emily: in emily chang in san francisco and this is bloomberg technology. coming up in the next hour, washington discusses antitrust with big tech but big tech is ready. plus, the administration reveals new possible timetables for tariffs on mexico. what could slow down the global trade war? and if you are being inundated

with robo calls every day, help could be on the way thanks to a new initiative from the fcc. but can scammers fill find a way to get through? first, our top story. big tech is mounting its defense against u.s. antitrust scrutiny. have been spending big on lobbying and continue to staff they are in-house legal teams with numerous antitrust lawyers who served in the government. in the first quarter of this year, amazon, google, netflix, and facebook spent a combined billion dollars. david, is there a sense that that these companies saw what was happening in europe and started to prepare years ago? david: you definitely get a

sense talking to people in washington, lawyers and their policy shops, that something like this was almost inevitable. there was sort of a feeling that some of these companies were redesigned to some action in one some actiongned to in one form or another. there was speculation about who was most at risk for investigation. a lot of this comes down to the fact that there is so much in so atmosphere in washington, much criticism of the companies both on capitol hill and at conferences. this is a subject that is being talked about. companiest are the themselves officially saying? we are getting dribbles from outside counsel and sometimes sources within the company, but do we have an official party line? max: no, i think officially, these companies are very

conscious of the ways in which they let people down. we have seen that messaging come out of facebook and google most clearly where, you know, you have a lot of talk about responsibility and a renewed focus on our role in society. just to build on what david was saying, a couple of years ago, we saw mark zuckerberg going around the country on this weird photo to her where he was posing with iowa farmers. everyone was kind of scratching their heads and saying what is he doing? in retrospect, it was clear. he was preparing for this coming storm. when you look at tim cook stepping down and becoming more of a voice. a lot of tech leaders years ago started to realize that this was coming and started preparing. speculation ofs zuckerberg running for president back then. that now seems a lifetime ago.

joiningut the people these legal teams. who are they? former doj folk and elsewhere -- andthe government coming from elsewhere within the government? companies have been hiring a number of antitrust lawyers who worked at the ftc and the justice department. people who have experience conducting investigations into conduct as well as mergers. they also have public relations on capitolshops here hill. they also have very prominent law firms, armies of lawyers who would be ready to go to work if turns into real

investigations. emily: the idea we seem to be getting from officials talking about the company's positions is that these companies will try to make the case that they are better for competition than not, that they support small businesses and competition between small businesses. do you think washington is going to buy that argument? >> it's hard to say. it depends on how you look at it. it's 100% true that online advertising has created opportunities for small business. the other thing about this from an antitrust perspective, antitrust laws are about consumer harm. all of these companies are offering services for free -- google and facebook are offering services for free. amazon is offering lower prices. -- one vulnerability for

these companies as they all have these big, dominant networks, so if you want to buy a search advertisement, there is only one company, google, that will sell you search ads pretty much. there are smaller players, but their market share is tiny. if you want social media, there is one place. the fact that they have these dominant platforms i think would be the focus of criticism or inquiry. emily: on that note, david, is there any sense of how google, facebook, apple and amazon have handled the threat of coming investigation differently? how are there strategies differing when it comes to getting the ears of lawmakers? showedwell, the shot you , the lobbying has increased

significantly. that is certainly the case for amazon. bloomberg reported earlier this wherehe numerous agencies amazon has been going on talking to regulators. that's a lot different than back 20 years ago when microsoft was under the microscope. microsoft essentially had no presence here in washington. that's another long story where bill gates didn't think too much about this town then. i think these companies have and you see that that in the spending and what they are doing in the policy shops here in washington. are goingiously, we to continue to follow all of these headlines. well, two companies that recently went public have seen earnings results on thursday. they have seen sales surge and

beaten analyst estimates. is beyond meat. it said earnings would break even. issued a yearly forecast that topped estimates. sales are forecast at $122 million in the fourth quarter. coming up, tariffs are set to go into effect monday, but the situation is fluid. we will talk about the latest in the global trade war on multiple fronts, next. this is bloomberg. ♪

emily: shares of blue apron in thursday trading, .itting an all-time low it's now a penny stock.

it has struggled since late april when it reported weaker than expected revenue and continued customer losses. making news on tariffs while in france. here is what he told reporters what happened with respect to china. wille way or the other i make that decision after the g20. i will be meeting with president we will see what happens. probably sometime after g20. emily: meanwhile, a former top chinese official gave a much more pessimistic outlook on the talks while speaking to bloomberg earlier. >> if the u.s. doesn't want to go to the wto and they talk of china with their current attitude, things will drag on. it won't be a year or two. it could be even longer. in that case, we will see who can take it on the chin. china will have to endure that. the west will have to endure that. the whole world will have to

endure that, and the global economy will go backward. emily: the g20 is at the end of the month in japan. meantime, when it comes to mexico, just a few moments ago vice president mike pence said the mexican tariffs will be imposed starting monday. bloomberg businessweek's max leader and economic team sarah mcgregor join us. sarah, can you give us more details on what just happened? >> we don't know exactly what the officials talked about, but we just heard from mike pence that talks will continue. at the intention is to move forward with these tariffs on monday. our sources are telling us there is a chance that tariffs could be delayed. toico wants to buy more time

meet u.s. demands over immigration proposals. one scenario we could see is that the u.s. does impose tariffs on monday but they are short-lived. and if they u.s. imposes these tariffs, how big are they? are they in the 5% range that has been tossed around? >> that is what they will start at on monday, 5%, and then they will rise incrementally until they hit 25%. 5%, i think a lot of companies are saying that's not great, but maybe they can live with it for a short time. 25% is a different story. that could, within months or the course of a year, could push the u.s. economy and the mexican economy into recession. emily: with respect to china, the president is now saying he's going to wait until he talks to xi jinping at the g20.

how much possibility is there they could come to terms and a face to face meeting? will: trump today said he hold off on imposing more tariffs on the rest of chinese goods. he will hold off on that until he meets with xi jinping at the g20 in japan later this month. that meeting hasn't been officially scheduled. so, you know, trump is hoping for it. perhaps there are early stages of it going on, but it is not a sure thing. if that meeting happens in talks break down or if it doesn't happen, it sounds like trump is intent on moving forward with those tariffs, which again, is a huge risk for the global economy. we saw the imf raise its forecast for the economy for 2019 while at the same time warning that if there are more tariffs, it's going to be a big hit. max, you havee, company struggling in the midst of this, notably huawei. we are getting new details from

inside huawei about how they are trying to prepare for potentially a new world order. thousands of developers working on new software and potentially a new operating system, which means they would not have to rely on u.s. software or android. what can you tell us about this? max: bloomberg has a report about round-the-clock shifts at huawei. i think it's helpful for huawei to have a fallback plan. but the truth is, if this proposal from the trump administration to continue to prevent american companies from doing business with huawei, which is hugely important, a chinese telecom and tech company, that is going to be a disaster for huawei. they cannot reinvent the entirety of the global supply chain in 90 days, which is what they were kind of have to do to

reduce their dependence. so, for instance, arm, which makes most of the chip design is a u.k. company. they have said they are not going to be able to do with -- do business with huawei because some of their technology includes u.s. technology. productsso many of the and offers that are dependent on this technology. the flipside is that china has promised they are going to retaliate by coming up with their own list of blacklisted companies. for the u.s. companies, it's not so much a reliance on chinese technology, it's a reliance on china as an export market, as the main growth engine for a company like apple. if china retaliates, it's going to hurt big tech companies as well. sarah, as thele, president travels through europe, he has been touting his message, meeting with the irish prime minister and theresa may. do we have any indication of

whether his message is being heard? sarah: well, it was interesting, because some of the leaders in europe did indicate that they did see huawei as something they should consider on national security grounds and they agreed it was worth a closer look. i don't know if that message appeased trump, but he certainly lightened his tone. he had threatened to cut off intelligence sharing and crackdown. he said we won't do that. thats a conciliatory tone they work together to solve the issue together. that was a bit of a surprise. whats a bit of a change in we have been hearing. meanwhile, the huawei ceo is still under arrest in vancouver while she awaits an extradition fight, and we have now learned that fight is going

to start in january of next year. so, dragging at this entire saga for her, stuck in canada. what can you tell us about this? >> with this trade war or whatever we are calling it, there is the main narrative, which is the tariffs, and then there are ancillary things like the blacklist in this extradition case in canada. now, the legal case has to do with huawei allegedly tricking banks into doing business with iran. the fraud case. it has nothing to do with the trade war extensively, although china has said this is all politics, and trump has at times indicated he might be able to work some deal involving -- assuming they drop charges against the huawei's ceo. who knows? you could imagine a grand bargain where this is part of

it, compromise, a plea deal, or the u.s. drops charges as part of a larger agreement with china. we will certainly continue to monitor that. thank you both. coming up, the race to 5g is heating up, but will the new generation of networks be even more vulnerable to cyber theft? we will discuss that next. this is bloomberg. ♪

emily: the obamas are getting into podcasting. spotify says it has signed an exclusive podcasting deal with the production company backed by barack obama and michelle. this after the company signed a deal with netflix for a slate of tv shows and movies. michelle obama said the podcast will amplify voices that are often ignored or silenced altogether. spotify will distribute the podcast to audiences worldwide

as part of a multiyear agreement. the next generation of 5g technology is expected to transform the world at greater speed with better connectivity but it will also open the door for cyber attackers. will 5g be?e joining us to discuss is nicole egan who helped develop artificial intelligence for cyber security. there are two sides to the story. there is the concern around surveillance and a greater concern about 5g. in general, the idea is if the world is more connected, it is also more vulnerable. let's answer that question first. would you agree? i think what happens with 5g is that people are moving to it because there is a need for speed. people want to get the next generation of applications out

there faster, things like connected vehicles. all of these applications require video. oft's why there is a lot buzz and discussion around 5g, the advantages. but there are risks that are going to come with it. there are more points for attackers to get into the network. emily: does not mean a harder job for you to protect them because -- does that mean a harder job for you to protect them because you are now fighting on more fronts? nicole: we have teams having trouble keeping up today. add 5g to it and it does amplify it. if we are able to use artificial intelligence to have all of the points in this new definition of artificial intelligence is really going to help customers get ahead of this. some particular

concerns? nicole: what we are seeing is that this is raising to the forefront the whole issue of people analyzing who is in the supply chain, where is this technology coming from? seems to be focused around one particular venture, but it is really shining a light on a broader issue. emily: do you have specific concerns tied to huawei and its connections to the chinese government? >> i think they are one of many. it comes down to not only inmunication networks but everybody's supply chain, there is technology coming from all over the world. any piece of technology might have dozens or hundreds of different providers of component pieces. tohink it means we have

change the way we look at security and work on monitoring to see if all of a sudden something starts beaming to other parts of the world we did not expect it to. emily: is china concern more so than other countries or are you saying technology can be a concern anywhere in the world? >> i think attacks can come from anywhere. this bridges to a broader topic. there's kind of an impasse of nationstates on the styles of attacks rolling over into organized cyber criminal rings. that kind of correlation and connection between nationstate isivity and cyber criminals coming to the forefront. emily: how can we use ai to detect cybercrime and protect in a more connected world? nicole: i think the first part is using artificial intelligence to understand normal. we embrace the principles of the

human body immune system. sometimes a virus gets inside, ai the important part is fighting back. this is going to become a full on water, algorithm against algorithm. , algorithmwar against algorithm. we need ai that can fight back in real-time. emily: are you seeing these attacks become more are some ofd or these folks using the same old tricks? nicole: we are talking about 5g, digital transformation and new information. i think you have to get back to basics. i think you have to have cyber hygiene and keep your systems up to date. so much for you joining us, nicole egan. it is a scary, scary world out

there. coming up, how apple could be at the core of the tariff decision. this is bloomberg. ♪

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technology." apple's front and center in two of our biggest stories today. the government continued antitrust crackdown and trumps tariffs, which he has pushed back until after g20. in a late notice, -- the poster child for the battle continues to be apple. the latest tariffs have the mckinley increase the cost of iphones, supply chain disruption

and have a major negative impact on numbers across the board. he joins us now. you say in this note that it has been more noise than reality. what do you mean? dan: through this week, iphone demand in china is in line with expectations. despite worries that they are burning iphones in the street, thus far, expectations are in line with what we have seen for apple. there are worries about what is on the horizon, but thus far, it has been minimal disruption. especially on the supply side. and 20%re factor earnings hit when you look out over the next year. right now, we think we are looking at something that is minimal relative to the fears. emily: what is the worst-case scenario in the trade dispute? 325: first, you put the $

billion tariff after the g20, that would have a 15% negative implication, if they don't pass that. that would be negative on supply side. demand side, what would that do, potentially, to demand? iphones 70 million coming up for an upgrade in china in the next 18 months. that could have a 15% impact their on demand. that would be what i view as the worst-case scenario. stock is, i think the reflecting that, which is why, in our opinion, if it is anything other than ciccone in, it is here. emily: you have a note that shares are plummeting, weak demand, week outlook, the ceo. what is happening there? dan: it is a nightmare on held

street situation happening there. mergerback, that was the . they were looking to consolidate , focus on the cloud market. it has been a disaster story thus far. when you look at the visionary , it has been a one plus one equals 1.5 situation. investors are wondering, does the board decide to put this thing up for sale, look for a financial buyer? that would be the best case. other than that, this continues to be a stock in the near term. emily: what would you hope to see in a new ceo? dan: you hope that they put a for sale sign on the house. right now, you need a financial buyer to but this thing together, cut the costs, and that would really be the goldilocks scenario. if a ceo comes in and tries to there is a bigd,

market opportunity here. i think investors are getting too negative. last night, that was the trifecta of bad news. want to see people on the board make serious decisions if this is a strategic process on the horizon. emily: over shares rallied yesterday, actually hitting their opening ipo price. there were some positive coverage notes out. do you still continue to believe in the long-term valuation story? if so, how long does it take to get there. ? dan: you are starting to see the stock get some sea legs. investors are better digesting the ridesharing valuation. when you look at uber, i can tell you some of the parts. most of my conversation with investors, it is going to take time, but it will take a $100 billion valuation in the next 18

months. they will be on that path. right now, the big thing for over is that pricing war starting to subside. that is the key on uber. they can continue to be insulated there. this is starting to move in the right direction after what has been a massive white knuckle period for over and lyft. emily: i always loved your colorful metaphors here. vox is a digital media empire with millions of monthly views on experience sites, but on thursday, those properties went quiet. staffers staged a walkout to pressure the online media company to sign a union contract. give us the backstory. ?ow did we get to this place

josh: it has been 14 months that the new union has been negotiating with management. emily: why was the union formed in the first place? josh: people want to dress ,ssues like starting pay whocially for new writers are women or people of color who are not getting the compensation they deserve compared to others. they want to dress issues with severance, they have brought up issues around compensation if people's work gets converted into tv or movies. they were able to get recognition from box media -- vox media within a few months, but getting a contract is slower going. emily: why is it happening at vox and not other digital media companies. josh: it is happening at other digital media companies. we have seen an industry with more brand sensitivity. there has been a wave of

everyone from gizmodo to huffington post organizing and folks obtaining union recognition. emily: what is next, and what izers asking for? josh: there are outstanding issues in compensation and severance that they want to see results. he isemail, the ceo said as serious as he could be about reaching a deal but he said that it is not smart and realistic to pay people more than a market rate. those comments drew a new round of criticism on the social media. the sides are still a part in this area and escalation beyond this one-day walkout could take all kinds of forms. emily: you had layoffs at vice, buzzfeed, do you sense there is a consolidation in the new media space coming? josh: that is a fear.

people are concerned about a change to something like the facebook algorithm, how that can overnight change the business models for these companies. precariousness cuts both ways. it intensifies people's fears about organizing, but gives them a reason to organize. emily: we've seen 20,000 employees walkout google for different reasons, for how the company handled sexual harassment and certainly, tech employees do not necessarily complain about being underpaid, but could this sentiment spread to other industries? it could, and as you have said, we have seen a wave of activism among tech staff. we have seen a kickstarter that people have translated into turning a staff. emily: josh adelson, who covers workers issues here. thank you so much. up, google announces a multibillion-dollar deal to buy data and links firm -- data

analytics firm look or. -- looker. this is bloomberg. ♪

emily: at time when big tech is under a microscope, google is looking to expand. is -- google is set to buy a data analytics firm. he gives google a new tool in its campaign to sell more cloud storage and software and compete with larger rivals amazon and microsoft. google has not made a big acquisition since 2014. why now, and why looker? >> i'm not sure i would call this a big acquisition, in terms

of googles size. it is a lot of money, but when you're talking about the cloud world, this is pretty small. there was a lot of pressure on google to do something to expand its size. at least from the investor community. you can debate whether google cares what they have to say, but this acquisition was not as big as a lot of people where hoping for. this is an incremental change. it is a product that a lot of customers are already using and they will be able to sell them together. emily: we were just looking at graphics showing past acquisitions and one of their didn't turnisitions out so well. some would argue that the nest acquisition has not been a success. youtube, double-click for sure turned out to be phenomenal. i wonder if google is scared of

its own track record. gerrit: google generally believes that a canceled its own problems. this is an engineering focused company. a company full of the smartest people in the world who think they have the right answers for things. they love products that have developed in-house have had success. chrome and search ads, which is one of the most successful tools ever developed in history if you look up your profit. generally, the attitude within the company is to build rather than by. not all applications you can build on your own. to amazongle's third web services and microsoft in the cloud. they have a new ceo who you spoke to today. he told you people asked us for months, are you rushing to do acquisitions? we have an disciplined in building sales and have chosen to look for couple mentoring technologies. what did he have to say to you

about buy versus build when it comes to gaining share in the cloud market? gerrit: obviously, he would not tell me what his acquisition strategy was going forward, but it is true. most of what he has been talking about despite being asked it, has been building his own sales force, focusing and narrowing google cloud focus on a few industries and getting good at selling into that. as an engineering organization, they have not always had a strong sales culture. that is what he is trying to build. if we take them at their word, that will be their focus. maybe these more incremental acquisitions will be the norm rather than a large transformational one. emily: meantime, you could call it a more acquisition -- a more increment all acquisition but washington is examining google and apple that for antitrust issues.

is now the right time to be doing this? under: this deal was works before this weekend when we saw the news about a department of justice investigation into google regarding antitrust. it is important to note that in the cloud, google is not dominant. they are far beyond -- behind microsoft and amazon. they have had trouble closing that gap and they are far from catching up to those companies in the cloud space. truly looking at cloud is not going to be the approach that regulators will take. of course and his environment, facts don't matter much and i am sure that there will be some people who use this as another political point show that google is getting too big. much forank you so your reporting. the techwith google, giant is attempting to lead the way in the business of game streaming through the internet. google has announced racing and a raft of new titles for its

stadia servers. access to the games will cost $9.99 per month. a free version will let players by games. i spoke to the president and ask why people would pay for this new service. >> i think what we are offering is an incredible value, because they don't have to buy any hardware. there isn't a custom game console or high-end pc that normally costs hundreds of dollars. controller,ou get a a 4k streaming chrome cast, the full destiny to experience and three months of stadia. it is an incredible value. gamers can play the games they want to play without having to go through the hassles of downloading and installing and patching and updating and all the rubbish that since around traditional consoles and pcs.

emily: don't you think we are facing a subscription overload with all of the entertainment streaming subscriptions? certainly there are many other gaming alternatives. what is going to convince gamers to choose google? represents is a phenomenal value. the games that gamers will get to play they can use on any screen. there tv, their pc, their laptop, tablet and phone. incredible, but we also recognize that not everyone wants to subscribe. in addition to the stadia pro, base, which is free. they can buy the games and play them when they want to. emily: are you trying to get exclusives? gerrit: of course. we have announced our game development organization led by a industry veteran, jade raymond.

she will be building out our exclusive content. we are working with a number of third-party companies to bring their games to stadia exclusively. emily: game streaming is on the rise. the have got apple arcade, potentially your price could impact the price they decide on their service. what are you expecting from the competition and how are you positioning yourself relative to them? >> first of all, i think this is a general trend in the industry, as we move toward the streaming future. andtechnology is there now google has some extraordinary capabilities in this area. we have been investing in this for 20 years, so stadia is standing on the shoulders of giants as a technology that built and created youtube and other high-performing services that serve billions of users. the timing is ready now to deliver a very high-quality

experience to gamers. stadia allows you to stream at up to four k, 60 frames per second. that is only possible because of the innovations we have made. emily: d think game streaming will take over before there is a new generation of consoles? streaming gives players an alternative and it is a future direction for the industry, but it is not going to happen to everyone overnight. i think that the good news is that the innovation means better games, it means better content for players. what a great time to be a player. emily: does the innovation work with multiplayer games? there is skepticism that streaming will not work on a multiplayer experience any better than a console or a computer and can you do it better than microsoft and sony? >> the great thing is when you have a streaming technology, the multiplayer experience is even better, because all of the players are on the same tech go back and. all of the players are connected via the same proprietary google technology using our own fiber

, on which there are hundreds of thousands of kilometers worldwide. the experience of multiplayer will be far better than you can get on traditional platforms. emily: how would you rate the experience now? this is a technological problem you have been working on. how many of the kinks have you worked out? >> we have an working on this for a number of years. we have been testing privately inside of google for a number of years. we tested publicly last year with project stream, partnering with ubisoft to bring assassin's creed odyssey, which is a demanding title. we learned a lot from that experience testing with hundreds of thousands of people and now what we are able to do is to innovate even more in the way we compress the data and bring the high-quality experience into people's homes. harrison, google vice president. still ahead, cracking down on unwanted robo calls, but will it work?

we will discuss next. this is bloomberg. ♪

>> a list of top robo callers include wells fargo. although then use robo calls to chase debts and sometimes they do that a lot, as this woman can testify. lisa says wells fargo ring her more than 20 times a day. >> what is the point of calling someone 20 times a day to collect a debt? this great timing, because when what i couldn't pay you 45 minutes ago, a small propeller plane full of unmonitored drug money just crashed into my deck. emily: that was an epic monologue. john oliver's point pretty universal. nobody likes robo calls. the good news is, you may be getting less soon. the sec footed to allow carriers to block robo calls by default. this is opposed to waiting for customers to sign up on their own but experts warn that

skimmers may still be able to get through. first of all, will this work? todd: it will work. it will grant some relief to consumers, because the companies can now move ahead and do the blocking without having to ask permission from every individual customer. they can put a computer all great them on their and go after phone numbers that sent me in it emit lotsly in it -- of calls. they will have an easier time smiting those. -- theyit won't work are not required to do this. we have to wait and see whether the companies pick this up. said if thereir is one thing in our country that unites republicans and democrats, it is that they are sick and tired of being bombarded by unwanted robo calls.

we hear you and we are on your side. i have an app on my phone that automatically blocks robo calls. why hasn't the phone company done this before? why hasn't the sec already ruled on this? long history of -- there were controversies in recent years about calls to rural areas not being completed for technical reasons. it is a sea change to say what -- rather than prodding you, we will give you and ok to block some. this gives some people the willies. the debt companies, the credit unions issued a statement. they are right there should -- there calls will not go through. the people getting 20 calls a day will not mind that, but if you are getting a reminder to pay your mortgage or your rent may want that reminder.

it is a two edged sword. emily: are the carriers happy about this? doesn't this mean less business? todd: interesting reaction from carriers. verizon said they will take advantage of it. at&t took note of the vote. the big trade groups said it is up to individual companies. for may fear the liability blocking calls. emily: i will be watching my fun to see. todd shields, thank you so much. that does it for this edition of bloomberg tech. livestreaming on twitter, you can find us there at technology and be sure to follow our global breaking news network on twitter. this is bloomberg. ♪ ♪

paul: welcome to "bloomberg daybreak: australia." i am paul allen in sydney. shery: i am shery on in -- i am shery ahn in new york. paul: kerala top stories we are covering. the u.s. mexico talks, washington says discussions continue on immigration. president trump keeps up the pressure on china, saying he will decide on any additional duties after meeting xi jinping.