♪ emily: this is "bloomberg technology." i'm emily chang. president trump has been focusing his ire on tech giants. is there more to this threat? we will talk about it with reinke cello of pennsylvania. and companies feeling the heat as china pushes to regulate screen time. but can the country limit how long kids play games? and a huge blow to scooter mania

in san francisco. they blocked the biggest names from operating in the underdogs beat out the guys. first of the top story. president trump railing against big tech in an exclusive interview with bloomberg. "i won't comment on the breaking up, many people think it is a very antitrust situation, but i won't comment on that," the president told us. he continued to hammer that point home at a rally later on in indiana, all this following a string of tweets where the president accused social media companies of silencing conservative voices, in an action known as shadow banning. he claimed without evidence that google search results are biased against him. for more, i want to bring in shira ovide in new york, and david mclaughlin, our antitrust reporter. david, i will start with you. with that evidence, president trump is making these claims.

is there an antitrust issue here? >> well, when it comes to this googlef whether or not is suppressing conservative viewpoints, that very likely is not an antitrust issue because of the first amendment. the president is certainly not the only person in washington to be raising these issues. wheren interesting moment you have a lot of liberals and conservatives who are saying companies,f these facebook and amazon, are two deserve some antitrust scrutiny that they haven't gotten for many years. >> it's a curious strategy, given that the president's own campaign manager acknowledges that faced look helped him win the presidential election. take a listen to what brad r scale told me a couple months

ago. facebook has helped a and ifways it is the .1% it hadn't existed it would have been a lot tougher. three hours of facebook and one hour of youtube, it changes. that changes things. i think what google has done to search result to put youtube videos at the top, they continue to understand the value of the platform. we are using it for a lot of things now. we are using it probably more now than 2016. emily: in those comments, not only does he did knowledge facebook helped the government when but they will use google and youtube more in the next campaign. how does this make sense? >> both things can be true. the president and his allies can be among the savviest users of

facebook and youtube and other internet properties, and the president and his allies can believe those companies are too big and too powerful. there is a legal issue and a political risk issue. legally, it is going to be a hard case as the law has developed so far to prove google, facebook, or the others are violating antitrust rules because there is a very specific test which is, are these companies and how are these companies harming consumers. that is largely based on prices of consumer products. it's hard to make the case that any of those three companies have really been directly harming pricing of things that consumers by. there is still a political risk that, if the president and his allies or other people believing social media sites are squelching conservative point of view, if that gets people to use facebook less or to distrust

google more, that is a risk to those companies. at the same time, we have seen the sdc and doj antitrust division say they are closer looking at the way the law should be applied to different companies including these digital technology giants like google, facebook, and amazon. even if you cannot win an antitrust case against the companies, you can drag the companies into these regulatory reviews as google has been through in the united states and europe. that is distracting and harmful to businesses there. emily: google's response to the president's remarks say we don't bias our results to any political ideology and, in the meantime, google, facebook, and twitter have been called to testify next week. we cover these hearings in depth. google has not agreed to send the top person and facebook is sending the clo and twitter is

sending the ceo. david, had you expect these hearings to proceed given the presence remarks leading up to this? david: i think these hearings go to the ongoing course of criticism that, when it comes to, as in the clip he just played, their power over campaigns being very strong. in washington, you will see the ftc and doj take a harder look at these companies. in the next few months, you you will see the ftc open a number of hearings into antitrust issues. one of the things they will be looking at is tech in particular and whether the sort of antitrust framework right now, whether it should be changed in some way to address this issue

that the products they are not selling, are free, and are the antitrust laws able to get up at. those are the issues that enforcers need to be considering and will be. emily: what are you going to be watching for, shira? there is such banter around the mark zuckerberg testimony, but the questions from lawmakers were often fairly ignorant. do you think congress will be better prepared and, on the flip side, how will sheryl sandberg and jack dorsey perform under that pressure? shira: i think members of congress will be better prepared. members of the house, which went second, they seemed to have learned from the senators mistakes in questioning mark zuckerberg. even though you are right, zuckerberg did a good job in the hearings, i think it was

revealing. may in ways mark zuckerberg did not intend. i felt he dodged a lot of questions and seemed almost embarrassed to explain out loud the business model of facebook to collect user data and sell advertising against a that. to me, that was revealing and i think damaging to his and facebook's reputation. i think sheryl sandberg in particular is a well reversed spokesperson for the company. dorsey, less so, even though he has had more experience going into these tv interviews and other places. you just don't know what happens in congressional hearings. these executives can be as prepared as they possibly could be and you still have these revealing moments coming out of left field. none of these companies want their senior executives to be trotted in front of members of congress who have access to grind. emily: folks we have talked to

the google is missing an opportunity by not sending a higher level representative. what could the repercussions of that be down the line? if congress is looking serious at regulations. david: i think you saw two senators say they will not be part of the solution and, if that is the case, we do not want them here. of all these companies, google has been the most targeted by enforcers like the ftc here, the long investigation of the company, but then they have the ongoing issue -- investigation in europe resulting in fines amounting to something like seven or $8 billion. it seems to me they are the most exposed at the moment. emily: david covering antitrust for us and shira, always thank you both.

we will be covering those hearings all week. a conservative advocacy group is taking comes claims a step further suing google, facebook, and twitter for alleged bias. one group claims the giants are violating antitrust laws and they are conspiring to censor conservative political posts. all three companies have yet to respond over this lawsuit. gaming companies have taken a hit after china steps up its campaign to wean youngsters off of screens, but can the company really limit screen time? we will discuss next. if you like bloomberg news, you can listen on the radio, on bloomberg.com, and, in the u.s., on sirius xm. this is bloomberg. ♪

♪ emily: china regulators are trying to limit the number of new online games in total number of time. this is as beijing tries to mitigate gaming addiction in their children. this muddies the water for what has been a rapidly growing gaming industry. our chief asia correspondent has the story from hong kong. >> game companies including tencent's stocks fell after the government said they planned to limit screen time. authorities are concerned about video addiction in china and the levels of violence. china's ministry of education specifically stated the latest moves are aimed at preventing

and controlling myopia in young people. this might be coming straight from the top. president xi jinping has spoken about the need to help children's eyesight. shares of tencent in hong kong, they sell the most in march, and game makers in japan stumbled as well. many in japan depend on the china markets like capcom and nexon which gets half its revenue from china. some say this may not have an effect on leading developers as they already have age space -- age-based gametime restriction. this could pressure shares in the near term. emily: for more analysis, let's bring in our tech analyst, matt larson. how big is china for the gaming industry globally? >> we are looking at a $125

billion market globally. china and the u.s. maintain half of that market, which is not surprising given population distribution. another telling fact, as a percentage of gdp, most countries, video gaming is around .2%. china is .49%. these are huge numbers for the industry generally. emily: the government is trying to implement a one-hour rule for parents to impose on their children. of the amount of time the child can sit in front of the screen per day. is that realistic? even in china? matt: it's like something coming out of my childhood. china has done it in the past. there have been regulations on a game called honor of kings there have -- that have been imposing time limits on underage users so it is possible. some of the other regulations they are looking at is making

the games less addictive. we in the u.s. have looked at similar addiction triggering features in games like random generation of the various rewards and things like that. time limitations are something you can link to a user account in the age of the users. emily: that something the game makers could do, isn't it? matt: exactly. those are some of the regulations that china is announcing. how much do you put it on the family versus what the game maker can build into the backend. emily: we spoke to the ceo of razor, a gaming company in china for their reaction to the regulations. >> we don't have any specific concerns given the chinese market is still a huge market, and many of the games there are doing well. engagement with the game is still very high. i think it is a matter of time for the entertainment sector to continue growing in china.

emily: china still has the benefit of the sheer size of population. how much is this really going to hurt game makers? matt: they have the benefit of the size and we talked about entertainment spending. videogame is roughly 12.1% of internet spending and projected to increase to 14%. the market right now is $32 billion in china looking to expand up to $60 billion. when you think about market impact in multiples moving forward, the thing -- the thing is the growth case. do these restrictions limit the time frame with which the market expands? i don't think there is doubt the market will continue to grow. the question is what the rate the revenues will grow and how long people are able to engage with the game which translates into advertising dollars and revenue, generally. emily: does it appear that china can regulate its children the same way the company has been able to regulate middle-aged

people? one policy was in effect for decades and is now gone. we still see censorship on search engines and social networks, but, that said, is the younger generation of china responding as the previous ones have? matt: it has yet to be seen. especially in the stan age where the youths are looking for ways to get around the regulations implemented. if you have a time limit, there are going to be ways to work around it or sign up for multiple user ids so we will see the responsible as well. i think china is sensitive to the cultural protectionism and also recognizing there is opportunity here and revenue growth with significant business interest as well. if they get the regulations right, there will be a balance there. i think we will see a little bit of both being served. and you always get the people on the tail end who are avoiding

the regulations altogether. we will see what gets implemented and how effective that is. emily: it's fascinating given the chinese government has done so much to boost its own domestic companies, blocking facebook, pushing google out of the country, blocking twitter. at the same time, it has helped companies like tencent and alibaba and baidu thrive without competition. this seems to be taking the quite opposite approach. matt: in the short term, i think it seems to be blowing the other way. i think the hope is that china gets the regulations correct on the front-end. we have seen similar regulatory regimes and talks about intellectual property at the same time. there also setting up courts that might implement more protection measures. i think you are seeing a little bit of the scales balance in the long term. setting up a regime now that

might cause short-term pain for hopefully long-term gain. emily: matt larson, thank you so much for weighing in. we will keep an eye on those regulations. the home of the dallas cowboys is gambling $10 million on what he calls the country's biggest e-sports venue. it is expected to open later this year and will hold up to 2000 fans. it will also include shops, team training areas, a broadcast studio, and other features. coming up, the battle over the ride-hailing space continues to heat up. who will get to the public market first? lyft or uber. and "bloomberg technology" a streaming live on twitter and be sure to check out our network on twitter, tictoc. ♪

♪ emily: the race for ride hailers to go public is kicking off. bloomberg learned that lyft has hired an ideal advisor in an effort to beat uber to the public markets. lyft hired classified group for a targeted march or april 2019 debut. the company is planning to take pitches from banks as soon as september. here with more is eric newcomer. >> it's an interesting strategic question if you are the smaller company. lyft was last i'll you that 15.1 billion and $76 million for uber. people are hoping for this generational ipo. if you are the smaller company, what do you do? we are reporting their strategic choice seems to be let's get ahead of uber. emily: why does that strategy make sense to them? >> it means you probably have more options with bankers. if uber does the huge ipo, even if you are not the lead banker or second bank, you might still

work with uber and the conflicted with working with lyft later. if people have not already picked a horse, they might to jump on and invest in lyft. emily: and there are risks? >> right. one person could hold their horses and wait for uber. it's hard to know whether it is to your advantage or disadvantage to be measured against the competition. you are just a smaller ipo. it seems like the advantages are leaning more toward going first and getting some attention of its own instead of being an afterthought to uber's huge ipo. emily: lyft has had a cfo for a while, uber just hired there cfo, could they get their first quicker? eric: when we spoke to their cfo, a formal merrill lynch banker, he was not even willing

to commit to the timing until he looked at the books. i spoke with the ceo later said we are still on track and like being public, that is going to -- it is a heavy lift to get to the late 2019 ipo for uber. and lyft has had a cfo and a lot of its key executives in place. emily: let's compare the balance sheets and what we know. you reported detailed numbers on uber's financials. how does that compare to what we are seeing at lyft? eric: i mumble scared because we know so much more about uber's financials as they have been disclosing them quarterly. we get a very good sense of their billions of dollars worth of losses, but they have been pretty transparent. lyft is more of your private unicorn happily keeping its numbers private. it has been a while since we got an update. they have kept raising money so

they are plenty of cash, but we don't know exactly how much cash on hand or what second-quarter financials were. emily: or whether they lose at the scale uber is losing. they certainly don't have as much coming in. eric: historically, relative to revenue, their loss has been pretty big even compared to uber. again, we do not know where things are at the moment. the u.s. should be in more profitable market than if you are investing all of the world as uber is. uber is competing in india and lyft does not have that problem. at the same time, lift is spending to gain or hold market share against uber so we really don't know. they have starting investing in their own autonomous vehicle research program so we could be surprised. emily: and it also doesn't have the international opportunity at this point. eric newcomer, thank you as always. coming up, we talk to

congressman ryan costello ahead of the social media and search hearings. what will he be asking jack dorsey? that is next. this is bloomberg. ♪

♪ emily: this is "bloomberg technology." i'm emily chang. president trump has been focusing his ire on tech giants. he didn't let up thursday night at a rally in evansville, indiana. >> look at social media. the thing called free speech rights. you look at google facebook twitter and other social media giants. i have made it clear that we as a country cannot tolerate political censorship, blacklisting, and rate search results. >> the president's comments come ahead of wednesday's hearings on capitol hill where facebook ceo

and twitter coo will appear. they will appear before the house energy and commerce committee. representative brian costello joins us now. what do you make of the censorship and free speech and the issue that has been dogging these companies? some of the things the president deciding comes with no evidence. >> i think that it is a fair characterization of where we are. there is some politicalization of what it does and does not go into the algorithms and the content judgment calls when certain tweets are requested be removed. at the same point in time, there is some constitutional question around what right does a company have to remove content based

purely on the political slant? ultimately, i think the hearing will come down to can twitter .2 empirical data that rebuts the fact that somehow because its owners and employees may lean left they are not making content judgment calls that favor those who may lean left? that is the overall gist of it. >> left leaders may say that twitter does the same to them. what are the questions that you want to ask? >> i would point to, what your algorithm makeup, what feeds into it. i understand that some of it is proprietary but can you demonstrate, can you open it up to us so that we are able to see

that there is not content bias there. i might add, they may have the right to content bias if they want to. if they do demonstrate there is some content bias, i'm not sure they even ran afoul of the law. i think the other thing that is less about whether there is a philosophical bias there and something even more thought -- fundamental, does the algorithm reward extremist rhetoric? be it on the left or right? we are at the time with fabric of our culture continues to deteriorate. some of that i think is attributable to social media and the way people use the platform. i might also say that why can someone sign onto twitter and not even provide who their identity is? this allows people much more of

a license to say things that they would not say if it were directly attributable to them as an individual. that leads to much more harsh discourse and from a best practices perspective might be a better experience for the consumer the company and the political culture to make some policy changes. this would be in the recommendation from not in the legislative description realm. to make it a better platform for our country, for users, and the country. >> what about facebook coo sheryl sandberg specifically? also the evidence that there are foreign actors attempting to meddle in our elections again and that russia's meddling could have swung the election in favor president trump? >> we will never fully know. so much noise and chatter and inaccurate information gets

pushed out by both sides as an election nears. it is hard to say whether the russia interference contributed to people changing their votes or would have voted but did not or did vote that would not have voted. i think i'm facebook, some of the questions are the same as with twitter. i don't know we will get much into russia into russian interference because we did last time. with facebook, there are a few lines of questioning. the eu just introduced the gdp are which is a data privacy law which is very far-reaching. as policymakers we would like to understand how that has impacted the company. whether it might be a barrier for smaller companies into this social media market. what is their experience in that realm? also, is it a platform that

rewards more extremist rhetoric? finally, is facebook a publisher? there are constitutional and statutory regulations that come about if you are a publisher related to first amendment protections. facebook regularly uploads information that they are the original source and content originator of that information. that prescribes to them much more in the way of legal responsibilities. >> and an exclusive interview with bloomberg, the president said in terms of antitrust issues around these big tech companies, i will comment on the breaking up of amazon or facebook as you know many people think it is a very antitrust situation for three of them but i just will comment on that. do you think that google facebook and amazon are antitrust issue?

>> in short, i think that there are implications to this companies as they evolve and frankly enter into different industries. that is not a personal jab at anyone in those companies. if you look at the federal trade commission, clearly tech companies have grown so large so quick and now we are in the retail business. they are trying to get into all kinds of different industries because they have the data. data in and of itself is a commodity and with that data you can do a lot of other business ventures with it. amazon buying whole foods is a good example. i am not saying the anyone of this companies has violated antitrust law but i am saying that the rapid growth and

expansion of this companies to give rise to antitrust consideration and i think we are entering a new era of antitrust jurisprudence. we are living through it right now. we will need more guidance and enforcement moving forward. >> how it disappointed are you that google is not showing up next week? do you think the outcome back to hurt them? >> google does have i think some answers that we need to hear from in terms of advertising. yes i am disappointed. anytime you are called before congress to answer questions, you should come. there are legitimate public policy considerations that i feel we are entitled to answers on. the hearing is rooted more than anything else in consumer tech -- protection. in terms of advertising model. i am disappointed. there will be other opportunities for them to appear. i hope they do. when you don't appear, my sense is you don't want to answer

questions concerning public policy and when they are asked, they were provided information as to why we wanted them to appear. >> you are retiring. are you happy with the job the president trump is doing? >> i think some of the policies of the president has pushed forward are directly attributable to the economic growth that we are enjoying right now. the tax cuts, some of the regulatory reform measures we have taken. at the same point in time, my feeling is the president text fights that are unnecessary and that it diminishes his ability to be persuasive and to grow larger coalitions for the next part of legislative reforms that would like to have happen. i will withhold judgment on 2020

but i think he would enjoy more support from the body politic if you would stop picking fights, stop going after mueller, stop entering into the primary battles and instead just focus on what the job is. there are a lot of folks who gave him a chance that did not support him and some who may reluctantly have supported him but did not want to support clinton. a lot of those people have a tinge of disappointment because the president rather than being a uniter, oftentimes finds ways to be a divider. >> some more than a tinge. thank you so much for sharing your time with us. up next, the era of scooter transportation has begun. cities are granting permits. we talked with the funder of a company who just got a permit. this is bloomberg.

♪

emily: on thursday san francisco and santa monica announced permits to allow scooter sharing services. santa monica gave big players authorization to operate. san francisco went in a different direction only offering permits to smaller players. they can run 625 scooters each for six months. in july populace conducted research on the social and

economic impact of scooter sharing across the u.s.. why do you think the city chose you? >> we started by working with the city first. we started by working with washington, d.c. and we invested in technology that involves writers pedestrians cyclists. the technology is for the people using it and for the broader community. >> this is the only scooter company that has not received a cease and desist. you have the other bigger players out there saying this decision is disappointing. san franciscans deserve an equitable process. instead they have selected an experienced scooter operators the plant to learn on the job at the expense of the public good.

what is your response to that? >> we have been operating electric scooters longer than mine has. we are working to provide a service that benefits the writers. everyone is learning as they go in this new industry. >> what do you make of these different solutions and the two cities? >> san francisco is a unique city. we found that perceptions of electric scooters were dramatically different in san francisco versus many other u.s. cities which found the majority of people appreciated having a new transportation solution. there is a backdrop of history here in san francisco that may have affected how decisions are played out. i think there are a lot of opportunities for companies to make a difference in cities across the u.s. >> you are referring to battles by over and left they came before this.

it san franciscans are open to scooters, why would the city be more closed? >> we found that san franciscans were not as open to scooters as most other u.s. cities. there is a backdrop of anti-tech sentiment in the bay area. it has been an experiment a playground for a lot of companies. what happened with san francisco may not be reflective of what happens everywhere else area. >> how do you work with that and you can only put 600 25 scooters on the road? that is not a lot. >> electric bike share in san francisco is a good example. that is the same approach we think will work here and that means increasing the number of vehicles overtime. >> you have done a lot of research about evolving

transportation. what are the shifts you expect to see? >> what we found was that the mobility services have accelerated. in just 12 months, electric scooter share services attracted 3% of the population urban areas. it took car sharing services 12 years to reach that point. one of the reasons is it is ubiquitous, every city has a very large portion of the population that has access to smartphones. with cb services growing and their network effects across multiple operators and services so we are excited to see what happens. >> what you have been patiently

waiting, you have these competing companies that have raised hundreds of millions of dollars. how does that put you in a long-term advantage? >> money is being used to expand into a lot of cities quickly. the same results we are seeing in san francisco. positing waiting running a process than choosing to deploy. other cities like washington dc or portland, extra capital doesn't give you extra market share. the advantage is working with cities to create these processes and collaborating with them to create a long-term relationship. >> tell us about your expansion plans. how do you plan to grow into other cities if you are the ones that we more patient. >> the process is we are going to very how fast the permits are approved. smaller cities might choose to put out permits sooner. we are talking with all of the cities area sometimes these things take longer and that is ok because we want to roll it out in the right way.

>> do you think other cities will respond in the same way san francisco has? airbnb is battling with new york. we are not seeing other cities having the same battle. will san francisco be a unique case or will other cities take san francisco's lead and have a similar response? >> we believe in the case of micro mobility cities well put into place more regulations than previous transportation services that came before them. reasons are number one they are lightweight and small and stationary so they are easy to throw in the back of a truck or van i confiscate. there is already been a precedent set by washington dc, portland, numerous cities who have established similar permitting processes. most other cities are following suit. >> how profitable can this

business be? you don't have drivers but there is a question of how many people will use them? >> we have seen a broad swath of population using them. your studies show that with data. the key driver for this business profitability is offering -- operating costs. people are using expensive vehicles. we think that designing a custom vehicle optimized for fleet use is safety -- and more profitable. >> there has to be consolidation wouldn't you agree? >> it depends on how the city regulatory issues play out. >> thank you so much. lots to watch evolve here. coming up, google is in the

center of major privacy problems. how they handle new reports of collecting user data from mastercard? we will talk about that next. ♪

emily: apple and 20 other companies used to be the biggest buyers of short-term corporate debt. this is making it more expensive for other companies to borrow. the reason why apple microsoft and others are selling, u.s. tax cuts are prompting them to bring home their overseas cash force. which had been invested. it turns out google and mastercard -- select google advertisers contract whether the ads they ran online lead to a sale in a physical store.

the companies never told mastercard users of this arrangement. i want to bring in a bloomberg analyst. how does this work? >> they announced a technology last year but they didn't say they had done a deal with mastercard to get it done. >> is this legal? has a law been broken here? in not disclosing this? >> probably not. it is a classic case of when you sign up for a mastercard when you sign up for google services, page 24 paragraph three says something like you give us permission to use data for marketing purposes. that is generally the phrase that mastercard users in the agreements for sure. >> google is in hot water with the president. we don't know how much teeth his threats have.

how does this pile on to what google is already dealing with? >> those are two separate issues. the search issue and the bias issue. on the privacy side, it cuts to the core of what google does. the general pact we make with google and facebook is we get great services and in return they get to use our data. they don't tell us specifically every time that they are using our data or what it is for. that is the rub here. they will have to tell people more about what they are doing more often than that. that will freak people out. >> what about other services like gmail and android? they are doing things that users don't understand how they are using the data. it is curious about how the ad for costa rica comes up when elsewhere i have asked somewhere about costa rica. >> the gmail example was many

years ago and that was probably the first classic internet privacy scare in the u.s.. it is still happening 10 years ago. 10 years later it is still happening. obviously it is so important to google and other companies that they are not going to change what they are doing here. they will have to explain it a lot more. >> how much to google pay mastercard for the data? >> we know that it is millions of dollars. we don't know exactly how much. >> the story we will continue to follow. thank you so much. that does it for bloomberg technology. we are gearing up for jack dorsey's debut before congress. you don't want to miss it. this is bloomberg. ♪ xfinity mobile is a new wireless network

designed to save you money. even when you've got serious binging to do. wherever your phone takes you, your wireless bill is about to cost a whole lot less. use less data with a network that has the most wifi hotspots where you need them and the best 4g lte everywhere else. saving you hundreds of dollars a year. and ask how you get xfinity mobile included with your internet. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. >> the following is a paid

program. the opinions and views expressed do not reflect those of bloomberg l.p., its affiliates or its employees. >> the following is a paid advertisement for "credit secrets." the product endorsers who appear have been compensated for their travel and lodging costs. all endorsers are actual and enthusiastic and successful users of the "credit secrets" program. ♪