and watch all the shows you love. taylor riggs in san francisco in for emily chang and is is a face-off with facebook. and potential competitors accusing facebook of anticompetitive behavior. is at stake.hat and the ultimate engagement. askser ceo jeff dorsey elon musk for a tip. and retail in return.

making the return of merchandise a more customer friendly experience. that is the goal of this organization and we speak to its ceo. -- four potential competitors are demanding mark give uprg be forced to control of facebook. in a lawsuit, they get use facebook of anticompetitive behavior. they also want it to sell whatsapp. facebook says the claims are without merit. partner in we have a -- and a cocounsel in the case. great to have you with us. i wanted you to talk about the lawsuit wanting mark zuckerberg to be forced to give up control of facebook. is this possible and why? >> as of now, he has incontestable control over the company. his class of shares overpowers

the class a shares. he has carte blanche to do what he wants with the company. hehe board. if you look at the details of our lawsuit, the anticompetitive scheme was hashed and commanded straight from him and there is no reason to believe that if you facebook key assets, that you would ever fix the systemic problem. there is great distortion of the market. taylor: i want to talk about some of those distortions. one of which is where the lawsuit alleges that they want instagram and whatsapp to be sold off from facebook. >> what is happening now according to a lot of major news sources including zuckerberg on his blog is they are rapidly

,ntegrating whatsapp, instagram and the core facebook products. and the reason we have moved very quickly to bring this suit is that once that integration is over, it will be impossible to break this up. it will be impossible to take the giant amalgamation of data that integration will create and put the genie back into the bottle. it is not just the data. the real issue is that right now, the market's are somewhat segmented. whatsapp has a global presence. facebook and other products are more u.s. heavy. integrated, these products can communicate with one another and essentially, you will have 2 billion people and one giant social network. at that point, we do not think a normal remedy will fix rings. taylor: how did this even get approved when all of these deals were going through in the first place? >> what is interesting is how

regulators think of competition. sometimes, it can be formalistic. at the time, they did not think of an applet, a third-party mobile apps as a competitor to a social network. in reality, what they are competing for is the social engagement and the user data that comes from it and that is why a messenger app is direct -- a direct threat to facebook. you can then target content and sell advertising. that is what they are all fighting for. what regulators will do is that these are two very different things than they are not in competition. now we know and we know from facebook's own documents that apps andfind messaging dating apps in direct competition with them. so when a regulator looked at this, they did not have the view of the market that would tell wadingat they are

into incredibly concentrated markets. taylor: how do you make this seem that it is not just four smaller competitors angry at the bigger guys market share -- bigger guy's market share? >> you will always have a monopolist. more chat programs and messaging programs in competition with facebook, there was a dating apps and now we know tinder is a massive success. we don't know what would've chosend if facebook had sides. a lot of what we are alleging is that when facebook pulled core apis out of its platform and it decided this in 2011 it let developers think that the

platform was stable for three aars before they even made move to pull it. while they did that, they targeted those they wanted to win and they asked them for their most sensitive data. the distortions occurred at the time my clients were competing. they never had a chance. and so, the size i would not positive. we are proceeding as a class because facebook looked to, checked and found that 40,000 apps were affected by this decision and 1000 of the top -- 80% of0% of them them would be affected by the decision. we can establish liability for at least four, we are establishing them for everyone that is hurt. if anyone thousand is hurt, they should participate. taylor: thank you so much to our guest.

we appreciate your time. i want to bring you facebook's statement we are getting. facebook responding saying -- we operate in a competitive environment where advertisers and people have many choices. ,n the current environment claims like this are not unexpected but they are without merit. we will bring you more on the case. on this point, i want to bring in kurt wagner and our representative from bloomberg intelligence. perspective,book what appears to be the bigger threat? that people want mark zuckerberg to lose some of his controlling stake or the threat of this anticompetitive behavior? one andare a little bit the same in that mark zuckerberg's control has led to the problems with these products. it seems unlikely to make that they would be able to take away his control considering he is

the guy with all of the votes. they bigger risk is that actually were to split up facebook. i don't think this will happen but it would be a devastating thing for the business. instagram is a huge part of facebook's current revenue and the whatsapp messenger is considered potential revenue. into your world of fundamental analysis, do investors care? there are a lot of these smaller lawsuits coming their way. >> we solve that over the last year. when you look at the valuation of the company come in you look at the expectations for 2020, they came down. earnings came down a lot more. valuation and expectation metrics were reflecting regulatory issues. as far as a breakup scenario is concerned, our antitrust analyst oftinues to see low odds

that happening but even if it does happen at some point, we have to think of how it impacts investors. look at these companies standing alone -- their value standalone would be higher than what is represented at the moment. taylor: looking at the pe ratio. we have heard this from mike levine. is lowerook revenue than some of the other competitors given the news. with some of stand these antitrust cases? does it present a headwind on the stock? >> if you look at the expense side, expenses winning big on the valuation last year. wasguidance they gave 42020

really aggressive. you are preempting some of these worries. what is important for this year for facebook from a fundamental standpoint is that the expectations are reasonable. in line with what the marketers that we have talked to are expecting. it is on the top of the list in terms of increasing ad budgets. the other players out there. and the future of facebook is increasingly looking beyond advertising. e-commerce. not talking about libra specifically. you saw them walking back from thewhatsapp as well opening door for business services and payments. diversification versus advertising is not really capturing expectations. year isare seeing this they are coming out and showing progress on many of these

fronts. that could change the narrative. taylor: we have been talking about whatsapp as a way to get into some other business opportunities. >> this has been the discussion around facebook for a number of years. can they figure out a different business line from ads? advertising has worked well for them but e-commerce and instagram, payments with whatsapp and possibly messenger -- these are big opportunities. one thing whatsapp is doing or businesses is serving as the don't for businesses that have a website or another kind of software system to send a receipt via email. you could send a receipt via whatsapp and charge the business for that. this is what facebook envisions in terms of diversification. but again, they have been talking about this for years and they have not hit on anything to date. that is why they are still an

advertising heavy business. taylor: most analysts believe they are still poised to benefit from that going into 2020. kurt wagner will stick with us for the next segment because dorseyup, twitter's talks to elon musk. what will one of its most controversial users due to fix the platform? this is bloomberg. ♪

taylor: twitter ceo jack dorsey wants to know how he could improve the social network. who did he go to for advice? elon musk. on thursday, dorsey spoke to elon musk in a video call in front of thousands of twitter

employees. he asked elon musk to give some direct feedback. here to discuss is kurt wagner. how does this all, part where you have elon musk on a video screen live in front of twitter employees? offside --is at an off-site, a global off-site. he faced times elon musk. they have some issues getting the audio to work and eventually, voila they are talking and elon musk's face is on this big screen. taylor: what is the advice? >> you should do a better job of identifying real people on twitter versus bots or fake users on twitter. he says it can be really hard to get real feedback. are people who are complaining actual customers? people who have issues with tesla cars -- are they bots or

competitors? and you cannot tell a bot versus a real person on the network. taylor: i feel a lot of hate mail we get, the negative trolling comes on twitter. i don't get as much of that on instagram or facebook. how has twitter not been able to control that as much as some of the other social media companies? >> it comes back to real identities. in order to create a profile, you have to use your real name and a real photo and if they believe you are not your real self, they will ask you to send in a driver's license. twitter does not have that which is one of the things that makes it fun. you can have these anonymous accounts. but it also creates a real opportunity for people that want to be hurtful and negative because they can hide behind any email or username that they can

get their hands on. it is hard to police that way. taylor: i wanted to ask you for your thoughts -- twitter in 2020 versus facebook for the advertising market. >> there is really no comparison. facebook and google are way up here. i don't see them coming much closer in 2020. unfortunately for twitter. taylor: always a good and flexible conversation with kurt wagner. why verizon decided it was time to stop its bundles and contracts. ,. will hear from the ceo this is bloomberg. ceo, will hear from the next. this is bloomberg. ♪

taylor: in the streaming era, cable companies struggle to adapt to the new normal of watching content. verizon believes it has found a way. kellymassar and jason spoke to hans vestberg to find out how the company is still

relevant. >> we sat down and talked about what do our customers want to have? remember, we are the best network. we have a fantastic rand. .- we have a fantastic brand that is what we come to the table with. >> the top-tier customers will get access. are there more partnerships coming? you get it free from the beginning. cost.e a lower we now know how many of our customers we would be turning around because we have such a good understanding of our customer base. it might be more but i would do an exclusive.

i would only do it with a brand that is up to our values. jason: talk about the amazon deal. we talk so much about the cloud and amazon services. what does that enable you to do? s: we spent almost a year and a half with amazon to do this. we are bringing the cloud service out to the edge together us access give a norm to applications. this is the first time in the .orld where we are seeing this amazon could not have done it by themselves because they do not have wireless 5g. ricin could not have done it by ourselves because we do not have cloud software. this is something transformative. as a developer, you can click on our website and start developing an application for 5g with

enormous throughput. it is transformative. may be thousands of them. we can then give 5g experiences with low latency. autonomous callers, real-time ar-vr. all of that can be at the edge. we are just seeing the start. that is why we are so excited about this partnership that we launched on the third of december last year. ceo,r: that was verizon's hans vestberg. and now, 5g. it is also the focus of senator marco warner from virginia. he joined bloomberg earlier today with chief washington correspondent kevin cirilli. wei5g and the issue of hua

has been a bipartisan issue. there are a lot of us in agreement with the administration. fromve to prevent huawei dominating the 5g marketplace. if we all allow the market to play out, they will end up with 60% or 70%. what we have not been able to offer our allies or small telcos is even if you are convinced that huawei is a national threat, china has put up $100 billion to back huawei. it offers enormously attractive financial plans. the we have to do is over next five years, we have to get to the next generation in what is called open radio access

network. legislation, would put up over a billion dollars to support that kind of development and that kind of international effort to finance and go head-to-head with huawei. >> where with the money come from? >> from the auction of certain spectrum that should be allocated to 5g. there is a series of said like carriers that have the spectrum. that legislation is moving forward. wouldoceeds, some of them go to build the broadband. toe of it would go developing a western, not just eierican, alternative to huaw in the next five years. in the meantime, we have to shore up the competitors for huawei. >> i am struck by this. germany has a tough decision to make.

china is trying to make inroads into the german market. they are pushing huawei hard. >> not only germany but our closest allies, the brits are also making this decision. they have huawei equipment. it is not a good, long-term solution according to their security network. in particular a supplier like close that has such ties to the communist party. what you have to say is --what is the alternative? will it be able to compete in terms of not just five g but also six g and next-generation technology? and can we move this away from a single provider to a more open based software driven system? that is where the west can compete. and the fact that our government with this legislation would make

that kind of down payment that i hope but also spur other development from other western nations who don't want to rely on china. kind sense is this is the of legislation that needs to pass sooner rather than later. until we have a plan, not just coming out of america, but for the west writ large, huawei will continue to win. country, because they don't feel there is a viable western alternative, it is going to then turn to huawei. if we can put together and organized plan, i think the westwood sign-up and we could stop what would be a major national security issue. taylor: that was senator mark warner from virginia. coming up, we look at what phase one of the u.s.-china deal means for the bottom line. and the peacock streaming

service. and amazon is receiving a less than warm welcome in india. all of that is up next. this is bloomberg. ♪

♪ this is bloomberg technology. i am taylor riggs in san francisco. the u.s. and china have signed a phase one of the trade deal. president trump and chinese vice premier put pen to paper for a deal the president claims will have a significant impact on the tech world. to talk about phase one's completion and all of the top tech stories of the week, we are .oined by two guests what changed on wednesday with assigning a phase one? to keep theough

technology industry interested. a lot of stuff that has been most vexing for the technology industry remains in place. tariffs, restructuring on trade with huawei which have proven very problematic for many in the technology industry, they are still in place. -- have left us and in suspense for many months. said, there were changes in ip, with limits around that. there was progress made and that is something that the technology industry can take encouragement from. taylor: your thoughts on whether we have enough concessions on the likes of ip theft. dan: it is a reasonable starts, but there is a long way to go. if we sit back and just think about what is going on here, this century is really going to be marked by enormous change and the technology arena which really has ramifications

across economies, societies, so part of what is going on here in my view is that both the u.s. china and other nations realize the importance here. from a company and investing standpoint, we continue to focus on company abilities to innovate and deliver value to their customers. if they are able to do that even in the face of continued tension between two countries, i think there is room to create a lot of value. taylor: you mentioned huawei earlier. steve mnuchin said it will not be a test piece in the larger trade fight. if the technology sector happy that huawei being treated as a separate issue and not being folded up in the trade fight? have in question people the technology industry is how much of a national security threat huawei really is. and are they on board with the administration stance.

a lot of technology companies that want to still sell to huawei are finding ways around the limitations. a lot of companies that want to buy from huawei also are saying, we think that the technology that huawei is making is low cost and the most reliable. it is what we need, it is what we want for our 5g networks. i do not think there is widespread consensus across the technology industry that huawei represents a significant enough security threat. i do not think that they are buying the argument as forthrightly as the u.s. administration wants to put it across. taylor: i want to switch to another big story we were watching this weekend that was comcast and peacock, entering the very crowded streaming space. in the midst of the crowd, how do they stand up -- stand out? peacock is a good offering

and we will see how they get traction in the months ahead. it speaks to the change in the video landscape in terms of the bundles, traditional bundles going away and really consumers are getting a lot more choice and that is good. in terms of comcast, disney, netflix -- the key is to develop differentiated content, have closer relationships with your customers, and we think there is certainly room for more than one company to be successful over the next few years. you, youet me talk to take a look at the crowded space free, ad is 3, -- supported, subscription only -- what do you feel right now is the best method as you take a look at netflix which is subscription only and other companies that have added support? whatyou asked my colleague he likes about it, and i think

what is interesting is the flexibility and pricing. they come in with all of these different tears. there are people who want entertainment and are willing to sit through ads. all the way up to a much more creative subscription. has millionscast of subscribers and also will have access to this without being a big barrier are another price tag. i do not want to pay more for the service, so it is going to be great for them to have people like me who are already buying, who are buying comcast, they will be able to say, these people are users, a few months down the road, the show that they have made traction. taylor: i want to get some of your other thoughts on another big story this week. amazon was trying to make some inroads in india, but being greeted with some anti-amazon sentiment. such a large market for amazon's future growth. how do they start to make

inroads? dan: it is a multiyear journey. what the company has been doing so far makes sense. they will be investing for several years, and the importance if we think about what they are doing, i think it is around crime. a they are able to deliver great experience in terms of getting their customers good, then increased contact that -- good then increased content, that could be a good offering. amazon is doing the right things there and i do expect this to be a multiyear journey for them. we think it is an interesting part of the investment story. taylor: thank you to both dan flax and bloomberg technology executive editor, tom giles. rigmarole taking the out of returns. this is bloomberg. ♪

♪ robots in stores, social media commerce with the great racethose are among tech transfr is prettyon well-positioned, although, walmart and amazon are duking it out. they have different strategies but they are starting to converge. one was physical, the other was digital, but now both are doing a bricks and clicks kind of strategy. taylor: if the point of purchase is easier than ever with technology, what about returning an item? in our series called retail transforms, we talk about how tech helps with the return process. tell me more about your

business. it is an online platform to help with the return experience for shoppers. taylor: i wonder, do you get any sense of the health of the consumer -- if they are returning more, does that tell you anything? >> we believe that returns are fundamentally broken. give thempany, we credit immediately so they can buy the right item, and get it before returning the wrong item. we take a look at consumers and shopper behavior to make sure that the right persons are getting the credit. taylor: we just came off some week numbers -- weak numbers from kohls. when you look at all online return rates, those are

trickling the average off-line retail rates. taylor: what is some of the shifts that you have noticed a deck technology has -- noticed that technology has contributed to in the retail landscape? eduardo: amazon crushing it. consumer brands have a good opportunity right now as amazon and walmart are doing some revisiting logistics of shopping shopify, theyike can get to a point where the shopping experience they are offering is on par with what amazon prime offers. taylor: are you seeing some of the traditional retailers having to shift the way they do business to cater more to that e-commerce, online customer? eduardo: absolutely. expectationsrs' has shifted towards immediacy. we call them the now customers.

we see how brands are kind of leveling off to meet shoppers' expectations of the point of return. taylor: i want to get back to your business model. how does the current model we have with customers making returns, how does that lead to a more poor customer experience? eduardo: we do not believe that brands are doing anything malicious from stopping shoppers, but they are not very well equipped to map to these modern expectations. the way that we help brands offer the amazing shopping experience is by giving customers the opportunity to use the merchandise credit to buy it again before we turn in the wrong items. that results in customers getting the right item and returning the wrong ones. taylor: is that where the immediacy comes from? you say that is the customer of now. eduardo: yes. it is good for the business and it is good for the shopper. we are seeing that consumers are

buy againng to immediately and outspending the return amount. this is actually positive economics. taylor: you have been the ceo for four years now. what are the early results you have seen? eduardo: the first one is the valuation of the vision around instantaneously. i also see consumers responding positively to it. we also have the customer satisfaction which is super high up compared to costco or amazon, only scoring 84%. taylor: who are your clients? eduardo: we work with fast-moving consumer brands like everlane, other voices. taylor: finally, i want to talk to you about given that you have such a gauge on the retail sector, what do you think is next for the sector as you look out at the next few years? eduardo: we see the world dividing in two.

if you want to buy something transactional, amazon. if you want to have more of an experience, you will go to a consumer brand offering you a set of flavors, so we see how the world is splitting in two, and that is all geared toward the best shopping experience, the fun times ahead. taylor: i might be the customer of now you are talking about. thank you to edouard ou -- eduardo vilar. super league gaming is heading to china, teaming up with a group to bring e-sports to a growing market. we will bring you our conversation with the super league ceo. this is bloomberg. ♪ ♪

♪ its way toports on becoming a billion-dollar industry. one man wants in on the action. super league gaming is teaming up with a group to holst live events in china. the alliance will allow super

league to put on video gaming tournaments at more than 700 movie theaters owned or operated by the chinese conglomerate. league is all about bringing technology, and when you marry that up with and -- with a real estate -- livestream, and these are everyday competitive gamers. 700+e talking about their footprint, mall footprints, and all the ways we can bring competitive e-sports leagues to all gamers around the world. investors have not been too convinced on your growth story just yet. with this alliance have a material impact on your future performance? much a microcap company, and we are in a space for a life people have questions

about how it monetizes. what i encourage investors to do is take away the word e-sports, because it sounds like a new word and therefore a new category. it is very much so. we are talking about the fact that 50% of gamers identify as competitive, so that is 1.3 billion. 69% says they would love to game out of home, no different than going to the arcade. i wanted the social experience and yet it is a digitally native audience. they do not have that yet. what is happening in the stock market is the fact that we are small caps, it is a little bit like the supply and demand challenge, and educating the market space about how this really is a primary way that gen z-millenials want to spend our time. millennial gamers spend about $117 a month on gaming content, and the crazy part about that is onis almost $40 of it is not

their own gameplay but paying to watch other people gain play. -- other people play. that wallet,rstand we see that the market space is much larger than anybody can predict. shery: how do you convince advertisers? it sounds like you are saying this huge drop and then share price is significantly tied to a perception in -- perception issue. you most of the e-sports have seen have all been private and they have been at the pro league and team level, very large valuations, and again, early gaze on how to monetize it. what we found with brands early on is early on, it is kind of sexy and exciting to focus on the pro level. becomet everybody has more comfortable with the fact that gamers are not growing out of the games, we find that

brands are coming to us saying i have done my investment at the pro level but now i have amassed that level. mouse in that logicpro their hand or that taco bell product in their hand. because i think so many brands now realize that such a large segment of the population are gamers, we have gone in the last few years of education to now being able to start to show how we really monetize not just a gamer about all of the content that we are generating. >> what is the potential for this industry in china and globally? nn: if you look at it and say 10% of the 2.6 billion gamers out there do want to participate in e-sports -- basque wild did not start with the nba but it started in the driveway -- basketball did not start with

the nba but it started in the driveway, and that is where all sports started. it just 10% of the gamers want to participate and let so you can monetize them at five dollars a month, you are looking at a 20 billion-dollar+ category. our argument would be that people do not really know how to quantify the value of e-sports, and the 3 billion rejection is just a -- projection is just a fractional level projection that does not speak to everyone that wants to compete. taylor: that was ann hand speaking to bloomberg. chinese investor, millionaire, and silverlake joining forces. the investors are putting $1 billion into merger between starpointe, acquisition, and swift payment company global blue. quinn, down with vonnie

-- sat down and talked with bloomberg. >> it is quite a conservative valuation for businesses growing organically, 42 percent margins, highly cash generative. other integrative payments companies, if you compare it, it is a significant discount. the interesting thing for me is thinking about the strategic possibility for the business. travel,ioned luxury consumer data, the ability for more consumer marketing -- the cross-border payments nature which is the most lucrative area of payments. this business is in a sweet spot for us. >> the last time you are with us almost two years ago when you started this, you mentioned that you would be able to do something with $10 billion or

$15 billion in enterprise value. do we see more acquisitions i had to grow this firm? >> yeah. when i was here a year ago, we to do a fintech business, got to have a little bit of growth and create value for investors. vonnie, when you are introducing it, i never thought we'd have the dream team lined up -- and also the ceo of the business, jack stern. to answer your question correctly, yes. is directly involved in the. have run public market m&a plays that have made lots of money for investors and have been helpful to our customers, so that will be a part of the strategy. we think jack has positioned the business to do that. >> you have very powerful co-investors here. what do bring to the table? >> let me enumerate them.

125 million dollars, hugely strategic business, perhaps the most impressive and until technology company in the history of the world, and brings tremendous expertise, and they bring a chinese customer base that is growing, traveling more, shopping luxury more. the third point is incrementally million, and0 additional investors are putting in another $125 million. so new investors and existing investors so when you tally that up, it is a billion-dollar investment. a real valuation of this deal that we struck. >> this is the second major fintech acquisition we have seen this week. what is wall street not getting about technology that is making these up and comers rise weekly? >> fintech is hot. we are seeing it everywhere. isis connecting banks, it

consumer marketing in the case of honey selling to pay -- paypal -- that is why dan loeb agreed to partner in the first place. i got a pretty smart guy, among the smartest stock pickers and all of wall street. it is per cicely because fintech is the best area to invest in olive finance right now. have seen them at the airports here at the u.k., but as you say, fintech is super hot now. any resistance from these guys about going public? it has not exactly been the greatest year for tech companies going public. >> no, not at all. silverlake has been excited the entire time. the ceo has been excited. these are public markets people. even was in the red for six years, and tripled the stock while he was there. silverlake has many investments

and public companies. solarwinds now. many, many others. they view being public as being positive for a variety of reasons. one is for the currency and strategic acquisitions, but there really was not a resistance to going public whatsoever that i picked up. farley,that was tom farpoint acquisition chairman speaking with bloomberg's vonnie quinn, and guy johnson. that does it for this edition of bloomberg technology. livestreaming on twitter, check us out and make sure to follow are global breaking news network. this is bloomberg. ♪

david: banks that have bounced back. i'm david westin. welcome to bloomberg wall street week. rock creek group ceo. >> by definition, we found emerging managers can do really well. david: and former treasurer and cio of the world bank. >> trade laws and trade rules will get redefined. it's a question of time. david: and sam. >> you want the tax revenues associated with successful business. david: former ibm ceo. >> we all face issues around cybersecurity. david: and michael froman, former u.s. trade representative. ♪