♪ emily: i'm emily chang, and this is "the best of bloomberg technology," where we bring you our top interviews from this week in tech. coming up, facebook ceo mark zuckerberg wraps up his grilling before congress. the biggest takeaways from those who hold the power in washington. plus, a bloomberg exclusive. our conversation with anthony noto on his plans to rewrite the rules in the online loan and revamp the culture. and it's the big apple versus silicon valley. we explored the new york tech scene with the ceo of the fin

tech startup, betterment. but first, it has been a long week for mark zuckerberg. still, he emerged mostly unruffled after two hearings before congress. he generally kept his cool, even as lawmakers downplayed his apologies over failures to protect user privacy and his assurances to do better. some coming up the facebook ceo with stern words. take a listen. >> how can consumers have control over their data when facebook doesn't have control in over the data itself? that is my concern. >> who was going to protect us from facebook? is also a question. >> mr. zuckerberg, i think your cozy community, as dr. martin jamieson recently said, is beginning to look a lot like "the truman show," where people's identities and relationships are made available to people who they don't know. >> your platform is still being used to circumvent the law and allow people to buy highly addictive drugs without a prescription.

with all due respect, facebook is enabling an illegal activity, and in so doing, you are hurting people. >> you said everyone controls their data, but you are collecting data on people that are not facebook users, and you are collecting their data. emily: so where does the social network go from here? we posed that question to roger mcnamee, and our very own sarah frier. >> so all those times during that 10 hours of testimony that zuckerberg said, i will have my team follow up with you on that, now that is happening. the congressmen are getting their questions to facebook staff, facebook staff has to go through and meticulously answer them all, then we will get some him really interesting answers that take a little longer than those five seconds zuckerberg had to respond. >> and he said i will have my team follow-up with you many,

many, many times. roger, i'm sure you were listening. how satisfied are you with what you heard from mark zuckerberg, and how satisfied were you with the questions from lawmakers? >> i would give both mixed results for reasons that i think are obvious about the structures of the hearings themselves. in during the senate hearing, in him the first hour and a half, there were at least a dozen different issues that senators raise, areas of serious concern, and that helped mark respond because he did not have to worry about prosecutorial technique being applied at him, hammering at the same issue over and over. he was able to say i will get back to you and move on to the next topic. the problem with that, and this is where i think he has a real issue here, is that facebook may be like a rock, but this scandal is like water pouring over it. it will erode the rock. the trust of facebook is in

severe jeopardy right now, and mark and sheryl have no one to blame but themselves. they have handled this thing in a cavalier fashion, and it is really serious. we are talking about democracy, about civil liberties, about the rights of human beings in places like myanmar and the philippines. they have to be more focused. emily: that said, mark zuckerberg told us that it hasn't had a meaningful impact on usage. sheryl sandberg told me and sarah frier that only a few advertisers have paused spending. then we had this opinion survey. how do we make sense of that? >> i don't know about the opinion survey. it's really easy to say you deleted the app whether you have or haven't. i would be stunned if we don't see a change in usage, both in the march and june quarters, because of this in north america and western europe. in i just think the erosion of trust is so staggering at this point. from facebook's point of view,

they -- it goes after just what the business really is, and i think they have forgotten that they don't have a birthright here. they require consumers' willingness to work with them. mark's responses to a lot of those questions, particularly senator dick durbin's question about his hotel room, would you divulge where he had stayed, and then the representative's comments about the business model and the inherent invasions of privacy, those things are a tell. they give consumers a sense, wait a minute, they view us as fodder, fuel for their profit, they don't view us as customers, or even human beings. emily: there was another issue that came up several times, specifically in the house hearings, where the questions were, rightfully and luckily, more pointed and better informed than in the senate hearing. representative kathy castor asked this of mark zuckerberg, about what happened, and how does facebook track users off facebook, including users who

have never signed up for facebook? take a listen to that exchange. >> you are collecting personal information on people who do not even have facebook accounts, isn't that right? >> congresswoman, i believe -- >> yes or no? >> congresswoman, i'm not sure that's what we are tracking. >> no, you have already acknowledged that you are doing that for security purposes and commercial purposes. you are collecting data outside of facebook. when someone goes to a website and it has a facebook like or share, that data is being collected by facebook, correct? >> congresswoman -- >> yes or no? >> that is right, that we understand -- in order to show which of your -- >> so for people who don't even have facebook, i don't think the average american understands that. emily: roger, is it true that several other internet companies do similar things like google, and if so, what is so bad about this?

him >> so i think there are a million things that are wrong with it. yes, lots of internet companies do it. i use a product on my phone and on my computer to block trackers exactly like this. in it is simply frightening. for any given page i land on there will be between half a dozen, 15 different trackers of people attempting to insert into my browser as i'm searching around the web. in my mind, the whole thing is a massive invasion of privacy, predicated on a lie, on this notion that none of this is really going on. as consumers begin to understand the degree to which they are being used as fuel for business models, that they have no real benefit from, i think that the trust erodes a lot further and it goes way beyond facebook. i think facebook is in the crosshairs because of its impact on elections is so great, but in

reality, in every day life, google has a profound impact, instagram, snapchat, and especially youtube have an unbelievable impact on society and on mental health. emily: but roger, one of the reasons people are really upset with facebook in particular is because facebook is going out there and saying you are in control of your data, we built this for you, you own everything you do on our platform, it's all about you. this questioning from castor really caught at that point for zuckerberg. it's not your choice to share your data. facebook is tracking data on people who don't even have accounts. >> i think you are exactly correct, exactly correct. and i think representative castor -- that was a brilliantly well-informed question from a legislator charged with protecting the public interest.

we all owe her a massive thanks, because she and literally a couple dozen other members of congress, did us a public service. they exposed a lot of the nonsense that is going on, and one representative asked an important question, senator blumenthal, senator klobuchar. it was a really long list -- senator kennedy. when i look at this, the problem is that we were asleep. we love the products, we love the convenience, we love the fun, we love the kitten photos, but at the end of the day, in order to monetize that, these companies got involved in surveillance, and the surveillance they did is every bit as intrusive as what a spy agency would do. the difference is that they are not doing it for the national interest, but for profit. emily: roger, you will stay with us. i have to let you go, but before you go, you are following up on things in the hearing that were

surprising, like cambridge university and what zuckerberg had to say about that, that they are investigating whether something bad is happening there. what else are we, the bloomberg news team, looking into? >> one of the important points in the testimony was that ai was going to solve everything. all these questions about whether facebook is treating its content the right way, whether there are biases, taking down hateful content fast enough, they offered ai as a solution to all of that. ai is trained by humans, that have the same biases as any of us, and it's not going to end well. emily: that was roger mcnamee and bloomberg's sarah frier. google's youtube is being accused of violating u.s. law on children's privacy. a coalition of child advocacy and consumer groups has asked the government to investigate. the groups say youtube uses the information to illegally target ads.

youtube said in a statement that it will look into the complaint to determine if improvements are necessary. coming up, our exclusive conversation with anthony noto on how he is shaping the company's future, now that he is at the helm. and later, we will hear from representatives from california and new jersey, their reaction to the facebook hearings and thoughts on the future of tech regulation. this is bloomberg. ♪

emily: in the battle for e-commerce supremacy in india, walmart may be about to leave amazon in its wake. india's leading e-commerce company is said to be leaning towards selling to walmart, according to people familiar with the matter. both are bidding for a controlling stake at a $20 billion valuation, $8 billion more than their 2017 valuation. if completed, it would give

walmart a major stake in an emerging market of 1.3 billion people. michelle gill, a former goldman sachs executive, is the next cfo, filling the role that has been vacant since last summer. it is the first major appointment by the new ceo anthony noto. they also announced they surpassed half a million users. we caught up with him in san francisco to talk about his plan since taking the helm at sofi. >> we have to continue to build on our core loan products and student loan refinancing, personal loans, mortgages. we need to continue to build out. the real opportunity is to add financial services product, including sofi money, sofi wallets, the ability to invest with us, and sofi credit card, and sofi advice. much of 2018 will be building those products, while still making sure core products perform well. emily: you have been there six weeks. what is it you want to do differently? >> the most important thing we do as a company is build a

culture we are proud of, the culture that is welcoming and inclusive, a culture that reflects society. we have to have a diverse employee base if we will serve our members, and our number one core value is that members' interests always come first. to serve them well, we have to reflect society, and we have to have a diverse employee base. emily: you mentioned culture. the former ceo left amid sexual harassment allegations, the cfo, as well. in fact, half a dozen employees have stepped down as a result of the chaos. when you walk into a company, what is your first order of business, knowing that the culture has been toxic for a really long time? >> sure. we focused on three things in my first six-weeks. one was re-forecasting 2018, making sure we are aligned in our top priorities, building objectives. third, critically important to your question, what core values do you want to have as a company? we are building of a process

that took place after the change in management called one sofi, and i have worked with leadership teams to define our 11 core values. they will build the foundation of the culture we are trying to build. next important step is educating the company on the core values, the behaviors that we accept, and expect, and rewarding those that are culture carriers. and punishing those that are not culture carriers. we will have no tolerance for employees that can't help build a great culture. emily: you just hired a cfo, michelle gill, from goldman, which is interesting, since goldman is increasingly your competitor. is this an effort to take on the goldman -- or the rest of the financial world? >> not at all, it is an effort to build a diverse company. and hiring the best leaders. michelle is a unique combination of a phenomenal leader, a financial expert, and the culture builder, and that set her apart from the rest of the candidates. we saw a great slate of candidates, so we are pleased we are able to hire michelle. i did not know her prior to the process, and i really enjoyed

the hours i spent with her, talking about the vision for the company, where we can go, and building a strong culture. that's a rare combination, we are lucky we could convince her to join our team. emily: you have had a couple stumbles. the ipo, for example, has been delayed a couple times. why is that, and what are the challenges? >> it is important to recognize the incredible success the company has achieved, $12.9 billion of funded volume last year, up more than 60%. the company not only achieved positive, growing the top line, and reaching scale but also free cash flow. and gap profitability. we want to build on that success in 2018. one important area is the culture and building that foundation, but we have to invest in these other products that create more of the daily habit and more of a recurring revenue stream to accomplish the overall mission, which is to help people achieve financial independence. emily: do you see sofi as a public company, and if so, when?

>> it is not a priority in 2018, but i see being public in the future, we want to make sure we put in place the building blocks, strengthen our core products, invest in new products, and most critically, building up the membership experience. our ability to achieve an emotional benefit and rational benefit is bringing a membership experience. emily: so, two years? three years? what's a reasonable timeframe? >> i am not putting a time frame on it as much as i am conditions. which i just described. emily: mark zuckerberg is testifying this week in d.c. before congress. facebook is in the middle of a huge controversy, and speaking of facebook, twitter has been dragged down as facebook has over the last few weeks. where did facebook go wrong? >> it's a very complicated situation for them in particular. i'd have to spend more time with you to go through my thoughts on it. what i can say is what we are focused on, which is making sure

we have the right core values and leadership at the top of the company to ensure that our members are never surprised, to make sure their interests come first, which involves not just transparency, but also information and education. as long as we put their interests first, in addition to the information, and making sure they are educated in what they are doing, we won't surprise them and will avoid the pitfalls we are hearing about. emily: do you think tech needs to be regulated? >> i think an industry is regulated when they can't adequately abide by some standards that they established in running their business. if the leadership can step up in different companies, the right consumer environment, then they will do it themselves. there's no need for an outside force. emily: the financial industry has been regulated for a long time, and some would say tech cannot regulate itself. so does that mean tech needs regulation? >> tech is a pretty broad term, that can involve everything from software to hardware, to consumer technology and media.

in the media landscape, there's a fair amount of regulation. the ftc, some of the other important regulatory bodies, do provide regulation that they all have to comply with, including personal, private information. there are new areas that require greater scrutiny, and leaders within the industry should focus on solving those areas. where there isn't transparency and there needs to be. emily: that was anthony noto. coming up, for smart capital is one of the biggest cc firms in new york. investments in airbnb, shop if i and pinterest. we will talk about the investment climate in new york versus silicon valley. with a partner at the firm. this is bloomberg. ♪

emily: apple is launching two versions of the iphone 8, the second year in a row it has rolled out a new version.

the new color option could boost sales of the overshadowed iphone line, part of the product red initiative, which donates a percentage of sales to fight hiv and aids. we have been covering all the angles of the unprecedented testimony of mark zuckerberg in washington over the last two days. since the cambridge analytica data scandal broke, it has put serious pressure on facebook stock, wiping out its gains in 2018. but what about investor sentiment in the private market? we discussed. >> i think the sentiment in the public market mirrors very much the private market. yes, yesterday people were pleasantly surprised that mark was able to handle the scrutiny and held his own. you saw that in the public markets. in the private market, we feel the same way. the overarching question is whether or not there's going to be increased regulation. i think he made a good point that increased regulation for

bigger companies like his are going to be able to weather the storm. the smaller companies, that becomes a much bigger burden. there is a question there, but ultimately, i do not see any slow down in private market investing. if not, a continued acceleration. emily: these questions you are asking about -- how are you collecting this data? is this really not necessarily legal, but does this meet our moral standard of what is possible? >> privacy has always been a concern, and these are questions we ask when any company is collecting personal data. it is how do you use the data? facebook is taking the stance that they are a tool company, and that piece wasn't important, or wasn't part of their purview. it puts increased scrutiny as

companies grow. emily: is the public market volatility in the tech market impacting private valuations at all? >> we haven't seen it. if anything, private company him and valuations have been steady, if not accelerating. emily: we often compare new york to silicon valley. new york, there are a lot of exciting things happening in the tech scene, but there hasn't been that multibillion dollar exit. when will that happen? will that happen? >> we are seeing a continued acceleration. there has been a lot of buzz in the market about new york and how it will grow. we have seen over the last five years a big increase in not only the number of companies that have been founded here, but the number of exits. we have also seen a nice pipeline of potential companies that will exit at multiple billion-dollar valuations, whether it is health, there are some in the pipeline.

the other question is where those venture dollars go. i get asked a lot, is new york a real market? is it a competed market? i say almost every single deal we have looked at over the last two years has had silicon valley competing for them. emily: you are first mark capital's first female partner, which is awesome. i just wrote a whole book about diversity in silicon valley. some of the things i have heard anecdotally is that new york feels like a more inclusive place. i talked to many entrepreneurs who left silicon valley to come to new york and keep building the companies here. do you think there's any truth to that idea, that new york is less of a brotopia than silicon valley proper? >> new york has always been a melting pot. not only for the people here but the industries. we know that 40% of tech workers here are women, 20% are people of color.

that's a dramatic difference than silicon valley. so yes, i believe here it is a little more diverse. there is access to different types of talent across many industries. emily: but what still needs to happen? it is certainly not enough. >> certainly not enough, that's true. it's still a developing market, so we are seeing really nice trends here. i think we will continue to see more dollars come in, in the third quarter of 2017, we saw more dollars coming to new york. then silicon valley. 4.2 versus 4.1. i think we will continue to see that trend. emily: coming up, washington's reaction to facebook ceo mark zuckerberg's testimony. and a reminder, all episodes of "bloomberg tech" are live streaming on twitter. check us out at technology weekdays.

this is bloomberg. ♪

♪ emily: welcome back to the "best of bloomberg technology." i'm emily chang. mark zuckerberg's time on his testimony is over, and a new capitol hill and bill has already been introduced to protect consumer rights. the consent act would require the ftc to create new online privacy protections for users of sites like facebook and google. congressman ro khanna of california's 17th district in the heart of silicon valley joins us to discuss the past hearing this week what new laws might be to come. ro: i was pleased that mark zuckerberg agreed to testify, that he subjected himself to five hours of testimony, both in the senate and the house.

this was long overdue. facebook should have been testifying much earlier. and i was pleased that he is at least open to well-crafted regulation. i was concerned on two areas. it seemed like the senate had a one, knowledge gap. many of the senators have not really used facebook and twitter, and it was apparent after they asked their first questions and zuckerberg parried back. they were really unable to press him or get into the depth. and second, it is not zuckerberg's job to clean up the mess. it is congress' job to regulate and pass laws, and provide strong protection for the american public. and there wasn't a sufficient commitment or discussion about what an internet bill of rights would look like. emily: what should congress do? then? ro: i think that there is some very common sense things that we ought to do.

first you ought to have a right to know your data. first, if you want to know your financial information, you can go get your credit report. you can know who has asked for that credit information, who is trying to get information about you. you should have the ability to do that with all your data. you should be able to inquire of facebook or google or twitter or cambridge analytica to give you a report of your data. we have these rights also for health. second, you should be able to update your data. third, you should be able to move your data delete your data. , europe has a comprehensive set of these rights. i think the european regulation goes too far, but we should take some of those principles and have a robust framework here in the united states. emily: that said we're talking , about a massive data breach that happened on facebook's platform, on facebook's watch. we are talking about an election that was meddled in, by, you know, state actors on facebook's watch. and in both cases, facebook had warnings.

facebook knew about these issues before the company revealed them to the public. so where did facebook fall short, in your opinion? ro: they clearly did fall short, and they need to assume responsibility. first, they fell short in disclosure. all the reports i read suggest they should have -- and they knew about this breach back in 2015. they did not notify the users or they didn't notify the ftc. they did not notify the press. had they done that, a lot of the harms may have been avoided. they clearly did not have sufficient oversight. to have being paid in rubles, and to have russians buying advertisements, and that not setting off alarm bells is deeply concerning. and third, they allowed false propaganda to spread and go viral on their social media site without any verification. i am glad they are now owning up to the mistakes. i still believe in the power of social media to do good, but

there were clear abuses, and they need to be transparent going forward, and make real efforts to fix it. but that is not enough. congress also needs to regulate. we cannot rely on the self-regulation of facebook or tech companies. emily: a lot of the questions today focused on facebook's tracking of users off facebook including users who never signed up for it in the first place. should facebook be able to track user behavior across the internet, off facebook, even if they do not have a facebook account, which means they could never agree to the terms of service? ro: well, this is exactly why we need an internet bill of rights. so for example, if you use firefox, the mozilla browser, facebook would never be able to do that because firefox contains your data. whereas if you use the safari browser, you could, they may give the cookies, or that data to facebook if they have agreements with facebook. you actually have to go change on your iphone the default settings on safari to say no, i

do not want my data shared. this is what i mean where members of congress need to be using these platforms more. they don't have to be computer scientists or coders, but they have to understand what these platforms do. and we need to then have laws saying let's move to a world more like like mozilla firefox. where users clearly have the right to know what is happening with their data and to have data contained so facebook cannot do these searches. it is why for example you can go on the internet, surf the internet and want to buy ties, and suddenly on facebook, even though you never liked ties, you start seeing advertisements popping up with ties, and marketing to you. you say, why is that happening on facebook? that is because facebook often has information that advertisers have shared with them. and i do think that an internet bill of rights would stop that from happening. emily: you said that we cannot leave the security of our elections up to an internet entrepreneur. facebook says it is working on new tools that will be in place before the midterm elections to prevent what happened in 2016

from happening again. do you believe them, and if not, how concerning is that, and what can congress do -- isn't it on facebook at this point, to make sure it doesn't happen again? ro: i do believe they are acting in good -- with good intent, but think about this, emily. they have grown from a platform people tored thousand 2 billion people in 12 to 14 years. it is really an extraordinary platform, and it is an extraordinary problem. i do not think we could just rely on facebook's word. congress needs to do two things, we need to significantly fund first the national science foundation, m.i.t., carnegie mellon, research universities, so that we can do the kind of research in machine learning, in artificial intelligence that is going to be necessary to protect our national security, and to prevent this kind of russian meddling or other types of interference. that is for congress to make

those kind of investments in research and in development. we are not making those investments. secondly, we need to have a right to -- individuals having a right to secured data, and making sure that there are advertisement disclosures. senator klobuchar has a bill along that line, so that facebook is required by law to comply. and that will put added incentive on their engineers to really come up with a solution if they have a legal liability that incentivizes them to do it. emily: necessarily going to but that is not happen before 2018, before november? ro: you are right. unfortunately given the speed with which congress moves, i am not optimistic that these laws are going to be passed before that. all i would say is that until then, congress should try to act as much as we can, because we are putting ourselves at risk without those laws. i do hope that facebook and other tech companies will realize that the more of these

breaches is going to further erode the public trust. these are platforms that largely were widely admired. i still think, as i travel around the country, there are people who look to technology with a positive framework, a positive sense. they risk losing that if there are more of these breaches. so i think it is in facebook's self interests and a lot of tech companies' self interest to put as much resources behind this to solve the problem. but it is not going to be easy. there is vulnerability there. ♪ emily: that was congressman ro khanna. we also caught up with representative leonard lance of new jersey, who grilled mark zuckerberg on capitol hill. leonard: i asked him a direct question and, emily, he responded. and i tend to disagree with his response. the federal trade commission is now investigating the matter, and i hope the investigation occurs in a timely fashion. emily: so what are you most concerned about? leonard: i'm concerned about the

privacy of the american people and certainly the privacy of the american people was violated in this situation. and moving forward, we have to make sure that it does not happen again. emily: so do you think that regulation -- more regulation is necessary? leonard: i am a cosponsor of a bill sponsored by marsha blackburn of tennessee, the browser bill. and that would have a system that would be more protective of the privacy of the american people, and you have to opt in. i think that is the way we should proceed. the browser bill is for all forums, not just edge providers but also isp's, and i think that is the way to proceed. emily: beyond the browser bill, you know is there any regulation , that you would support, given that there are a wide range of topics at play here beyond privacy? leonard: i want to make sure that companies have the ability

to innovate, but that does not mean that they have -- it should be in a situation where they invade the privacy of the american people. certainly congress wants to make sure that does not occur. i think the browser bill would go a very long way in that regard. emily: now speaker paul ryan now reportedly will not run for reelection last year. i feel like i have to ask you about this, since we have you, do you think that is good or bad for the republican party? leonard: i think the speaker will continue to be involved to the highest extent in his responsibilities into the end of the year and continue to engage in fund-raising for example. i wish him and his family well , and emily i think this was a , personal decision based on the fact that he wants to help raise his children in janesville wisconsin. , this is a very cynical town. there are all sorts of explanations. i believe the speaker, when he says that he wants to be involved in the raising of his

children with his wife jana moving forward, he will be , working on behalf of republicans across the country over the course of this year. and then there will be a new speaker come january. emily: do you believe it has anything to do with friction with the president? leonard: i do not. i believe that has to do with the fact that paul is a young man. he is 48 years old, he has a whole life ahead of him. he will be very successful in whatever he does, and i take him at his word. he and his wife are raising their three children in janesville, wisconsin, and he wants to be more involved with that. emily: now back to facebook. going forward, i know you have the browser bill, but bigger picture, how much of the responsibility to protect, to self-regulate falls on facebook , and how much do you think this falls on congress and the law? leonard: i think it is a combination of both.

and the coo of facebook, sheryl sandberg, last week indicated that she thought the company had not done as good a job as it should do. and that is obviously the case. mr. zuckerberg in effect said the same thing, both to the senate yesterday and to the house today. and therefore, i think we should move forward with the browser legislation, and we should not rely on what facebook or any other company says, because it is the responsibility of of all -- responsibility of all of us working together to protect the privacy not only of the american people that really people across the globe. because this affected not only citizens here in this country but those across the globe as well. that is why the british parliament is investigating this matter as well. emily: that was congressman leonard lance joining us from washington. ma isme alibaba's jack calling on mark zuckerberg to fix facebook. the social media giant is facing criticism and legal scrutiny

around the world after the cambridge analytica scandal which could have shared data on tens of millions of users. ma, who is china's richest man , said that the social network was valuable and the issues could have resulted from facebook's unprecedented expansion. coming up betterment offering a wealth management to the masses with its robo advisors. we will hear from its ceo next. this is bloomberg. ♪

emily: and major partnership in the streaming space, spotify and hulu announced solidified their partnership by offering a bundle of services for $12.99 a month. you get spotify by premium and hulu on demand with advertisements. they began first offering the bundle to students back in september, but they are expanding the promotion. operating in the heart of the financial capital of the world,

new york-based betterment is looking to disrupt the finance industry, going after high net worth clients with robo advising. so will cutting edge technology and low fees help usher more clientele into the start up? we ask that question of the ceo of betterment. >> we have always used technology to reduce cost, to help people reduce their taxes, and give them full holistic financial planning. and it takes a lot of data and processing of that data to deliver financial advice. we also used it on a customer service side to give them more delightful experiences and to route them intelligently. ai, in terms of what it is actually doing in better managing your money, is in the early stages. and i think that is true of most of these financial service companies who are just beginning to start to see the power of it. emily: what does that mean? what can't you do now that you might be able to do in two years? >> if you believe we will have self driving cars, of course you believe that we will have self managing wallets.

and i cannot imagine that in 10 years people are still going to be be managing balances between a checking and savings accounts. emily: that is so annoying. >> stocks and bonds. all of that can be better done by technology than it can be done by humans. it is much less annoying when you do not have to do it yourself. emily: there are larger incumbents getting into your business, and does this become a commodity? >> one of the things that is exciting for us is that incumbents are coming in. i think they are driving attention to the space and driving customers to us because all of these incumbents are conflicted. all of them are selling their own products. if you go to vanguard, you expect to get vanguard funds. if you go to schwab and what you are getting schwab funds. if you go to merrill lynch, you are getting funds that they are getting paid to offer you. at betterment we do not get paid by anyone to sell you certain funds. the only way that we make money is the fee that you pay to advise you. we are a fiduciary advisor and that makes us unique in the robo advisors space. we are the only one who is always looking out for our customers with interest. emily: do you have any plans to expand? some of your competitors are for example partnering with

banks to offer checking accounts and credit cards. is that something that you would do? >> what i am excited about is how do we help customers make the most of their money. we have always tried to make more of your money, so i don't want to give you just a checking account. i want to give you something better. i want to make your checking account smarter and help you make more money off of everything that you own. you will not see us launch just a checking account or just a debit card like all the other players are doing. you will see us launch things that make you more money. emily: how many assets to you have under management today? >> 350,000. emily: how fast you expect your assets to grow? >> we grew 120% year-over-year, q1 this year to q1 last year. i expect that kind of growth to continue. emily: how are you advising on the tech, given a, lots of market volatility and b, lots of uncertainty with what is happening with facebook. >> i think it is interesting in the broader sense of wanting to regulate these big tech companies. i share, as a consumer of these companies, i want that regulation as well. and when we get asked that question i like to remind people

that we have always been highly regulated. part of the reason i got into this business is because regulation had stifled innovation for a long time, and i saw there was a need to break through. we are regulated by the fcc. as an investment advisor and a broker-dealer. emily: does that same regulation need to apply to tech? >> i think regulation needs to apply to every industry. i think over time, most of the tech industry is doing brand-new things, and you need new thoughts and new regulations to protect consumers. emily: and what has happened with facebook impacted how you think about the user data, the very sensitive user data you have? >> because we have always been highly regulated, we have always had to think carefully through data. we don't store anything. your data is so important to giving you a full financial plan. if you think about the traditional advisor relationship, you would bring a shoebox full of receipts and plate -- and papers and hand it over to your advisor to help make a plan. we have automated the process and made it digital and seamless.

we have to take great care with that financial data to make sure that it is always used in her best interest, we never sell your data. we never rent it to anyone else. no one has access to it. and we don't use any proprietary passwords. so if you have your betterment data shared elsewhere, you have your specific passwords. no one else can use your data. emily: it was john stein, the ceo of betterment. coming up, overseas european regulators, we are keeping a close eye on the mark zuckerberg's testimony on capitol hill. we will take a look at what is facing the social media giant in europe. this is bloomberg. ♪

emily: finally, one more conversation on facebook. there have been heated reactions to ceo mark zuckerberg's appearance in washington,

including those in the e.u., and europeans do not seem convinced. german justice minister was critical of the ceo, she took to twitter, citing zuckerberg's pledge that he would accept responsibility for his company's failure saying that apparently this has not been that important until now. bloomberg gadfly's alex webb in new york, and bloomberg's caroline hyde in london joined us to weigh in. >> in europe, there is more concern for privacy particularly in germany for historical reasons. that has driven us a new set of regulations on the european level, the general data protection regulation. but in europe more broadly looking at facebook there has , always been a certain question mark about why these companies made so much data. and the question is are they shutting the barn door well after the horse has bolted? is it too little too late? doing something is better than nothing at all, but there is that certain sort of a superciliousness in that respect. emily: interestingly, mark

zuckerberg has said that he thinks that europe's data privacy rules and gdp are specifically a standard that should be applied around the world and facebook will apply it around the world whether or not u.s. decide to do it. also very interesting that mark zuckerberg was one of the cambridge analytica 87 million, so his data was potentially misused by cambridge analytica. what should we make of this leadership shuffle over there? give us some more context. caroline: i think we have got to remember that cambridge analytica still feels that it has done nothing wrong. we keep on hearing from the company throughout the testimony of mark zuckerberg. they have been claiming once again that we didn't break any laws. they have taken to twitter saying this. overall they are saying they did not use this 87 million user data treasure trove in the 2016 presidential election. they did not use it in the e.u. referendum. this is why i think we are seeing still so much reshuffling at the top of cambridge analytica. hadnow that the person who

been at the helm has been caught on camera by the channel four news had secret video footage they took of him bragging about some of the more questionable tactics he uses in campaigns at cambridge analytica. he has now fully resigned. as we now know the chief data officer who was acting as ceo has gone back to his usual role. i think it just means there is yet more confusion at the helm of cambridge analytica. emily: so speaking of confusion, zuckerberg said something very interesting today that they are looking more deeply at cambridge university and whether there is something bad going on more broadly. what did he mean by that? caroline: shock, horror, at the very heart throwing them under the bus, it would seem. the very vanguard of the academic institutions at the heart of the u.k. he is saying questioning whether they are going to investigate researchers at cambridge university. remember, aleksandr kogan was at

cambridge university when he was inventing these apps, getting the particular data from these users. notably, there was really firm rhetoric coming from cambridge university itself in response to this. i say that the reason they said they were really surprised that mark zuckerberg hasn't overall known what was going on at the university of cambridge. he himself is saying that you need to understand whether you say something bad was going on at cambridge university and whether they require stronger action from facebook. in response, cambridge university says look, we have , made them aware. not only have we written them a of march,k on the 21 asking them, desiring them to provide evidence against aleksandr kogan. he was working there at the time. they are saying, we did publish findings of our data and research since 2013. you should know about this. emily: last quick question, alex. we know that a facebook executive will be testifying in the u.k. in a few weeks.

we have 30 seconds left. how will it be different from what we have seen here in the u.s.? >> i think there will be -- the problem was there were a lot of lawmakers asking questions and they were constrained by time. they had four minutes today, five minutes yesterday each. that is very little. it meant it was very hard to pose follow-up questions. in the u.k. that is not going to be the case. there are fewer people on each select committees, and some more time. that gives them a far greater opportunity to really dig into the nitty-gritty and hopefully get more substantial answers, which mark zuckerberg was not able to deliver today. emily: that was bloomberg's alex webb and caroline hyde. and that does it for this edition of the "best of bloomberg technology." we will bring you all the latest of tech during the week. tune in every day, 5:00 p.m. in new york, 2:00 p.m. in san francisco. and remember all episodes are live streaming on twitter. check us out at technology weekdays. that is all for now. this is bloomberg. ♪

♪ haidi: russia faces new u.s. sanctions with links to chemical weapons in syria area trump said the attacks were mission accomplished. betty: u.n. ambassador nikki haley said washington is sending a strong message, and everyone will feel it this time. trade, the tpp and north korea's nuclear program are all on the list with shinzo abe visiting mar-a-lago this week. the boston fed president worried about rates. eric rosencrantz here, low unemployment, low