♪ emily: i am emily chang in san francisco. this is bloomberg technology. gdp are goes into effect this friday. changing forever. how tech companies handle personal data. how it will affect you and what the likelihood it is and -- implemented in the united states. steve mnuchin is urging the justice department to review big

-- review the power big tech has on the economy. the tech conference kicks off in paris. can emmanuel macron transform france into a global innovation? to our top story. it is the first truly massive set of laws of the digital age. it is going into effect in europe. it is called gdpr. it is meant to safeguard the information of european citizens. any company found violating the rules could face fines of millions of dollars. that means a company like facebook could be on the hook for $1.6 billion if it is found in violation. we will go to london to see if these laws will test that saying that silicon valley innovates while the eu regulates. we are joined by caroline hyde and alex. fortune 500 companies are

spending almost a billion dollars to become compliant. to become$8 billion compliant. what are they doing? alex: it is about creating new terms and conditions. all residents have to agree -- of the european union have to agree to make sure that they are complying. they will have a large -- have alerts constantly from facebook and twitter and snapchat asking to agree to the new terms and conditions. the thing about them is that it is a huge list of impenetrable legalese. they are massaging the way they use that data. it is a huge legal challenge for these companies. emily: if i'm a facebook user, how does this change how facebook handles my data? >> it doesn't change the way it handles the data. it makes them more transparent. it has to explicitly say what they're using it for.

i have to say that i no longer want my data on facebook. you have the right to be forgotten. it is really about making it clear, digestible about what it is your data is now used for. i think it is fascinating. this is not just affecting facebook and google, wells fargo says it may hurt their revenue. what it will really hurt is the general mom and pop shops. maybe they got an email list of you. maybe the hairdresser has your a map. any local business that has data on new has to get explicit consent to use it going forward. that is why we are being inundated with hundreds of emails as in us to keep in touch -- asking us to keep in touch. >> mark zuckerberg said he is committed to rolling out gdpr globally. >> we are committed to rolling

out the controls and affirmative consent and the special controls around sensitive types of technology like face recognition. that is required in gdpr. we are doing that around the world. i think it is worth discussing if we should have something similar in the u.s.. we will go forward and implement that regardless of what the regulatory outcome is. emily: what do we know is the likelihood of whether u.s. lawmakers will enforce the same thing that the europeans have adopted? alex: if you looks in -- listen to what mark zuckerberg said about rolling out gdpr globally, they are not. they are doing pieces of it. there are some elements that contravene laws in geography. it is not a case of a one-stop shop.

in the u.s., there will be some sort of regulation. there is a growing consensus that there needs to be regulation. there will be long conversations with silicon valley itself as to the nature of this regulation. i would not be surprised if it was nowhere near as broad as gdpi here in the eu. emily: mark zuckerberg is set to testify in europe this week. how do we expect this to unfold differently to what we saw in the united states given the increased focus there on privacy? >> i think tougher questions. we know that the cto suffered tougher questions because of the way they managed to give the questioning. the u.s. senators had four minutes. they have longer time to drill down to the specifics in the united kingdom.

the eu is fighting to have this in public rather than behind closed doors. we will have to see how much they dig into it. when you look at what gdpr stands for, it stands for the consumer to be given the power to opt in as opposed to opt out. this is a 56,000 word law that has been brought into consideration. it is the length of shakespeare's "hamlet" and "othello" combined. they want them to be thought that they are tough on big tech. particularly when it comes to these deemed monopolies or oligopolies. these laws will hit the small businesses. it costs them more than the juggernauts like facebook and google. mark zuckerberg will be given a tough task when he comes to face the eu in brussels.

emily: we will be covering mark zuckerberg's remarks in europe. thank you for joining us. a story we are watching is google could face $4.3 billion in damages in a british lawsuit involving iphone users. this is according to a company court filing. iphone users sued google saying that it unlawfully collected information by bypassing the default privacy settings. google denies this. sticking with google, it was hit hard. how the u.s. government is not responding to the so-called monopoly, next. tesla is also getting hit. why consumer reports magazine won't give the tesla model three its recommendation. this is bloomberg. ♪

♪ emily: google is getting a lot of heat after a 60 minutes segment. they called them a destructive monopoly in online search and search advertising. a highlighted how critics like yelp -- rivals like yelp have had enough. >> ultimately, this manifests itself in expecting the top links, the things it shows at the top of the page are the best around the web.

i can tell you that is not the case. that is not the case anymore. emily: since the program aired, steve mnuchin urged the justice department to review the power that large tech firms like google have over the u.s. economy. that is taking a page out of the eu playbook. this woman is intent on stopping google's illegal behavior inserts. she was featured in sunday night's episode of safety minute. she has pursued antitrust cases against google and microsoft. gary, i want to start with you. let's take some historical comparisons here like standard oil. what are the arguments for google and alphabet that they have gotten too big? gary: the basic argument is that \they have no real rivals in

general search. they are using their power in general search to manipulate search results in ways that disadvantages competitors and limits consumer choices. emily: brian, fair? brian: i think they definitely have a very high market share. i think as big companies get bigger and bigger it is tougher to come by growth. sometimes big companies engage in tactics that they should not. i watch the program, i thought it was great. i think rape -- great points were made. i think provides -- it provides ample information for people to look into it a little more. emily: jeremy says that he could not have started yelp if google operated the way it operates today.

there was talk about the threat to his business. he also said this about how links are displayed and how that affects you as a small business. take a listen. >> it is not just the first page, it is the first few links on the page. that is where the vast majority of user attention goes and where traffic goes. >> if you're not on the top of the first page or the second page, that will affect your business. >> if you are on the second page, forget it, you're not a pro-business. -- you're not a real business. emily: google said it was not a monopoly. it cited competitors like amazon and facebook. it did not make challenge -- changes to its ultimate them to disadvantaged -- changes to its algorithm to disadvantage competitors. at response ability is to provide the best experience for our users. gary, what about the argument

that some of these sites may not like how they are displayed in google? could that be correlated to the strengths of their business and what they have to offer? gary: that argument is totally bogus. you don't have to take my word for it. if you look at the federal trade commission report that 60 minutes cited. that has been up on the wall street journal website for two years now. you will see in the footnotes that the ftc got google's internal emails. it shows that google made a list of competitors to target with the goal of bringing those competitors down 20% in their search traffic hits. they changed their outer them repeatedly to get those results. they reported to their superiors that they had achieved the results.

i don't understand how these google people can go on saying what they are saying. it is directly belied by the ftc report. >> you say that the government is not enforcing the laws we have. do think we need better lawmakers to better understand the technology power? >> we could use more lawmakers who might get interested in the sector and affects -- understands how it affects their constituents. we don't have to go off on passing the legislation. we have legislation that works fine against microsoft. it has to be enforced. the problem is that it is not being enforced. it wasn't in the obama administration. it needs to be enforced now. if that doesn't work, we can try something else. i think that will work, though. it worked against microsoft. emily: google is not called out specifically but tech companies in general, the doj has to take a closer look.

does that concern you for apple that shareholders -- alphabet shareholders? >> when you look at all the businesses that google is in, if something ever came down antitrust wise, it would be probably worth a lot more. they are number one in the smartphone operating system market. they are number one in search. youtube has 1.8 billion monthly subscriptions. they have a lot of great businesses under this umbrella. you should always look at any company abusing their power. i think that is a given. emily: interesting that if google was broken up, there is an argument to be made that it could be worth a lot more. these companies could be even more powerful separately.

how do you respond to that? if google is broken up, how should it be? >> i think there is a good chance that these individual constituent parts would be worth more. historically, we know that when standard oil was broken up, that is when john d rockefeller got most of his net worth. the fact that they are worth more individually doesn't mean they are more powerful. they can't conspire with each other as separate individual companies. in many cases they would have to compete. at the very least they would have to enter into contract negotiations. other people would be able to compete against them more readily. i agree with the other commentator. there is a possibility that they would be worth more to shareholders individually. i think that is something that we ought to think about down the line. the first step is to have a public trial so we understand what the remedy should be.

we can't jump to breaking them up. we don't know how. we need a public trial so we understand what the issues are. emily: interestingly, facebook has been the company that has been in the regulatory spotlight over the last few weeks. google spent far more on lobbying in washington than facebook or apple. we pulled the numbers on that. how do you think google compares to facebook when it comes to the idea of being a monopoly given that facebook owns whatsapp and instagram and others. is it that big an offender? gary: i think google has been an offender longer. i tried to be careful with my comments on companies. i spent nine years studying google. i haven't got to those kinds of

facebook complaints yet. i want to be more circumspect in what i say. i don't think the right approach is to compare one to the other. rather, we have value in each one against the legal standard. right now there is a complete record in europe. there is a record developed by the fcc in the united states all with respect to google's antitrust behavior. we have to move on that record. that is what has to happen. emily: gary, you pursued the case against google in the eu. the company was fined $2.7 billion. google is appealing that decision. how do you expect this to play out? gary: i would expect in europe -- this is a decision by the european commission. i expect the courts would uphold the european commission not only because their record is good and the investigation was thorough.

they always uphold the european commission -- the courts always uphold the european commission. google will lose that money. whether that decision will curb google's behavior, i am not sure that is the case. the eu will have to do a lot more if they want to bring google to heel. >> what could change this? >> i think all of these are great data points to think about longer-term, how google needs to change. i think a lot of these big tech companies need to change a little bit. as you get bigger, it is tougher to grow. maybe there are some people doing things they should not. that is something that maybe top executives should take a look at. emily: thank you, brian and gary. we will continue to watch this. coming up, one of the most and

sources on information for u.s. car shoppers. reports on the tesla model three. why consumer reports bypasses them. that is next. ♪

♪ emily: consumer reports has passed on tesla's model three. they will not recommend the car for various reasons including long stopping distance. the magazine also said that the car has hard to use control but praise tesla's battery range. what exactly is consumer reports

concerned about? >> they have a number of concerns. the main one is this braking test. it took a lot longer to stop them a full-size pickup truck. that is a big concern. you need to have a break -- great braking system. a consumer reports recommendation is coveted. they had a lot of raise. but the fact that they passed on the model 3 is a big help. -- a big deal. >> do they have anything to say about autopilot and safety concerns? >> they did not talk about autopilot, they said that the braking and wind noise is the main concern. >> how common is this? for consumer reports to pass on recommending a popular car? >> it is unusual. their ratings can change. tesla has the ability to upgrade their cars in software updates. to pass on the three this early on is unusual. >> any response from tesla?

>> they said that they did their own tests and found that they were good. but they have not responded to the report in full. >> what do we know about the $35,000 version of the model? >> when elon musk unveiled the model 3, he said it would cost $35,000 before options and incentives. when it comes to production, they are producing the higher and versions of the car -- higher end versions of the car first. they had not made the $35,000 smaller range battery car yet. >> does this have to do with the production issues that the company has been grappling with? >> tesla will make more money if they sell the higher end cars first. there is this whole thesis around the car that it was mass-market. they are not selling it at the

mass-market price point yet. elon musk was talking about how the all-wheel version is available now. and if you fully option it, it is $78,000. emily: what is the latest we know about whether these production issues are under control given the executive turnover? given that the shareholder battles -- there is a lot going on. >> it seems they are working through them. elon is putting on a great face. he says they're working on all of the robots. we won't know until early july when tesla releases its second-quarter sales and production figures. emily: thank you for that update. coming up, getting ready to be gdp. how companies can get in my workplace massive fines. later we will take a country has a look at the state of the electric vehicle market. a new report says china will hold the top spot for the ev market for decades to come. this is bloomberg. ♪

emily: this is "bloomberg technology. i'm emily chang. the anticipated arrival of europe's new privacy laws, gdpr, how would they affect consumers? bloomberg's quick take has the answers. >> you may have seen these pop-up in your email. google, facebook, go daddy, square, and many more are updating policies to give consumers more control over their personal data. those updates are thanks to a new law governing data privacy called the gdpr. the catch, gdpr only applies to

people who live in the european union. but its adoption is largely expected to have americans asking, why don't we have asked? here is how data collection currently works. when you sign up for facebook, you have to click a box agreed to terms. that gives facebook the right to track online activities, even if you are not actively browsing facebook. facebook and let third parties access this in order to sell services. >> consumers have a right to ask for copies, whether it is messages sent to them or buy them. up to entire archives of all the content they've generated on the service. >> on may 25 come companies with more than 250 employees and hold data on european citizens will have to get consent from users. instead of burying it inside of the fine print. they will make it easier to revoke consent of the users had previously given. for consumers, they have a right to know what is being done with their data and instead of being charged to obtain it, can request a free copy. >> google and facebook have been

making data available for download and deletion upon request for quite some time. >> consumers have the right to be forgotten, which is citizens request to be deleted. put ability committee gives people the right to sell to other companies. you may be able to trade a gift certificate from zara and a change for shopping history from j.crew. they must notify authorities and any failure to comply with the new lot will be costly. kennedy fines -- penalties can be as high as 4% of the general revenue. >> europe expects companies to act within the spirit of the law, not the just try to follow it to the letter. this means there will be disputes and legal precedents to be set. >> while the u.s. is still reeling over facebook and of the cambridge analytic a scandal,

the eu is moving ahead with tough new rules. many will ask the u.s. should be next. emily: now to someone who is helping corporations get themselves in compliance, doug mcpherson is the general counsel and chief administrative officer for open x, for publishers. they were in compliance as early as january and has set up online resources for those companies in need of guidance. he joins us from los angeles. what is the most challenging part of the process, that the companies need to know about? doug: thank you. open x operates one of the largest advertising exchanges in the world, connecting global brands with thousands of media companies, websites and mobile applications. that question is on all of our partners' minds right now. as noted, gdpr forces companies to change the paradigm in the way that they think about data. right now, a lot of companies have taken for granted the data they can collect from users, then use for purposes that might in some cases be unrelated to

the purpose for which it was originally collected. now, gdpr put in place a called privacy by design. that has a number of elements underneath it that the u.s. companies need to take seriously. emily: right. so as companies go through this, what are the biggest pain points, which is that, now that you have done it? doug: taking user rights seriously and making sure disclosures to users meet not just a letter, but fully, letter and spirit of the law. that will be paramount to compliance. and regulators have been clear that they want to make sure that those notices that you the users get are explicit and granular. one concern the regulators have, is in the european union people are used to clicking through the banners, but there is a concern that users may not take full advantage of all the information be made available to them. so consent is a big topic. data security is another one.

that happened in the background, but that a notification rules under gdpr, 72 hour notice, that were required companies to have monitoring measures in place so they can detect a breach if it occurs. simply complying with the new access requests, that is going to require companies to put in place new procedures as well. emily: there have been reports some companies have shut down ahead of this. are there companies that are not going to be able to get it together? doug: yes, i spent last week with 40 leading media companies. and some of them have reached that conclusion. i think this is one of the unintended consequences of gdpr, that while it is well-intentioned, one of the consequences could be that e.u. users are deprived of valuable content, because some companies will make the decision that the

potential penalties are too great a risk any potential violation of gdpr. if that happens in large numbers, that will be a loss for the diversity of content that is available to the e.u. users. emily: can you give us examples of a business that this may be too much of a risk for, we need to stop operations? doug: i do not know if i can speak to any specific companies, but the majority view is, a lot of standards are being set here and this is evolving very quickly. we want to be will to provide content to the european union users, but we want to make sure we are doing it in a fully compliant way that respects user rights. my hope is a lot of these publishers and websites will make their content available, but it will only be after they've done all of their work to make sure they can do it in a safe way.

emily: what is your estimation of the likelihood that similar rules will be put in place in the united states? what impact would that have if it does happen? doug: there are efforts right now. last month, senators markey and blumenthal introduced a bill called the consent act. coincidentally come on the same day that mark zuckerberg was testifying to congress. that would require the fdc to put in place policies and procedures that mimic what gdpr has done. the other thing happening is individual states are taking action and looking at legislation that would take effect in their own states, which is just as we have seen with gdpr the, well it is targeted to e.u. residents, any company that processes anything related to those residents is subject to gdpr. a single state taking action could have brought industry implications. emily: so, net net, do you think

consumers will be better served as a result with gdpr? do the benefits outweigh the costs? doug: the costs are significant and there is no doubt that companies are taking this seriously. earnst & young put out a study that said the fortune 500 companies are spending $7.8 billion on gdpr compliance. companies are hiring scores of new data privacy professionals. so put that up with software programmers as the hardest role to fill in the tech industry these days. the benefits are unknown. remember, this is a global regulation that is paradigm shifting, nothing like this has happened. what we will really have to see is whether the users take advantage of the controls they have come or whether they are eager to get to the content and they click through the consent

boxes without taking full advantage and making all the choices they now have available to them. emily: ok, doug mcpherson. thank you so much for breaking it down. coming up, going electric. a new report forecasts tesla will encounter steep competition from other automakers. we will discuss, next. later, the french president is attempting to usher in a new era of innovation and growth for the tech industry in france. we will discuss his successes and setbacks, coming up. this is bloomberg. ♪

emily: the next few years are expected to usher in a shift to the auto industry, and electric vehicles are on track to change the future of transportation. a new report predicts by 2040, 50 5% of all new car sales will -- 55% of all new car sales will be electric. here with more we are joined by sailing in new york. set the stage, because your report focuses on how china will actually dominate this market. how so? guest: two main reasons. china is the largest auto market in the world, with over 23 million cars sold per year and the second biggest is the u.s. china is already the biggest. but secondly, the policies that are driving auto companies to produce and sell the electric cars. we expect both on the size of the market and policy framework

that is driving electrification is going to be the strongest in china. emily: how should other countries be responding and watching? salim: china is not alone in this. yes, china was about half of the total ev sales last year globally with over 500,000 cars sold, 90 million cars are sold globally, so a small market still. but the u.s. and europe have aggressive policies, albeit not as strong as in china, but in the u.s. you have things like the mandates in california, similarly in europe you have the co2 emissions standards. but the strongest is in china. emily: so who or which companies, which tech companies and car companies are best poised to take advantage of this and why? salim: we hear tesla mentioned

in the news almost on a daily, almost hourly basis, but they only constitute 10% of all electric vehicle sales globally. the leading sales manufacturers are companies people of not heard of, like byd and a lot of other chinese companies. while tesla has created the movement of electrification in the last 10 years, they should because his not to be caught in a stampede of using vw, that releases a large number of models of a coming years. what we do is count them and by 2020 we will see about 300 ev models available globally. emily: the has been frustration that the election petition of cars has not happened as fast as expected. what do you think will be more impactful in the near-term, will it be self driving cars, or will it be electrification? salim: to us, electrification is the most impact trend we are looking at an automotive sector.

obviously, autonomous cars are a point of interest to many investors and industry observers, but the feedback we get out of those who are building the technologies is this is about 10-15 years away, so the biggest changes for the time being in the car market will be around the powertrains, the energy driving the vehicles. automation for sure will have a big impact, but it is a little but more pushback into the future, less known frankly, as when it comes to bear. emily: all of these trends combined, along with the rise of ridesharing, how will this impact consumers? will consumers be buying as a result? salim: we are looking at a shift, essentially. when the detroit companies that were selling hardware to come -- were selling hardware to customers, now they are looking at mobility. should it be leasing them to a private citizen, or is it in the form of uber and lyft. now the companies are hedging their bets.

gm taking large equity stakes in lyft, and other initiatives like chariot at ford. you have seen a setbacks that uber and it tesla faced with their hardware technology not being up to par. so i think from the incumbents in the market, they are taking a cautious approach. for the short to medium term, it is very much the paradigm of passenger cars sold to private consumers. what is changing, we think, is the electrification part. emily: ok, thank you so much for that report. coming up, station s in paris, changing the game for tech across the country. what you need to know about france's startup scene, next. this is bloomberg. ♪

emily: a story we are watching, netflix has nabbed another high-profile partnership. barack and michelle obama have signed a multiyear deal with this domain giant to create a mix of programs, it could include scripted series, documentaries or even feature phones -- films. in the wake of brexit and president trump's comp ok relationship with tele -- silicon valley, tech firms are expanding to paris. they are making large investments in france and bring in tech talent to the region. as a summit kicks off this week in paris, caroline hyde explores how the french president is ushering in a new era of innovation there. caroline: the french president

is looking to become the head of state for global tech. this week he is hosting the heads of google, uber and other firms. the meetings will be followed by the visa technology summit, which could signal a shift for the country. for years, the texting in france has operated in the shadow of the rest of the world, but he is capitalizing on a void left eye president trump's complicated by president trump's complicated relationship with global tech. france has had only three startups to achieve unicorn status, compared to 22 in the u.k., 105 in the u.s. but recently, paris's tech industry is reinventing itself. there were a record 743 tech deals in 2017, growing by 45% in 2016. the total value of the deals also jumped nearly 50% from last year. meanwhile, the country is having to jumpstart innovation and

investment for its biggest bet to date. station f, the world's largest start up campus. 366,000 square foot property opened up last summer with 8 spaces, for kitchens and one coffee shop with a pop up space. however, it will cost firms about $600,000 a year membership fee. so, has it been a success? that remains to be seen. but is continuing to expand program offers and companies, opening 100 share departments. ♪ emily: caroline hyde there, it was joining us now. you will be in paris this week am aware there are a couple of there are a couple of different tech conferences,

including a big meeting with a number of different tech leaders and the french president. what do we know about the meetings, who will be there and what will they talk about? caroline: about 40 leaders gathering to meet president macron in elysee presidential palace. there will be the uber ceo who was invited, mark zuckerberg with facebook, really a plethora of key leaders. they are all going to talk about how technology can be for good. the timing is perfect for president macron, really shining a light on the responsibility of the tech companies. we understand from people who are family with the matter, that he wants to bring investment in france with some of these big technology companies, but he wants to speak to eric schmidt, he wants to talk about the responsibility of juggernaut tech companies that he thinks are like countries, that they need to face up to those responsibilities, whether it is a robotics, artificial intelligence, in privacy. he will have one-on-one meetings with key speakers. and he will be speaking with mark zuckerberg one-on-one about that very thing, about privacy. this is the first leader of a developed nation that mark zuckerberg will be meeting since the scandal involving cambridge analytica.

emily: and on the back of his testimony. what is the argument do you think that president macron will be making to these tech leaders about why they should build up their presence in france, versus elsewhere? caroline: he is known as being young, only 40 years old. dynamic, he was an investment banker. -- he is known as being young, only 40 years old. dynamic, he was an investment banker. he was an entrepreneur himself you try to found an education startup. he wants to show that france is changing, france is known as having terrible labor laws, very hard to hire and fire, you pay

money up front in terms of employee taxes. he is trying to change the narrative, saying we are a place you do not have to leave, because they have fantastic mathematics and science engineering focus to schools and universities, but they lose all of their tech talent notably to silicon valley, one of the highest presence of foreign tech talent in silicon valley is from france. it is noted that 60,000 people are from france there, so he is saying, do not go away. build your businesses here. come here and invest. they have launched a big ai focus, artificial intelligence with the samsung investing, the likes of the mind, part of google to invest. so they are investing along with of them. there is a fund, 10 billion euros, that they are managing. part of that is going to artificial intelligence, 1.5 billion euros going toward artificial intelligence, city is try to change the narrative.

saying this is a good place to live, work, build businesses and invest in. emily: give us an idea of who you will be speaking to this week and what is on your agenda. caroline: i think it will be great, because we have our own bloomberg event. sooner than you think, is what it is called, which we will be doing on wednesday when all the tech leaders come to meet with president macron. we will speak with key leaders, as you can see we will be talking about the new mobility technology they are focusing on at renault. we will be talking about deliveroo, they have been just look at france. we also have the blabla car ceo, they were born in 2006. we will be speaking to the leader of that business. and a whole host of others. we will have atomico, the key

leader, nicklas lidstrom taking the stage for firefly. we will talk to those businesses out of san francisco like stripe. we will be across the board speaking to the business leaders, then also going to viva technology, where we will speak to another host of key leaders, like the local business leader for uber, the leader of the european parliament business on the very next day, may 24. two days of focus, whether it is not own event -- it is at our own event, or at the local event. shining a light on what tech leaders are discussing with emmanuel macron. emily: ok, caroline hyde. we will be watching you. thank you so much. that does it for this edition of "bloomberg technology." tomorrow, also talking about the ongoing popularity of e-sports and how the game fortnight has taken over the globe. that is all for now. this is bloomberg. ♪

♪ yousef: this is "bloomberg daybreak: middle east." here are our top stories this morning. manus: the president says an version could come this year and worries that his comments could overdo it with rate hikes. yousef: the white house says momentum is building for talks with china. but steve bannon is dividing the capitulation. manus: secretary of state mike pompeo threatens iran with it compliesless with all nuclear demands by america. yousef: can mark zuckerberg explain why data from