♪ emily: i am emily chang in san francisco and this is "bloomberg technology." google slapped with a $5 billion fine from eu antitrust enforcers who ordered the company to chase away its certain browser apps on android devices. commissionern margaret joins us ahead. plus, he is known for not holding back. we will hear from former microsoft ceo steve ballmer on leadership in both tech and oil.

tech companies in china are thriving things to the country's 2025 initiative. is it all in jeopardy as trade tensions lie? it is a record that google wishes it had not set. the european union has find the company $5 billion over its android policy. that is the biggest fine ever in an antitrust case. the eu says illegal practices on devices pushe google services in front of users. google was also ordered to change the way it but rouser apps on android smartphones. joining us from brussels is caroline hyde who caught up with the eu commissioner margaret, right after this decision was made. you got the first tv interview posted this decision. what were the tekey takeaways? caroline: the fourth of the way she describes this. these are very serious illegal

behaviors. the slap of the fine is so eye-popping. it is a drop in the ocean compared to the amount that google can afford. they have more than $100 billion in terms of cash and investments, but it is a record-breaking number. she went into length try to vindicate this sort of a amount because of the dominance in search. the fact that it was so dominant means that they can a lot more chunk of change in terms of digital advertising revenue. that is why, because it has been going on since 2011, she can waive the $5 billion. is talking tough while there are such strained relationships between the eu and the u.s. emily: talk to us a little bit more about what the real impact will be here on google. it sounds like a lot of money, but for a company of that size, it is a drop in the bucket. caroline: you are right, but now

it is whether they change the business model. they have been given just 90 days to change the way in which they currently tied in the likes of google search and chrome browser into deals with mobile phone makers and telephone operators, that they have potentially agreed to be exclusive in the past. all of that has to be unwound within 90 days otherwise they will be fined even more, up to 5% of daily revenues were every day they don't recognize -- rectify the situation. the shopping way ruling happened last year when they thought google pushed their own search engine for shopping too much and was hampering competition, they never gave restrictive ideal of what google should go out and do to change their business model. i really pressed her on that. >> the obvious minimum is that the contractual disappears. you find a lot of things in contract.

it is their sole responsibility to make sure that this infringement comes to an effective and. that remains to be seen and what choices they make. caroline: she wants a change of contract. i also wanted to ask her, how do you make sure this is effective? fine thatast record little that -- google got in terms of shopping in google, they once again, many complained that some of the tactics used have not actually rectified the situation at all. how can she ensure that competition will improve? >> i think it is very important in the follow-up of the first google decision that we have taken no initiative. we cannot say that google is complying with the decision. that is very much an open question. we will do the same thing. we will monitor if google lives up to this decision. caroline: there is your hint. i think she is saying look, we

have been monitoring how google has responded to the previous fine and previous desire to change the way in which they promote their own shopping website over and above other competitors. at the moment, we cannot say comply.or not they i think this is a veiled threat that google, we will start finding on that respect. you have to start complying to this new respect. emily: google disagrees with this decision and says they will appeal. what do they need to do now? caroline: i think google has are reallye out and trying to educate our try to put their point of view across in the statement saying, today's decision rejects the underlying business model that supports android, which have created more choice for everyone, not less. we intend to appeal. this is really google trying to

spell out that the mobile system they provide android is free. it is an open source free operating system. that has allowed mobile phones to increase in numbers, to become far cheaper because the filmmakers have to invest in making operating systems themselves. they feel they have added to filmmakers and the consumer -- phone makers and the consumer. i think this is the key question of how google reacts. clearly, they feel they have done the economy and the industry a favor, rather than a curse. emily: google now has 90 days to end their illegal contact -- conduct. what has been the reaction in brussels? ofoline: it has been one sort of a shop of shoulders.

is it too little too late? i think some people feel it has been two years in the making since it was first shown a light on by the eu. they feel that perhaps google has more than 90% in terms of market share for search. can this change matters now? i think notably, perhaps even if the finest eye-popping, it is not always hope to rectify the competitive landscape. i caught up with one company that was affected by the previous ruling on googles shopping. this is the ceo of a company saying we need to go even further in terms of the way google has to change. >> we want to see a competitive marketplace. at the moment, google doesn't seem to be able to do that. a lot of us say, the only way to do that is to break them up.we are the only ones saying this . you have the boston globe two months ago. you have the chief economist of the competition authority saying it only the other week that this

is the only way to enforce google properly fixes markets. oline: i protect to the competition commissioner, margaret as to whether or not google should be broken up. she thinks that would push the discussion into the long weeds and would take too long to make the market competitive. i think overall, she feels these companies do benefit the consumer in terms of, they make good quality product. they just need to apply by the letter in the law in her mind. interesting to see how the u.s. reacts. question.t is a caroline hyde in brussels for us. thank you so much. we are going to talk about this much more later in the show with one of the lawyers who brought the initial complaint and its particular case. sticking with google, the company will be folding its next unit into the google home devices division. in doing so, google has removed the ceo. they required -- acquired an

extra $2.3 billion in 2014. change came after complaints were received about fawaz's leadership. coming up, eliminating startup challenges. anare going to speak with investor who has concrete tips on how companies can cut the problems off at the start. that is next. if you like bloomberg news, check us out on the radio. this is bloomberg. ♪

emily: google isn't the only company at odds with of the european union. airbnb is also facing a regulatory crackdown from brussels. the online home until platform

has until the end of august to make its pricing more clear for users. it also has to clarify whether it has private or professional hopes. it is facing off with new york city authorities as well. host is accusing city officials every town against him for speaking out in support of home rentals. our next guest is an angel investor who served as an advisor to airbnb as well as a slew of other companies. he was also vice president at twitter and helped launch google maps. he has just written a new book that aims to help startups avoid challenges like those we just described. how could airbnb have prevented some of these issues at the start? when this is a company that actually, in order to grow, sort of circumventing the law. much about theow specific case as to what is going on with airbnb now.

i think in general, as companies grow in scale, they run into regulatory issues over time because they're entering new markets with a might be less familiar or because as they start to get hashed, other -- heft, other companies start to react. in some cases, there might be a lobby once they start to get market shares. emily: how could they have avoided this? is there a way companies can be that are prepared for regulatory? you see scooter companies exploding and running into the same thing. gil: number one is bringing in a regulatory or compliance personnel early. counsele their general was the first 10 hires. cryptocurrencies were a new thing and they wanted to have somebody on board early who was thoughtful about the regulatory environment. i think thinking about that early is important. author.ou are now an in this startup book phase you , i am sure you are familiar

with all of these. what makes your hand but different? elad: i think a lot of them focus on the early stages of the startup. in my book, why am really focused on is the later stages. as her startup starts to work anywhere going from 100 people to 1000 people over a year or two, have you deal with executive hiring, m&a, a lot of new issues you face. funds you talk about mega and how firms like sequoia soak up a lot of the oxygen. how is the fact that there is so much money out there right now changing the competitive landscape for better and for worse? isd: i think the softbank unique in that it is larger than sequoia's funds. i think there are three ramifications to it. there is a lot of preemptive rounds happening, venture capitalists are funding things much earlier than they normally would and are writing much bigger checks than a normally

would. second is the rise of secondaries. $12bank famously bought out billion of uber stock. that was a great example of liquidity happening much earlier, or a way to circumvent an ipo. emily: is this good or bad for companies? order -- early employee, you are a happy camper. is there concern employees will lose their motivation and enthusiasm? elad: i think it is both good and bad. of downsides of a is a half the unicorns that existed today should not be valued at what they are at. emily: is airbnb one of those? elad: i don't believe so. there's a great saying from warren buffett and that in the short run, markets are a voting machine and long-run, they are a weighing machine. companies have

gone public so it is difficult to see how they would be valued until they are out. emily: what is your advice when companies want to push when it comes to valuation about how it could come back to bite them? elad: i think if you get over capitalized or evaluation is too there are difficulties where companies had to it many years to do so until valuation caught up with fundamentals. the path to liquidity can get worse if you over capitalized the company at two high of a valuation. emily: any specific examples? fam: i think spotify ously went public to avoid some covetous it had with early investors. i think there are different companies that have had to adapt. emily: was that good or bad for spotify employees and investors? elad: so far, it seems like it has been good. it seems like employees have not turned over much of the stock or sold very much.

you a i want to talk to little bit about twitter because you spent so much time there. it is always in the news. right now, they are fighting fake accounts, harassing accounts. they say they are cracking down on 10 million accounts are day. this is very much top of mind with the midterms coming up and meddling that is happened in the 2016 presidential election. do you think this is something twitter can ever get under control? i think it is one of those problems where it is an ongoing race. the march technology you come up with, there will be more on the other side that keeps adapting. twitter has done a good job of cleaning up some accounts it has. they added the capability to thread tweets together in a tweet storm quite recently. there's been a few other things i think have been nice and innovative. emily: what about facebook? do you think it will recover from this recent data scandal? the here and a totally people who don't use facebook anymore

or they are angry of facebook and yet executives tell us it is not putting a dent in advertising or engagement. elad: i think ultimately, they are built a franchise that will survive the storm. i think there sent a message on how use be thinking early about some broader societal issues you are going to infringe upon. i think it is been a good lesson for everybody to watch. emily: illustrated the page in your book about diversity. what is the biggest mistake companies are making right now that is holding them back from being able to really change the makeup of their workforce? elad: in the book, we actually talk with paradigm. i think fundamentally, you want to ensure that you have diversity at all levels. cofounded, we actually included about a dozen

female angels in our very first round of financing. i think starting early and being very thoughtful about how you have to permeate every aspect of what you are doing as a company, and not just about who you hire, but how you think about it holistically is important to do. emily: elad gil. thank you so much for dropping by. ceong up, former microsoft steve ballmer sits down with david rubenstein to talk about microsoft's relationship with facebook and more. this is bloomberg. ♪

emily: steve ballmer became a viral sensation after taking over microsoft. in 2014 andown oversaw the computer company after bill gates retirement and during a particularly difficult time. his reign followed the first.com crash and saw the beginning of google rise in apple's iphone.

he remains microsoft's, largest shareholder owns the l.a. clippers and has a net worth of $40 billion. he joined the david rubenstein showed to talk gates, amazon and missing out on facebook. david: in the or 2000, you become the ceo. bill decides to retire. you now can run the place. we surprised that he decided to retire? surprised.s he had asked me to be president in 1998. i said fine and that was another number two position. i was fine with that. he came to me and said we be ceo? i asked him, do you really want me to be ceo what you are me to be a figurehead. just to tell me. he says no, i really want you to be ceo. was i ceo? bill stayed working every day

until about 2008. i would say i didn't feel like a total ceo probably until bill wasn't working there everyday in 2008. there was a lot of shared responsibility. david: talk about some of the things that happened while you were ceo. what ise were saying the path toward software into the living room. the only path that was clear was the video gaming systems. there was no way to be in the videogame business and not build the hardware. we had been in the hardware business in a small way. we have had our mouse product,. and a few other products along the way frankly, i think we probably should have done more hardware sooner. david: you made another investment at the time that was criticized. facebook. i think you invested $300 million or so. why did you do that and you regret not trying to buy the

whole company? steve: i did try to buy the whole thing. zuckerberg came to seattle and we met their. i put a concrete financial offer on the table. microsoft try to buy from bill gates in 79. bill said no. even though facebook was tiny, i think it was 2009, and i offered $20 billion plus. absolutely no interest. david: a couple of other businesses. businesshe smartphone that apple has pretty much perfected in the u.s., you are skeptical that that would be a good business. do you think microsoft could've gotten into a earlier? steve: we could have and should have. we should've gotten in the hardware business. david: one of the things that happened during this period of time was cloud computing. amazon built this business under

your nose. we surprised they had become so they can cloud? steve: they became bigger than i anticipated. they had more success. here is why i am not saying i was completely dubious. it is very hard sometimes for big companies to do something very different. trick.it doing a second at the time, i would call amazon a one trick pony. it was doing retail stuff. it was doing an awesome job. to do a second trip, you don't get a lot of companies that do that. that does not mean microsoft is out of the game. we started this thing called as you are in office 365. my successor started to taking the thing to new heights. david: right before he left, you try to buy, and i think before he left they completed the nokia acquisition. that didn't work out. why do you think? steve: i think they were probably two reasons. number one, maybe it was late.

number two, after i left, while the company went ahead and bought it, i don't think there was the same level of enthusiasm at the board level in management level for scaling up and investing. david: you ultimately decided to leave. your successor, we surprised when he was selected? steve: no. he was the recommendation i made. he was a recommendation bill gates made. thought he was a candidate to replace me which is why we moved him into his last job which was running one of the big divisions. and was glad he got the job because he is than a great job. steve ballmer there, former ceo of microsoft, now owner of the l.a. clippers with david rubenstein. watch the full interview wednesday at 9:00 p.m. eastern. , opening up the android market. what is the eu decision against google mean for its competitors,

smart phone makers and the android platform? bloomberg tech is streaming on twitter. this is bloomberg. ♪ two, down and back up.

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whether it would be internet explorer or luckily even chrome itself during -- itself. it doesn't actually own the internet with the user. it is adapted by the likes of samsung. it is not being forced itself to provide that kind of option. the handset provider will decide. emily: given that you brought the original complaint,? yes, we are pleased.

this is a good decision. emily: the money is one thing. another.egulations are for google, is money the really big deal or is it the other things that google now has to comply with? >> the money is really a drop in the notion. it is a -- a drop in the ocean. it does not take a big chunk. question is, in these remedies, it will have to respond. potentially reduce its access to data if people start using alternative search engines, browsers.

google'sssential to added business, allowing it to serve the kind of ad with matching interest and user browser behavior. one long time google rival is oracle, one of your clients. in the past, oracle has signed on to letters supporting eu actions against google. behindh has oracle been selling this antitrust backlash? this antitrust backlash? >> oracle has been involved in has the resources to pursue this. that they have been far from alone. other companies have been deeper involved. would is the don in particular that oracle has to pick with google -- what is the

bone in particular that oracle has to pick with google? google has been able to commandeer a great majority of the data relating to individuals using the android mobile phones. oracle is involved in that area. competition has been excluded and would like things to be opened up there. emily: mozilla, a smaller browser, is one of the companies that is happy about this result. talk to us about how -- google is appealing, we'd should

-- but this could -- we should say, but this could open the market for others. >> it does not mean it will put an end to the 90-day deadline to be in accordance with the law. there is a slight possibility that a court will delay that deadline, but it seems very slim. after that point, google will have to face fines if it does not meet the standards that have been set. it will not affect anyone's found the have in their hands right now. it is about sales and the agreement they have with those filmmakers behind the scenes. harder for them to install other applications on their phone. they given there is google already, that means the phones that will be sold still hold all the google apps that they have right now. it made a change in the consumer perspective until the next generation of products. emily: other companies like

oracle, expedia, companies that have behind the complaints to the eu, how much is this about competitors getting back at google and how much of this is the eu and the competition commission releasing a problem? >> anyone can bring complaints -- really seeing a problem? l >> anyone can bring complaints. the commission would not pursue any case against anyone, including google, unless it found there was genuine consumer harm. quite clearly, that is what happened here. it happens in every such case. emily: do you see more action coming? the european commission has? quite a hard-line, especially on u.s. tech companies, that we do not see from regulators in the united states. >> i would not be surprised to see more. there is one more google case in the pipeline.

important to note that, although the commission has acted against american technology companies, a generally has a more robust antitrust and force my policy with respect to dominant whereas european companies dominate in europe, the commission has [indiscernible] emily: alex, what are some other potential cases on the horizon? course,alistically, of we heard the case for google that is forthcoming. we will look to the extent to other geographies follow the lead that happened here.

google and other companies are looking for the next billion users and those are users in india and the like. getting in quite early, that could create a real problem for them. that is the kind of regulation i am keen to follow. emily: thank you. the nfa and cyber command everything together to work any potential russian meddling in the upcoming election. president trump says he accepts intelligence reports. the cyber command efforts may take offensive action, including --

coming up, zte is back to work. but it is missing a key component. have the deal it can't with the united states could impact chinese tech firms were broadly. -- startarted six is .p zooks

emily: elon musk took to twitter again, this time for an apology -- for an apology. "my words were spoken

.n anger quote this apology comes after increasing calls to take a break from twitter. the company is involved in $15 billion worth of land or collation projects across southeast asia and possesses what it says is world leading technology in the reclamation market. takehe company will advantage of china's ambitious plans for record growth. >> the chinese market has passed

its peak in building infrastructure projects. southeast asia and the middle east are now seeing really strong demand. countries like vietnam, indonesia, bangladesh have only just begun nationwide construction of highways and ports. we see business opportunity in places like hong kong and singapore, which have large populations, but limited space. they are desperate for land. we have over 500 large projects on the go all over the world. we are very excited about the prospects of our business. >> we know singapore is in the process of a significant land reflation project. are you involved in that? how significant is that as an opportunity for your company? >> singapore already completed several lanark relation projects. we are now working on a -- several land reclamation projects. we are now working with the usingment on new projects

our own technology. if it proves successful, we are confident we will win the full contract. in april, we signed an interview with the philippines -- we u with themo philippines. >> how would you characterize the financing environment? are you partnering with development banks? are you partnering with private investors on some of these projects? >> the philippine government will not provide direct funding for this project. but they will give us ownership. we hope to use that asset to generate revenue for our business. shown interest. financing from companies like gnc holdings.

our company began our international push a few years back. not 80% of our revenues generated in countries around the belt road initiative. we aim to grow 30% to 50% a year. orwill take us another year two to complete our ipo. made in china 2025, this industrial policy that the government here has drawn up, to what extent is that a catalyst for a company like yours? regionaln to set up head offices in different parts of the world. so far, we have done so in singapore, dubai, and panama. in china, we have built an r&d center where we are training engineers, techno is -- technicians and talent to move into more countries step-by-step.

emily: for more on what is , we are joined in new york with peter elstrom. obviously, many of the companies, as a result of this initiative in china, are thriving. is it impacting them? peter: they need to be aware of a potential problems with the trade tensions with the u.s. in terms of tariffs. it will cause certain things to get more expensive. the real challenge for some of the chinese technology companies is, if they are not able to get the come opponents -- the components that they need from the u.s.. we saw this with the zte, where they were not able to get semiconductors from the u.s., and some optical component parts.

that.re aware of they are moving aggressively. they focused on artificial intelligence and semiconductors and they are very aggressive. they talked about the financial incentives they go beyond free rent and tax holidays. they will also pay companies for setting up r&d centers. if you are a venture capital firm, they will give you money to come there. in some cases, they will compensate you if you lose money in your capital investment projects in beijing. it is adding energy to that. but the question whether it will effective in building the competitive technology sector. only: they lifted the ban zte, but do you think the fear factor from the united states and among lawmakers will get

worse when it comes to chinese tech companies? >> it is certainly an issue. it is worth looking more closely -- ours business reporters frowned zte is sterling to get all its employees back in the factories to restart operations because they are out in the countryside. not paying ther highest wages in the industry and they are reluctant to come back in case there are other problems come in case things don't start as smoothly as they had in the past on the other side, for cost -- in the past. on the other side, for customers, there is another challenge. these are year-long projects. if you are going to hire zte to build your telecom project, you need to make sure they have access to the best technology for a long period of time. so there is a risk if u.s. congress decides they will impose more penalties on zte. there is the risk they will like it the claimant they actually need. emily: thanks for breaking it

down. coming up next, your robot ride is here. the zooks taxin next. this is bloomberg. ♪

emily: the ninth flight of its project, working toward flying humans to space for the first time. the booster and spacecraft blasted off the launch site in texas shortly after 11:00 a.m. eastern and then performed a tot designed to prepare

ferry passengers to safety in case of emergency. ks is standing up by building and a taunus the equal from the ground up -- building an autonomous vehicle from the ground up. working to make their cars the goto rideshare of the future. >> we all make poor choices. take these two guys. they are the founding's of zooks -- they are the founders of zooks and they want to compete against this. zooks is different. its rivals are adding self driving technology to existing cars. zooks is making a new type of vehicle for that self driving age. it's making a robot. it's early incarnation looks like the love child of the

matrix, mad max, and transformers franchise. this is tim cantley clay. down under, he was a well-known designer. one day, he had an epiphany. the vision of the future full of robotic vehicles and he came here to build them. >> i saw the future of how the whole system could work. i need to find a brilliant computer scientist. that led me on a journey for six months and i ended up finding jesse. brilliant scientist is jesse levinsohn. x in 2013 togoogle speak on my vision on autonomy. i started talking to this one guy. and i can't get him. that was my signal to go get him. this?t drew you to

on selfbeen working driving car since 2005. then that thisck would be one of the most transformative technologies. you need a product, a business that makes sense. i have not seen that in any other company until i met tim and he showed his high level of vision for whatz o -- for what zooks could be. >> and that's a fleet of robotic vehicles that can be held just uber. lyft or an >> it will take us out of the automobile and to the next stage of mobility. tim and jesse take me to the alameda naval air station or i will get a test drive and see how a zooks robot handles.

>> they are designed in a way that only makes sense. that powertrain is designed for full economy. they have dual voltage architecture. they can drive without any human intervention. this is vh4. this is vh5. out andobot will drive try to dodge them. i get to do the whole test sitting backwards because tim thought it would be funny. and with one swift keystroke, i give complete control of my life over to an ai. [wheels screeching] >> whoa! >> that really doesn't get old, man. [laughter]

it's like a ride at disney. >> they crank through the course an45 miles in our -- miles hour. is it madness to take on the world's leaders automotive and tech companies at the same time? of course it is. but i say go for it, tim and jesse. we all await the deluxe robotic rideshare of the future. emily: that was ashlee vance. you can watch more of "hello world" on bloomberg.com. tomorrow, we will speak with the cofounder of grab. how it fought off google -- uber. that's it for now. this is bloomberg. ♪

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