emily: i am emily chang and this is "the best of bloomberg technology." the google ceo testifies before the house judiciary committee, facing tough questions. we will talk to two lawmakers who took part. apple suppliers may consider moving iphone production away from china if tariffs drive. what does it mean for the supply chain and will other companies follow? glossier is disrupting the half

billion-dollar beauty market. first, our top story, the google ceo face more than three hours of questions on capitol hill. lawmakers pressed him on how google protected user privacy and whether the platform is biased against conservative views. it was a tutorial for just how google works. >> if you google the word "idiot," under images, a picture of donald trump comes up. i just did that. how would that happen? how does search work? >> we have gone out and crawled and copied billions of pages and we take the keyword and match it against the pages and rank them based on our signals.

>> it is not some little man behind the curtain figuring out what we are going to show the users? it is a compilation of what users are generating. emily: not some little man. we caught up with the democrat from rhode island who asked a series of questions about china. >> i was not satisfied, i was disappointed with 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 to collect information, to engage in censorship, human rights organizations have come out against this.

what i hoped he would say is google does not intend to do it but he did not. he continued to say it was an internal discussion but it is alarming that in a repressive place such as china with a disrespect of human rights, no free press, that google could become an enabler and facilitate repressive economies and surveillance inconsistent with their core mission and values. i am disappointed he did not shut it down and that this is going to continue. emily: he did not rule out plans to get back into china. he did not deny they've had conversations with government officials. there are 100 employees working on that project. it does not sound like this is going away. what other questions do you have? >> we have to continue to be sure we're watching this closely. he committed to engaging with congress on this as they move forward.

we have to look at legislative solutions. we should not allow an american company to facilitate what could be human rights violations, to become a propaganda tool of a repressive government. if it could happen in china, it could happen in other places. an american company should not be facilitating that or helping that happen in china. we will continue to engage with google. we have to determine other solutions that prevent this from happening. emily: what actions would you take, given what you heard, to rein in the power of google? >> the other issue i raised with respect to google is their discriminatory behavior, whether they are favoring their own products in their search. the european union found they were and imposed a hefty fine.

i asked, can you commit to not engaging in discriminatory behavior which disadvantages competitors. he said it is not occurring and took issue with the finding of the european union. this is an important issue that we are going to get to -- how to make sure the internet remains open and free and there are not anticompetitive behaviors. this is an issue which we are going to focus on in the antitrust subcommittee, making sure the internet remains open and free from discrimination that favors stopping implant forms. emily: you are likely to take over the antitrust subcommittee. what hearings do you have planned? >> we will begin with a review of existing antitrust laws. we will bring in expert technologists.

and how we can be sure we are preserving access to reliable, trustworthy information on the internet. doing careful study, bringing in people who have expertise, listen to what some of the smartest technologists suggests, and i hope we can work in a collaborative way with technology companies. this has been like the wild, wild west, which in the early years, was necessary but we are now in a place where we need to have regulation where we can diminish consequences of this economic power in these technology platforms. emily: would you call or will you call him to testify again? mark zuckerberg, do you want to hear more from them? >> absolutely.

i hope this is just the beginning of an ongoing discussion between these leaders in congress so we can work together to develop the best solutions to these problems. it will require more conversations and testimony. emily: when it comes to more regulation on google, where would you like to see that applied? >> we have to be sure we're doing this right. we want to make sure we do not impede the free, open internet and in a way that advances consumer rights and privacy interests. some of the things i am hoping we will have is a competition-based solution so that people can move from platform to platform with their social graph so there will be incentive for technology companies to enhance their privacy protections and the market can drive some of that. we need some clear legislation that makes it clear that data belongs to the consumer. they ought to consent to the use of that data by a third party.

i think these competition-based solutions are part of it. there are not easy answers to these but we need to bring in people who have the best thinking and ideas and begin to shape solutions that protect the constituents we represent. emily: the congressman of rhode island. we also speak with bob goodlatte who led tuesday's hearing. >> it was a good hearing. i thought the members asked good questions. on this issue of bias, he was not helpful of determining whether or not when they rely on third parties, the southern poverty law center has labeled some groups that are not racist

as racist and has been sued by one entity and had to pay a judgment, that indicates to me this is a problem that google is wrestling with, has not resolved. when you see the california republican party labeled by google and they bring up nazism or a north carolina senator when her photograph is placed, it says she is a bigot, whether it is systemic bias or simply a flaw is a serious problem that they do need to address. there were other issues we talked about as well. emily: how does google square the other perception problem, that because its workforce is largely left-leaning, that it is biased no matter what he says?

>> they have to work overtime to gain the confidence of a large percentage of the american population who want to be assured that when they conduct search or on youtube, they are going to get fairly treated and unbiased information about what it is they are searching for. emily: we heard several republicans say things along the lines of i do not want to regulate you but. which is it? do the republicans want to regulate google or not? >> overwhelmingly, they do not. the problem they find themselves in, google does, is they have an exemption under the law of the communications decency act that allows them to censor objectionable material without facing the kind of liability laws that others, for example, organizations they rely upon, are subject to.

just like your news organization or a radio station or newspaper are subject to libel laws, it can be held liable for falsehoods, this exemption that technology companies have, given the fact they have moved from providing a platform on which anybody can post whatever they want and therefore they are saying, we are like a phone company. we cannot control what people do. they have become editors of that content and therefore, the congress does need to take a close look at how these companies are regulating themselves. i am not saying that the government should regulate them. if they are subject to libel laws, you do not need regulations because media

companies that are subject to libel laws take great pains to make sure they are not sued. if that same standard were applied to technology companies, that might be a self-regulatory influence. emily: if democrats brought antitrust legislation, how would republicans respond? >> you would have to see what the legislation does. our antitrust laws are important with regard to google because they control about 90% of searches in this country. youtube has about 75% of the adult population and close to 95% of the 18 to 24-year-olds using it. they are important. they have grown to that position because they have provided services people want and need. when you go in and try to use antitrust laws, i am not opposed to doing that, you have to do it in a way that takes great pains

to make sure you do not have a result that takes away from people the kinds of things they count on for google to provide. the other thing this hearing helped with the american consumer was to make them more aware about how much information google has about you. if you have an android device on your person, and a majority of americans do, they know when you bend over, when you go from the first to second floor. they know the temperature in the room you are in and you couple that with the information they gain by the things you search for, they know a tremendous amount about people and they have to work overtime to make sure they continue to have the trust of the people and they are losing that now and that is why after months of trying, we were

fortunate that their ceo did agree to come forward and talk to us about this. emily: congressman bob goodlatte, chair of the house judiciary committee. coming up, morgan stanley and goldman sachs bidding war over uber comes to an end. if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg app and on sirius xm. this is "bloomberg." ♪

emily: to a bloomberg scoop. days after filing for an ipo, uber has said to select morgan stanley to lead its public offering. the news marked another big win for morgan stanley which can expect to receive a large portion of the fees which come with the ipo. with a listing valued at $120 billion, it could be one of the largest at all time. eric newcomer joined us to discuss.

>> morgan has helped uber on a lot of its debt fund raising rounds. some of them have been controversial. that has helped develop the relationship. michael grimes has played a big role and established himself and that is the bank that has been in the room, writing the prospectus. not too surprising they are going to lead the offering. emily: when you published the story, i could not help thinking back to facebook's ipo, which morgan stanley also had, and the opening day was a disaster. as i understand it, morgan stanley carried a bit of baggage. are those days behind us? >> i think so. plenty of companies think they are. facebook did turn out to be a highly valuable company. perhaps, they underpriced it if the goal was to pop but looking back now, they were not crazy to say that facebook was valuable,

that investors should have paid more for. emily: what does it mean for goldman? >> i think the fact that this is morgan singularly leading the ipo and goldman will have a role down the road, is not the position they want. even if it was morgan stanley leading this, the fact it is not both of them hand-in-hand, is not great for goldman sachs. this is the defining ipo of the time. jpmorgan had the opportunity to lead lyft. there is team uber which has a huge pile of money and then there is team lyft where you have an opportunity to run and goldman is stuck in the middle. emily: and goldman held out for

uber and it did not work out. had goldman been courting uber as aggressively as morgan stanley had? >> for a long time, there were senior goldman executives throughout uber's ranks. it was a goldman company in terms of recruiting. those people have left. yeah, i think that relationship is not as deep as morgan stanley but we will have to see, it is not over for them. there is plenty of work to be done before uber goes public. we will have to see what goldman takes on. emily: updates on timing? >> i would love to have them. for uber and lyft, the first half of the year, lyft has talked about march or april, now it is how quickly they can get ready. there are variables that are

unknowable to tell you when it will be. the first six months of next year is my bet. emily: eric newcomer there. softbank is said to be planning to sell its stake in nvidia. the company could make about $3 billion off the sale. the report comes as nvidia and other semiconductors continue feeling the impact of rising trade tensions as well as slowing demand. coming up, robin hood is rolling out a new perk for its customers. they talked to bloomberg about the company's growth. this is "bloomberg." ♪

emily: robin hood financial rolled out its version of a bank account to customers on thursday. it will offer checking and saving account options with 3% interest. that's higher than the rates offered by goldman sachs. it has taken its shot at traditional banks with improved interest rates with little game. julie sat down with the robinhood co-ceo to ask how they can offer this substantially higher rate. take a listen. >> the way robinhood offers this is we take customers' cash held in their checking and savings balances and we invest them in government grade assets. u.s. treasuries, the yield we earn, we pay back to customers and we believe that long-term it will be a profitable business for us, so we are very excited about it. >> you mentioned there will be checking and savings.

will the checking come with a debit card? >> correct. there are four designs and it is issued in partnership with mastercard. we have a commercial agreement that we share in the interchange revenue which is the other way this product makes money. >> since you are able to go out and invest in other products, i assume this is different than a typical checking account i would get at jpmorgan where they are lending this money and it is not insured. should customers have any concerns that their money is not going to be safe when depositing it into this account? >> robin hood checking and savings is offered by our broker-dealer and it is insured up to a quarter million dollars, which is the same insurance amount offered through traditional fdic

insured accounts. it has a lot of similarities to fdic insured accounts, but is offered through our broker-dealer which is a financially regulated entity as well. >> after offering free trader to customers, you have done things like get into crypto and options trading. it was not super surprising to me when i did my piece last weekend a lot of people said you guys are an ipo candidate for 2019. does that seem too early, or is it a possibility? >> we announced robinhood five years ago this week, in 2013, with the stated mission that our goal was to

democratize the financial system in our country. a very lofty goal. we stated the way we were going to do this was by building a company that is insanely focused on customer experience and that did things a little differently. we made long-term investments in our own infrastructure by building an engineering first company. you seen what that's yielded for robin hood over the last five years. a major step along the way we announced a month ago which was clearing by robinhood,the first self-clearing broker-dealer in quite a while, and checking and savings is the first product we built on top of it. we are continuing to make long-term investments in our business and building a company that we hope is around 30 or 40 years from now. we see this as steps along the path that we have set forward for the company. we are definitely considering an ipo. the timeline, we cannot talk about just yet. as we announced, we have also hired a cfo who comes to us from amazon. we are continuing to build the business and we are incredibly excited about the trajectory. >> got it. last question. something we've all been noticing lately, the markets have been more volatile than the last two years. what impact has that had on customer behavior? i am sure you guys see a lot in

the data from how often people are trading, how often they are logging in, and other things? >> right. one of the things that's always been unique about robinhood's customers is we tend to have customers we view as more contrarian. what i mean is that on market dips, we tend to see more buying than selling behavior. we have continued to see that over the last small bit of turbulence we have had in the market. as we look forward, we continue to be bullish on the state of the economy as a whole. unemployment is still very low. we've seen behavior that's in line with what we've seen before. emily: that was the robinhood co-ceo. coming up, fallout from the trade standoff between the u.s. and china. apple suppliers are continuing moving iphone production out of china, creating supply chain chaos. bloomberg live streaming on twitter. be sure to follow tictoc on twitter. this is "bloomberg." ♪

emily: welcome back to "the best of bloomberg technology." increasing trade tensions between the u.s. and china have apple suppliers prepping for unfavorable conditions that could mean moving production out of china if tariffs rise. president trump told the wall street journal that tariffs could be slapped on smart phones and laptops made in china. we talked about this. >> at this point, it does not appear to be likely. quite frankly, we will get more clarity as we know how much longer this administration is going to last, whether the next administration is going to continue these tariffs.

these are plan b, plan c, and plan d scenarios that the company is weighing right now. right now, if tariffs are around 10%, if those go into place, there is not much room for panic. if discussions begin of a 25% tariff on iphones, exporters from china to the united states, there might be contingency plans in effect. emily: does this mean that apple views the tariff issue as more serious than we thought? >> it is not just white knuckle for apple but for investors. this is something that cook has tried to make sure this does not heat up because apple is front and center in terms of bullseye. the likelihood here is small we could see a better chance of man going on mars than apple moving their factories out of china.

this is a nerve-racking situation, both on the demand and supply chains and the stock reflects it. emily: cook has been to washington several times and he has met up with the president's daughter. if apple moves production out of china, where would they move it? >> i love the -- it is more likely we will have a man on mars than apple moving production out of china. other places are malaysia, thailand, other countries in asia that have similar labor practices and the ability to keep cost down. i do not see a time when the iphone is produced locally in the united states. i think apple is going to wait this out. you see the stock price, this is a real problem, a real issue, a real concern for investors.

it is not real in practice but it is real for markets. emily: the ban on iphones in china right now, the result of this dispute with qualcomm, how serious is that? >> we continue, from everything we see in china, it is the older version. we have yet to separate that from ios-12 from pre-ios 12. 10% of the phones in china are impacted. qualcomm is trying to focus on the core, trying to force their hand in terms of apple and this is something, look, china is key to apple's growth prospects. the last thing you needed was some sort of further worries around china and that is why investors are watching this as the last thing you want to see is the further dent in terms of

china demand from this latest shift. emily: the huawei cfo being granted bail, how concerned are you about this having a broader impact? >> apple has a bull's-eye on its back. you look at the u.s. technology companies and they are the ones that are worried, not just from the demand but from the supply chain. i do not see many u.s. tech ceos running to book their flights to china and this next call, you see how this goes between the u.s. and china but the huawei cfo situation throws a wrench in it and you see it impacting stocks and that has been a black cloud over u.s. stocks, specifically apple.

emily: we do have the google ceo not ruling out plans to get back into china with a search engine. as a result of his testimony on capitol hill, you have lawmakers calling for more regulation. are you concerned about the impact on the tech sector more broadly if congress takes a harder line on tech? >> it was a concern if you go back to march and april. we went through the hearings with zuckerberg and that was where there was an investor concern. it is still a risk but now it is more in the background in terms of big tech and some sort of regulatory risk. right now, it has been added to a overhang on the stocks and you've seen on the faang names, you never had regulatory risk and that is being factored into the multiples and investors are keeping a close eye on it in terms of what comes out. emily: dan ives of wedbush

securities and mark gurman. gopro is trying to minimize the impact of having its products on any tariffs list. the company plans to move production out of china by next summer. the ceo says today's political environment requires agility. coming up, speed accelerator. why they back some of the most well-known startups to strike in their earliest days. now, 2000 investments in their portfolios. we will ask partners which trends to watch in the year ahead. glossier tripled in size last year and now, it shares new numbers about how fast it is growing this year, only on bloomberg. that is next. this is "bloomberg." ♪

emily: when it comes to startups, an investment from the seed accelerator is an entrepreneur's dream come true. since 2005, y combinator has provided leadership to over 1900 startups today. it is gearing up for his next round of funding with big rounds of funding. they join me to discuss. >> the trends we saw in double down on were in financial services, we made a big investment in drugs. we see more innovation on the digital banking side, credit card side and i think we will continue to see that.

b2b, there is a big focus on smes. one of our portfolio companies focused on payroll but offering more services. you will continue to see that. we saw in mobility, trucking, we also saw micro mobility, like in scooters. a lot of capital went into these categories. emily: we always talk about the companies, airbnb, what is the next generation? >> building off of what she said, we have seen a drop in cameras as well as the pricing in radars. we see a lot of hard tech become acceptable. we see companies using that and

they are going to be able to put in ai. we have larger companies go into china to build stores. you can walk in, buy your groceries, and leave. we are also seeing this next generation, we have heard about ai a lot and we are doing ai for insurance or this but now we're seeing we are starting with a problem, doing a store that uses computer vision and putting ai on top of that to figure out what are the trends that people are buying. we are also seeing the trend that the next generation will continue to be global. emily: i did not realize how big it has gotten abroad and you have launched an operation in china. what are you doing? >> in china, we hired a microsoft executive and the premier ai expert. we want to be as accessible to founders around the world. we want to track founders who

are solving the hardest problems and that is not just in one country. we decided to open in china. >> and there were a lot of obligations from international companies. 40% of our startups were international. i think we're seeing more applications from international companies. emily: i have been following you for a longtime, almost as far back as when it was graham and livingston. 1900 startups. can you provide that many startups quality support? >> some of the things we're doing is we take batches and break them up. we have grown the partnership larger, 36% are female and we help make the batch smaller, about 25 to 30 companies and make it the same as it was so they can get that advice and attention they need. emily: diversity is something you have been criticized about. you have made it a focus and

have made it. what are you doing? >> in the last batch, 28% of founders were female. 12% were black and latino. we are putting efforts not just into founders who are applying but before that. we have startup school that is a step before the accelerator program, aspiring founders. we want to get more female founders and people of color into the system. the best part of it is the university for startups and if we can help support founders from there, we will see more. emily: traditional venture capital firms are raising massive amounts of money. you have got softbank coming in. does that change the strategy,

does that mean more competition? >> one of the beautiful things and one of the reasons i joined is it is focused on helping the founder at all stages. you can come up with an idea and we have a startup school for you. we have the accelerator program for you. we have a series, a program we launched as well as the growth program with continuity. i see it as much much more than a vc fund. >> we have this batch, we received around 11,000 applications. there are a lot more founders globally starting companies because tech is no longer just about tech. emily: we have been talking a lot about tech lash and the backlash against big tech in general and these promises to

make the world a better place when these companies are making money. do you expect that to continue and will that trickle-down? >> i think that the founders that are starting companies are aspiring to solve a problem and hoping to make experiences

emily: when it comes to the beauty industry, the glossier founder emily weiss says the customer experience is broken. she started a beauty blog that evolved into a rising social commerce star that is shaking up the $45 billion beauty market. glossier has raised $85 billion in venture capital, dropping new products every few weeks. we spoke to the ceo about surpassing more than $100 billion in sales this year. >> beauty is undergoing an incredible transformation. it is a $445 billion dollar market. it is going to be $700 billion in six years. why is that? millennials are not trusting experts. 80% of millennials look to

instagram to make their fashion and beauty shopping decisions. as we think about glossier's growth and that 70% of our customers have come through word-of-mouth, we are focused on facilitating that by having connections with customers and introducing them to one another. emily: i know you said you tripled in size last year. this has been a big year. how big? >> we are set to cross the $100 million revenue mark in 2018. emily: this year? >> this year. the thing we're most excited about are our one million new customers this year. another thing we are optimistic about is the fact that almost 50% of our monthly revenue comes from repeat purchases. we've had new customers this year but 1.3 million repeat transactions. if you think about mattresses or even clothing, it is unusual.

emily: i want to hear more about the vision. you have got two permanent stores. you have got pop-up shops and i've seen the lines that go on. what is the vision for how much of this becomes a physical presence and how much remains online? >> what is unique about glossier is the fact we have this connection with every consumer and not many companies can say that. you look at some of the incumbent companies who rely on retail channels and partners to communicate with their customers. we have this direct connection with every person. we facilitate that by having off-line experiences where we connect them with one another and we create this community flywheel that leads to growth.

emily: you would never sell to a department store, to amazon? >> those are not part of our plans. emily: how do you calculate the threat of amazon? they have their deals, yesterday was beauty and skin care products. >> i think what is so interesting, they have created a playbook for e-commerce to date. when you think about e-commerce and roughly 10% of commerce is happening online in the united states, that is nothing. there are other experiences that people want in particular with fashion and beauty categories. these are emotional categories. you have people walking in who take out their iphones and go on to google to search for products. while amazon makes it easy to consume, it does not make it easy to connect and when we think about the future, we think about that commerce and the

social utility we can build. emily: a lot of acquisitions lately, walmart, there have been rumors about an ipo. is that something you have a plan for? >> we have a lot of runway ahead of us. we have been intentional about our growth and we believe when you look at the beauty landscape and you look at beauty incumbents, in 10 years time, with the way consumer behavior is going, those may not be the most dominant players and we believe glossier has every ability to fill in that space. emily: i think about the museum of ice and glossier is a visual brand.

how do you maintain the buzz? >> we do not think about us needing to maintain the buzz. what we think about is how do maintain the tools or the digital conduits for connection for women to write their own stories. no woman is buying all one brand and yet every woman has the ability to influence the people around her to create her own beauty routine. we think about giving voice through the lens of beauty and we think that opportunity is incident. emily: you hired a product head who worked at instagram, facebook, oculus. what does that look like? >> we think a lot about the ability to create a platform that is around social utility, not around social network. when you think about social network, you think about large players that are not about a

specific interest. beauty is something all of us touch every day. every consumer is affected by and we want to use glossier, both our digital platform and physical products to activate more passive beauty consumers and encourage her to use her voice. emily: what is the plan to take this more global? >> we have launched several markets including the u.k., france, and canada. we are focused on growing those. we are focused on intentional growth and a high-quality connection with customers. emily: glossier ceo emily weiss. that does it for this edition. we will bring you the latest on tech throughout the week. tune in every day. check us out and follow our global breaking news at tictoc on twitter. this is "bloomberg."

♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.

>> coming up on "bloomberg best," the stories that shaped the week in business around the world. instead of voting on a brexit deal, parliament votes on a prime minister. >> this no-confidence vote has been threatened for so long. >> the parliamentary party does have confidence. >> theresa may survives another challenge, but can she get her brexit lan across the finish line? >> she will still have a deal she cannot get through the house of commons. >> she is a dead woman walking. >> not much clarity on the trade front either as the u.s. and china send mixed signals. >> we are hearing they separated the issue of hauwei and they are focusing on areas of common ground. >