♪ emily: i'm emily chang in los angeles and this is bloomberg technology. coming up in the next hour, why the threat of antitrust elation has silicon valley and tech investors on edge. plus, after a rocky ipo underwritersuber's are defending the stock with bullish calls.

chinese authorities continue to push back on censorship. just how high can the great firewall in china really go? the u.s. government is increasing its scrutiny of big tech companies. on top of the department of justice and federal trade commission conducting oversight and possible probes into google, facebook, apple, and amazon, the house judiciary says it will spearhead its own investigation into possible antitrust practices. house lawmakers plan to hold hearings, endorsed by house speaker nancy pelosi, who had this warning. " unwarranted, concentrated power in the hands of a few is dangerous, especially when digital platforms control content. the era of self-regulation is over." developmentlatest

today in terms of all these potential or actual investigations? >> the only confirmed new investigation is the one you mentioned coming out of congress. evenoj and ftc have not confirmed reporting that we and others have put out there that they have divvied up the four big tech companies. the companies have not confirmed it either. we have reported that the companies have reached out trying to figure out what is going on. at this point, we should probably be careful and not necessarily say that this is the new microsoft antitrust case or at&t antitrust case. but it does feel different. if you look back at the last years, politicians on both sides of the aisle are talking about antitrust. these agencies want to do

something about it but we are not sure what it will look like. emily: certain sources i have spoken to, legal sources, say it is more likely that these agencies could take a look at these companies given that they have divided oversight. but do we have a sense of how much more serious really these potential investigations or potential actions could be today , now 24 hours into this? gerrit: i think dividing them up as a sign. over the past few months, reports of meetings, conversations, lawmakers asking agencies to jump into this. this is showing that those requests have been heard in these agencies are getting the gears turning toward these tech companies. the questions come down to how the tech companies are responding. they don't quite know what to

expect yet. emily: let's talk about alphabet. they have been a target of various investigations in europe. they paid i believe three huge fines. there has been some speculation that alphabet could be the most vulnerable here given what we have already seen in the eu. is that the case in the united states? gerrit: i would hesitate to say that alphabet is the most vulnerable. if you look at public rancor, i would say facebook has borne the brunt of politicians, advocates, consumers. it is true that alphabet has had to pay upwards of 8 billion euros in fines over the last few years. they have also kind of honed their playbook. you had that nancy pelosi quote was talking about these companies being big and their economic power being dangerous. the last years in the u.s., that .eally hasn't been an issue

they have been concerned for prices for consumers and consumer welfare. they have helped consumers, helped bring down prices for services. google search, gmail, they are free. in terms of products, they are great. we of course pay with our data. about, has curious the u.s. legal system, government system changed the way it is thinking about antitrust just go after these up nice for their size rather than their effect on the end consumer? emily: google has the most popular operating system, the android operating system. that said, we saw developers sue apple for antitrust. apple is under the microscope intentionally from the doj but also senator elizabeth warren has called out the app store and whether or not that model is anticompetitive. tim cook, the ceo of apple,

pushed back on that today with cbs saying we are not a monopoly. apple has 30% of smartphone market share. what is the difference between the apple app store and the google play store? gerrit: in some ways they are similar. fee toarge that same 30% anyone who wants to sell anything on their marketplace. storese the two main app in the united states and western countries. there's a lot more when you go to china but there's -- but that's a different story. there are some more kind of complicated ways to download apps but most people download them through the app store. i think a lot of outside observers, that 30% fee is .ikely to come down emily: we will keep following these stories.

willberg's gerrit de vynck have more later on the show. a forecast with top wall street estimates that they will continue to see rapid growth. new markets to reach an annual revenue growth billion 2023. salesforce continuing to expand by hiring more workers in the u.s. and around the world. productivity and data integration. has had a rough start as a public company but some think it is still a critical milestone. what ford is to say about the transition from private to public, next. this is bloomberg. ♪

--ly: someone consider uber some would consider uber's ipo to be a bit of a failure but bill ford, the head of the private equity firm, said it wasn't. he spoke with our erik schatzker. is, or think the lesson what is happening, is more of the growth with these companies is happening in the private market. uber, if you step back and talk about a $60 billion-plus valuation, what in a compliment. so much of that happened in the private market. i think it is a reason why so many institutional investors and retail investors say i have to get exposure to private markets get with the

innovation. , dating back to 2015, you enjoyed some of that appreciation while the company was private. do you look at the ipo and call it a disappointment? bill: i don't. i call a milestone. they still have to work their way in the business model for profitability. i don't see it at the end of the road. i see it as an important milestone. i think it is an important achievement making that company available to public investors. >> if you could re-edit the movie thus far, how would it look different? bill: the only thing i would have may be done differently is push the governance transition in the move to a professional ceo a little bit earlier. i think some of the challenges they are dealing with today or

dealing with last year would have been dealt with earlier. raise an interesting point about an ipo for a company like uber being a milestone. at the same time, we acknowledge , at least under the current construct, so much more value is created well the company is private. what future does that leave for the public market? it raises some existential questions about the purpose of the public market and why people would participate there and if you had a choice, why you would want to be in the public arc it if you can be -- the public market if you can be in the private market? bill: years ago, the public market was a source of capital because the private arc it was small, the buyout is this -- the private market was a small come the buyout is this -- the buyout business was growing. now, capital is widely available

in the private market. people are realizing they can accomplish much more as a private company, forestall the quarterly earnings, the management time that gets taken away to manage being a public company. that is a shift. i think there are positives and negatives. emily: that was bill ford, ceo of general atlantic. , we'veg with uber learned about yet another investigation. the internal revenue service is now examining the ridesharing company's taxes for 2013 and when he 14, according to a company filing. we are joined by bloomberg tech's eric newcomer. how serious is this investigation? that i think it shows

regulators have looked at every piece of uber. it is hard to know how serious it is. very interesting financial situation. billion in operating profits over the last few years. tos is a company trying figure out how to do its accounting. we will have to figure out over time what the irs finds. ofspeaks to a broader array inquiries they face. emily: does this mean they could eventually pay more taxes in certain jurisdictions, or that they could end up with a huge fine? eric: there are lots of questions about uber's taxes. a lot of it is the carryforward.

they are losing a lot now and the hope is that the day they turn a profit, they can use a mitigate losses to future taxes. they set up their taxes in the netherlands try to avoid some taxes and the rules have changed. it is a constantly shifting ground for uber. away,hose profits so far the tax situation when it does turn a profit is filled with a lot of uncertainty. emily: we heard from the ceo of general atlantic, who also happens to be an uber investor, talking about it. some came out today rating the company as a buy. some analysts are signaling preference for uber over lyft. to readthink it is hard

too much into it. there was so much excitement head of the -- excitement head of the ipo. i think so many people buy into this story we were talking about before uber came onto the public markets. the banks and many who worked with uber on this ipo are coming out and giving it a buy rating. obviously there's a lot of thought that goes into that. figuring out the uber investment, there is this huge trade-off between buying into the belief that the transportation industry will change overall versus a closer analysis of the losses. that is a big bet to make. newcomer, thanks for stopping by. coming up, the trump administration may have secured a new weapon in its fight against huawei.

how european customers are helping the u.s. turn the screws on the company. make sure you follow tictoc on twitter. this is bloomberg. ♪

companiesbig tech brace for increasing regulation in the united states. cofounder spoke with and chairman about whether he thinks bigger is better in the current landscape. >> by and large, i am very bullish on u.s. trade. there are many things that are good for the u.s.. india is a big market for u.s. companies. i think there's a lot of two-way trade possible. i am overall very optimistic about the future of india-u.s. trade. it may be a bit rocky

getting there. infosysall correctly, relies on the u.s. for about 60% of its revenue. does this impact you directly? nandan: not really. we are hiring 10,000 people in the u.s.. a terrific response from local governments, governors, even from the federal administration. i think the fact that we are working on creating jobs here, that is working very well, and i think we have a great reputation for job creation in the u.s. scarlet: do you feel like you have an open line to the government to make sure visas ra two-way street and -- visas are a two way street? i want to get your thoughts on the u.s. increasing oversight on various technology companies.

in hearing how facebook, google, apple, perhaps even amazon are caught up in this. we have seen europe tightened its grip on these industries. while this shape the landscape for big tech companies overall? nandan: it is early days yet and we don't know exactly where this will go, but it is true that there seems to be more interest in these issues. scarlet: is being big a good thing or bad thing in this day and age? nandan: i think being big is important. scale benefits. we have platforms that have millions of users. it is important to have scale. scarlet: let's talk a little bit about prime minister narendra modi's victory. last month saw a landslide victory for the prime minister. how do you see modi using his mandate? nandan: i hope it will be used

for economic reform. india is well-placed for reform like labor laws, getting the banking sector back on track. i am hopeful that with this majority and a clear mandate, they will do that. scarlet: what kind of timeline? nandan: very quickly. all governments have to do reform within the first few weeks and months of their tenure. emily: that was nandan nilekani, infosys chair and co-founder. googlebeen weeks since cut access to the android system for huawei. in europe, people have been trading in huawei phones. in a press conference with theresa may on thursday, president trump said the u.s. and u.k. will find common ground

on huawei. pres. trump: we will have an agreement on huawei and everything else. we have an incredible intelligence relationship and we will be able to work out any differences. emily: joining us from washington, sarah mcgregor, covers trade. will there be an agreement on huawei between the u.s. and u.k.? sarah: we will have to take trump at his word he is working on that. it will help the u.s. interest. of course, the u.s. has been jumping up and down trying to get attention, saying huawei is a security threat. a key way to cut them off is obviously the you -- the u.s. market but also to look abroad places like europe and the middle east. it would help the trump administration if sales are dipping and people are

questioning their purchases of huawei equipment and cell phones. emily: there's the blacklisting, trying to convince other governments around the world not to use their equipment. if we see huawei really take a hit from some of these actions around the world, will this fire up the chinese even more to retaliate against the united states? sarah: i guess the risk we are looking at now is the u.s. huawei blacklisting american the u.s. to huawei -- blacklisting american suppliers to huawei. periods a 90 day grace that ends in august. that could affect the operating systems that huawei works on. and may not get the same parts it uses. it is scrambling now to diversify its supply chain. huawei are trying to develop their own operating system and i

think the chinese government would say it is full steam ahead this is its crown jewel. it is sort of the future that china wants to have, leading innovation. emily: president trump is also trying to convince the u.k. to get on side about a possible trade deal. a tradecome to terms on agreement, how would that affect between whatnamics is happening with the u.s. and china now? sarah: they have created some working groups and got some groundwork. of course, for the u.k. to leave the eu so they have that autonomy and they can ratify and hammer out trade deals. that is a big first step. after that, there's a lot of things up for grabs. trump brought in the possibility today that the national health system of written needs to be

one of the issues -- health system of britain needs to be one of the issues they discuss. the u.k. said that is off the table. so what are the parameters, what are you actually negotiating? there's a lot of things they need to figure out first. mcgregorl right, sarah for us on trade in washington. thanks for that update. coming up, the u.s. government sets the stage for formal inquiries on big tech amid criticism that practices are harming competition. who's got the upper hand? this is bloomberg. ♪

this is bloomberg technology i'm emily chang in los angeles. the u.s. government's potential probes into antitrust behavior by the likes of google, facebook, amazon, and apple. house judiciary committee is getting in on the action with hearings and an investigation. so what is the difference between the agency's actions and congress? the attorney general in charge of the antitrust division explained that earlier on bloomberg. >> that process will play out publicly and is unlikely to have a major impact on what the federal trade commission and doj

will be doing if they decide to investigate. those tend to be highly confidential, non-public, on the merits. as much as possible from whatever political debate may be going on. to discuss in washington, we have charlotte, the policy counsel for public knowledge, a washington nonprofit shaping policy for an open internet. she worked in the anti-competitive practices divisions of the ftc. and senior analyst jennifer read. charlotte, we are wondering what this division of oversight actually signals about the intentions of these agencies. does this mean they will investigate? is an investigation imminent? or is this procedural? it is simply

procedural but it indicates an investigation is likely. this is the type of process they are not going to go through if they are not going to open an investigation soon. but it could happen. emily: jennifer, how are the agencies different? is the object of the same? jennifer: ultimately, both would be conducting broad investigations. the law-enforcement agencies, the doj and the house judiciary committee. but the ftc and doj are looking at conduct to understand if these companies have engaged in conduct that goes beyond just aggressive competition and crosses the antitrust line, harming the competitive process. congress, we look a little bit more broadly. we look at not just conduct, but how the economy has changed with technology and whether or not the antitrust laws can handle

policing these companies. and whether legislation is needed to rein in the power of these big tech companies. the doj has emily: oversight into an investigation of apple and google while the ftc takes facebook and amazon. i am curious about the role of congress here. is that just for the public to have these hearings and do this investigation? or could that lead to policy and regulatory changes? charlotte: i think that is why the congressional process will be crucially important. the agency process as bill baer said earlier will be secret. the public is not going to have a lot of insight into what is going on. is a good chance that there are additional problems caused by these companies that are not antitrust violations, but different types of problems.

we do not have an expert regulator for digital platforms. having a more public process in congress could build a record could have -- to have new -- could build a record to have more regulations. companies atese bigger risk of being broken up or being regulated? i think it is difficult to say because antitrust investigations are always very fact intensive. and whats on the facts the conduct is that the federal trade commission and the department of justice finds. and what the proper remedy is to fix that problem. these remedies are narrowly tailored. let's say there is legislation like the type of legislation elizabeth warren is talking about where a company cannot run a marketplace and also be a participant in the marketplace.

a company like apple or amazon would have a bigger risk because they are companies that run a marketplace and compete on that marketplace. what could the possible penalties be? i know this will take years to play out. at thee the scenarios end of a five or 10 year road? charlotte: at the ftc, we like to say remedies, not penalties. the goal is to promote competition. it is often not actually intended to take a penalty. -- to be a penalty. be significant divest or's like a breakup. it is seen in the courts as a very severe remedy. another remedy might be interoperability requirements. that is a major way of promoting competition.

these markets are characterized by network effect. the more people connected to the network, the more valuable it is. upyou make that network open , you can address the network effect power and create more competition. emily: we know about the antitrust investigations at microsoft in the 90's and what happened with u.s. telecom. the ftc is investigating facebook right now on privacy issues. facebook has said they are prepared for a multibillion dollar fine which would be billions of dollars more than any find the ftc has ever levied. ftc is insay that the really uncharted territory here right now with the power and the scope of these companies today? charlotte: i don't think it's uncharted territory. there are a lot of new considerations. .hese are fairly new products

there will be some new things that they need to figure out. i think that the ftc and doj are used to be late with very -- to dealing with very big companies. they will be able to handle it. emily: and we saw the markets rebound today. doseems to be nothing to with antitrust issues and more to do with mexico and the fed. but over time, how devastating could it be to the valuations of these companies given that this could drag on for years? jennifer: first of all, the important word is time. much't see anything happening for a long time. these investigations take a long time. if they end up going to court, that takes a long time. of thelotte said, one options is structural. a breakup or divestiture of certain assets. if that is what the remedy ultimately is, i think that

could have a pretty significant impact on these companies. charlotte mentioned the interoperability. think about the microsoft days and the department of justice trying to create a remedy to break up microsoft, they could not do that in court. there was forced interoperability that opened up the markets for a lot of new innovation and competition. regulators time, the may look at something like interoperability and think it may solve some problems provided there is a problem. emily: we will continue to follow all of this. charlotte and jennifer, thank you both for weighing in. of digitalthe rise in china and how they are testing beijing's firewall. we will discuss it next. this is bloomberg. ♪

emily: in bloomberg businessweek, the regime of china's president xi jinping is one of the most restrictive the internet has ever seen. they have spent $180 billion a year on surveillance and censorship tools like the great firewall. the controls are tested by a new group of tech savvy activists. bloomberg businessweek editor jeff muskus joins us. tell us what these activists or dissidents are doing. jeff: somewhat the folks at a collection of activists that have been up and running since 2011, they do their best to provide a jumping off point for people who are in china and want to use -- either through browsing tools are social media -- a different kind of site they don't normally have access to if they abide by the

rules of the road. but we also spoke with folks including laborers that may be planting trees and spraying pesticide, they are unlikely activists as it gets tougher and tougher to speak up online. working was living and in beijing for the 20th anniversary for the tiananmen square massacre. it was about the same time facebook got shut down and twitter got shut down. and any time we aired a story about tiananmen square or showed a video, that would be blacked out. -- that would be blacked out in china. how has that restriction increased under xi jinping? it has always been there, to a certain extent, but it has gotten more restrictive and not less. jeff: he certainly made good on his annual promised to crack on mostder and harder

of the ways that people are allowed to express themselves online in china. tools at hisiggest disposal to do that include cracking down on apple to force them to remove hundreds of virtual private network apps from their app store. if not counterproductive, it has been unsuccessful. 10 years ago, young chinese students were much more concerned about getting a job and more concerned about the economy than they were about political freedom. do you get the feeling that is changing? or that there is more of a push back against xi jinping's regime? are probably right that there are a lot of people that are still very happy to

sort of put their heads down and not become targets. is thaton of the story it can be a very lonely fight. like the greats fire people operating from the thatws or these laborers are willing and have spent time in jail for complaining online about things their local government officials are doing, they tend to argue that the case they are making is to try to slow the sensors down or get people to think twice about the compromises they are making. they are not turning the tide just yet. if theinteresting to see trade war has any impact on sentiment if it leads to some sort of greater economic downturn. jeff muskus, thank you so much. you can hear more from the magazine editors and reporters

every saturday and sunday on business week on bloomberg television. has criticized australia for not encouraging tech innovation. is that changing? our correspondent spoke at the summit. >> on the innovation side of things, i think there are certainly things that the government could be doing to help. look at the last three or four years on r&d and concessions for example. smaller companies started and going. that certainly hasn't helped. at the same time, we do have a booming tech industry here. is a regardless of what the government does, which is great. they can certainly help a lot more than they are, but we have a pretty rosy future. reporter: there seems to be a dominant theme that a lot of the progress will be made regardless

of public policy. >> there are certainly things the government can do that are regressive. there are things they can do that hurt industry. if you look on the energy side of things, the lack of stable energy policy is probably one of the two leading factors of why it is so expensive in australia. the instability makes it hard for long-term investments to be measured. and you require a larger margin of error. there are a lot of things that you can do to accelerate those transitions. but they are not going to reverse technological progress. reporter: what advice would you give to a young tech entrepreneur and aspiring innovator in australia to try to navigate the environment? >> just focus on your customers.

it nor the government. ignore the thing -- ignore the government. ignore the things that are going on. we have a lot of universities turning out world-class engineers. we have a lot of customer problems to solve. it is worth having big businesses, small businesses, , otherommunities industries that we are strong in. energy is a huge sector. but i see a lot of agriculture startups. we have a lot of problems to solve. focus on that stuff. reporter: i was looking at your twitter feed earlier. the pictures of your attendance -- attendance at the apple worldwide conference. >> it is a blessing and a curse

to have that profile sometimes, for sure. we try to use it for positive things and advocating for changes that we think are there to be made. more business leaders in australia should do it. we need business leaders to speak out on issues and say what they think are the right solutions. we will make mistakes, but i there is that responsibility to try to explain , understand, and advocate for positions that move our economy forward. and in australia, you make it about the company or the ceo. tale a bit of a cautionary echo >> -- cautionary tale? >> you have to run a good company at the same time. we want to make it as best we

can in terms of hiring the best talent. keeping that talent and nurturing that talent. we have amazing company culture. you have to put that first. that is what has gotten us here. we have so many problems to chase down and solve. we don't turn up to work quiet every day. we are bullish on what we are doing as a company. emily: that was mike cannon-br ookes. companies bring ai to organ transplant and pioneering what you might call medical miracles. that is next. this is bloomberg. ♪

matching organs to donors is a challenging process and shortages can mean life or death. there are currently 113 thousand americans waiting on the national transplant list. but finding a donor is not the

only obstacle. roughly one third of organ transplants are rejected by the recipient's immune system. a molecular diagnostics company is improving that process by bringing ai to transplant care. the company has developed a genetic test to match organs with recipients developed technology to monitor the immune system post operation. joining us is caredx ceo peter. tell us how ai is helping to improve the matching process here. there are two big issues in organ transplantation as you were mentioning. you need to match an organ to a recipient. then after transplantation, you need to care for the patient throughout the lifetime of the patient. we are applying novel sequencing technology to match the organ with the recipient. after that, we are using the same sequencing technology to care for the patients, detecting rejection episodes early. taking sure conditions have the

information -- physicians have the information to treat the patient. emily: how does the sequencing technology work? how is it different from a matching process without your technology? this is next-generation sequencing. it is the future in diagnostics. we are applying this technology to match an organ with a recipient on a very granular level. with transplantation overall. we can actually detect the dna of the transplant in the bloodstream of the recipient. that is a very novel technology. it is revolutionizing how we can care for patients because it can detect rejection episodes earlier. add on the artificial intelligence platform that can allow the clinician to have a deeper insight aggregating all of the various data streams.

to make better decisions in potentially detecting issues earlier than they can today. emily: how are you improving success rates? what are the numbers? we have a clear goal to improve the patient's life or three years. we are aware of the ability to impact this and we are building an amazing platform in order to do so. we can focus on immune modulation, focusing on compliance. making sure patients are taking their medication and seeing their doctor on a regular interval. we can focus on standardization and precision medicine. individualizing the care for that patient is what we are all about. we have a tremendous platform to deliver and partner with the transplant ecosystem to make that available for

transplantation. emily: you grew 85% year-over-year. how does this scale? how does this become accessible to more recipients? peter: this is really an amazing growth story. we have built this amazing platform. over the last 18 months, we have achieved 5% patient penetration for kidney patients in the u.s. this $2 billion market opportunity. when we talked about it for her five years ago, people were wondering why that is. they live for 10 to 15 years and there is a recurring revenue opportunity. has a model that follows these patients over a long time and is financially very attractive. but more importantly, we are changing patient's lives by detecting rejection episodes early.

scientifically very interesting. emily: how do you expand this technology echo is there an up -- this technology? it is a unique opportunity being at the pinnacle of medical science. you called it the miracle of medicine. and it really is. innovation happens at the top of the innovation curve. this will allow us to learn a lot for other areas. transplantation for the top 200 medical centers in the united states. once we have built an ecosystem that allows us to have artificial intelligence and , weented intelligence integrated into electronic medical records and we can roll the platform out to many other areas. emily: fascinating stuff. it peter maag, thank you for

sharing what you are doing with us. it does it for bloomberg technology from l.a. on tictoceck us out on twitter. this is bloomberg. ♪

>> welcome to daybreak australia. i'm paul allen live from the australia summit in sydney. bloombergry ahn from headquarters in new york. we are counting down to the market open. paul: here are the top stories we are covering in the next hour. signals of being open to rate cuts and watching the fallout from the trade war. the stocks jumped the most since january.