♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." big tech in the firing line of the u.s. government. couldet, facebook, apple be set to face antitrust probes. from the key takeaways conference. visits britain this week, could the two sides find

common ground when it comes to while way. first, shares of amazon, alphabet, apple, and facebook tumbled as they could be the target of antitrust probes. the department of justice is weighing an investigation into potentially anticompetitive practices. they potentially also have jurisdiction over an apple probe. they could look into whether facebook harms competition. nearly half of ad revenue in the united states and amazon makes up 9%. amazon does not dominate the ad market but makes up to -- but makes up nearly half of the market. with us, assistant attorney general from new york state.

also, bloomberg tech's brad stone. it sounds like a lot but none of this means any of these branches of government are actually investigating, just that they are now sharing responsibility. brad: that's right. i think we have a political reality, not necessarily or not yet a legal one. the tech environment is bake, complex -- is big, complex, intimidating. they have to kind of divvy up the playing field. does this mean they will or that an investigation into any of these companies could be imminent? i'm cautiously optimistic that there will be investigations. normallynd doj don't talk about divvying up matters unless they will have an

investigation. emily: to be clear, you are optimistic because you are in favor of breaking up these companies or believe there is a case? sally: i'm in favor because i believe they need to be, at a minimum, investigated. once all of the different anticompetitive conduct is unearthed, at that point you decide the best remedy. i wouldn't take breaking up or unwinding illegal acquisitions off the table but i think the first step is to investigate. emily: brad, is there any difference in the way any of these companies are being explored that we know of yet? they're completely different companies, different market strategies, different levels of competition? i think we are seeing a rare political consensus in washington, not just among folks

like sally, but from the left and right on capitol hill. senators like josh holly of missouri talking about how tech is bad, maybe not a source of innovation but a source of peril for the economy. folks on the left who worry about how foreign entities have used these companies to manipulate our elections, very much an overarching sense that something needs to be done it -- to be done. emily: how much of this is the result of what the white house or president trump himself wants to happen? how much is it the result of some sort of bipartisan consensus? think it is more a result of mounting pressure around the globe. the u.s. is really late to the game. there are jurisdictions around the world who have been

investigating these companies. will to the political enforce antitrust laws. emily: is there any difference in how the doj and sec might investigate? what should we read into the fact that the doj got apple and google, the sec cut amazon and facebook -- the sec got amazon and facebook? sally: the sec has been looking at privacy. now, fcc is probably -- , it usually looks at retail so it probably has jurisdiction over amazon. it is a little bit strange that we are now having the doj look at the same conduct that the ftc passed on years ago.

i think it makes sense that each agency would take two companies because it is too much for each of them to handle on their own. emily: google has arguably become more powerful over the past two years. what does this mean for investors? we saw other tech companies, netflix for example, which didn't even come up in these reports, also fall. got: it is not good you've two agencies with subpoena power that will be arguing -- that will be crawling over these operation nothing is good for these tech companies. is a little bit look, part of what is fueling this is lots of little voices thattle operate in the ecosystems of all these companies for years. emily: sally, what could be the

impact on the 2020 u.s. election? sally: i think this could have a major impact in terms of the lobbying we could see. antitrust investigations take time we are not going to see the investigation of any -- the resolution of any investigation probably until the u.s. election the leadership of the ftc are quite conservative. if you have a change of administration, it could be a big deal in terms of who ultimately decides how these investigation, if they come to fruition, are resolved. emily: some experts are saying this could drag on for five-plus years. thank you both. president trump is in the u.k. for a state visit he's got another item on the agenda, trying to convince the government there to ban while awei from-- to ban hu

5g networks. ei means for the next british prime minister. that, with the president here to celebrate 75 years since the day -- since such athat huawei is divisive issue. the u.k. faces a difficult decision. it may be possible to build a 5g network without huawei but it may be difficult. in a post-brexit world, u.k. may need china and china may push back on the u.k. if it rules out huawei in this project. there will be security implications if huawei participates, some say. a u-turn may be possible.

it will certainly feature a significant portion of tomorrow's press conference with many asking questions about which way the u.k. will ultimately turn. at this point, theresa may is backing huawei's participation but as of friday, she will not be prime minister. emily: coming up, apple showed off the next in a of software and features at the worldwide development conference but it was overshadowed by government scrutiny. if you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg.com, and in the u.s., on sirius xm. this is bloomberg. ♪

eray: apple unveiled a new

for apps and software at its annual worldwide developers conference involving the mac pro, siri, and even breaking up itunes. here is apple senior vice president of software engineer talking about the new version of ios. >> ios 13 is a huge release. nothing is more important to iphone users and performance. this year, we worked top to bottom, making everything faster so that you do the most. things like unlocking with face id, now 30% faster. emily: on one of its most important days of the year, the tech giant was upstaged by a possible probe from the u.s. department of justice. bobmore, mark gurman and o'donnell. talk about the scene on the inside.

was there any sense of what was happening on the outside? bob: there was nothing about it. they are the most enthusiastic fan boys and fan girls. particular for dark mode, not that big of a deal. it looks cool, and that's great. but it was interesting because it was a classic case of apple kind ofthe glitzy things they do so well and playing some serious catch-up on other areas. you look at apple maps and you think, didn't i see that on android like three years ago? they are trying to do some interesting things. they recognized some mistakes. they are pulling apart some big products. i think they are kind of

resetting themselves in certain areas. all in all, a reasonable event. i'm a hardware guy so mac pro, i thought that was cool. emily: what about the $1000 stand? new mac pro, $6,000, and there is this new display that is 5000. the display doesn't come with the stand. stand, extra thousand dollars to put it together. emily: let's talk about the significant software changes as you reported going into this, a new era for the way we access apps and itunes sort of going its own way. >> a few of the highlights things, one is ipad os. you had ios which ran on the

iphone, ipad, and ipod touch. the decided to rebrand the one that runs on the ipad. for all intents and purposes, it is the same as before but they are just changing the name and adding some new features. it is to be seen if people will start ditching their macs and pcs for ipads because of these changes. mark brings up a great point, the same question i had. they make these advancements to make ipad much more computer-like, although missing the mouse still. it does become this interesting gray area you have between ipads and mac os. on the high end, apple can push mac pros. on the middle mainstream ground, they are creating more question marks. a catalyst to enable ipad apps to run on the app.

even with ipad os, if i may developer now, i've got five .ifferent os's emily: isn't the idea to make it easier for developers? what they are calling now project catalyst. two years ago, it was called marzipan. clicking a it by toolbox in the developer kit, so that should mitigate that a little bit. apparently you can connect the mouse as an accessibility feature. know, some want to of these gestures and new features are actually confusing. i feel it i will be able to get the hang of it quickly, and people apple developing these things obviously know what they

are doing, but what about mainstream users? i think it is going to be difficult to sort of get a hang of all these new gestures. emily: i wonder if it will be a generational behavioral shift? be somehink there will of that. even the demo, the guy trying to grab the text, didn't work once or twice. apple used to talk about having to shake your device. you get these weird changes, all efforts to overcome the fact that certain pieces of it aren't quite there on some devices. some devices, you have standard means of interacting, others are trying to figure out other ways to move forward. generally, apple is quite good at coming up with these things but it is still hard to make these changes. privacy,ey played up evolving health offerings, there's a new more natural siri.

mark, what do you think about issue?titrust mark: i was thinking about this earlier. apple, they are in the crosshairs because it is a big tech company. look at the iphone market share, it is way less than 50%. ipad market share has come down. the mac, if he just looked at it from a pure market share standpoint, is technically a flop. the apple tv, that has low market share. the apple watch has high market share. in terms of the antitrust behaviors you would look at, apple doesn't hit a lot of those benchmarks. emily: even if they are the gatekeepers for a lot of the apps that are used? mark: that is true. they did trying to put in some

places in terms of the new app store development to make it a little more open. they came out with a lot more new developer tools today and they can say, we are going above and beyond any other platform in order to be inclusive developers. i see why on the surface it an issue but if you look -- it could be an issue but if you look deep in it, i think apple may have an argument. emily: most of it will roll out in the fall and will be watching. mark gurman from bloomberg, bob o'donnell of technology's. thank you. coming up, a former washington inside tells us how the government be planning to scrutinize. this is bloomberg. ♪

now to our topg story. the u.s. government looking into possible antitrust probes of facebook, amazon, apple, and google.

we have a distinguished fellow at georgetown law institute for tech. before that, she was a counselor for the federal communications commission. what is your reading on this? not necessarily breaking news but it certainly seems like the tides are turning. >> it isn't breaking news but it is significant think the important thing to note is that this is very early in the process. andfact that the ftc department of justice have now divvied up the tech companies among themselves, the fact that i just heard that the house antitrust subcommittee is going to hold a bipartisan investigation included a series s, hearing on digital platform it needs the government is getting serious. while it is early days, it certainly is an indication that this administration, and that both democrats and republicans, want to look the size of these

platforms and also at their power. emily: we just got the release from house judiciary on this bipartisan investigation into digital markets. they say a small number of dominant, unregulated platforms have extraordinary power over commerce medications and ration online -- and -- commerce communication and information online how long -- online. how long could all this to? -- all this take? gigi: it can take many, many years. the breakup of at&t took eight years. that doesn't mean that is what is going to happen here although folks are calling for possibly breaking up these companies. investigations, norma's amounts of fact-finding. -- enormous amounts of

fact-finding. the federal trade commission in 2011 looked into apple, facebook, and google to see if they were acting anti-competitively, and they found they were not, but even that took two years. they have to talk to a lot of people, competitors, other folks in the tech community, nonprofits like the one i used to work for. this is law enforcement this is not a regulatory process like i participated at the fcc. these are law enforcement proceedings and they engage in an awful lot of process before they decide, can we bring a case in court, should we drop it? congress can pass legislation. i think there are certain areas, but to truly and privacy -- particularly in privacy,

antitrust, where i wish they would act. emily: perhaps president trump or even the next president could be long gone by the times of s are investigation concluded. there have been talks about how some of the trumpet restoration -- the trump administration's tactics on china could be aimed more at slowing them down. sheryl sandberg made the case that breaking up facebook would make it much less competitive and perhaps at a disadvantage to chinese tech companies that are not facing potential breakup? is that a consideration here, competitive not just in the united states but with china? gigi: that doesn't concern me. i read that statement and frankly had to scratch my head. i didn't understand that at all. we have antitrust laws that are

there to protect consumers and competition. there is bipartisan agreement and there is great concern in the consumer community that these companies have gotten too big and too powerful. again, talking about breaking up the companies at this juncture is a little bit premature. the investigations have to happen first. that may be a solution. there could be other solutions. ishink sheryl sandberg jumping the gun a little bit where there are investigations to be had and determinations to be made as to whether breaking up companies will actually help or maybe hurt? emily: certainly making an argument she believes will help her case or facebook's case. thank you for joining us. coming up, how the antitrust scrutiny is weighing on the market. later, we will hear from the

marriott ceo about how the hotel giant is stepping up plans to compete with airbnb. this is bloomberg. ♪

emily: this is bloomberg technology. i'm emily chang in san francisco. onh drag down u.s. stocks monday in a report that the government is considering antitrust investigations into facebook, google, apple and amazon. the nasdaq at one point plunged more than 2%. the ninth largest drop on record. joining us to discuss is the senior research analyst daniel. no official antitrust probe happening. dividing up and ftc response ability for potential antitrust probes should they happen, but investors should not take this lightly.

what does this mean for the markets? daniel: i think it means these companies are potentially going to have to adjust their business models. what is important to these companies and the societies that these companies operate in is to bring a level of transparency to everything. if we think about their platforms, the need to demonstrate that people or other companies that might participate are able to do so in a fair way. i think the other piece of this is around user data. the companies need to do a better job explaining to their users how the data is being used and obviously the business models of these companies which make money off of that data. i think if we step back, this is a necessary part of how these companies need to evolve over the next few years. we do see opportunities in these names like alphabet, like facebook. we also see opportunities in apple and amazon. each of these companies have

different complexities, but ultimately, we see good growth opportunities for them over the next few years. emily: we have been talking to our guests throughout the day about this antitrust issue, these antitrust issues and the threat pending tech regulation. take a listen to what some of these other voices had to say. >> there is a growing recognition that kind of wild, wild west days of social media platform companies is coming to an end. >> we need to make it responsible to the americans using their platform. >> when you look at the big picture in the digital advertising space, the question i would pose is where the ftc allow chase or goldman sachs to own the nasdaq? the answer is not. >> when you start regulating, a lot of bad things can happen. emily: comments from lawmakers and the president over the last several months. do you think one particular

company, that there is a better case for one particular company than the others? an aggressive antitrust investigation? daniel: we will have to see the data that comes up and how each one of these companies and the cases on their own merit. when we look at facebook, we need to get more insight on how facebook is operating versus instagram versus the newer platforms like messenger and whatsapp. google, we need more insight in core search, youtube. each of these companies have different businesses and different ramifications for each. without getting further details, we will have to wait and try to better understand how this will evolve. however from an investment standpoint, this uncertainty and the risks associated with it are very much -- a big chunk of it is being captured in the price today. he saw the shares selloff.

if one were to take a longer-term perspective, we think this presents opportunities for some of these companies. emily: that is an interesting argument. other experts have said today that perhaps a long-term antitrust investigation, not knowing what the results might be, could actually increase alphabet's value over the long-term or be better for alphabet's market cap and valuation. explain that argument to me. daniel: it would really depend at its core if the company is able to continue to innovate. for example, if the core search business, if they continue to innovate and drive value for users, that can still grow at very good outsized clips. youtube, the asset is continuing to seek terrific growth. the google cloud platform which is more aimed at enterprise users beginning to shift more their businesses to the cloud --

when we speak to customers, that is in the very early stages. i think of the regulatory framework comes onto the core search business, assuming google in that case is able to manage and demonstrate they are doing -- that they are fair and just in terms of companies using their platform, that can ultimately strengthen it over the medium to long-term. they are going to be competitive risks. all of these companies face challenges every which way. we have to look beyond the u.s. market where globally, it remains a very competitive landscape. if these companies are able to innovate while managing through these complexities and putting in place remedies that are appropriate, there is opportunity to create additional value in our view. but at the end of the day, if their business practices get

severely impaired, you would see the revenue growth rates potentially slow. larger investments could pressure margins. i think that k's is what the market is busy pricing right now. when we look at the innovation piece, we see a lot that we like. emily: we heard some of the executives of these companies say we welcome regulation. mark zuckerberg has set i welcome the right regulation. i wonder if there is an argument to be made that some sort of regulation, rules of the road could be good for these companies because many of the problems they have run into is a result of this sort of lack of transparency. the confusion of misinformation, in the case of facebook, the content. could rules create clarity or certainty among these companies? daniel: i think regulatory framework could begin to bring a little bit of clarity.

aree markets, technologies changing very quickly. the framework needs to be a living, breathing organism. it might be different in different countries. so, we need to start, we need to do more to bring a little bit of oversight. but if we look at other industries such as health care, utilities, financial services, there are a lot of other industries that are being regulated which ultimately is, i think for the participants, beneficial. technology has a lot of the same elements. what these companies are bringing, products and services, are adding a lot of value. i think when we add more and more rules, these rules need to adapt as these technology environments change. there is no silver bullet in my view. we need to take a thoughtful approach and be willing to change as the technologies evolve. flax, lots of

different forces at play here. we will be following them all. u.s. businesses are coming to terms with the new tariffs and trade war. marriott international has big expansion plans for china and throughout the asia-pacific region. arne sorenson, the company president and ceo, joint bloomberg television earlier to talk about trade and how the company is stepping up competition with airbnb. arne: we started our pilot there last year so we have about 2000 units when we launched a month ago. a big part of that is in europe. you watch the footage of president from visiting the u.k. there is nothing like the pageantry which is rolled out for something like this. it tells you a little bit about how attractive europe is as a destination, particularly for tourism. american travelers are heading into high season. that business will be strong

this year for hotels. >> this home rental business is perceived as a direct charge into airbnb territory viewed is that fair? arne: we are not ignoring airbnb, but it is a different focus. we watched a this business evolve over the course of this last decade. a big chunk of it has been the cheaper stay. the extra bedroom or studio apartment. the focus of our business is to deliver something we can stand behind. something that people can feel like the experience they are getting is not risky. they have services standing by. they have key rental. they have a clean apartment. we are going into the whole home space which you can say is the toupper end of the market in terms of square footage. >> you also have your loyalty program. you have infrastructure. does that give you a leg up?

arne: absolutely. the general thesis is the bonvoy program which envelops all 30 of our brands will be the connections. you can earn points staying in homes and villas, redeem points. you end up with connectivity our competitors do not have. >> moving to your ambitious plans in china. on your last earnings call, i want to read what you set about china. china and the u.s. seemed to have stepped away of the brink of the looming trade war. while we are a bit more cautious, we remain optimistic china will be a positive market for us and present exciting growth opportunities. two months later, what would that be? arne: another reminder not to climb up the pole of production. >> but march 1. it was a very different world. arne: it was a different sensibility. today, the trade conversations were much more apprehensive,

business conditions on the ground in china sort of reflect the chinese economy which is the verse. it's big. we see markets like beijing and shanghai that are stronger than some others. as thing we forget americans is our business in china is really about the chinese economy. the majority of our guests are chinese. even in markets like shanghai. the question becomes not what is happening with trade narrowly, but instead what is the impact of trade conversation on the way chinese gdp is growing? one of the reasons for a bit of optimism even in the midst of all of this is the chinese are transitioning to a consumer economy. they know that is important for domestic political reasons. that tends to be a driver of demand. while we will be a little less optimistic about the tone, i think we stay quite optimistic about china long-term. >> you say it is the chinese economy. we heard over the weekend that

perhaps china might be looking into fedex. there is this list of unreliable entities they have. have you seen any evidence they may take against your interest in china because you could become an innocent bystander that is really injured in this trade war? arne: we have not seen that yet. we don't know the direction things are going. 0 open hotelse 36 have in china, 100% are owned by chinese real estate. we manage the business for chinese real estate investors. our economics are not simple american economics. yes, we are an american company. the bulk of the profits go to chinese investors. how you play that politically, we will have to see. emily: arne sorenson, marriott international president and ceo. coming up, lingo shares under pressure this year but could a slew of new satellites usher in a new era for wi-fi.

we will hear from the ceo, mike finley, next. this is bloomberg. ♪

technology has been around for two decades. while it has certainly transformed consumer technology, it still has drawbacks. unreliability, the service that a lot of us like to hate. selling access to a global network of 600,000 hotspots. how will the next 20 years of wi-fi be different? ceo mike finley joins me know from new york. let's start with earnings. you reported results and shares under pressure. what is your response to some of the skepticism from the market? mike: we have had 18 consecutive quarters of revenue growth. we have exceeded our guidance

for 20 quarters in a row. we have met the guidance that we and for the first quarter we are timing for the rest of this year. we are performing according to our plan. we continue to invest. we have lots of opportunity in our cellular business. our wi-fi business continues to grow. the combination of those two together is what separates us. inhave a new opportunity multifamily apartment buildings and student housing we are developing as we speak. emily: let's talk about the future of wi-fi. what was once new and innovative now can sometimes seem old and expensive. what do you think the next 20 years of wi-fi will look like with elon musk sending satellites into space? jeff bezos trying to become a provider of space internet. how will that change the business or will it? in and ofink wi-fi

itself continues to evolve. wi-fi 6 is starting to come out now. we have recently done a trial at john wayne airport in orange county. higher-speed, lower latency. many more devices can be used at the same speed. better security. that is what wi-fi continues to evolve and you will continue to see devices and capabilities come with that. the second piece of it is, we are a connectivity company. we offer the combination of cellular and wi-fi together. as new technologies come out, satellite, those types of capabilities will be enabled in devices. when you have a company like boingo that is a neutral host company in large airports and multifamily housing and military bases, in stadiums, we will be able to enable all that technology so the end-user can benefit to give abilities in front of them. emily: let's talk about 5g.

there is a lot of excitement around it. and say a lot of hype challenges given what is happening with huawei and the fact that huawei is really the leader in 5g networking equipment. but the united states has blacklisted huawei from suppliers and trying to convince other governments not to use their products. where does this leave the future of 5g? mike: 5g is here. it has been launched in the u.s. there is infrastructure companies outside of huawei that have been in front of that. are lunchingrators with. devices are coming in rapid fashion. the chips that companies like qualcomm not only developed but now have in the marketplace. there was a laptop that lenovo announced that has 5g in it. it is not really hype, it is here. it will emerge over time.

i think it will come faster than 4g did. part of that is because you have infrastructure vendors and device makers are seeing it is going to scale quickly. you have operators all over the world that are launching and want to launch 5g products. i think that is being worked on at a long time. boingo will take the 5g capabilities and implement them into all the venues we have. you mix t hat with wi-fi that is coming and it is really in incredible offering that comes to end-users. emily: how are the u.s.-china trade tensions impacting your business? the in-flight wi-fi company has said the trump administration's concerns about zte slowed some of their plan to switch to a faster network. mike: that was a completely separate thing because they had been using zte you have it. i don't see it impacting us at all.

we don't have any of that equipment in any of our products and facilities. like i said, we work in the u.s. with all the u.s. operators. when we deploy our networks, we are deploying it with the equipment they are using. when we combine that with wi-fi, it is a significant offering to our end-users. emily: all right, very curious to see what the next 20 years of wi-fi looks like. mike finley, thank you. we are continuing our conversation on big tech regulation. we will hear from jeffrey solomon. his thoughts on potential probes facing fas facebook, google, amazon. this is bloomberg. ♪

hard mondayech hit following reports of potential antitrust probes into facebook, google, apple and amazon. growing concerns from regular taters and politicians. bloomberg sat down with jeffrey

solomon to talk about the crackdown. jeffrey: for the last 10 years, it was bound to be big. it started after the financial crisis. you look at dodd-frank and the regulations that came out for the big banks. i think big tech is suffering from the same. it is not a republican or democrat thing. it is a thing the american population is looking at. a lot of skepticism of bigger companies. i think seizing on those same populist concerns from both parties, the doj and ftc will look at big companies to see what they are doing. >> line now though? this has been a problem since the financial crisis but weikel after these companies at this point when the economy is doing well and we have an election coming up? or maybe it is because the election is coming up. jeffrey: you do it when you can. i think big tech has largely sidestepped a lot of the issues financial firms have been accused of. this is not the first time it has happened. the clinton administration went

after microsoft so we have seen this before. prior to that, a lot of people went after ibm in the late 1980's. this kind of thing ebbs and flows. it is not great to be big. >> europe has been looking at it and whacking out the fines. >> the u.s. antitrust versus microsoft for how this should unfold or she would look at the european fines against google? jeffrey: i am not sure there are precedents. we never really had this many big tech companies look at at one time. in the case of microsoft, it wasn't antitrust situation. here, it is not clear to me it is antitrust. a lot of concern about security, breaches and what the companies are doing with people's personal information. i think it is an excuse for the government to muck around and take a look at what is going on under the covers of these companies. again, i think it is bad to be

big right now. in a populist environment both from democrats and republicans, it is tough to be big. >> keeping your research analysts busy. talk about what else cowen seeing the effects of your business. investment banking, capital markets. it has been a rough ride looking at the effect of what has happened in terms of uber's ipo, lyft. what ipos from your perspective in the tech area? jeffrey: we have spent a lot of our time in biotech and health care. since the jobs act, which is really what unleashed the latest wave of ipos, there have been 1000 companies that have gone public in the u.s. almost 70% are sub $1 billion market cap companies. 300 are biotech companies alone. only 4600 companies in the u.s. listed today. when you talk about 25% of the companies listed in the united states today going public in the

last six or seven years, a great story about how small companies have dominated the investment landscape. what we do is try to identify those emerging growth companies or disruptive companies that are not quite at the big size of the tech companies. a lot of press and discussion around the unicorns and how big tech -- the reality is capital-intensive companies like biotech companies have to have we can help them get access to public capital. i would take a contrarian view and say small-company ipos and small-company financing has not seen a decade like this probably since the 1990's. emily: cowen ceo jeffrey solomon. we will continue to cover all the headlines on these potential antitrust probes as we have them. that does it for this edition of bloomberg technology. we are livestreaming on twitter. follow our global breaking news

network, tictoc, on twitter. this is bloomberg. ♪

paul: welcome to daybreak australia. i'm paul allen. shery: i'm shery ahn. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering. big tech leads wall street lower amid antitrust speculation. the nasdaq down 10%. the fed president james bullard sees a rate cut soon. u.s. manufacturing