reporter: you are watching bloomberg technology. president will reportedly stop the plan to impose additional sanctions on russia for its role in the syria attack. it walks back at announcement this weekend by nikki haley, which was heavily criticized by the kremlin. the washington post reports sanctions were under consideration, but the president did not give final authorization. next month, lawmakers will review a bill on counter sanctions against the u.s.. the proposed bill had already been an to president clinton, as well as a couple of the russian officials.

michael:, president trump's personal attorney, never represented him in a personal matter. he had secretly done work for the fox news anger. congress updated the authorization for the u.s. military action in the middle east after president trump ordered those airstrikes against syria without congressional approval. a draft to define military goals in the region reportedly could be introduced today. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. bloomberg technology is next.

taylor: i am caroline hyde in london for dump this is bloomberg technology full coming up, netflix sets the bar, leading the charge for the next quarter of big tech earnings. zuckerberg's record q&a session. he has another date with a top eu watchdog. and the u.s. supreme court prepares to revisit in 1992 decision that could rewrite the rules for the tech industry. the ceo joins us ahead. to our lead. netflix shares surge in late trading after reporting the strongest start since the company went public teen years ago. they added 7.4 million subscribers in the first ofrter, beating the estimate 6.4 million.

bestompany is the performing stock on the entire s&p 500 this year, proving one quarter at a time that investor confidence in the online television service has been justified. joining us now to dissect the lane fox.enry the ceo of a tech oriented venture capitalist firm. gentlemen, i will turn my attention to, paul, you first. these numbers, subscribers at a full prices going higher. what is the secret? content,hink it is making shows everybody wants to watch. as long as that is the case, people will want to subscribe and stay with netflix. it has been an amazing story for them. caroline: an amazing story, but they have been able to up the

prices consistently. are you expecting the amount of numbers, the description numbers they are seeing, the revenue they are bringing on to be able to be repeated quarter after quarter? the kindo not know if of growth they have posted in the last three or four quarters sustainable on a percentage basis. at some point they reach saturation and get to a point where they really can post those kinds of revenue increases every quarter. but i do think that as long as they keep making these great shows, that people will continue to tune in. they still have a lot of international expansion ahead of them. they are on a good track. they will not sustain these kinds of numbers forever. but they also -- i think anyone waiting for the other shoe to drop with netflix will have to wait for a while. caroline: this is phenomenal

user growth we are seeing. content is king. can anyone play catch-up? henry: that is a great question and it is interesting to look at the landscape of people who could compete with netflix. amazon is one company that has started to invest heavily in original content. they have a lot of data on users and have a big distribution channel to deploy. i think it is an open question as to whether anybody will catch netflix. i think it is interesting to think around how disney might find a way it to compete. they can play forward a of years and believe disney does managed to acquire 21st century knoxville i think bringing the very height wally production focus that it has in the movie sphere, and the ability to wave in merchandise in a way netflix has not been able to do could get become a competitor. caroline: fascinating points

henry brings up, all. where are you seeing the landscape? is this a winner takes all expectation here. paul: there has been a rising tide with more and more subscription services and there is no sign of that slowing down yet. like everything else, that is not sustainable either. i agree with henry that competition is coming from all quarters. theynd disney are competitors. andhave amazon, hulu, potential competitors like apple and faith of that have not -- apple and facebook, which have not tipped their hands fully yet, but once they start, they have the kinds of budget netflix has been throwing around. and they have the expertise and relationships and could give netflix serious competition. caroline: i mean, talking of how the share price has performed

and the competition there -- i am diving into my bloomberg gtv, if you want to look yourself. we are up 60% so far year to date, they are in the yellow. we see a vast outperformance versus amazon in the blue. henry, what about the world you are looking at, the startup world? are other people trying to build on netflix's's instruction model? henry: absolutely. we look at the industry at l arge. we do see increasing numbers of subscription models. of course, all different media formats from traditional publishing to reinventing audio and podcasts all the way to film and television subscriptions as well. i think there is a huge change in subscription models from

investor perspective. they have a very protectable revenue source. at the same time, there is a very large barrier to entry as it becomes clear that high quality production content is required for suspicion packages. but we see enormous amounts of activity. over the last five years, people have tried paid content and failed. to changes beginning and users are beginning to understand there is a proper from being aed customer. they are having a very strong subscription increase now in the revenue stream. i think there opportunity is not just in the new companies, but companiesional media to reinvent themselves along the netflix model. caroline: that is interesting -- paul, i am looking at anyone you said, betting against netflix will continue to fail in this

respect. i am looking at short interest at the moment and that has continued to pale off if you go into bloomberg -- and i'm going to gtb again. we see an uptrend in share ince but downward trend activity, currently shorted. do you remain out of teh game ifyou remain a bear on netflix. i think netflix has and is still playing the long game. one thing interesting about content libraries, they are cumulative and build up. and it is in content always there to return to. a show popular today could go screw ups and downs but eventually people go back to it. i think netflix has been doing that very well. , building interest in retaining

the customer base and as long as they keep doing that, they might futures and downs in quarters, but i do not a this very changing for the worst tanks the market anything or something happens to their business or the content. but as long as they keep doing what they are doing, they will keep succeeding and they will have that back library to fall back on. caroline: biggest first-quarter revenuelic company, the of 43%, subscribers and revenue up. they even have an upgrade on the debt rating. a fascinating conversation. analyst from emarketer, thank you for joining us. henry lane fox will be sticking with me. now, the federal communications commission has announced a $40 million settlement.

settlement is over accusations that the carrier made it seem that all outgoing calls wherere ringing at the destination when they were not. t-mobile u.s. admitted they did not correct the problem. according to the fcc, t-mobile u.s. injected the false ringing sounds on hundreds of millions of calls. why on earth do this? the called party believes that the call is actually ringing when it is not and as a result, the caller could hang up, thinking nobody is available to receive the call, thus saving t-mobile fees it would have had to pay the local carrier. now, coming up, the u.s. congress called and mark zuckerberg answered. now, he's getting ready to meet with a top european regulator. that's next. if you like bloomberg news, check us out on the bloomberg radio. you can listen on the bloomberg bloomberg.com and in

xm.u.s., on sirius ♪

caroline: facebook is providing more information on what data it collects from users when they are locked out of this little media what rightful the website and applications that use the content could see the information even if you are locked out or do not have a faith that the count. now with an online segment, the social media giant said this happened because other apps and websites do not know who is using facebook. facebook added that users can opt out of these kinds of apps entirely. mark zuckerberg withstood over 10 hours of questioning from lawmakers and i was getting

ready to meet the european union top regulators as well. he will meet with the european commission vice president. this is during a two day trip to san francisco on tuesday. the eu is planning to unveil new legislation next week shedding on how tech giants are dealing with customer complaints. for more, let's go to new york. your amazing reporting continues and your focus on the company. is not coming to europe, but europe is flying out to him it would seem. what are we expecting in the meetings with some of the chief digital regulators. inorter: as we saw last week testimony, there are a lot of questions about whether faced likes the rules. whether they will rule them out, of course they have to now in europe. he will also be meeting with google. it will be a very educational trip, i am sure. he has met the break in the past and said it was a very cordial

meeting. they shared some information. he met with sheryl sandberg in the past. now things are getting a little bit more serious as the eu mark zuckerberg to come testify, just like everybody else wants zuckerberg to come testify. he is quite in demand these da ys. just.ne: isn't he i want to get opposing views here because the big u.s. giants, including that of facebook, how do they view eu regulation. it is ahead of the curve, as sheryl sandberg has admitted. do they feel targeted in any way? henry: -- sarah: i think zuckerberg made the point that they will give the same protections for users around the world. i think he would rather have the control himself rather than it be regulated for him.

i think facebook would like the self-regulation, and if they get it into law, that could potentially help raise look by preventing younger companies from being able to get to facebook's sides. and regulation is something that a company with a lot of resources have an easier time running into effect for the it will be interesting to see how this rolls out around the u.s.. caroline: let's bring in henry lane fox. it is interesting that we will unveil may fed, gdp are, the general protection rule. which will be able to ensure the data debacle would have penalties if it occurred today. how are you seeing the reaction to facebook, the fact it was a u.k. company involved in the heart of this? henry: that is a great point. i think something that is very

encouraging though, is the ceo leading the way when it comes to a regulatory approach and that is being taken seriously by the tech giants. i think it is also important to remember that europe has a wonderful ability to suggest what regulation might be best to come into effect, but fundamentally, the monopoly is growing up in two markets, am erica and china. europe is in many ways a slight backwater compared to the size of those areas. i think there is a very open question as to whether we will really reach a global coalition regulation. and in the and in the end i believe that is required. caroline: sarah, take a back to some of the news you saw breaking today with faith look. because we are hearing them outline how they will not be tracking perhaps -- try to explain the tracking of when you are not a user of faith took. sarah: it is very confusing.

please is saying that last week -- and i should they in testimony zuckerberg said the reason that his book needs to track nonusers was for security purposes. but they would be getting back to congress with more reasons. today they published a blog post saying that it is not just a security purposes. in fact, it is mostly for business reasons because the various apps and websites that use facebook's log in or facebook's services, those sites and apps send information back to facebook and then facebook does not discriminate whether or not that information comes from users. facebook just gets all of it and then with the information on it nonusers, facebook can do whatever it wants, including targeting those users with a ds to join facebook.

not just for security purposes. it is interesting to see them admit that today. caroline: facebook, do whatever it wants perhaps, that will be no more, when it comes to european regulation. sarah frier, joining us and of course, henry lane fox, our guest for the hour, sticking with us. doubling down in london the details on the multimillion dollar office complex, next. this is bloomberg. ♪

ipo of $4 billion

. a bit closer to home, wework doubling down in britain. it specializes in shared workspaces, teaming up with two $826 million. pay they are in negotiations to purchase the complex. the u.s. announced the deal will close without disclosing the purchase price. henry lane fox, still with us. this working space, will that benefit them? henry: unquestionably. i am a huge fan of wework. i think it is a fantastic thing for london and this deal says that london is here to stay. we are very lucky to participate

in the startup and there is no sign of the growth trajectory they are based around, the startups that are launching. to see thatsuring people are still prepared to make sizable investments here, betting on the fact that london is a wonderful haeartland for economic ecosystems. caroline: what about brexit? henry: that is a great question and there are three things we have that other cities in e urope do not have. we have a wonderful creative industry here come outside of technology. we have incredible university talent coming out from universities across the the u.k., and we have access to smart money. not just capital, but people understand how best to help mrs. grow. caroline: it is of course, compared to silicon valley. when you are looking at companies to invest in, too many

still hope to go to silicon valley, or will they take their company to full fruition in europe? many want to see that happen within the next 10 years. i think what is interesting to me as well, there are the number of companies from uruguay, japan, korea, japan and america who are coming here to base themselves around europe properly as a market and we see a huge influx of applications from startups across the globe. that is enormously reassuring for us. you talk about how we have creator skills, advertisers -- are there particular areas where london is the beacon? henry: i think so. i think we have got enough proof points to say we have a strong

hartline for machine learning talent here within the u.k.. obviously, financial services -- we have been part of financial services for a long period of time. there are large amounts of intelligent capital but to work inside the city. i think growth of fintech has been astronomical. personally, with cyber there is a big mission from the government to develop the more encompassing cybersecurity framework to help startups grow here in the u.k., using the government to buy a nd invest in services. ofotics, we are making a lot investments. wonderful entrepreneurs are coming out of universities. there is a wonderful landscape. there are some areas where we have a competitive advantage. caroline: i hear it in your vociice. henry lane fox will be sticking with us. coming up, we were talking about artificial intelligence in the u.s. what british lawmakers are doing

to make sure they are ready for the coming a.i. ways. bloomberg technology is live streaming on twitter. check us out at 5:00 p.m. new york and 2:00 p.m. in san francisco. ♪

yvonne: it is 11:29 in singapore. underpinning global growth and giving the authorities more 6.8%, defeat rose matching the previous period and in line with the bloomberg survey. investors were watching sales and came in line with expectations. treasuries rose in february by the most in six months. highlighting the attraction of american asked -- american aspects. beijing's ownership increased by

$8.5 billion. beijing remains america's largest creditor, followed by japan. president trump intends to nominate richard clarida as the vice chairman. more than one decade at pimco. he has inside from how washington works from his time working the treasury under george w. bush. he is a longtime columbia university professor and will succeed richard fisher, who stepped down in october. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. i'm yvonne man. this is bloomberg. sophie: i have a check on the markets and asian stocks are mixed. 107 andis holding at he was futures are pointing higher and in japan, the nikkei 225 is trading flat with electronic and banks weighing.

afterrean won, rallying sustaining chief technical support. let's check out the aussi, slipping, along with the yuan. china, not doing much for risk-omn moves. tech and banking stocks, they are diving the most on the heng seng. chinese lenders are extending losses. the pboc, will raise the deposit rates, but leave lending rates as is. is slidingeuticals ersk cancer drugs rose. the kospi, downgraded. checking on the leaderboard. i want to highlight the casino operators, which are rising after ccip lifted the forecasts

on the industry. china, the stop was raised to overweight by jpmorgan. raisingo have companies ground over reports that they are seeking higher -- that is a look at the markets here on bloomberg markets: asia. ♪ caroline: this is bloomberg technology and i am caroline hyde in london. back to the top story of the day, london, posting the strongest start to the year since it went public. it is growing at the fastest pace in history because of the combination of the grabber growth and share prices -- because of the combination of subscriber growth and share prices, to describe her growth growing 25%. joining us, lucas sure, who covers the company for us. it seems to be the perfect mix, they are increasing their

subscribers. it does not seem to be in any way shaken. lucas: it is getting a little ho-hum with the netflix earnings. i remember, there were years when during each quarter you did not know if the stock would be up or down, it would seesaw so much. haveast few quarters they blown through estimates, despite raising prices over the last year for about 80% of their customers, suggesting it has no effect on the business and they will have another price increase within the next couple of years. what i would love to find out is if they would break out some other subscriber growth in individual territories, instead of us having to rely on analyst reports to know they are doing well in the u.k. or brazil. caroline: many have focused on the debt load. on looking at gtb

bloomberg and you can see how much cash they have managed to burn through. , -- this doesore not seem to be an issue, given that moody's just upgraded their debt rating. people seem to like the way they are spending because it is on content. lucs: it is this cycle they have worked out when they can spend and borrow as long as the subscriber growth keeps going because they have convinced people that the spending is what is fueling the subscriber growth, all the new content and deals with ryan murphy and shonda rimes, a new movie every week, that's justified because of the long-term effect. the real question for bondholders, for investors, for everybody will be, how long can the numbers keep increasing at this rate? at the moment, it has continue for a couple years. if it keeps going for the next three or four, it does not matter because they will pay it off. caroline: lucas shore, fantastic

reporting. thank you very much, indeed. now, artificial intelligence. it is already here and becoming a bigger part of life every day, but that has not stopped people from working. in a recent report by mckinley, it estimates that 800 million jobs could be lost by 2030. and now, an influential group of british lawmakers has ordered a new report with an additional warning for regulators, do not let major tech companies .i.inate the growing a industry. here to discuss, henry lane fox. i mean, this is how you find entrepreneurs for the companies you are building. it's one of the methods. mp's wearingk at

about a monopoly of data by the likes of people h -- likes emeths like google and facebook. henry: it is increasingly with regards to technology they do not understand. there is almost always a human within the loop for almost all the a.i. companies we see at this stage. the question of whether we are allowing companies to build big data monopolies is a valid question. the question is, how do you combat that? you only allow so much of the or restrict your

pricing. many people have put forward different theses. from a personal perspective, i have been sympathetic of the idea that we should enforce upon these tech giants parts of the aggregate data sets to allow younger companies to innovate on the backs of it. yes, they could receive some form of license fee, but maybe there does need to be some form of regulation that encourages them or a change to the structure, which encourages them to be more open with their data. caroline: -- henry: a.i. is not the pure lifeblood. historically we needed more data to fuel the a.i. now we have built models that can self train on low levels of data. there is an argument that the data monopoly is not where the magic occurs and you can see that partly within the number of small scale acquisitions they have made, not just here in europe, but in the u.s.

there has been a breakthrough on the algorithmic level. caroline: are you looking for companies that will be valuable to these tech -- henry: we do try to invest where we can within the industry, finding propositions. we are fortunate to have an investment that covers six different industries and we treat a.i. as one of those industries. within financial services we are working very heavily with an insure3rr. we have an enormous presence here in asia and enormous amounts of work developing new risk models around insurance that has been very successful for a long period fo -- period of time. people would argue that it has existed for a long time. we see it from the insurance and fintech perspective, applications within media, spotting beauty trends for one of our firms, loreal.

we have accurately predicted flight delays. these things make consumers' lives better. who wants to go to the airport hours. there for so, i think many of the applications we look at our very positive for the consumer and positive for society at large. we have a treasure trove of data existing within the nhs. and we have a stretched health service. we are excited to have invested in a new firm using a new form of a.i. to generate alternative processes for different types of drug discovery and there is an enormous benefit opening up datasets. enormous economic and social value. caroline: there it is.

henry: but i do not think this will go away, this question. we have spoken about it for a long period of time. i welcome of the government put out today, at least the set of principles upon which we organize ourselves. but i challenge them, the real underlying question is how? they have no real answer for that yet. caroline: henry lane fox, our guest host for the hour. whether facebook ads meant to start discourse. that's next. this is bloomberg. ♪

caroline: new intrigue into the political as brought onto facebook before the 2016 political action. more than half of those apps have little or no public paper trail and more than six were linked to russia. this is according to a new study , where researchers examined 5 million and that ran from september until november of 2016. joining me now from washington dc is a professor from the university of wisconsin madison. wonderful to have you with us, fascinating the research you have done and talk to us about who actually was running these sorts of ads, what made you realize they were in some ways suspicious? >> good question. so, we examined 5 million paid ads on facebook. they were exposed to nearly 10,000 volunteers. volunteers users, who represent the voting age of the population in the united states.

we track the sources and sponsors behind this at. theealized that most of ones who did this were anonymous. unidentifiable, able to be were not checked upon with no public footprint, or unregistered groups, or nonprofits who did not report to the federal election commission. caroline: what sort of ads where they running? young: we focused on campaigns that studied issues like abortion, lgbt, racial conflicts, terrorism and some candidate scandals. critical issues. division wasthe

amplified within the public. or, the refugees are attacking us. that amplified the fear and threat, things like that. ads contain candidate attacks, like things like that. on't you thinkd facebook was able to find or flag ads at the time as suspicious and knowing what we do now, do you think the activity would be more easily able to be tracked and shut down in the future? >> that is a good question -- there are two issues to highlig ht here. wayis that this is the digital campaigns work on social media. by only a small

segment of the population. is not content necessarily publicly accessible. that is the way it works. and that is the big difference those types of advertising. it is not just facebook's fault. that is the way it works. the other thing i want to amplify is the regulatory loopholes. researchers offered some sort of explanation as for why we found this anonymous e news links on social media. the issue is that it is not about -- not so much about people's psychology being -- selectively exposed

to certain media content. it is because there are loopholes where unknown actors could take advantage of the loopholes. so, in the future, if we have inadequate regulatory policies gap could be, this tightened. caroline: four regulation to come from d.c. im,fessor young mie k i wonderful to have you joining us. cp next, we speak to the fcc c o ceo. if a good programming note, you are watching us in san francisco, you can also hear us on bloomberg radio, bloomberg technology the only daily news program august on innovation -- news program schools simply

focusing on innovation and business progress. ♪

caroline: reports are out that amazon shelved its plans to sell and distribute pharmaceutical products after considering this last year. shares of drug companies and providers jumped off of trading this year. eoanwhile, oracle's co-cei says the plan of the pentagon makes no sense. the deal was criticized as a private deal with president trump. a final request for the proposal, which outlines a 10 year contract will be released in may and rewarded by the end of september. debates of amazon, of online sales taxes are at the

center of a multibillion-dollar supreme court case. toy are asking the court overturn a 26-year-old ruling that exempts many internet merchants from collecting sales taxes. the 1992 decision says retailers can be forced to collect the tax only if they have a physical presence inside the state, such as a store or warehouse. they do not always collect taxes, including amazon, ebay, and thousands of small merchants. joining us now from new york is etsy ceo, john silverman. how much of a difference with this make to your business if we saw on overturning of this rule? john: the are talking about the digital mainstream being subject to thousands of difference of tax jurisdictions, where our areers'microbusiness asked to comply with tax law. caroline: complexity abounds. whether or not there is a risk

about back taxes being collected. is that a risk, or not on the agenda? john: let's take for example, one of our sellers in the state of washington sells marshmallow pops and pecan bars. it turns out marshmallow pops are qualified as a candy, which because it does not contain flour and does not need to be refrigerated, whereas pecan bars are classified as basked goods. at toeeds to know th comply within the jurisdiction within the state of washington, unless it is back to school where there could be a tax holiday. in connecticut, she needs to know whether the candles she felt are for athletic purposes or not, unless they are being purchased by somebody from the pta, in which they could have a tax holiday. the challenge here is there is an unmanageable number of

jurisdictions for which no small seller could truly comply. caroline: back taxes perhaps not on the agenda, but the complexity is front and foremost. if the supreme court is not overturn this law, could we see state-by-state cracking down on this and how do you manage your business for that future? john: it is not about back taxes and it is about state by state. 25 years ago the supreme court ruled that individual states could not force people that do not have presence in their state, do not have physical jurisdiction, to comply with each and every tax jurisdiction -- that is what is at risk and if that ruling gets overturned, a micro selling who sells from her living room will need to comply with over 10,000 different tax jurisdictions. the way it works right now, if she does not have physical presence in a particular state, she is not object to the

tax jurisdictions within that state. caroline: have you put in place provisions if this is overturned? have you factored in the extra cost? john: it is about more than cost, but, how much time will she spent trying to comply? we will have the backs of our sellers, but should the supreme court overturned the quill ruling, it would likely go to congress and then congress would need to decide how to make this manageable for sellers, the worst scenario, we think is every state gets to impose its own tax rules on every single person who sells into that state. that will really create terrible friction for sellers, and hold back jobs, and the success of pillars.o -- micro-entrepreneurs. caroline: you say you are

improving the service for your sellers at the moment, helping them target potential shopping. many ink you have abandoned them when going into bricks and mortar state-by-state. what are you doing for your own customers? josh: we have been working hard to make the at the platform even better -- hard to make the etsy platform even better. sales have been accelerating and during the fourth quarter we did $14 billion in sales. the work we have been doing has paid off and our sellers have been successful selling more product as a result. caroline: josh silverman, we will hopefully keep in touch as this does make its way through the supreme court. ceo of etsy, wonderful to have you with us. now, a reminder, we are live streaming on twitter. newk us out, 5 p.m. in york and 2:00 p.m. in san

francisco. that is all for now. this is bloomberg. ♪

♪ manus: the world's second-largest economy continues to grow amid robust consumer spending. we are live in beijing for the data. yousef: president trump intense to -- intense to nominate someone new to the fed. jay powell's inner circle starts to take shape. -- y: the manus: the tadawul closing high. the treasurer is also hitting a