emily: i'm emily chang in san francisco and this is "bloomberg technology." in the next hour, the other tweet heard round the world. why elon musk is in hot water agains the ftc. details are emerging about the thousands of content moderator hired through third parties. is there a better way to flag posts and misinformation? apple wants to help you catch some z's.

testing a new feature on the smart watch that could give it in average in the sleep trucking market. elon musk's twitter fingers are at it again and the sec has noticed. exchangesecurity and commission has asked a judge to hold him in contempt for violating a settlement struck last year with regulators. he is required to get approval from tesla for social media posts and other writings. the sec said he breached the agreement last week with a tweet about tesla production. on february 19, he tweeted the electric carmaker would make about 500,000 cars this year. a few hours later, he revised to sayweeting meant annualized production rate at the end of 2019 probably around 400,000, i.e. 10,000 cars per week. deliveries for the year estimated around 400,000. annualized production rate around 500,000, deliveries around 400,000. in response to the request of elon muskhe judge,

said sec forgot to read earnings transcript which clearly states 350,000 to 500,000. joining us, matt robinson who follows the sec. on the phone, we are joined by garrett nelson, who has a rating on the -- hold rating on the stock. what are the most extreme potential penalties here? get --t, the sec has to the judge has to agree with the sec that he did in fact violate the settlement from last september-october. there, it could reopen negotiations they set on the penalties and him stepping down from the board membership, so it opens up the can of worms they had closed previously and yet to be seen how far the sec could go in terms of trying to go after elon musk. walk us through the

numbers here. does the earnings transcript say 350 to 500,000 cars and does that give musk a defense? not newefenses it was information. it was a repeat of an earnings call that he clarified the tweet and took four hours to do that. he is not supposed to tweet without those tweets being vetted by this established securities lawyer. emily: shares barely moved. investors don't seem concerned. are you? >> we sure are. it's funny. tesla shares, investors seem to andmmune to this soap opera the never-ending news flow coming outof tesla of his erratic behavior so it will require the companies show oversight of his social media posts, which to us it doesn't

appear there is any oversight in place at all. we think the judge is going to come down hard on you on -- elon. most likely additional fines, perhaps social media restrictions but worst-case and aerial of -- scenario of elon having to leave the company is probably not going to happen. supposedly has a twitter center. -- sitter. there is a lawyer who allegedly reads his tweets. what does this person do and did the person read the tweets? >> this is a lawyer in house at tesla whose job includes monitoring musk's tweets. we know from correspondence that were disclosed yesterday, this tweet on the 19th, this designated sitter read them, met him at the fremont factory and

they drafted the subsequent tweet together. this person is doing their job, but he is still tweeting without them. maybe he needs more training in what is material information and what the agreement says he can't do. then he tweeted again overnight that the sec didn't read the transcript and it is embarrassing, and he clearly doesn't have respect for the agency. he has made back here numerous times. emily: what can we expect from the march 11 hearing? matt: the judge is going to take both sides and the sec is highlighting the fact the tweets need preapproval. someone needs to look at them before they are sent out. it is focused on that and what they will present to the judge. this is black-and-white. someone needs to see this before it is out and tesla is admitting no one did. and is the sec's argument from there, the judge will decide whether he violated the agreement. the point ofony is

the original tweet was to point out tesla produced zero cars in 2011 and look how much they are producing now. production numbers have beat estimates over the last several quarters. theseu at all concerned side issues could be a distraction to the actual numbers and what tesla actually produces? what theyo small feat have accomplished going from zero cars to the production rate they are at today, but the real issue was the oversight, the settlement that he entered into with the sec last fall and whether they are in compliance so that is the real issue. emily: how does this potentially affect the previous settlement? matt: this could rip it up, potentially. i don't think -- part of the reason the sec structured this is they kept musk running the company. they don't want to be in the

position of picking executives, but they want investors to have reliable factual information coming from their most famous ceo. emily: let's talk about investors. you talk to a lot of in -- tesla investors. many of these investors bought into the bold rule breaking ceo. today like when he does this? >> this is a man who hung up on the chair of the ntsb over an autopilot investigation. he sued the airport -- air force for the right to fly his rockets. he complained to nasa when a competitor got a contract. he's always bucking authority and a whole ego's of tesla is they are a challenger disrupting detroit so the fact he is noting the sec is surprising and investors have concerned, they could talk to him directly. would how far, could and

the sec take this? matt: it depends on how he reacts. the tweets overnight saying the sec is not paying attention, doing embarrassing work -- the agency does take that into account. even the interview from last december when he said i don't respect the agency, they said he is clearly flouting the settlement he agreed to. emily: indeed. won't forget those words, what he said in that "60 minutes" interview. matt robertson from bloomberg and garrett nelson of cfra. we will continue to track what happens. back anotheren attempt by the trump administration to undo it $85 billion purchase of time warner. a u.s. federal appeals court ruled the justice department failed to show a lower court made the mistake when it rejected the government's antitrust arguments.

the next merger decision is the t-mobile-sprint deal. we will be following that. ei fights, huaw back. it pokes fun at u.s. intelligence. we will discuss, next. check us out on the radio, listen at bloomberg.com and on sirius xm. this is bloomberg. ♪

emily: at the conference in barcelona, the battle against huawei took center stage. during the keynote address, the company -- to ban their five g

technology. huawei has a strong record insecurity for three decades, serving 3 billion people around the world. accusation onity our 5g has no evidence, nothing. emily: to discuss, bloomberg executive editor for global tech, tom giles. he didn't just ignore -- deny allegations, he poked fun. >> he is making a joke in front of the entire world. emily: and a reminder, it was under the prison program the nsa had on a backdoor in u.s. tech companies and edward snowden revealed it. >> he is saying there is no

chinace of us giving special access to global telecommunications networks at mobile world congress and to anyone who will listen has been saying for years ,ow don't use huawei equipment it will leave your networks vulnerable. there is a risk they will somehow give china access to your state secrets, to your ip, intellectual property, or trade secrets, your sensitive communications between governments, etc. that would create a national security risk. this is the u.s. statement, u.s. officials made that statement today in barcelona but all along, huawei has been saying where is the evidence? emily: in making a joke, is huawei taking a risk it will ruffle more feathers? you have many countries deciding whether to ban huawei or by

their technology in state? midst of a is in the couple of legal actions against them. one, they say they violated a trade embargo against iran, they have arrested the cfo and she is under arrest in vancouver. there was the extradition thing going on there. they have accused huawei of stealing trade secrets from t-mobile, taking the fingertip off of this robot so these are two cases the u.s. is prosecuting against huawei right now. it is risky, but i think huawei recognizes the stakes are very high. big telecomed out, companies around the world -- not the u.s., the u.s. has said no to that, but around the world, telecom companies are spending billions on this 5g rollout. what they have said to u.s. officials is we actually kind of like huawei equipment.

it is not that bad, and it is cheap. emily: mobile leaders from europe don't seem that upset about huawei. and they are saying to the u.s., let us by what we want to buy and where else are you going to go? emily: president trump is thinking about using a next -- executive order to enforce a ban , challenging competitors in the united states to step it up and builds technology equal to what huawei has. tom: exactly, but we are on the cusp of 5g and you can't afford to put for some brand x together its five g technology if you are concerned about falling behind china. emily: compare what happened to huawei with what happened to zte, a company to u.s. almost destroyed and through this life -- lifesaving

vest. it was an agreement that was hammered out between the i can't china, and remove her exactly what his words were, but something to the effect of donald trump said something about how he doesn't want to see these people lose their jobs. there was a last-minute deal put together and we have seen from results from zte that they have come back. those shares are doing well and zte is finding customers out there. emily: so what's next in the huawei versus u.s. saga? the cfo is waiting for extradition to the united states. tom: we are supposed to get canada's decision on whether or not to extradite the cfo on march 1. that is the deadline. all signals seem to be it is going to happen. the other thing we are awaiting is an arraignment on the 28th in

the intellectual property theft case. those two things coming to a also against are this backdrop of ongoing u.s.-china relations. it is all very exciting and we will bring you that story to bloomberg viewers as it happens. emily: all right, tom giles, thank you for the update. coming up, steve wozniak speaks out in an exclusive interview. what he thinks about facebook's ceo mark zuckerberg. bloomberg tech, live streaming on twitter. follow our global breaking news network tictoc on twitter. this is bloomberg. ♪

emily: one take away from jpmorgan investor day, jamie dimon's bet on tech. the bank spends $11.5 billion a year on technology. that is a figure smaller banks can't compete with when it comes to providing the latest and greatest on mobile. buys into the theory that this will lead to greater consultation among regional lenders. apple cofounder steve wozniak says he has lost a lot of respect for facebook ceo mark zuckerberg after he saw a house testified before u.s. congress. el-dinrg's yousef gamal sat down with him for an interview and he discussed startups, cryptocurrency, and apple's next big thing. steve: different technologies and those are ongoing things.

when i am associated with a company, i urge them to hold off as long as you can from an ipo because you are no longer running your own company, the shareholders are. and your decisions are different. i am not looking at specific ichnologies and companies would think about in terms of how do we get when ipo anyway? i only think of how do we make a good product that is good for society. yousef: you have said in the past you believe bitcoin is going to be the world's single currency or hope it is going to be the world's single currency. we've seen massive value destruction in bitcoin. is that still a workable model for you? steve: i'm not sure i can buy that we have seen massive value destruction. we have seen massive value creation. psychology will often drive stock market dips. got to get out now, got to get out now. the psychology factor is a fear

thing and there was an id that bitcoin might go to $40,000, it went to $20,000. i have some bitcoin, but never as an investor. andly had it to experiment buy and sell things around the world, how to travel and find restaurants that accept bitcoin. when it went high, i didn't want to be one of those people. i've never used apple's stock at. i don't want to be one of the people watching the price of bitcoin and i sold out. whatever it is, it is over what i bought and i experiment on new bitcoin devices. yousef: we have seen tech leadership across the board get in trouble online. i am thinking of facebook with mark zuckerberg, jack dorsey on twitter. when you see these issues and you have spoken about this what is thehe past, message you want to send when you see these scandals? steve: first of all, jack dorsey is doing a lot more than mark

zuckerberg did. i lost a lot of respect watching him speak and answer questions. supposedly taking some steps that are nothing. not one nickel or one penny of facebook's income. the socialcompany, web, called foursquare out of new york and at foursquare, you rate different restaurants and places you go and company and they keep a lot of data. they have been offered millions of dollars for data on users and they turned it down because it was unethical. so you can make a choice. you can draw the line at a good place and not a bad place. i quit my facebook account. i've really never used twitter. yousef: is it time for the government to get more involved? were a few legislative efforts, but clearly that needs to be taken more seriously? steve: probably. regulation is good. regulation is anything that says

companies will not do certain that things, or countries, governments will not do bad things. have a constitution and the bill of rights and the constitution, the government shall not pass a law, congress shall not pass a law. you will not, the government will not do certain bad things and that kind of regulation, we need some of when things are getting bad and the united states is behind europe on recognizing a lot of these issues of data privacy. yousef: we've got the mobile world congress underway. 5g and other technologies in focus. what are you most excited about? steve: i used to track a lot of what was going on in the mobile world and cell phones. every day, i wanted to look, what is coming out and cell phones? i would buy the latest products. many of them i had and i have lost that interest. i am more interested in things like the new television sets that are coming out, the 5g television, hk televisions.

i don't know that i will benefit from 5g or i really feel the need for an increase in cellular bandwidth right now so that will not impact me much. electricrested in cars, were they are going, what the benefits are, what their problems are. the infrastructure for them. right now -- i am sort of at a low point, but i am waiting for apple to come back in the game, too with something new and striking. yousef: is that what needs to be done from apple given what we have seen from samsung? there is a sense that apple is falling behind in the innovation game. steve: apple has been the leader for a long time in areas like facial id, touch id, and easy payment with the phone. they were the leader, but not the leader in things like the folding phone and that worries me because i want a folding phone.

it is one of those new technologies that catches my attention. apple always has surprises, working on a lot of things in the background. they just got so successful with the iphone that there was -- that was the whole business for a long time and they are branching out so a lot of their services are good. tv toaiting for apple come on. emily: steve wozniak speaking exclusively with bloomberg. etsy's fourth-quarter sales surpassed expectations, sending shares to the highest since the company's 2015 ipo. analysts were especially impressed that the full-year guidance be expectations. as the brooklyn-based company scaled back on its marketing spend in the first quarter. sleep up, a tracker could be coming to the apple watch. what it could mean for competition. speak to the former sec

chair about his new book and how public policy can keep up with new technology. --this is bloomberg. ♪

emily: this is "bloomberg technology global link" where we join daybreak: australia to bring you the latest in global tech news. andwith haidi stroud-watts shery ahn talking about the trump-kim summit. what are you following? let's get you started with the u.s. cyber command saying it thwarted a russian attempt to interfere in last year's midterm elections. the military says it disrupted internet access for russia's internet research agency. the state-sponsored petroleum factory was the first of its

kind and aimed at interfering with u.s. elections, according to "the washington post." to holdings could be looking ipl again as he plans another ipo in another five years. in 1998first public before being made private by softbank in 2016. he said being a private company thaned arm to invest more it could have as a public company. alibaba's founder is now china's richest person. he is worth $42.5 billion, placing him again -- i had of tencent's ceo, three $5 billion. the richest man in asia remains an oil magnate with $48 billion. those are the top global tech stories we are watching. as you know, one of the side effects of the u.s. attempts to ban huawei's 5g

technology is it is driving interest in other telecoms. that was told to us at barcelona. >> we are watching the situation closely. this is for governments to decide. we will be there for our customers when they need us. , there areoncerns also uncertainties and we will watch the situation closely. haidi: huawei unveiled a brand-new very expensive phone at the convention. before we get to the pricey atnes, huawei poking fun u.s. intelligence but it was interesting hearing from phone executives speaking with one voice and saying they need access and diverse city when it comes to suppliers and potentially the huawei been could risk the delay to a 5g rollout. >> huawei has main -- two main

parts to their phone. they provide 5g equipment for infrastructures and carriers around the world. the other thing, they make these phones. they introduced a $2600. all phone. -- foldable phone. their five g technology is also fairly advanced. that gives carriers a conundrum. what if their consumers want to buy huawei phones that governments are not allowing them to sell? also, 5g. what happens when customers are asking for 5g? the carriers that offer that functionality will have a competitive advantage. innovation and the hardware space, as well as the advancements in the 5g and carrier network space, huawei has the carriers in not so great a position. emily: all of this negativity around huawei and the u.s. man

and other countries, is that affecting the handset business at all? not appearw, it does to be carried you see verizon, t-mobile, sprint all discussing their 5g rollout plans. for rise and said they will be in 30 cities for 5g by the end of 2019. t-mobile indicated a handful of city by 2020. sprint and at&t and others will really show what progress in their 5g networking across 2020 and after that. in the u.s. at least it does not appear that huawei is having an impact on 5g networking but that is a different story outside the u.s. for international carriers concerned about their 5g prospect because of the inability to carry 5g equipment from huawei. days we remember the would recoil at the idea of $1000 for a new iphone model. a $2600 foldable phone from

huawei, who will be paying for this? mark: what we have seen since the $1000 iphone, we have seen prices skyrocket more. samsung announced their galaxy fold for $2000. at $20 underced that threshold and $2600 for this folding phone. who is going to buy it? i don't think many people. i think that price is out of reach but that is early adopter pricing. this is what it costs to make. this is what they will have to sell it for. they think it has to be so expensive because of its functionality but you won't have a lot of people paying for it. even a diehard fan like me, i would not shell out money like that for it. when: what have we learned it comes to the new big thing for wearables? mark: wearable technology has

been slow at mwc. thebigger news we got was announcement of new devices. we are seeing a lot of these watchmakers, whether that is fitbit or garmin announcing an uptick in their smart watches. apple released their latest smart watch in september, the series four. outy: you got a new story reporting apple is testing a sleep tracking feature for the apple watch. how will this work? what do you know about it? apple launches a new health feature on the apple watch or any other devices, they put it through its paces on outside people they bring in to these labs, they have outside their cupertino campus. they have multiple fitness labs, one for swimming. they have special chambers that hot conditions upward of 100 degrees, weather

conditions that are cold, bicycles, all sorts of oxygen equipment. same fordoing the sleep tracking for a future version of the apple watch that will launch next year or this year. emily: bloomberg's mark gurman for us reporting on apple and huawei. more ahead. stick with us. this is bloomberg. ♪

emily: speaking at an wc in -- wants to promote u.s. leadership in 5g by modernizing regulation. said the agency is working to lower regulatory barriers in the telecom industry but will the u.s. be able to compete in the global 5g race and continue its campaign to ban huawei a quick meeting other countries? sec is ar chair of the

not there of a new book "the history of our future." he joins us from washington. great to have you on the show. in the book, you argue the tech revolution is a story we have seen before but what are the risks of the tech revolution we might not be prepared for? lessons of the is aous tech revolutions failure to engage's folly. it goes to such things as what you were just talking about insofar as regulation. there were new rules that we established at the beginning of the industrial era which made that era successful for both capitalism and for consumers and competition. we are in a similar kind of situation now where we need to be establishing new rules and

when you hear the chairman of the fcc saying own no, regulation is bad, he overlooks the fact that even adam smith, the father of the invisible hand and laissez-faire, that you have to have some basic level of -- for a free market operate. emily: what are the risks if we don't have the rules you think we need to have in place? tom: through history, those who have taken advantage of the new technology have not only brought forward new good services, but the usee made rules for of that technology that benefit themselves. look at the experience we are having right now with privacy. onre is an alchemy that goes where your private information and my private information gets owned by ad becomes

third-party company, whether it be a network or a platform that uses that network. what are the rules for that? how do we figure out what the basic standards are going to be and we need to step up and do that, not just deny there are issues. emily: federal privacy regulation is apparently coming. what would you like to be written in these rules? tom: let's hope it is coming. when i was chairman of the fcc, we passed privacy rules for the networks that were repealed by the republicans when they got in office. i think we need to make sure we empower consumers. i think we need to make sure we have expectations on the ies that go back to the common law concept of a duty of care. the job of the companies

collecting the data needs to be that they make sure that they anticipate and mitigate any potential harms, number one, and number two, they don't afford that data -- horde that data to create new cartels that prohibit competition in the marketplace. i think what we are seeing today is just the opposite of both of those goals. emily: do you think big tech companies need to be worried about regulation? tom: i think big tech companies ought to be welcoming regulation. like i said, even adam smith said you need to have rules. what you are seeing right now, for instance, is the tech companies are coming to congress and saying hey, let's pass a federal privacy law that states because

after they were successful in the trump administration of eliminating all rules, states moved in and now, they are going oh my goodness, the absence of rules at the federal level we are finding is harmful for us. i think they would welcome rules and we need to make sure that consumers and competition are protected in the development of those rules. emily: meantime, on the subject of 5g, you have the chairman who wants the u.s. to be a leader on this, president trump talking tough on huawei, considering an executive order to enforce a ban on equipment. could these actions toward huawei backfire? tom: it is important to worry about the cybersecurity of our networks. throughout history, going back to the points i make in "from gutenberg to google," throughout history, networks have been attack vectors.

i don't care if you are talking they havers or roads, always been attack vectors so why should we surprised that we find that the network of the 21st century, digital pathways, are the new attack vectors? we need to make sure we are protecting those. i was disappointed that what the trump fcc did as soon as they came in was to repeal the activities that we had put in place in the previous fcc to establish cyber protections for expectationve an the fcc would have a role in that. the new chairman came in and said no, we don't have a role in cyber and eliminated the kinds of things we had started to put in place. emily: former fcc chair tom wheeler. always good to have you with us.

check out "from gutenberg to google," his new book. ahead, facebook has thousands of people policing content on its platform. now, the public and employees are voicing fresh concerns about the toll it is taking. this is bloomberg. ♪

emily: new reports about the working conditions of facebook's content moderators are causing the social media giant to defend its practices. ona message to employees and its blog, the company defended outsourcing of content moderation, hiring 15,000 workers who flag misinformation, graphic violence, terrorist propaganda, and revenge porn on platforms. facebookew here is employees themselves are complaining about how facebook handles content moderation. what are the employee saying?

>> they are saying if this is so crucial to our business and how our users feel about the product, why is it something we outsource? the response from management has been, we need to scale this up quickly. we need to make sure these workforces are flexible and can move to different needs and facebook thinks over time, artificial intelligence will get good enough that it will be able to reduce the need for these contractors in the first place. emily: over time? decades? this will take a long time. sarah right now, hate speech detection is only 30% effective by ai but other detection like nudity is better. you have to look is it flagging a naked statue or a person. they have gotten better at parsing out those things, but still, the most crucial things that content moderators are

areas, at are the gray things that are subjective to make decisions about and facebook tries to cover them all in its internal rules that it is impossible to get consistent policies across this entire global user base. emily: p reported for years moderators, it is a tough job. you are looking at potentially upsetting offensive things all day long. are the conditions for these workers getting better? had a tremendous report monday explaining that. at times, contractors can't take bathroom breaks. it is difficult to deal with mental health issues as they see andle shot to death alive they have to decide what to do about that in seconds, it is hard for them to have a consistent approach to policy and move quickly. this is a tough job that they are doing, that they have three weeks of training but they are scarred for life.

,"me of them told "the verge they have started believing the conspiracy theories they sort through on facebook about 9/11 or sandy hook or any of these at gs we have seen become the core of the dark corners of internet discussion. emily: election meddling, fake news, to combat things, are these third-party moderators counted in those numbers? sarah: some of them are contractors, which allowed facebook to reach the goal quickly. it also means they have to deal with is expanding workforce that will not possibly handle all of the trillions of interactions that facebook users are posting everyday. the amount of video that gets created, the content that gets theted is massive and contractors are relying on people reporting things. now they have the ai flagging

things through the content moderator. it is a tremendous amount of volume and things change all the time. what is offensive in one country might not mean anything in another country so they have to make sure their policies are keeping up with the changes on the internet. emily: tough job on both sides. sarah frier, thank you. waiting for up is an ipo that could value the company at $8 million. it is snapping up stationary bikes that cost more than $2000, the realwatchers say money is in subscriptions that cost $40 a month. is it a fitness startup or a streaming service? i want to bring in bloomberg's olivia zaleski. which is it? been thinking of it more as a media company, not a hardware company. a lot of people here about the $2000 i can't think that is

expensive but the real money to is in itsr peloton subscriptions for yoga classes, boot camps, a class for running. those cost about $19.99 a month and apparently, the company is selling a lot of them. emily: what kind of growth is peloton seeing in the bikes themselves and subscriptions? olivia: they haven't revealed those numbers yet. we do understand from sources at the company that the subscription for the non-hardware products come of the classes, is doing extremely well and that seems investors are interested in that. they are starting to value peloton as more of a media company. olivia: they raised $550 million in a funding round last year that valued the company at 4.15 billion. the ceo was on the show at the time. what is the outlook for the ipo? olivia: they are looking to raise -- have their ipo between

$8 billion and $10 billion, which is a huge jump. clearly, they feel confident going into the ipo. they think investors will jump in at $8 billion or more, so we will have to see what happens. emily: who is peloton's competition exactly? olivia: that is a good question. gym,nk it is really, the equinox. they are targeting wealthy people who can afford the $2000 bike, but also they are targeting people who can't afford the $2000 bike, who just want to be able to go to a cycle class every once in a while, but at home with a stationary bike they are ready own. they are trying to reach everybody. olivia: how does this fit into the tech ipo pipeline this year? we are waiting for this very soon. olivia: there are so many ipos happening this year. this one we would expect early summer, but we don't know the

exact timing. releases its lyft model this week, there are a lot of things happening in ipos. emily: bloomberg's olivia zaleski in the newsroom for us. thank you so much "bloomberg technology. that does it for this edition of "bloomberg technology." -- this edition of "bloomberg technology ." we will be speaking to alibaba's vice chair at the sports summit. jack ma, stepping down as chair in the next six months. what is his outlook on the u.s.-china trade war? is he optimistic about a deal? livestreaming on twitter, check us out @technology. check us out on tictoc on twitter. this is bloomberg. ♪ you.

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