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♪ emily: instagram's cofounders unfriended facebook tuesday. sources told bloomberg they left over growing tensions with mark zuckerberg. the duo have been at the company since facebook acquired instagram in 2012 and had largely been able to operate independently of zuckerberg and facebook. lately they have become frustrated with an unusual uptick in day-to-day involvement by zuckerberg, who is now more reliant on instagram, now worth $100 million, for facebook's growth. >> facebook is so much more dependent on instagram now than it ever was. their own growth is going to slow. they are going to have to spend more to grow in new areas. instagram is so crucial to the picture.

hit one billion users but there are many more users they can still add. have theving and they products that everyone wants to use. there has been a lot more attention paid to the way that instagram could drive traffic to facebook, which is kind of a new dynamic. basically in the past instagram was very dependent on facebook for its growth, now facebook is becoming more dependent on instagram. emily: two years ago i sat down with kevin cistron and asked him if he regretted selling. they bought whatsapp for $20 billion. of course he said no and talked about all the great things facebook had done for instagram and talked about how great it was to work with mark zuckerberg. take a listen to what he told me to years ago. >> think of it like having like the best board member in the world. imagine how many companies would like to have mark zuckerberg on their board. that's what we get. it's independent but you get

amazing guidance from someone who has been able to build a tremendous company. emily: fast-forward to today and systrom what kevin says -- kevin systrom says in his statement. missing from the statement was anything about mark zuckerberg. >> what i thought was fascinating is that the very end he says something to the tune of i wish the best of luck for both companies going forward. they are the same company. when the founders leave instagram it is no longer this company within instagram -- within facebook. net is nobody to challenge zuckerberg's vision, should they want to, and say this is not where we see instagram going. systrom has been historically very stubborn in terms of the products and the vision forward,

and what he wanted to maintain for the culture. this opens up opportunities for zuckerberg to do more, to do what he wants, to integrate. instagram. . it could threaten this unique brand that the company has built. emily: meantime, mark zuckerberg said kevin and mike are extraordinary product leaders, i've learned a lot working for them. i wish them the best and look forward to seeing what they don't next. the whatsapp cofounders have also left the company. tried toe cofounders kick off this #delete facebook movement. this does not look good. what are employees on the inside telling you? withat whatsapp situation the founders of whatsapp being replaced by someone who had run internet.org at facebook am a chris daniels, that was heralded as a scary thing that could potentially happen to instagram

if facebook was not careful. there is definitely a lot of concern about what happens now. i am told the most likely person to take over instagram from here is the man who previously ran facebook's news feed. this is a lot a change for instagram in search -- in such a short amount of time. ceo, coo,lost their c-levelre be any other people in the future? how quickly should they move to do it? emily: bloomberg text sarah frier. coming up next, exclusive conversation with ceo jim brett. how the company is leveraging social media and why amazon is the perfect partner. this is bloomberg. ♪

♪ emily: last quarter j.crew

finally broke 15 consecutive quarters of negative comparable sales. in the last six weeks the ceo jim brett relaunched the brand. he joined bloomberg's retail reporter for an exclusive interview where he also talked about the company's recent decision to sell its mercantile brand on amazon. >> i really don't believe that we compete with amazon on the main j.crew line. i see the products that are being sold on amazon has more value oriented. mercantile is really a new brand a well that's geared towards younger customer, still with the preppy spirit, and a greater value. we felt like amazon was the perfect home to launch that new brand. >> you are not worried about canada buys asian -- cannibalization? >> no. i think we have a strong

partnership with amazon and i believe we will maximize the sales for j.crew mercantile by growing j.crew mercantile. >> do you envision further j.crew group brands on amazon? >> not at the moment. >> you also developed a number of other third-party relationships. recently, nordstrom. how big a part of the business do you see wholesale becoming for j.crew? the short-term, wholesale has been a huge global opportunity for us. we have a wonderful relationship in the u.s. with nordstrom, but we do not have the relationships across the globe, so recently we watched all across europe in all of the major department stores. , and we america as well are exploring opportunities in the asian -- in asia now. >> two weeks ago you relaunched the j.crew brand.

what sort of response are you seeing from customers? do you see increased traffic, higher sales? jim: we are excited about the relaunch. we definitely see an increase in new customers as well as reactivated customers thomas of people who have left the brand and are coming back. >> are they spending as much as you would like? jim: they are. it's an exciting time. when i started i received so many emails from customers saying i loved j.crew, but i have grown out of the brand, meaning physically, it does not fit me anymore. we are now receiving so many comments via social media of people who are so happy to be able to shop the brand again. isn't just about trying to be everything to everybody, it's about in whatever you're doing, including as many people as possible. in fact, we received a comment on instagram from a woman who said thank you so much for

showing the extended sizes. please keep doing it, it helps me a lot. >> you've talked a lot about engagement through social media. that's another thing we saw with the relaunch i'm a a shift in marketing strategy -- rewatch, a shift in marketing strategy. have you relaunched the backend of the business as well? how much have supply chains changed? how much has inventory management changed in j.crew? jim: that's a lot of the work we have been doing the past year. a lot of it is changed. we have a more customer centric back end process. ceo jimhat was a j.crew brett in an exclusive interview with anna chandra. still ahead, the technology on the hill. talking digital privacy and there was some disagreement with congress on regulation. we will hear what next. we are live streaming on

twitter. be sure to follow tictoc on twitter. this is bloomberg. ♪

♪ welcome back to the best of bloomberg technology. -- bigike big attack technology and congress agree on the need for stronger consumer digital privacy laws. take a listen. >> at&t welcomes today's conversation. we believe it is important for congress to weigh in on the issue of privacy, and provide consumers and business clear national rules on how information is shared, used, and protected. we are not newcomers to this position. now there appears to be growing agreement about the need for a new had comprehensive federal

privacy law. ali was one of six representatives from big technology companies testified before members of the senate congress committee. while they agreed with senators on the need for new regulation, they differed on the details of how those new laws would work. we spoke to the ceo of the internet association at technology lobbying group that represents google, and twitter. >> i think it says a lot that are members, in particular, internet companies are pushing so hard for a national framework to give meaningful transparency to all americans over their data. you should know who has your information, how they are using it, and we are calling on congress to pass a law that protects people but also allows for the innovation that has made the technology sector so vibrant and united states. richard blumenthal and

other lawmakers called out these technology companies. when it actually comes to the bill, they will kill it with their teeth. do you think the technology companies are committed to this process? >> that's something that michael can speak to. i think details will be interesting. you are a lot -- were a lot of moments were senators urged the officials to weigh in on a particular issue. this is the law and the language matters, and so it's a little bit hard to go into a hearing environment and ask someone to weigh in on idea or not. i think when it comes to drop that language they absolutely -- they're absolutely are going to be a lot of differences of opinion, within technology, and also outside of tech. one of the big ones i am watching will be enforcement. folks will be talking heavily

about how they want that to look. >> many of the internet association companies have been critical of gdpr. i want us to take a quick listen between -- to this exchange between a senator and a google official. >> any idea on how many human hours in my have taken for google's workforce to bring the company into compliance with the gdpr? >> we do have some analysis of that that i would be happy to share with your stuff. i don't have those numbers available today. i would estimate that it was in the hundreds of years of human time. >> hundreds of years of human time. michael, what do you make of that? gdpr is very complicated. folks are complying with it, but it is a very complicated law, and one that's maybe not best for innovation or startups. there are many american

newspapers that have decided they have had to shut down their website in europe. outback steakhouse close their website in europe. this is exactly why we need an american approach, a federal law and the united states that shows we can be leaders in technology and privacy protections. we need to get it right. the details matter. we are behind this 110%. down withling to sit all lawmakers on both sides of the aisle to make sure this gets done. en, a chairman spoke about security. what did you learn? >> data security has been really difficult. it is being negotiated. it has come out over a couple of congresses. security is one of the issues that we have heard, you know, as we have gotten this sort of consensus from industry and the last days and weeks that security has to be a big part of this.

that is another big issue i will be watching. companies are going to be really talking strenuously about what it means to have security, and especially who has the burden for that, and what it looks like if that goes wrong. the privacyl of proposals that have been floated by the technology community suggests federal legislation should preempt the california state privacy law. what are the key flaws they see in this california data privacy law? >> people's expectation of privacy does not change as you cross from state to state. it is not make sense if you are driving or flying across the country to kick into brand-new privacy laws as you go from border to border. or if you are faced timing with your grandmother in another state to have the two of you be under different privacy laws. i don't think that makes a lot of sense. they got the california a lot wrong. they push it through -- california law wrong. they pushed it through in a

limited -- short amount of time. there are things in the california law that would think make people less private and less safe. there are provisions that prohibit companies from the identified information. you cannot aggregate information that is not associated with people to meet the requirements of the law. i think we can do a better job. we should have a state-of-the-art, best in class, best in the world have is a law that protects all 50 states and not a piecemeal approach. >> what is your take on what michael just said? consumer have gets -- advocates have a different perspective. >> absolutely. a lot of them would like to defend tougher state laws, you know. states want to go strict, they say. there is no reason we should stop that. increasingly what i am hearing from consumers as they want the federal law to essentially be a baseline, but it's something that the state can go over and above.

i expect that to be another point of tension between industry and the consumer point of view. i think it's important to know this was an industry hearing. the chairman said there would be an early october hearing with consumer advocates, including somebody who was a real estate developer who was kind of behind that privacy lot that went into effect -- law that went into effect in california. hasy: coming up, the eu cracked down on google, facebook, and twitter. now it's latest target is amazon. we will hear from the eu competition commissioner about this latest probe into the e-commerce giant. the woman who helped transform ge has written a new book to help guide other companies. we will hear from her later. this is bloomberg. ♪

♪ emily: world leaders in finance,

business, and technology met in new york yesterday for bloomberg's global business forum. to aditor in chief spoke you competition commissioner and asked about the recent probe into u.s. tech giant amazon. >> it's a two-sided market. they have a dual function. they both host the little guy so he can enter into e-commerce, they provide a number of services which allow smaller businesses to be active e-commerce -- in e-commerce opportunities, and that's great. they are also big guys themselves. ,ookstore, you know, everything groceries, movies, the works. they get all of the data from the little guy and we want to understand how this data is being used, because this is all about competition. when we say innovation, competition is the most important driver for innovation

or you to stay ahead of your competitor. >> do you think the future is a bit like telecoms companies or maybe what happened with microsoft many years ago where you have a platform company which is then forced to let other people trade and have access to that platform? >> i think that is difficult to say, because as was just said in the video, this is a revolution. things change and we have not even seen what is coming with quantum computing, blockchain. we probably have a platform economy that is much more diverse than what we have seen, which is why of course it's important for us to understand, what is the new big? how are companies that benefit from networks affects from huge amounts of data, from marginal cost approaching zero, how do they compete? for us that is the important thing. >> do you think in some ways

competition has been left behind by big tech? it is difficult to intervene until after they have created these neo-monopolies, as some people would see them. >> i think our principles are fine, because they are about human nature, and we don't change, unfortunately. with all of our good sides and bad sides, i think remain the same -- we remain the same. in regulation we need to stay alert. in europe you can be successful, but you should not miss use your power. this is actually the story of findes -- fines. we found that they misused their power for competitors not to be to,nnovative as they ought our consumers not to be able to enjoy the benefits of choice, innovation, affordable prices.

that of course is where we have to be very the gillette -- vigi lant. >> it took you seven years. in seven years, tech -- in technology, seven years is a lifetime. >> it takes five minutes to break into your home. it will take the police and court system quite some time to find the guilty person. to get him or her convicted. >> hopefully not seven years. >> no, but you still have responsibility to do process. we live in a union based under rule of law and we will never compromise on your right to defend yourself. that being said, of course we can use algorithms too. incan use all of the tools order for us to be more speedy. >> do you think technology firms

have simply become too big in some cases? >> no, i don't think as such, that you can make that conclusion. i think they can be much more transparent. my colleagues have made i think very good proposals to ensure transparency in the relationship between the smaller business and the platform. that i think is very much needed , the transparency, the willingness actually to deal with people, and to be much more sort of clear that they respect your privacy, your ownership of your own data, so that we as citizens feel that we can build trust with technology. emily: that was the eu competition commissioner with bloomberg editor in chief at the annual bloomberg business forum in new york. someone joined us to tell more about her plans. >> she was careful to say that they are just looking at what amazon is doing. amazon is a platform that competes with and offers a place

for smaller sellers to put their products out into the world. they are going to look at how products at amazon sell themselves, like amazon basics -- that amazon sells themselves, like amazon basics, are they playing fair or not? emily: we don't know yet about what kind of penalty there might be if there is a penalty, but what are the chances amazon could be forced to change is business practices in the eu? especially given that google has been ordered to do so as well? because we are in the early stages of this we are waiting to see whether there are big problems that the eu thinks it needs to jump on. if it does it will open other probes, and at that point the risks become higher. at that point you look at what might be -- what precise market they are looking at. it's hard to assess any kind of potential fine right now. with the google find for example, they picked -- fine for

example, they picked a small market. there was one fine this summer already $5 billion. these things can roll and become very big but we not quite on that track yet with amazon. emily: president trump has not been shy about his feelings about amazon ceo jeff bezos and tangentially amazon itself. what other the chances that the scrutiny in europe could -- the united states? >> i think that is a question for the united states. the market shares of some of these companies have are much higher. in some ways some of these issues are specific to europe and the behavior that the eu will look at our european issues. i can definitely see that the u.s. has a lot of interest in what the eu is doing. america is the home of antitrust. is jumping on eu

these problems and the u.s. so far have not. does it mean -- doesn't mean it won't. she is very much trying to explain why she wants to take these cases. that's a message that some people might pick up on. antitrust forers bloomberg news. ge first female vice chair talks about being the first female vice chair and her new book. that's next. this is bloomberg. ♪

♪ comstock helped navigate ge through many complicated situations. as ge's first female vice chair her tenure saw the creation of ge and nbc's green initiative eco-imagination along with andc, who, and -- hulu,

hulu digital. in her new book she shares her own transformation story as well as ge's. >> we need to think ahead. we need creative problem solvers. look at what is happening in silicon valley. you could argue maybe we need a few more people that could think about the unintended consequences of some of our technology. with an established organizations it can be so hard to harness the power of change. how could big companies as -- such as ge be nimble in this age of technology. : i found most companies want to be nimble but taking the action to do so is another thing. you need your court established, optimized, and you need the people who are creating the future. they are different kinds of people with different measurements, different funding requirements. emily: how did the people who

are creating the future create the people in the first track to do something differently? beth: that's why you need separate tracks often. they need to come together for some things clearly and you need to set joint goals, but i think you also need these rebel pirates, these people that come in, even in big companies, and try to disrupt what's happening. that creates a lot of attention in the early stages. emily: do you think it's possible for the ge's of the world to compete with the amazons and apples of facebook, and googles of today, or is it too late? beth: i think it's something to think about. ge does not get to be that was without knowing a thing or two about change. i think we can look at sustainability in these companies, but yes, the stakes are always higher as you get new companies disrupting. ,s investors, we watch amazon they are getting bigger and more

complex, the stakes are higher, the ability to take risks. maybe the question, can these does continue to compete and be as fast and nimble as we have known them early? emily: that is actually my exact question. now that they are so big, it's hard to imagine them not been so dominant, but do you see that in the future? could they fall from the throne? beth: i think you have to assume that. that is an eventuality. there are people sitting there going, are we still the -- are we still willing to take the same kind of risks? can we? founder like companies tend to get him -- get a bit more acceptance. look at these traditional companies who have done reinvention. what they companies do well is culture. take tesla down the way, culture is a challenge. i think these companies can learn a lot from some of these established companies that had

-- that have had to figure out adaptation. companies, scale of these newer tech companies can learn a lot from some of the incumbents. emily: which of these new big tech companies is the most destructible? disruptable? beth: i think they are all disruptable. i was out in the media world when we saw netflix as a tiny whisper. we knew that was coming. we did not know how it was going to get there. now you look at it 10, 12 years later. the same forces are going to happen to netflix. i really feel like everybody needs to keep imagining forward new scenarios and new alternatives. emily: your book gets personal and its rare to hear personal lessons from someone who has had the journey that you have. you were ge's first female vice chair. why did you leave?

beth: i left because there was a management change. john schneider came in, new leader who wants a new team. i think that's what happens often. it was a bit earlier than i expected to leave, but new team. emily: what are the challenges we need to know more about in terms of getting more women into the top positions? like where you are. there were soaked few people -- there are so few people who make it to the level of beth comstock. what don't they know? beth: we need to embrace more difference. it's a human trait we have to overcome. you know it from the work you have done. people have all kinds of excuses about why they don't want to hire people who are different. trackompanies have a good record of hiring women have the undergraduate level, and lose women as they progress in their careers. we need to address that complex issue. we need to have programs that

allow women to come back in and out of the workforce. at the end of the day we just need to make way for more women. we need to have a pipeline and that takes time. you need to take your time finding the future women leaders of your company. emily: you have a killer line in the book where you challenge a male venture capitalist who had said we are looking hard for women but not prepared to lower our standards. you said, who created the standards. and you said you can't find any women that qualify? that's absurd. why are more women and minorities not getting hired? they are half the population? beth: people don't want to take a risk on something different. it's not proven. there's a thought that if they don't have the same path as us, they clearly can't be quite as capable at this job. i love the discussion of meritocracy. who is setting the merits?

i think a lot of people are well-meaning but they are not challenging their thinking to say, is this really true? and i doing enough to challenge that belief? i think we just let it pass. taking enough risk to hire people who are different, disruptive, and potentially going to build a brighter new future. it's the risk i think, at the end of the day. emily: we don't use the word visionary or genius to describe women, but we use that word to describe dozens of men. how fast do you see change happening? people always ask me how optimistic are you. you have been there in the trenches behind the scenes. how fast are we really going to see the numbers shift? beth: i'm optimistic. there are a lot of people saying we have to make a change. i wish it were faster. frankly having worked for 24 plus years, i wish there would have been more change.

it is disappointing and frustrating. i see it for my daughters and young women coming up. the salary issues are still what they are? you still are having to work much harder, do things in a much harder way? how is that possible? emily: what's next for you? beth: i'm doing my book tour. i will answer work in a new way -- enter work in a new way. emily: do you think ge can get back to greatness? beth: i think ge is great. it's a great company. it's in a bad place with the stock market right now. that has some complex issues that they have to work through. i think people underestimated the complexity of ge internally and externally, and it's not an easy fix. emily: that was beth comstock. that does it for this edition of the best of bloomberg technology. tune in every day 5:00 p.m. in new york, to copy them in san

francisco -- 2:00 p.m. in san francisco. be sure to follow tictoc on twitter. this is twitter -- this is bloomberg. ♪ >>

scarlet: this is "bloomberg etf i.q.," where we focus assets, risks and rewards of exchange traded funds. ♪ holding near record highs and companies on a buying spree. what etf's can investors use to futurize their portfolios? we put that question to matt bart illini. first mover advantage. with everyone and their mother betting on a marijuana boom, we speak to the first ceo of a cannabis etf fund. not getting as much hype as a