft share -- mulesoft share. we continue the fallout of the misuse of facebook data, report of what data cambridge analytica hat and how it was used continue to pour in and our next guest is someone with a insider perspective of how facebook operates and calls into question the effectiveness of something called psychographic targeting.

antonio, wonderful to have you on the show. we had some bragging coming from the now suspended ceo of cambridge analytica saying we did all the research and all the data and all the analytics and targeting. ere does this leave facebook data? there is a safe and that at tech world that just because it doesn't work as a meet you can't sell it. i don't quite buy it, the reality of psychographics has been used for a while and it is a decades old practice. was they what they did both a facebook app and built a model based on responses to that at. pp. you still have to use facebook targeting data, otherwise it is difficult to find that user on facebook.

the real challenge for them is taking the model intrinsic it -- and translating it. i think i don't think facebook's data was being by the existence of cambridge analytica in my opinion. caroline: that date into the main part of your story, particularly across the media shining a light that people are worried about the safety of personal data. but perhaps the irony is that even the use of personal data, this use is not very effective and wouldn't have helped trump where the 2016 election, you don't think? antonio: i really don't think so. one of the biggest stories in the election is that a lot of strategies best regular commercial world has used for years is now being exterminated by political campaigns. i think there are a number of techniques of how i think trump did when the election and that was using a tool called custom audiences where they join to voter rolls and first party data

at the rnc has and that is valuable and the targeting you see on facebook after browsing a webpage. trump also did that. the reality is what cambridge did is very old. this is not a new story. and member as a product manager at facebook i met a member from the team at cambridge, and they were also building models and try to use it. -- it did not the work terribly well. i think in some ways they are stuck in the past using the model they were using, in my opinion. whilene: is fascinating, you are at facebook you are meeting with cambridge analytica. feedaid on your twitter that there was turmoil within facebook. talk to us you put on facebook that potentially now there is a big sign of turmoil. i dido: just to clarify,

not work with cambridge analytica i met with psychologist who work with their department. to mewer your question, one of the unique things about facebook, even relatively late in its history and even now -- i joined when the company was already 2000 employees. there was a real feeling of being vision oriented and motivated for the overarching mission of facebook. everybody was a believer and was a tough nut to crack. the fact that now lots of different outlets are finding lots of sources sitting there about the internal intrigue of facebook is really unusual. bad signnion, it is a of what is going on internally. caroline: the voice but facebook the dataut, they said

projections are fundamental to any decision we make. the policing of data is going to get a lot tougher at facebook, do you think? antonio: i think that is true. the park at facebook that i worked on, that at system, the one from deadly cure come up with super paranoid about data and really aggressive about advertisers in terms of not taking data. that may have not been that attitude rating on the platform start, but to me, the direction -- there is not a lot of users on the facebook that form -- platform. it didn't take off and they left it sitting there, so i think one constructive thing company could do is to be a lot more aggressive about how it deals with partners on the facebook platform side so this kind of thing won't happen again. caroline: fascinating to get your perspective, former facebook product manager and contributing writer at wired. coming up, we continue to

monitor goobers autonomous crash in tempe, arizona and how big of a impact it will have on autonomous driving. this is bloomberg. ♪

caroline: a story we continue to watch, the tragic death of a woman hit by a uber self-driving car. police video shows the woman moving in front of it suddenly and a factor investigators are likely to focus on as a -- as they assess the performance of the autonomous vehicle and a police chief on the case told the san francisco chronicle that after seeing the video, it is very clear it would have been difficult to avoid this collision in any kind. uber has halted all autonomous fecal tests and joining us now is mark bergen who is covering the story for us. it looks as though it would have been difficult whether it was autonomous or not. what is the reaction from work

yesterday? mark: they have been quite and they are working with our authorities in tempe. a lot of companies at large are waiting to see if there was a perception issue and an issue with the car and the volvo that uber is using. or as the police suggested, if this was purely unavoidable if it was human or software controlled. otherne: as you say, companies listening, apple, gm come up all testing that technology. are we yet to hear or see any reaction from these companies? mark: play at suspended their economist testing and they put out a statement saying they are concerned about the emotional state of their safety drivers. gm has said they are continuing to launch a service next year, we have not heard from waymo,

considered the technical leader in the field. we have yet to hear from apple. boston put a ultimatum to temporarily's all testing. we heard pittsburgh, where uber is testing, says these come to -- these companies can continue to test. caroline: there is a interesting piece that shows that apple is getting in into autonomous vehicles. particularly in california, can you update us on that? mark: it sounds like apple has more cars on the road than waymo and part of that is waymo has been doing this for a long time and have been testing california roads for almost nine years now. -- california has been less receptive and they have lost now that there has to be a human and a vehicle. and states like arizona and texas and washington -- they are more deregulated.

yet companies like waymo and uber testing in arizona more than california. greatne: mark bergen, reporting and think you for joining us. coming up, back to the fallout of the facebook data story and we turn to the political response and what executives on both sides of the atlantic have to say. that is next. this is bloomberg. ♪

mark: i am mark crumpton and you are watching bloomberg technology. the senate intelligence committee is releasing recommendations for requirements necessary to protect u.s. elections. >> let me say this with a great

deal of confidence. it is clear the russian government was looking for the election system highlighted some of the key gets. -- key gaps. there is no evidence that any vote was changed, russia tried to give it 21 states. of thehe head organization of the prohibition of chemical weapons come from the group has been asked to examine the nerve agent used against a former russian spy and his daughter in britain. >> upon the request of the british government -- we have to point some experts to the u.k. and they will collect some samples which will be sent to our designated labs. this may take another two or three weeks. mark: israeli prime minister benjamin netanyahu says the palestinians are losing it and

there real face is exposed and they don't want peace. the palestinian president preemptively rejected the white house peace proposal just still being developed. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. it is just after 5:30 p.m. in new york and it is a 30 a.m. in wednesday morning and sydney. paul allen, good morning. >> we have new zealand trading already up after we saw all the major indexes in the u.s. close higher, including the nasdaq bouncing back from yesterday's declines, of the facebook continue to slight further and will be watching out for tencent fourth-quarter earnings later today. futures are also pointed higher at the 10th of 1%.

trading in japan, the nikkei closed for equinox day. the asx, if we look at the australian dollar, it is now below 77 u.s., not a great deal of change to the yen and greenback. -- we expectuding tightening and am watching for powell's comments. gold is a little bigger and oil edging higher. sydney, moreen in from uber technology -- from "bloomberg technology" next. ♪ caroline: this is bloomberg technology and i am caroline hyde. the latest allotment of the facebook tsonga, they are being sued in california court by

shareholders is a they suffered losses after he disclosed that cambridge analytica obtained profile information of 50 million users. the safeguard is being blamed for a slump in share price following the revelation that data was harvested without permission a research firm connected to donald trump. government, we are seeing reaction from both sides of the atlantic. what tech companies are facing in washington, and also covering the legal side of the story -- first of all, sarah, let's go to you and talk about the government reaction. they want to speak with mark zuckerberg. talk asiticians want to well. sarah: we have lawmakers in washington and on both sides of the aisle and both chambers of

commerce asking for briefings. todaympany is going in and tomorrow to talk with different members of congress, for mark are calls zuckerberg to come to washington, although we don't have anything scheduled yet. a full committee has not scheduled a hearing are asked him to come and testify. we also have a federal agency that is the chief privacy watchdog in the u.s. looking into whether facebook violated its privacy practices here in the cambridge analytica scenario. caroline: talk to us if they violated the 2011 consent decree. this could lead to crimes? sara: we do not have a federal privacy law. the way facebook is looked at by the government is because the ftc will enforce what a company says and what it does with

privacy and protecting data. in 2011 we slipped up and acknowledged they slipped up, and now they have to ensure they have gotten informed and explicit consent from users before sharing any data with third parties. caroline: fascinating, there is the government angle. talk toinvestor angle, us about the lawsuit and we know who the investor base is? >> it is investors who want shares after february 3, 2017, and that is when they released the 20 annual report at which time they addressed the threat of any misuse of data by third party users. but they did not get into details regarding such a breach. at that point in time investors believed they should have at least known what is going on with their data to inform

investors and shareholders and once again, similar language was used in the next quarterly report in may when they did not disclose any potential losses. these attorneys believe they should have not what is going on with the data at the time. caroline: this is in california court. give us an idea of how quickly these losses will occur and how we might see a response from the company. where do we expect to go after these investments -- announcements from the investor base? >> the loss of filed today and aere will be a period facebook to apply, likely a month. the lawsuit itself will take months, if not longer. it is hard to tell how long this litigation will take given how complex this is with data privacy. caroline: this is such a significant fall in the share

price, $45 billion wiped off and -- great to asking have your opinions on the government and legal angles. last year mark zuckerberg eight headlines with the talk of the american heartland, and now the ceo has to embark on a term of europe and its governments. lawmakers in the u k and european union requested zuckerberg appear to answer questions on the alleged misuse of data by cabbage analytic a. we spoke to a member of parliament to see if zuckerberg responded to his invite. >> i think he should agree and it is down to him to choose to or not. it is noticeable that we have heard nothing from him so far since the story broke two days ago on the data breach and the involvement of can which analytical. are also outstanding questions we have as a committee following

the session we had with facebook in washington last month we asked them that expressly about the relationship with cambridge analytica who asked about the way in which developers can harvest user data from facebook and about the enforcement of power that facebook has to get control of the data. we haven't received satisfactory answers on those questions and requires someone at the top of the company was job it is to know every detail them go through this properly. caroline: the misuse of data of 50 million users of facebook and investors surrounding that 2016 residential election, you are investigating potentially the role of social media within the uk's vote to leave the eu. you think russian manipulation was done then and facebook has anything to answer regarding the brexit vote? damion: we know there was russian involvement during the brexit campaign. at the moment, from what is published, that appears to be a

lower level than in the case of the american presidential election. we are looking to map out and it is incredibly important. the u.k. information commissioner also launched a investigation looking at how data was used during the referendum. analytics was used at the time from russian agencies and by official campaign as what we need to understand more and user s you to understand more in the way in which data can be used to target information. --etimes russian agencies they don't know, and there is little transparency about where the initiatives are coming from. caroline: we heard your voice calling for mark zuckerberg and we are hearing from relays and the united states, the ftc is looking into whether facebook potentially has broken the consent the cree -- decree. using regular leaders in the u.k. will be involved as well? damion: in european lot there

are restrictions based on people's political views and opinions. with that legislation didn't necessarily consider was the fact that people may harvest huge amounts of consumer data, data that people consented to give as part of surveys on their opinions or consumer habits. but they never considered it to be used for a political campaign at that to be held by a committee that is not a registered article party. this is a big area of concern that they are looking at. using changes will be put in place internally at facebook and what changes would you like to see venture might is put the rest for this never occur again? damion: our concerns are the way they manage and handle data. to understand how easy it is for developers and others to acquire of facebook users and how facebook polices what happens with that data. facedny people who are

abuse for every day of the week, it will look at the story in a some substance in as well -- how come facebook has damaged data on me and what they do with that and is it safe? that is what facebook has to provide assurance on. a lot of outstanding questions we have about facebook is around that. there's also the other question about promoted messaging through facebook to pay for messaging through facebook itself. whether facebook is good at posing that messaging and understanding who the advertiser is and if it is a political campaign and it advertiser is not breaking any laws by seeking advertisement into a foreign country. i think these are important areas of understanding business practice and ethics that we need to get to the bottom of. caroline: do believe social media companies like twitter have become too powerful? damion: they have a huge amount of power.

i think if they think they are too powerful, therefore above the reach of governments and parliaments -- then i think there are organizations who believe in postings that they often do that it is different and ultimately it doesn't matter how big you are, yet to comply with the lot in the territories you operate, and if you don't, there are functions that can be used against you. want them to be responsible and act in a responsible way, and at the moment it is incumbent for them to demonstrate that they are and people run the company to be more forthcoming and provide clear answers to the questions we are putting. caroline: had they responded to you yet? damion: we have outstanding questions on the hearing we had with facebook last month. they still haven't responded to those outstanding questions even though the hearing was a month ago. and we set today we want mark zuckerberg or summer -- or

someone with a similar bracket to respond and they need to explain the cambridge analytica data breach and what occurred and why is it they knew about this two years ago and did not act to ensure that the data was recovered. caroline: that was damian collins there. senatorapitol hill, john kennedy of louisiana as part of a bipartisan effort to publicly question tech ceos before a hearing and he caught up with kevin cirilli to discuss why he wants to get facebook to washington. >> is no longer a company -- it is very powerful. it touches millions and millions of people, data is the new oil. we need to ask hard questions because some of facebook's behavior lately has gotten into the foothills of creeping. caroline: an update on the salesforce deal to buy mulesoft.

the company has also raised its 2022 sales goal to $22 billion because of the purchase. will stay on the headlines. this is bloomberg. ♪

caroline: some breaking news uber, the investigation will address operating concerns with the car surrounding the tragic events of a uber autonomous vehicle striking a woman and conquer. the investigation will address driver interaction says is the national transportation bureau and they say they have had investigators and tempe on tuesday collecting information. will have more on that story later.

meanwhile, the london-based venture capitalist firm has a fund to help young companies in europe and israel grow. the intention of the fund is to make average investments as much as $30 million in areas such as enterprise software. they are in the tired investment -- and joining us now is a managing partner was been with the company for 18 years, congratulations on the new fund. you have bigger checks to write. what is the sweet spot? >> we are very excited and we think the bigger fund is really a reflection of the opportunities available for european companies. -- andson silicon valley europe, great japanese can come from everywhere and with great investors from hamburg, germany, tel aviv, product, sweden.

and backo scale up them to help them become globally successful. caroline: plenty of companies become globally successful, there is a company you invested round.latest it has a institutional investor in that particular round. a an end one, i want to talk about the new investors coming in to europe as just today, have a company in germany joining tencent and you have softbank vision fund putting phenomenal amounts of money into companies in the u.k.. is there a lack of capital in europe or is everyone getting into the party? davor: we think there is a funding gap in markets, and this is where i think you see some of the new players coming into the market because they see that increasingly europe is building global champions.

spotify, some of the global leading companies are homegrown in europe. we are seeing a lot more international capital interested in investing in these companies. will we also see is a lot more new entrepreneurial ventures being started. many more than we saw a decade ago. caroline: what about the likes of spotify coming to the market and listing to the u.s.? -- you havenefit funding circles talking about a ipo. what about your own portfolio? davor: we do think the ipo is a good route, because oftentimes people don't sell into the ipo they are fundraising for continuing to grow the company. a healthy ipo market is good for all investors involved company so we definitely are quite excited to

see spotify potentially listing and some of the other ones. it is a good trend that is benefiting the echo system significantly. caroline: what about relation in europe? mark zuckerberg is being called in front by the u.k. -- and relators want to see him, how do you see the regulation in europe helping or hindering the growth of startups born and bred here? davor: most of our companies are fortunately or unfortunately too small to be under the radar of regulators. i think we are having quite a unique time in our history where you have some of the companies like google, apple, facebook -- amazon, reaching sizes -- close to 3 trillion and capitalization in a little over 10 years. i think technology is clearly on the map now. for a long time we have benefited from having free

access to search and social networking, cheaper access to wireless networks, but ultimately now we realize we need to also address the questions around -- what is different for consumers? what does it do for businesses and small startups? we work with people in technology consistently so we need to ask tough questions as to how do we proceed? i think you were talking about uber and some of the questions that ai brings to the table. how will artificial intelligence change how we view liability? there are lots of questions we need to address now and this is what we are seeing. what about you as a vc and the questions you ask the companies? we talk about diversity meeting to be raised and more women and diversity -- what about companies that growth suggest uber keeping ethics in line?

how do you address that with entrepreneurs? davor: i think ethics is important to us and we as private investors take great care and diligence to try to evaluate and mitigate the potential risks. we have some companies working in terms of helping regulating or managing fraud and other things that are born into the market. when of our companies in israel is highly successful and they try to manage fraud act was on the mobile advertising echo system. i think we can be helpful and trying to solve the problem that we are seeing today through entrepreneurial ventures. thank you very much for coming in. and congratulations on the new fund. up, as we wrap up our

coverage of facebook will see the chart you will need to see. this is bloomberg. ♪

what the financial community watches a internal facebook, following the valuation lost in the process, amazon ceo jeff bezos tweeted this. a picture of himself in the sunshine with a robotic dog. mark zuckerberg may be thinking one spot on the rich list, but jeff bezos is sitting pretty on the number one spot. rival ahead of tonight for the first time. as we wrap things up i want to show you one last chart the bloomberg terminal. 3765. we turn to our attention to the trials and two relations of facebook and market capitalization falling 45

billion over today's. days, and that is the 50 day moving average and the tech indicator for the stock that is not looking pretty. there is abefore, contagion starting to ease and we see the likes of amazon and alphabet manages to rise and netflix on the up-to-date despite the fall and facebook stock. how long will the story continue to unfold? that does it for bloomberg technology. reminder we livestream on twitter at weekdays at 5 p.m. in new york. ♪

a facebook is slumping for second day, congress is preparing an investigation into the current scandal. the company suspends its ceo. they say he secretly reports comments and it is unacceptable. >> finance ministers failing to block president trump's terrace and protectionism. >> it is all go at amazon. the market cap is now surpassing