tv Bloomberg Technology Bloomberg December 11, 2018 5:00pm-6:00pm EST
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emily: i'm emily chang in san francisco and this is "bloomberg technology." the google ceo testifies before the house judiciary committee raising tough questions. lawmakers,k to two one democrat, one republican, that part in the q&a. privacy, launching a censored search engine in china an accusations of conservative bias. of did he respond to some
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the questions and how will it shaped the company going forward? a development in uber's plans to go public. they tapped morgan stanley to lead its ipo. to the top story, the google ceo faced more than three hours of questions before the house judiciary committee on capitol hill. lawmakers pressed them on how google protects privacy. what the search engine plans to do in china, and what other platform is biased against conservative views. it was a tutorial for how google works. >> if you googled the word idiot under images, a picture of donald trump comes up. i just did that. how would that happen? how do search work so that that would occur? copiedave gone out and billions of pages in index and take the keyword and match it
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and draft thems based on 200 examples. >> so it's not some man sitting behind the curtain figuring out what to show the users? basically a compilation of what users are generating. emily: it is not some little man behind the curtain he indicated. naomi spent the day inside of the hearing and joins us from washington. take us into the room and a set the mood. what was it like in their -- and set the mood. what was it like an there? >> there was a lot of pent up frustration from lawmakers. they have not had this opportunity to question before. lawmakers on both sides of the aisle had questions. there were a lot of issues to discuss. from conservative bias, allegations of spread of misinformation on the platform. he was definitely in the hot seat but seemed to manage it well. emily: what were the standout
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moments for you where tensions to begh, or he seemed perhaps more evasive than at other times? naomi: i think the questions around what google is doing in china got particularly tense. sinder seemed to of aid those questions. he said we don't have current plans to watch in china. he did indicate that the -- google had 100 people working on this project. lawmakers pressed him on that. there were interesting moments around allegations of conservative bias. lawmakers were saying things like look, it seems like the employees are particularly liberal. how can it be that your product is not as well? firm andetty
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saying they are not politically biased. emily: yet the question remains, how does google handle the perception of political bias given the leaning nature of the workforce. naomi nix, who spent time is out of the hearing today, thank you for weighing in. one of the key takeaways from today is congress once enters -- wants answers. >> we are no plans to launch in china. we don't have a search product there. provide mission is to users access to information and getting access to information is important. we are always compelled across the world to try hard to provide that information. emily: did that answer satisfy lawmakers? let's find out from a congressman who asked pichai a series of questions about china. he joins us from washington and represents the first district of rhode island. how satisfied were you about the
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answers on china? >> i was not satisfied. i was disappointed with mr. pichai's answers. it is inconceivable that google could launch in china and at the same time, honor its commitment to universal human rights and to be sure they are a force for good. they will be used by the chinese government to collect information, engage in surveillance and censorship. 50 human rights organizations have come out strongly against it. i hope that pichai with a google does not intend to do it but he did not say it. he continued to say it was an internal discussion. it is very alarming that's, in a repressive place such as china, with a gross disrespect for censorship, no free press, that's google could become an enabler and facilitate idealsive -- repressive inconsistent with their core mission and america's core
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values. emily: he did not rule out plans to get back into china and did not to die they have had conversations with chinese government officials. he did reveal at one point there were 100 employees working on this project. it does not sound like this china plan, china experiment if you will, is going away. what other questions do you have in that case? rep. cicilline: i think we have to continue to be sure that we are watching this closely. he committed to engaging with congress on this issue and continued to engage with us as they move forward. i think we have to look at legislative solutions, regulatory solutions. we should not allow an american company to facilitate what could easily be very serious human rights relations to become a propaganda tool of a repressive government. if they could happen in china, it could happen to other places in the world. when we see a rise of
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authoritarian power, an american company should not be facilitating that or helping it happen. we will stay very close to this issue. we will continue to engage with google. legislativeetermine solutions to prevent this from happening. emily: what actions would you take given what you have heard today to rein in the power of google, which is one of the most powerful companies and the planet? rep. cicilline: the other issues i raise with google is there discriminatory behavior. whether they favor their own products in their search processes. the european union found they were and imposed very heavy fines. i asked to you -- could you commit to not engaging in discriminatory behaviors and mr. pichai said it is not occurring and turkish you with the signing of the european union -- finding of the european union. we will get to this in the
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judiciary committee on how the internet remains open and free and there are not anti-competitive behaviors by these big technology platforms. i think this is an issue which we will focus on in the antitrust committee making sure the internet remains open and free, and free from discrimination that favors these dominant platforms. emily: you are likely to take over the antitrust committee, what hearings do you have planned? rep. cicilline: i think we will begin with the top to bottom review of the existing antitrust laws. we will bring an expert technologists who have good ideas about the ways we can respond to this increasing concentration of economic power and huge platforms that are the gatekeepers. sure we arean be preserving access to reliable, trustworthy information on the internet. doing a lot of careful study, bringing in people who have expertise, listening to
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suggestions of ways to move forward, i hope we can work in a collaborative way with the big technology companies. these are difficult issues but serious ones. this has been the wild west. in the early years of the internet that was necessary, but we are at the place where we need to have more responsible regulation, so we can diminish the consequences of this huge concentration of economic power in these platforms. emily: would you like to call sundar pichai to testify again? do you want to hear more from jack dorsey and the ceo of facebook. rep. cicilline: i hope so. i hope we can work together to develop solutions to these very pressing problems. it will require lots more conversations and lots more testimony before committees. emily: specifically, when it comes to more regulation on google, where would you like to see regulation applied? rep. cicilline: i think we have
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to be sure we are doing this in the right way. we don't want to impede the free, open internet. we want to make sure we are doing it in a way that advances consumer rights and privacy interests. some of the things i'm hoping is, happen in the states competition based solutions so -- portability so people can move from platform to , so there will be some incentive for technology companies to enhance their privacy protections and the market can drive some of that. cleark we need legislation or regulation that make it clear data belongs to the consumer. they ought to have full control of what happens to their data, ought to consent to the use of the data by a third-party. there is a number of things we can do to create privacy for consumers so they can control their own data. these competition based solutions are part of it. there are not easy answers to
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these things, but we need to bring in people that have the best ideas who have worked in this space and begin to shape solutions that represent our constituents. emily: is a democratic house and republican senate repair tour together on measures on privacy that the president can sign on to? what does that look like? rep. cicilline: i don't think we should have republican or democratic issues. these issues are about privacy for americans. this is broad bipartisan support -- there is broad bipartisan support. we should work bipartisan lead to protect consumers, but do in a way that does not inhibit innovation. these are issues good for the country. where there is real consensus on it. what we ought to be doing is looking at the existing regulatory frameworks and existing statutes to determine
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whether they are working properly. if not, what do we need to do? we need to rely on people that have expertise in the field to guide the discussion so we come up with solutions that work and do not impede in any inappropriate way with the growth and dynamism of these companies. emily: congressman david island,e: of rhode thank you so much for stopping by. coming up, google's plans to get back into china. revealed that 100 employees were working on the effort, code-named dragonfly. that is next. this is bloomberg. ♪
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he said repeatedly the company has no plans to go back to china for now, but would not rule it out. he would not comment on whether the companies have had -- company has had conversations with chinese officials on the plan. will it or won't it? we have david kirkpatrick in new york and mark bergen who covers alphabet. mark, isn't it our understanding this and are by try -- that thear pichai is one of biggest advocates of this. >> yeah. it's their plan to work in india, southeast asia, and countries like china. sundar has made china a key part of the strategy. i think that's why he evaded the answer of which team is working on this. emily: you mentioned the word evaded. i want to take a listen to exactly what he listened to. take a listen to this exchange.
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are there any current discussions with any member of the chinese government on launching this app? >> we're currently not in discussions around launching engine in china. steps towards launching a product in china. emily: he did not get a yes or no in response to a yes of our question. his tacticu make of on this question? david: i think he is in a tough spot because there are probably good reasons why google would be investigating how it would possibly get into china. even if it believes the chances it ever would try to do so a relatively small. this is the world's largest internet market.
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more and more countries are moving in the direction of governing their internet restrictively in the way china does. i can see learning that might come out of this process that would be beneficial to google as it seeks to serve everybody on the planet. if they were to launch in china under any conceivable near-term scenario, they will have a horrible reaction in the united states and from users around the world. emily: is there any way google could do this and not avoid that reaction? i think his responses today seem like he was very confident. employees that are openly against this program and many that have been vocal and internally supporting it. i think google and the top leadership think a lot about china is part of their mission. their mission statement is providing search to the entire world. sunadar said something that
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google has never said before. as if they push forward with plans in china, they will voice it as an argument. yet there are people that believe google going into china with a censored search engine is a violation of human rights. david: including me. uncensored information is a human right. circumscribed information circumcised to be -- circumscribed as a violation. they would have to give the chinese government some backdoor and agree not to pursue certain searches. it probably would not be able to get the chinese government to allow it to say, users, be aware what you are seeking is circumscribed. it would be dishonest and a violation of human rights if they did not do that.
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emily: at another point during the testimony, mark, the child was asked -- pichai was asked if they share data with the chinese government. because some of the products were not available in china. available, with a be looking at this? this? mark: we don't know the exact details. apple operates in china, has a massive business in china. the assumption that every single i message in china is the same as a backdoor to the government and the government can access the data. this is something that google points out. they say look at the compromises that apple has made. operating inpeers china have made a lot of compromises to operate their. that has been operational -- there. that has been operational view. emily: david, is this something
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google will have to explore or have to do at some point if it wants to keep growing? david: like i said before, this is the world's largest internet market. i can't fault them for spending a lot of time figuring out is there any conceivable way we can honorably do this. they can still grow, definitely, in geographies all over the world. i would also say, regarding mark's point, there is something different about a search engine that a device company or a lot of other companies operating in china from the united states. it's search has a different character. does facebook. those two companies will have a dickens of a time to get the government's position. it's understandable they would be explorative. emily: more broadly, did you get a sense that google will have to alter its business practices as
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a result of the interest from lawmakers? mark: from today's hearing? we saw an interesting focus on data collection. there were a lot of questions texashe congressman from asking about gps. a few years ago, there was concern they could not crack mobile and they have thanks to android. they have a huge share of the mobile advertising market and a lot of that is because they have granular and precise location data. if there are restrictions on that, that could be a liability for the business. if you look at what happened in europe with gdpr, google and facebook are in a strong position with the advertising industry. the longer run, hide you expect that will impact the business? david: you mean whether or not they are tracking people and everything we do? emily: absolutely. david: i think we are seeing a
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societal push back right now that is in its early phases. against this notion we should be targeted for advertising based on data about our every last move. i think that is a problem these companies are going to be facing because they have gone so far in tracking us and have made so much money by doing so, that the general public is starting to understand just how egregious that has become. the press is looking into it extensively. i think it will be a big challenge for them indefinitely. emily: we will talk about this more later in the show. david kirkpatrick, mark bergen who covers alphabet, thank you both. much more ahead, bloomberg tech's livestreaming on twitter. be sure to follow our global news network, @tictoc, on twitter. this is bloomberg. ♪
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emily: the could be a new application and the rest of the hauwei ceo.- michael corbett went missing hours before the veil appearance of the cfo. it's not known if the two are linked. there is a possibility of retaliation being questioned by chinese authorities. that theudeau is aware chinese government is talking -- dell won a vote to return to the public markets. a move led by the founder. the giant said it would list on the new york stock exchange under the ticker dell.
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softbank is said to be planning to sell its stake in nvidia. the company could make about $3 billion off of the sale. a final decision has not been made. the report comes as nvidia and other semiconductors continue to feel the impact of trade tensions between the u.s. and china along with slowing demand. bobng up, we talk to goodlatte about sundar pichai's three and a half hour testimony in washington and whether or not he was satisfied with the questions surrounding google's collections of user data. that is next. this is bloomberg. ♪ is bloomberg. ♪
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leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. emily: this is bloomberg technology. i'm emily chang in san francisco. to our top story. the first appearance before refuting claims of buyias, explaining the company's and ach to privacy stressing its american roots. allegations from republican lawmakers about an anti-conservative bent including pressed on one specific study. >> not possible for an individual employee or groups of employee to manipulate our search results. e have a robust framework including many steps in the process. >> my time is up. let me just say i disagree. humans can manipulate the process.
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it's a human process at its base. emily: we should mention the study mentioned by representative smith has been refuted by multiple third and while there is no evidence of systemic censoring conservatives, there is no enying that google's workforce is largely liberal. there are claims that they are silenced across search, news, and social media. is the us to discuss congressman who led tuesday's hearing. thank you so much for joining us. question, how satisfied answer with pichai's about bias or lack thereof? good hearing.ry members on both sides of the aisle asked very good questions. bias, mr. ue of pichai was not very helpful in etermining whether or not when they rely on third parties like the southern poverty law center some groups eled that are clearly not racist as
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being racist and, in fact, have at least one entity multimillion dollar judgment, that indicates to me that this is a problem wrestling is still with, has not resolved. california see the republican party labeled by ideology and they bring up nazism or a north carolina senator when they are placed up, below that it says that she is a bigot, these are things that systemic bias or hether it's simply a flaw in their algorithms is a serious problem that they do need to address. lot of other issues we talked about today as well. google square s the other perception problem workforce is ts largely left leaning that it is no matter what pichai says? > i think they have to work
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overtime to gain the confidence of a large percentage of the american population who wants to assured that when they conduct search or when they things on particular youtube, a google subsidiary, get fairly g to treated and they're going to get nbiased information about what it is they are searching for. emily: we heard several republicans say things along the lines of a don't want to regulate you, but, which is it, republicans want to regulate google or not? >> i think overwhelmingly the to blicans do not want regulate google, but the problem they find themselves in, google does, is that they have an the law, section 230 of the communications them to ct that lousz censor objectionable material ithout facing the kind of liability laws that others, for
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example, organizations that they are subject to. and just like your news radio station a or a newspaper are subject to libel laws and can be held falsehoods, this exemption that technology fact ies have, given the that they have moved from a platform that anyone can post on and people can look at it, we're like a phone control what n't people do over their system, they now have become editors of and, therefore, i think the congress does need to take a close look at how these are regulating themselves. i'm not, again, i'm not saying the government should regulate them, but if they are libel law, you don't need regulations because i can assure you that media companies are subject to libel laws,
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take great pains they aren't sued for libel. were same standard applied to the technical nothing companies, that might be a self-regulatory influence. democrats brought antitrust legislation, how do you imagine republicans would respond? you would have to see what the legislation does, our antitrust laws are important regard to google because hey control about 90% of the searches in this country. i think that youtube has about of the adult population and 18 to o 95% of the 24-year-olds using it. they are definitely an important power. they have grown to that position because they have provided services that people want and need.e when you go in and try to use he antitrust laws, i'm not opposed to doing that, but you have to do it in a way that akes great pains to make sure you don't result, you don't have a result that takes away from
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that the kinds of things they count on for google to provide them. that her thing i think this hearing helped with american consumer was to make more painfully aware than they may already be about just overwhelming ch information google has about you. device one an android your person and a majority of do, they know when you bend over. they know when you go from the floor.floor to the second they know the temperature in the room that you're in and you with all of the information they gain by the things that you search for, they a tremendous amount about people and they have to work overtime, as i say, to make sure to have the tinue trust of the american people and i think they're losing that right now. that's why after months and months and months of trying, their fortunate that c.e.o. did agree to come forward
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nd talk to us about all of this. emily: where do you think republicans and democrats might common be able to find ground when if comes to egislating big tech in a new congress? >> it might be around examining ow section 230 of the communications decency act, it might be around some antitrust law. new into this new into this to know where that consensus might develop. there certainly was a lot of consensus and concern about the fact that google is right now in discussions with the chinese government about entering into their market, a market that they from in 2010, re-entering that market with would allow the censor andernment to gather information that americans would be very appalled in thef they tried to do united states. double standard is is
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concerning, but again, their competitors are in that chinese market. they're trying to figure out how a way that still llows them to uphold their american ideals of free speech and privacy and so on that one would be concerned about in doing business in china. they need to be very careful before they enter into american any kind of agreement get into that market. now facebook and twitter have gotten a disproportionate when it the criticism comes to meddling, disinformation in the united in u.s. elections. what do you think google's role the spread of misinformation should be? >> well, how you conduct a very, very e influential in terms of what information you have and how you decision-making process of what candidate to vote for or what information rely upon.g to so when you type in a search it immediately starts giving you suggestions,
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hree, four, five suggestions right below the search bar and some have been shown by studies to be biased. now, if indeed that's the case, re-evaluate that to make sure that when people do fair they are getting a sampling of the information they need. then once the search is conducted and they produce information, how they put it up n front of the viewer, i know they're a company that wants to monetize the information that they have and, therefore, make revenue from advertising as possible, but they have to their that against responsibility to provide balanced information to their customers. emily: all right, represent bob goodlatte, chair of the house judiciary committee, thank you very much, congressman for stopping by. up, we continue our coverage of today's hearing. how does the performance compare zuckerberg's or jack dorsey's on capitol hill?
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emily: google sundar pichai c.e.o. he first big tech to be questioned on capitol hill. saw mark zuckerberg and u.s. a chance to es had question chai on everything from user data privacy to the push into china. his performance in washington's hot seat compare to the likes of other silicon giants? , jason, you have watched every single one of word.hearings word for
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pichai's think performance has compared? >> one of the striking things is they're ess did, getting smarter every time we have a hearing and so, i think today was that congress still can't ask can't ask questions of these big powerful c.e.o.'s which we heard out of the zuckerberg facebook hearings spring.the i'm watching closely and they're asking savvier questions and on topic areas. emily: they were better informed than when mark testified. more broadly, david, what do you sundar pichai presented himself, this was obviously his first time in the hot seat, as we understand it, love being a spokesperson for google. he much prefers to be the the scenes.ind so that taken into consideration, what is your assessment?
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david: well, i think he came earnest, but i don't think he really tried to express with their concerns enough. or example, when the congressman was holding up his phone and saying could you track me across the room, he was ways they were technically accurate, it was based on the apps on the phone, et cetera. say,he really should do is look, we at google understand that the american people are nervous gly getting about how much we are tracking them and that's something we're thinking hard about. -- idn't say emily: now, david, hang on, because i actually have that listen tolet's take a this exchange with representative poe holding up his phone. there and sit er next to mr. johnson and carry my phone, does google know that i was sitting here and that i over there? >> you're welcome anytime, judge. no.es or >> i generally don't know
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without what -- don't know.ed you i think google obviously does. emily: now, david, he was up an iphone, not an android phone. certain google apps could have downloaded on the phone. it could be using safari, a ways that google could have been tracking that phone? > yes, his answer was overly technical one. unfortunately, he wasn't really allowed to say it, but the that, as the "new york times" wrote this week, this incredible article about ow location services that we inadvertently authorize on our phones, both iphone and android, tracking us to an extreme seriousthis is a really problem that we are all subjected to. i think he has to recognize that. back to e called congress to talk about that further down the road, i predict. emily: right, representative cicilline indicated as much. when it comes to
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protecting user privacy, user security, take a listen. >> protecting the security of our users is what really keeps at night and it's something we invested a lot over years. we work with law enforcement, we rely on their intelligence. and a comprehensive effort it's something we take seriously. me, jason, tracked as one of the bigger admissions he is concerned about how his company is conducting user privacy. hearing, google evealed another breach of user data, google plus accounts breached again. of that you make admission from sundar pichai, jason. no way not to admit, specially with sandwiched with questions about the entry into tried toch he artfully dodge.
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i think he has to be a little more honest with those answers. isn't going away. a ly: there is still a question, though, will republicans be onboard with antitrust regulation of google. necessarily clear from representative goodlatte's interview that we just conducted as well as several republicans in the room who said i don't want to regulate you, but. where do you think, david, republicans are actually going to fall down on this? really good s a question. i think it's hard to say. representative goodlatte said, they're generally opposed to restricting companies -- they of leaning toward more lenient approach toward lot of , but there is a concern about the sheer scale of these entities on both sides of aisle. i do think and jason and i were talking about it before, i think there is really a possibility hat some creative ways may be arrived at to really just sort
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of put more oversight on all have acquired at this unprecedented scale of society.e over modern we don't have any real rules constraining them. though iomething, even an't claim i know what they should be. emily: now, there was one issue hat, quite frankly, i was a little disappointed didn't get more air time in this hearing youtube.was did sentative nabler mention it at the beginning of the hearing, he asked what extremists doing with content. youtube id the way takes videos down, video by video. he odged a bullet in that didn't get more questions about youtube? >> that's a good point. i think he did. dodge that bullet. that's where facebook has taken lot of heat in their product offering and how it affects us
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ith disinformation and other violent content that can spread through it. youtube is very much a part of that discussion. did avoid a lot of those tougher questions. to last year, it was bloomberg that reported that the number two news channel on youtube which is version to the clean and better quality content and those types of questions are difficult questions for them to answer that intersect with human ecisions in terms of what they're offering us as the public. emily: any user with a quick see that youtube is ife with disinformation, with conspiracy theories with the very things that congress is so concerned about. david, should youtube be getting more scrutiny, just as much if facebook?than david: i don't think they should be getting more scrutiny than facebook. i think they should be getting a of scrutiny.
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actually think youtube has marginally done a better job than facebook at controlling and taking a little more of an role, not a rsight lot, but more than facebook. unwilling entirely to do that at all. youtube has done something in that regard. see youtube as't eing as toxic a social weapon as facebook particularly in countries that are where rising, et nism is cetera. but clearly, i believe all of some sense ies in are media companies and they have to start acting more like is, xactly where the line jason and i might disagree about hat, but there is more moderating and oversight they have to provide. a lot of outstanding questions remaining for sundar ichai and other tech executives. thank irkpatrick, jason,
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of the global economy. risky talk about scenarios. looks very solid. say what emature to will happen. an advocate forstable global oil markets. we need to get together and listen to our colleagues. emily: days after filing for an uber is now said to have selected morgan stanley to lead its public offering. news marketing another big win for morgan stanley which is elping several tech companies to market and can expect to receive a large portion of the fees that come with the i.p.o. with the listing at $120 billion, uber's i.p.o. could be all time. largest of in the meantime goldman sachs has also said to likely play a in the company's public debut. why morgan stanley and not goldman sachs is the question? >> morgan has helped uber on a
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fundraising bt rounds. a lot has been controversial. hat has helped develop the relationship. i think michael grimes has played a big role and established himself here and here and that's the bank that has been in the room writing the prospect us, not too surprising, then that they're the ones going to lead the offering. when you published the story, i couldn't help looking morgan facebook and stanley and the opening day was kind of a disaster. as i understand it, morgan carried a bit of baggage from that. are those days behind it? >> i think so. top two i.p.o. bankers, so clearly plenty of it.anies they are past facebook did turn out to be a highly valuable company, so it if they underpriced the goal was to pop on an i.p.o., but certainly looking now, they weren't crazy to say that facebook was a valuable investors maybe should have paid up a little bit
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more. goldman, is this a big loss? >> this is morgan sort of leading the i.p.o., goldman will have a role down really the 't position they want. even if it was sort of morgan tanley sort of leading this, the fact that it's not sort of both of them hand in and isn't goldman sachs. this is the defining i.p.o. of the time and also because j.p. the opportunity to go to lead lyft. awkward situation, there is team uber, which has a team pile of money and a lyft with an opportunity to run and goldman, sort of stuck in the middle between those two situations. emily: and goldman held out for uber, it didn't work out. courting uber n as aggressively as morgan stanley has? >> certainly. for a long time there were senior goldman executives sort of throughout uber's ranks, very goldman company in terms of their recruiting and
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people y some of those have left. their old head of finance left for another start-up. so, yeah, i think that relationship clearly, not as stanley, but n we'll have to see. it's not necessarily over for them. there is still plenty of work to done before uber goes public. we'll have to see sort of what on.dman takes emily: any updates on timing? >> i would love to have them. for both uber and lyft, the first half of the year, lyft has talked about now it's sort and of a dance, feedback from the s.e.c., how quickly they can get where the market is, so there are some variables that at this point to really tell you when it will be. the first six months of next bet.is my emily: eric newcomer is not going to sleep for a few months, eric, for very much, sharing that scoop with us. that does it for this edition of technology.
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paul: good morning, i'm paul just opened for trade. shery good evening, i'm ahn. i'm sophie kamaruddin kong, welcome to "bloomberg asia." paul: our top stories this wednesday, driving ahead, china to be close to luring tariffs on u.s. made cars, a climbdown by beijing. drama in the oval office. president trump said he would be proud to shut down the
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