♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." house leaders recommend sweeping reforms for big tech, calling facebook, amazon, and apple monopolies, and describing how facebook neutralized search rivals. plus, facebook and twitter take action on a post from the president in which he claims the flu is more lethal from covid a

day after he is discharged from the hospital. ath the election less than month away, wildfires continue andavage the west coast, office work in question. what is happening with the real estate market? u.s. stocks tumbling after president trump said he is ending stimulus talks until after the election. this was hours after fed chair jay powell renewed his warning that the economy will stumble without additional stimulus fiscal report. the backt falling on of this report. abigail: once again, a topsy-turvy day. trump tweetingt around 2:50 p.m., it was a jittery day. a piece of that was big tech. ahead of president trump

tweeting, we had the s&p 500 up 0.6%. so, investors working past those jitters. president trump coming out and saying he wants to and stimulus talks. intraday move, perish to the downside. s&p 500 to finish down 1.4%, and if you include the total move, down 2%. if they really thought this was the end to the negotiations, you might have seen more of a selloff. this could suggest more uncertainty. down sharply. for confirmed by the fact that the vix is spiking. there is that volatility really in play. we have a privy haven bid. a haven bid.

starting truly risk off. at the end of the day, after the close, a house panel potentially wanting to break up some of the big tech companies. the big laggards on the day. alphabet, facebook with that report, saying companies that were once scrappy startups are .ow monopolies the storyline free couple of years. it seems that maybe we have gone from a shot across the bow. still not a 2020 event based on the action we are seeing. emily: all right, abigail doolittle, thank you for walking us through that. lots to get through. a house panel proposed a sweeping series of antitrust reforms to curb the power of

apple,including amazon, google, and facebook. this is a result of a year-long investigation that found the companies are abusing their dominance. page, this is a 449 report. the most dramatic proposal to overhaul competition law in decades. what are the most dramatic recommendations that you are pulling out? that: so far, we have seen the companies could be restricted from owning different business lines or have different organizational structures imposed on them. that would be a tremendous change to how these companies operate. we have heard calls to break them up. is something they are very serious about. it is going to have to be approved, of course, by

congress. this is a huge investment by the government in raining and the power of these companies. emily: absolutely. this house panel is led by democrats. it will be an uphill battle to get republicans to buy into that. the report does not hold back. a quote from the report, companies that were once scrappy underdog startups have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons. they have too much power and that power must be reined in. our economy and democracy are at stake. the big question, is this going to lead to a breakup of big tech? also thethink that is worst fear from the companies. we have seen facebook come out

and say that breaking them up would be near impossible. the biggest argument in favor of breaking up is they really feel that equality that consumers are getting from these products has been degraded because of their power. in many cases, these are free product. existing antitrust laws does not necessarily apply. that is why it is necessary to think about costs to consumers in a different way. emily: amazon out with a statement in reaction, saying fringe notions on antitrust would destroy small businesses and hurt consumers. stores raising prices. you might want to challenge the word fringe, given that this is the result of a year-long investigation by a house

committee that is comprised of both republicans and democrats. we have also heard from facebook that abe -- that a breakup of facebook is a nonstarter. what kind of response are you expecting from the companies, especially facebook? sarah: first of all, that is a classic line. you get this from facebook, amazon, apple, google. they always bring it back to the small businesses. because these are platform companies, businesses are being built on top of them. influencer, a developer using apple's app store. i would be skeptical of that argument. these companies do have so much power over the economy. i think in the case of facebook, i was really interested in some of the reports of facebook's arguments.

facebook has said openly that they feel that instagram for instance would never be able to grow to the size and power it has today without facebook's investment.and instagram did have the resources to grow independently without facebook. they did not necessarily need facebook in order to survive. they are also saying that the company is competing more internally with instagram and whatsapp, which they own, than they are with twitter and snapchat. ofy use that as an indicator the monopoly status. emily: meantime, facebook and twitter today have been embroiled in another controversy. another controversial tweet by

the president. this time, facebook deleted the tweet. the president claiming that covid is less lethal than the seasonal flu. he has been on quite a roll, tweeting a lot in the past 24 hours of eight questions about his mental state. what is your reaction to the way the company has handled this. behaviore president's any different than normal? sarah: the fact that we are talking about it at all shows how new this experience is. this is the kind of thing that twitter and facebook has said they don't want. isre you draw that line really difficult. yesterday, the trump tweet said that he thought you should not

be afraid of covid. that was considered to be safe enough. but this message was considered dangerous, comparing into the flu. i think that the closer the president gets to a fact versus opinion, the easier it is for the network to justify taking some action on that information. but it is not consistent. emily: we will stay tuned for more posts by the president. sarah frier, thank you so much for your analysis. employees with tech fleeing silicon valley, wildfires battering the west coast, and an election that could throw us into further chaos, where does that leave the housing market? redfin, whoe ceo of also has some thoughts on big tech antitrust scrutiny. this is bloomberg.

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panel has finally released the results of its year-long investigation into big tech, proposing the most sweeping reforms to big tech law in history. this is a 449 page report. it calls facebook, amazon, and apple anomalies. it says google has neutralized search rivals. join us now, the ceo of redfin, who depends on these companies for advertising and traffic. i have to ask for your reactions here. the house calling three out of four of these companies and

monopoly and recommending laws that could lead to the breakup of these companies. >> regardless of whether these laws come to pass, although the tech giants will take note. that is good news for every company our size. we worry all the time about getting pushed down in google results. i think these companies will think twice about taking any kind of action that balances the market in their favor. how much do you depend on google and apple for customers? glenn: google, a lot. we get about half our customers from google. apple, less so. google is the most important partner that we have. they: speaking from perspective of a developer, i use the redfin app probably more than i should. but what is your perspective?

we have heard a lot of developers say, this is not fair, they are charging us way too much. others say that is just the cost of doing business. they should be able to charge rent for the service they provide. glenn: we are not paying anything for apple's app store placement. we do not charge you to use the redfin app. we can't complain, it is an amazing platform. if you are trying to monetize that traffic directly through the store, and having to convince that apple takes a piece of, that is a totally different story. as for google, we pay google to appear and we also appear for free. we just want to make sure that there is competition. if there were only one search provider and there were more advertise placements at the top of every search result, it would just make it harder and harder,

especially for a new company to beat our --. we want a place where the largest company wins. i think it is important to keep it that way. you want to make this about technology and consumers. emily: speaking from the perspective of an entrepreneur, do you think these companies are stifling innovation? is it possible for the next redfin to stand a chance given that these companies only marketplace but also compete on the marketplace? i don't think you can blame apple and google. it used to be that a billion-dollar company competing against a $5 million company did not have a huge advantage. but, now, if you have been to google's index for a long time, if you have a huge marketing

budget, the chances that an upstart will take you on are much lower. i love the wild days of the even 2005n 1999 and when anyone who built a better site could get more traffic. i think that is slowly decaying over time. it is just a nature of industries as they mature. emily: we talk about real estate in a second but i have one more question. do you think these companies should be broken up? aenn: first of all, i am not legislator, so who is it for me to say? i am also not the ceo of any of those companies. i try not to comment on businesses outside of our own. i thicket is important for these businesses to accept boundaries.

untrammeled corporate power is a threat to social well-being. i think there are limits short of a breakup that can be effective and you used talks of a breakup to put limits on what other types of companies you can buy, what kind of product's you can put on your own site. i think without that kind of hammer, the smaller regulatory efforts will be less effective. microsoft shows us that just that conversation can be so deadly to the buccaneering culture of amazon, facebook, and google. they have to spend more time thinking about their info on society and -- maybe that is good? emily: appreciate you being game to take a swing at that. let's talk about real estate. we have been debating the future of the market given all the

uncertainty in the world. i have heard it is the end of cities. i have heard the end of the city is a myth. what are you seeing in the real estate market and where are we going? glenn: i just think it is a rebalancing. cities are taking a step, rural areas are taking a step forward. you can't have this huge concentration of wealth go on forever. at some point, we have to share the love. the fact that rich people are moving to wyoming, texas, and everywhere in between is good news for us politically and economically. it means everything good about silicon valley will happen out -- will happen elsewhere. but it also means that anyone helping them move from there to here is in a very good position. i just think america is going through a significant shift. it does not mean new york or san francisco are dead. those are still some of the greatest cities in the world and

someone will want to live there sooner or later. emily: we have a huge election in less than a month. we have seen play of surprises in the last couple of weeks. i am sure there will be more. do you think there is some certainty ahead about which way the market will go? or could the election throw us into more turmoil? glenn: i think there is a significant chance that the election will throw us into more turmoil. nobody wants to bet on november and december. we should also take into we count -- take into account how the economy is affecting the election. the amount of people who have moved accounts for about half of the lead biden has an arizona. the same is happening from california to texas. the reason that state is going purple is in part because people

have changed their address. the economy is changing society. society is going to change the economy. emily: that said, you have so many people really suffering right now. unequal this an recession because some are feeling this worse than others. thousand market for white americans is different than it is for black americans. what are the trends you are seeing? glenn: i think with this particular recession, we finally see the american economy split in two. one part of the economy is hurting. the retail segment, service segment, is in dire shape. it is a bonanza for the upper class. very cheap credit below housing prices in much of america. those folks are going hogwild. that haso sits across

to feel uncomfortable about it. we want to see the whole economy do well, not just the economy for one half of america. ofly: glenn kelman, ceo redfin. thank you so much for joining us today. technuing now on that big antitrust report, from the house antitrust subcommittee. apple dominating the news. we mentioned that apple has a monopoly over app developers. this also happens to be the day that apple said it will hold an event next week to unveil something, we believe the new 5g iphone. mark gurman, let's start on the antitrust report. obviously, the findings are dramatic. you have democrats having to convince republican lawmakers to get them on their side. the what is your take on

house recommendations here? mark: these were all expected recommendations. talking specifically about the idea of not competing with apps on the app store for different categories that apple has an app in. saying that the app store cut of 30% is very high. examples of apple rejecting applications only to sort of copy that feature into its own app. the committee went as far as quoting steve jobs several years ago saying that we have always been shameless about stealing great ideas. very much sharp rhetoric against apple here in the report. there is not much in here that four.e not none of the recommendations really go right at apple. they are across google, apple,

amazon, and facebook. i think it will take quite a bit of time, and i think you will someech companies change of their practices. emily: we have not heard yet from apple on this but i am expecting and awaiting a statement. let's talk about the event next week. the invitation went out this morning. you have reported that it would be delayed until october. what do you expect will be unveiled next week? should workk apple on their taglines for the invite, but that is implying that 5g will be the star of the show. the interesting thing is that this will be the thing they are marketing the iphone on. at the end of the day, 5g

patrician across the u.s. is extremely limited. you will see a lot of people by these iphones, they will turn it on, and they will start complaining about how 5g does not work in their area. emily: let's talk about the 5g part of this. how significant is that? mark: 5g speeds are incredibly fast. to 10an be up to five times faster than your home wi-fi network. people believe it will enable augmented reality. but it will be a while until we see the full effect of 5g. all right, bloomberg's mark gurman. thank you so much for your reporting. again, we will be following that event coming up next week, october 13. and i just want to reiterate the headlines coming out of that house report.

report recommending the most dramatic proposal to overall competition law in decades. they have been investigating tech now free full year, calling apple, amazon, and facebook monopolies, saying that google has neutralized search rivals. we will continue to bring you the headlines from this report. a big drop today from the house antitrust subcommittee. coming up, more from "bloomberg technology" after this break. ♪

labor we learn the u.s. department has learned if microsoft's pledge to promote more black managers and executives violates labor laws. microsoft says its efforts are legal. argus has covered microsoft for decades. is the labor department calling this reverse discrimination? -- our guest has covered microsoft for decades. >> they are not using that term, but that's basically what it amounts to. people at microsoft told us that

last week, they got a letter from the labor department office federal compliance program asking about a program microsoft announced in june that pledged to double the amounts of -- the amount of executives and managers who are black or african-american in the next five years, and the question was -- microsoft said in a blog post implyt appeared to positions would be given on the basis of race. microsoft says they are certain there program meets federal law and is both fair and legal. emily: microsoft's pledge was quite dramatic, but we heard from a number of different companies pledges to increase the black representation, especially in leadership ranks.

i'm not sure if the wording was exactly in line with microsoft's, but this could have reverberations for companies and trycies that have vowed to to do the right thing to improve racial diversity. >> we are trying to figure out if other companies have received the same letter. a cross-section of companies who have made diversity pledges to increase representation and who .re also government contractors companies like boeing and google have programs similar in some ways to the microsoft one. google says they want to have 30% more leaders from underrepresented groups by 2025. boeing says it is targeting increasing representation rates. microsoft does not stand alone

among companies that have increased diversity programs and or large government contractors. the initial thing is that this is an office that has historically gone in the opposite direction. it has historically been involved in making sure that u.s. government contractors do take action to promote diversity , and this does seem to be a bit of a reversal on that. emily: i'm curious to hear your perspective on these house recommendations, recommending a dramatic overhaul to competition law, specifically with regards to apple, facebook, amazon, and google. you have obviously covered microsoft at long time. microsoft has come out and said, for example, it thinks some of apple's practices are unfair. what does this scrutiny on rival mean for

microsoft? >> for now, microsoft is probably happy they are not in that list. as mentioned, the -- they have aboutlves complained apple's actions with regard to the app store. microsoft's particular complaint largely comes from the fact that it's xbox videogame service has had difficulty being on the app store complying with apple's app store rules. xboxe meantime, there videogame streaming service is not currently available on ios. it did launch on android. microsoft is hoping that some of the scrutiny might change apple's behavior. in terms of other companies, certainly, google and amazon are microsoft's biggest competitors at thecloud space, so

same time, microsoft has, i think, a healthy attitude of their but for the grace of god go i. reallyow antitrust can hurt a company. they also may be wary of if there is anything that might continue to expand any sort of probe that might continue to touch them or might in general become a more aggressive antitrust regime. emily: fascinating to hear your perspective after all the years you have covered this company. bloomberg's dena bass -- dina bass out of washington. jay wilder has run some of the world's largest infrastructure projects and is leading the development of the revolutionary hyperloop transportation system.

>> we are kidding ourselves if we think the answer to the situation we are in right now is just going back and getting back to all the things that we were doing before. ve a tremendous need to be able to have new forms of transportation. i think the discussion about the new sciences is part of that, but it's, of course, all spectrums in being able to do this. the fact of the matter is that we have 21st century problems today. we want to be able to have a transportation system that works for us in the way we want it to be. we want it to be not just fast. we want it to be on demand. the way that we live our life. we want it to reflect our values, and we think the environment is a very big part

of the values that we have -- technologymany for technology's sake is not the point. it's about reshaping the thinking, creating something that allows us to have mass transportation in a way that fits the needs we have. my short hand this is to imagine , as you point out, connecting cities like metro stops, and what that would mean. now, suddenly, we move beyond the question of sprawl and are redefining urban environments and connecting urban environments and thinking about how we have mobility across urban environments for things that matter to us -- education, labor mobility, culture, health care, etc. having longer about disconnected places. it's about having places that feel as if they really are the same environment. this is groundbreaking for us.

>> if this worked out for you, you're going to put airlines out of business. green are you compared with the airlines? see .1 --l, we will plane.e admissions of a it fits with what we want to do in terms of the environment. i think what airlines have invested in for a short haul flight is to be able to connect people to hubs for longer haul flights. the idea that we are reimagining how different parts of the transportation paradigm is served should not surprise anybody. >> do you also replace gas guzzling cars and trucks? >> absolutely.

here's one of my favorite stories. i asked people in columbus, how far it is from here to pittsburgh, and sylvania, and -- pittsburgh, pennsylvania, and everybody gave me the same answer. they said it was about three hours. and i'm a kid from queens, and i looked at everybody and said they are wrong, and i said the correct answer to that question is that it's 185 miles. pittsburgh and columbus will always be 185 miles apart, but what you did was you translated distance to time on the basis of 1950's technology. that's called the interstate highway system. 180 fivek, it's still miles, but it's 25 minutes. i think when you begin to think

of it that way, when you begin to say that's the amount of time when it goes when you want to go, so you avoid the tearing of train schedules, when it goes to the city center, and when you have connected links to be able to get to the places you want to go, i would not get in a car, would you? emily: the ceo of virgin hyperloop speaking with our bloomberg editorial director. venmo is competing with apple in credit card territory. we talked to an investor in venmo next. ♪

emily: a venture-capital firm says today is raising at least $680 million to find the next bumble or venmo, topping the previous $250 million a fund -- fund they raised in 2017 and 2018. the industry is becoming more difficult to invest in. now, a partner and cofounder. talk to us about how the investment landscape has changed since 2017, 2018. obviously, things have gotten a lot more expensive. you notice companies waiting a lot longer to go public. in the past two years, we've seen a great public market for our late stage companies. that is, i guess, across the

entire industry, most vc's have a handful of ideas and ipr's are open. that helps with liquidity for us and m&a down the road. investors in the asset class are getting a lot of liquidity, and we are seeing good multiples in public markets. emily: let's talk about that because we've been breaking down u.s. on bigfrom the tech, recommending breakups of these big companies. do you as an investor think apple, google, facebook, amazon -- are they monopolies stifling innovation? ways yes.n some in other ways, no. wea technology investor, look for businesses that are what we call natural monopolies. if you take google's core search engine and that business by itself, for instance, there are network effects in that

business. if you split that up, it would go back to a world where there would be one dominant search engine. guess the anticompetitive piece is the bundling of other apps along with core search like youtube plus search where google drives traffic to its owned and operated sites, and i do think that is anticompetitive behavior. emily: what should be done? should they be broken up? tricky. ultimately, if the government comes in and breaks of google into multiple business units, in a way, alphabet already is a collection of multiple businesses, i guess you could spin it off, and they do commercial deals. i guess that's one path forward. the houserough what has suggested, however, it was far beyond them, and it included things like prohibiting amazon

from selling manufactured on its own marketplace. the question is where do you draw the line? walmart has been selling owned goods for decades, and are we going to prohibit retailers from selling products they manufacture if we think that's anticompetitive? emily: talking about one of your former portfolio companies, which is venmo, launching a credit card to compete with goldman's apple card, some of the concerns have been around6 payment products. what is your take0 -- what is your take on this development and it venmo can and should compete with apple? >> venmo was an amazing business. we invested probably eight and a half years ago now, and then we paytreeto patriot --

and ebay but the company. back then, it was still relatively small. venmo is really the first mobile fintech app -- mobile consumer fintech app. for the better part of five or six years, very little has happened to venmo. they've just tried to scale it, and scaling it has been hard enough. 60 million monthly actives requires a lot of work, but if you look across the venture , there's new bow banks like time out there -- there's chime outnks like there, and those exist because venmo has not added more to its platform. is going to invest more to catch up with apple. i use venmo every week, but i use it for payments, not for

checking out at a local retailer. i think that behavior changes probably outside the scope of what most venmo users will regularly do with the product. emily: really interesting perspective. we will be watching as we look for the next venmo and bumble. thank you so much for joining us. still ahead, an overview of the house panel's new proposal for big tech antitrust. that is next. this is bloomberg. ♪

emily: back now to our top story of the hour -- after a 16-month investigation, a house panel has issued recommendations for fostering antitrust reforms to curb the power of antitrust giants including google,

facebook, apple, and more. brad stone joins us now. you've been covering tech and big tech for a long time. what are your broad believes here? brad: it's quite a report. it is as much a prescription of remedies and list of harms as it is a call to action. the committee is urging congress to kind of revive the great antitrust tradition of oversight, harkening back to the realof ma bell and the titans, oil barons. it's 450 pages. i have not read the whole thing -- i'm sure few people have -- and it's fairly damming. this shows how apple, facebook, google engage in anticompetitive style tactics. it draws lines of connections between the companies so you see how they misappropriated data on their platforms. you know, google and apple do it by tracking uses trends and

close patterns of third-party apps. amazon does it by tracking what leveland producing white products. facebook identifies what is growing fast and makes acquisitions. they are going to have their handful -- hands full responding to this very comprehensive report. m -- emily: amazon published a blog post in response to the report, calling misguided intervention in the free market, saying they would kill off independent retailers and punish consumers. you have written a book about amazon and are writing another book about amazon. is amazonntingent selling its own products on its own marketplace. if that is disruptive, how far-reaching with the implications be? brad: right. it is a bit more than that with respect to amazon. i think the most effective parts of the report pertaining to

amazon is really kind of describing how the company engages in what's the report .alls bullying suspending sellers without notice, requiring them to , forcing them into deadlines, which would prevent them from lowering prices. when it comes to the sellers, amazon disputes this, perhaps realizing that the chorus of voices is loud now and sellers feel like they are in a vice. it's as their interests are aligned with sellers, but the facts are the facts, and a lot of sellers have then complaining about amazon's conduct. emily: what kind of sustained reaction is this going to cost? obviously, democrats need to try to get republicans on side. this would be a long

congressional process. the: it's the beginning of race. the justice department is about to file an antitrust complaint against google. the justice department and fcc andlooking at amazon facebook. a lot is going to hinge on the next election. when it comes to remedies, they pop a little about structural separation. that is a hard road. it's very politically sensitive. not a lot of republicans agree with that, so i think it is the beginning, but, you know, i think we can officially declare that the age of these companies kind of skating by in washington with this report is now over. --ly: last question obviously, these companies have incredible resources. how do you expect them to fight back? brad: it's what of the things the report talks about. these companies are growing in

washington, d.c., but agencies outdone.n been kind of the companies will fight back by doing what they do, hiring lobbyists and arguing their cases, and one of the things this report calls for, i think one of the more practical positions, is for congress to implement -- amplify funding to antitrust campaigns and basically re-embrace this historic role as an antitrust watchdog. stone, senior executive editor for bloomberg technology, thank you for your insight. we will continue to cover this, what it means for the tech industry. that does it for this edition of bloomberg technology. we are on bloomberg television, an interview with former new trump'sor and president personal lawyer rudy giuliani tomorrow at 8:30 a.m. eastern time. you don't want to miss it. this is bloomberg.

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♪ >> a very good morning and welcome to "daybreak australia." we are counting you down to asia's major market opens. shery: evening from bloomberg world headquarters in new york. slide as president trump pulls the plug on stimulus ,alks until after the election spurning calls for urgent fiscal action.