tv Squawk Alley CNBC July 29, 2020 11:00am-12:00pm EDT
with her child doing an interview with the ceo, that's something morgan could pull off. guys, we'll see you later. thanks for the help this morning, leslie. good wednesday morning, everybody. welcome to "squawk alley." the markets obviously got a lot on deck. the fed decision big tech ceos on the hill, the earnings continue to pile in, not the busiest day, that's tomorrow but, jon, this is the story of the morning is we're going to spend this hour dissecting how each of these executives is going to approach this important hearing at the house. >> yeah, carl. the question for me is how much of this is theater and how much is substance that's going to come down to the type of questions that get put to these executives not only in an election year but less than 100 days away from election day. how much will politics creep into this versus will the questions get to a cross-examining sense of defining what markets are and really probing what competition
means, what healthy competition means, julia, in this era that we're in my take thus far is that there's been a difficulty applying kind of legacy, anti-trust law to technology will new ground get broken here because congress, as we learned in elementary school, makes the laws >> absolutely. and there's been a lot of talk about the need for new, different types of laws. but jon and carl, what i think is really interesting here is the question of how much of today's hearing will really focus on the anti-trust issues, which are the purported focus here, and how much will we hear other criticisms, other questions about the likes of hate speech, manipulation, voter manipulation and the spread of misinformation on these platforms such as, you know, youtube which is owned by google as well as on facebook so i think there are a lot of different things at play here. while anti-trust will be at the center, carl, don't you think we'll see this veer off into other directions as well >> yeah. that's sort of my question,
julia, is how they're going to focus given the concerns on each company whether it's data privacy, china, anti-trust i don't know, it's going to be really, i think, difficult for lawmakers who already have trouble -- i was just pointing out c-span tweeted the last time zuckerberg was on the hill, julia, and orrin hatch asked him, how do you have a business when nobody pays for your product? and zuckerberg said we sell ads. and orrin hatch said, oh, i get it. >> yeah. >> i was on capitol hill reporting on those times when zuckerberg was testifying before the house and the senate this is going to be so different because not only are there so many different topics but you also have the fact that you have these four major ceos there all together, jon. >> yeah. the temptation for these politicians is going to be to say something, to ask question that that ends up being in a
campaign commercial of some sort, which won't necessarily get us to the point in development of anti-trust theory where perhaps we want to get but right now let's get to eamon jafrs with more on what we should expect. eamon. >> yeah, jon one of the things to look at today is the symbiotic relationship in many ways between these companies the members of congress and the washington establishment generally. remember, lobbying is the way that you take economic power and turn it into political power and all of these companies have been doing that over the past decade take a look at the lobbying spending just in 2019 for these companies that are going to be testifying today some of these companies setting personal best records here amazon 16.1 million in spending. facebook 16.7 million in spending google 11.8 million. and apple 7.4 million. the smallest of the group there for apple in terms of lobbying spending they've also some of these companies have been making campaign contributions to the members of congress who will be
questioning them today take a look at three members of congress that we found who have these companies among their top five donors in recent years. so big donors to congressman james sensenbrenner and jim jordan and jerrold nadler. watch those members in particular to see if they treat these companies any differently than the members of congress who didn't take any tech company money. we'll see whether that money has an impact when it counts for these companies. and meanwhile, guys, another thing to watch for today which is this on going negotiation that we're seeing over covid relief we have a new cnbc states of play poll. this is likely voters in swing states and how they see each of these relief proposals that's going through capitol hill this week and what you seesoever whel ming support here take a look for additional $1,200 in direct payments, 80% of our people surveyed support
that that is a huge monster number. 77% support funding for covid testing and tracing. 76% for expanded broadband access 68% aid for state and local governments. and 62% support that idea of extending the $600 per week in bonus unemployment so as congress wrestles with that this week, they're really going to have to wrestle also with the enormous popularity particularly in the swing states, particularly among the likely voters with an election looming politicians are not likely to ignore numbers like that, guys back over to you. >> more people in favor of more money that 1,200 than in favor of increased testing and tracing. i find that interesting. but back to the matter of the tech ceos. let me say the people in congress are working primarily for the good of the republic what does a win look like today? what does this committee need to accomplish to move the ball
forward on getting laws more aligned with where business is and needs to be? >> well, a couple of things. one is they're trying to generate political momentum. so if you are a congressman who wants more regulation today, the win for you is to have some smoking gun email that you've unearthed during the course of this investigation that you can either embarrass or one of these ceos with or use to make a point, hammer home that these ceos are being abusive in their practices and get the ceos on the defensive. what a lot of these members are going to be chasing for, john, is that viral moment that really influences the national debate and gets the consensus in the country to shift to the idea of, you know, we need to regulate these tech giants. they're too scary, right so that kind of moment, finding the incentive for that moment will be key for them for the ceos it's the opposite, right? they want to go in there and play rope-a-dope, take the hits, don't get flustered, don't get angry, don't react and get out of there with as little damage
as possible. they have a big advantage today in testifying remotely because they won't be physically under the glare of these members of congress and they will be able to get text messages and things from their staffers giving them data points and other things that typically they wouldn't be able to get when they're testifying on capitol hill in the traditional full dress hearing format >> eamon, certainly they have that advantage of being remote and also an advantage of having all four of them together as opposed to that spotlight as we saw on mark zuckerberg a few years ago. thank you so much, eamon really appreciate it. let's get over to diedra bosa >> thank you gabriel wineberg has been a vocal critic of google for years and has spoken to regulators about the dominance of its search engine. thank you for being with us. good morning. >> good morning. >> now, it may be clear to you, to lawmakers, to other
incumbents that google's size and power can stifle competition, but senator will argue today that his company actually helps small businesses. it's popular with consumers and it exemplifies the american dream. what should the committee ask him? >> it's not just google, too facebook is there. the two are really a doopoly i think they'll focus on that. and in particular from our perspective being a privacy company, the center of that is a data monopoly, data profiles about americans, people worldwide that has really been created from covert tracking across the internet. so i think there's going to be a lot of focus on how that monopoly was created via this covert tracking and what can be done about it, namely giving consumers a really easy way to opt out. >> so, in your words, gabriel, how does that actually limit the consumer because i think for
most people who use google and facebook it's not immediately evident. how do lawmakers make that clear? >> yeah. i think people are starting to realize after all the media reporting, an lit ka there is a lot of covert tracking going on. what is unclear to people is how to easily opt out of that tracking that google and facebook are hiding behind all these apps and types across the internet we offer a tool for that, but we've also been advocating government to create a do-not track law that really allows consumers to opt in to opt out of everything all at once. and so what i would love to see is asking those companies, you know, would they support a national do not track law that really makes it easy for people to opt out of tracking and one thing that does for competition, just to tie it back to the hearing and the point of the anti-trust committee, is that once you have consumers opting out of online tracking, you have a large, bigger audience for context yule
advertising, not the creepy behavioral advertising you see following you around and that allows companies like us to compete in the digital advertising market again because it doesn't require all that data >> now, gabriel, the ceos are going to be painting their companies as national champions, critical in some ways for the security of the united states and perhaps breaking them up could allow other giants, particularly the ones in china to pull ahead particularly in critical technologies. how do you think that lawmakers should respond to that argument? >> i mean, i think it's a distracting argument i don't think it holds a lot of water. there are plenty of innovative companies and innovation all around the world, not just in china and there's plenty of innovation in the u.s. and unfortunately because of these monopolies that innovation has been held back a great example is this
advertising market they choked all the air out of the system with this behavioral advertising, but if there was contextual advertising it would blossom to many more companies another good example is search which is a product that we put forward. it's very hard to get people to switch search engines on android because google owns the operating system and they make it very, very difficult. in europe there's regulations to allow consumers to easily choose their search engine. that's not the case in the u.s so i wouldn't if i were lawmakers get wrapped up into that distracting argument. >> gabriel, good morning it's jon i hope you'll respond to an assertion that the focus is in the wrong place here i might argue that we're talking about consumer harm when really maybe we ought to be talking about customer harm and the customers are the advertisers in the case where we're talking about google and facebook. consumers are not the customers.
they're not the people who are paying the bills so if we're talking about anti-trust and examining whether that's an issue here, shouldn't we be talking about the customers which is the advertisers and the ad market. >> it's a great point. and just to be clear, i think they're both harmed. consumers are very much harmed earlier you were talking about manipulation and even discrimination and propaganda online. >> perhaps i'm not sure that's an anti-trust issue. >> it could be if you expand the definition of consumer harm, which ma argue you should and you can consider privacy actually violation of privacy of harm to your point about advertisers, i think they're absolutely harmed there's a bunch of studies that show out of every dollar that goes into ad tech, 60 cents -- into advertising, 60 cents is going right to these platform. and it's just not necessary. that's the monopoly at work. >> julia boar stin here.
google and how you expect these companies to play off each other. e marketer forecasted they believe google's market share this year will actually decline because of declines to the search market in light of sort of covid decreases in advertising around travel and the like but i'm wondering if you look at the fact that google is likely to point to the fact that amazon's ad business is growing and pretty quickly do you think that these companies can use the growth of the other digital giants as an excuse does that really hold water? is it really about the smaller companies like your own that you think need to be paid attention to here? >> yeah. to be clear, a lot of this will be around markets. in google search, right, google is dominant across the world over 90% share in the digital advertising market, like you're pointing out, facebook and google are more of a duopoly with amazon arguably a third the distinction is amazon does
most of their advertising on their own properties where as google and facebook are running advertising across the internet as well as collecting data across the internet for that advertising. and so i think there's a big distinction there between this behavioral advertising which is based on the profiles and the privacy violations and the contextual advertising which is really based just on the page that you're on so i wouldn't take that argument i think there needs to be innovation all across the spectrum and you need to enable 1,000 flowers to bloom and the way to do that is to really open up this market to smaller players, including ourself >> that brings me to my question, gabriel. that is we expect the ceos to give lots of examples of instances in which they are subject to competition by smaller players, but we're not going to hear from the smaller players themselves who might argue the opposite i just wonder, do you have faith that lawmakers are going to give voice to that today? >> i hope so i mean, we've participated along
this process and other processes happening in the u.s. and worldwide in explaining how we face real barriers our goal is just to give people a way to get a private experience on the internet and that's been made very difficult by some of these companies, especially google and facebook, as an example i was saying earlier, it's very difficult to search your search engine on android and chrome as well we think that should just be very easy. we would love to draw attention to some of that. >> now, gabriel, finally, i just wanted to follow up on julia's question i know she mentioned amazon is becoming a challenger to the digital add duopoly, but there is another group of smaller incumbents you have shopify and zoom and tiktok with its letter from its ceo this morning that are providing genuine competition to these tech giants so do you think that that's going to hold weight today if the ceos point to those
companies that are providing competition? >> i don't think it should i mean, i think it's true there is competition but there's just not a lot of it. the percentages are pretty clear. i'm going to guess that lawmakers are going to come out with the stats from their investigation that show pretty clearly, at least in the digital advertising market, there is a very strong duopoly there that has captured most of the profits and most importantly it's base on this data monopoly underneath which is hard for anyone to compete with because the way they operate across the internet they are capturing data across millions of sights where as companies that you mentioned including us, too, really just operate one property >> well, gabriel, thank you for giving us your insight today i know you've been doing work on this and informing part of the investigation, so thank you and we hope to talk to you again soon gabriel weinberg, duckduckgo ceo. back to you guys. >> d, thanks for that. appreciate it.
it's a big day in washington as you obviously know by now those tech ceos set to appear at the top of the hour. we're awaiting the fed decision after that and the press conference at 2 and 2:30 catch all of that here on cnbc after the break, the white house announcing that tiktok is now under official review. we'll talk about what that means for that company, the likes of facebook, twitter and snap and more when we come back right now, switch to t-mobile and get four lines of unlimited for just $25 bucks a line. with access to america's largest 5g included. that's right. unlimited and nationwide 5g for the whole family for just $25 bucks a line. only at t-mobile.
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we're looking at tiktok. we're thinking about making a decision we're going to be watching the hearings today very closely because there's no question that what the big tech companies are doing is very bad. that was president trump earlier today with the administration announcing that tiktok is under review they will do whatever it takes to ensure the long-term availability of tiktok jon, what do you think is this just a sign that tiktok will be spun off >> i don't know what that is, julia. on the one hand he's saying that they're looking at tiktok. on the other hand he's saying with the big tech companies, that's the u.s. tech companies what they're doing is very bad what we're going to see in congress today i expect from mark zuckerberg and perhaps from others is something very different saying, hey, what china is doing, if you like that congress, then hamstring us.
then shackle us and then china will rise. what the president seems to be saying is we're looking at tiktok because we think maybe they're bad and by the way our own tech companies are doing bad things too how that plays, carl, i'm not exactly sure >> yeah. everyone should go and read mayor's statement, not just the slam on facebook which calls their competitive moves disguised as patriotism but says we're not the enemy, julia cryptically we're taking the first step of many to address these concerns so, clearly they knew this announcement was coming and trying to get in front of it to some degree. >> it seems like kevin mayer saw that zuckerberg points to china as the enemy, the idea that the chinese government is controlling this alternate version of the internet and that facebook needs to be able to continue as it is, should not be pushed to spin off instagram and whatsapp because facebook supports the american values of
free speech, et cetera so really interesting here to see these two ceos face off against each other we'll see if tiktok is forced to be spun off. jon? >> we'll see if this ends up being an argument about american surveillance versus chinese surveillance still to come, early facebook and google investor roger mcnamee what he wants to hear at today'heing omhes arfr t big tech ceos. we're back in two.
♪ welcome back, everybody i'm sue herrera. here is your cnbc news update at this hour. for a second-day in a row florida reporting record new deaths from covid-19 with 217 fatalities in just the last 24 hours. new cases also rose, though the number of hospitalizations fell. you can go to cnbc.com for more on the country's hot spots as the u.s. death toll approaches 150,000. texas republican representative lewis has tested positive for the coronavirus pandemic according to politico he was supposed to fly with president trump to texas today he has said he does not wear a mask because he gets tested regularly. the justice department is sending federal agents to cleveland, detroit and milwaukee. attorney general william barr says the deployments are part of operation legend and will help local law enforcement combat violent crime. in tempe, arizona, a bridge
has collapsed after a freight train crashed and caught fire. thick smoke from that blaze is visible for miles. you are up to date that's the news daupte this hour "squawk alley" is back in a minute - [announcer] if you've tried college but never finished, snhu let's you transfer up to 90 credits toward your bachelor's degree. - [woman] it doesn't matter how old you are, you can do it. you can finish. - [announcer] finish your degree at snhu.edu. not letting the pandemic kill your vibe. i wanted to be able to provide a space for people, to spread the love and to support our community. at this point, people's livelihoods are at risk. what can we do to support each other? there's no room for competition.
we continue to raise the curtain on today's big tech hearing at house judiciary with bezos, pichai, cook and zuckerberg we're now half an hour away. let's turn to deirdra bosa. >> that's right. you know, despite very different business models there were a few common themes in bezos and pichai's statements. bezos will talk about his adoption, spending his summers in texas on his grandparent's ranch. pichai talking about growing up in india with little access to a computer to arriving to the u.s. to an entire lab of computers. now in defense of their companies both will argue their size allows them to employee
hundreds of thousands of americans, support small business and give back to communities. bezos will touch on a key point about big tech's popularity and trust among consumers. noting that they trust only their doctors and the military over amazon to do the right thing. and indeed, guys, that is why this moment is different than big tobacco in the '90s or banks reckoning after the financial crisis consumers like getting their stuff delivered to their door in just a few days. most don't fuss because google is the search engine because it works. the cracks are starting to show. that's why we're here. amazon still has a counterfeit and price gouging problem, access to third party merchant and cloud data raises questions about its own competing private label products and many google users they don't know any other way because the search engine directs them to google products. as you noted, guys, this is
bezos' first time testifying but his prepared remarks make it very clear he is ready as for pichai, he was grilled back in 2018 on privacy and china. he is no newby here. back to you. >> deerd rarks so interesting here you're right people really think of these two companies as utilities they like them they use them all the time we mention in that interview with duckduckgo ceo that amazon is starting to take search market share from google how much do you think those two ceos are going to be pointing fingers at each other? >> julia, you raised that point and it was a good one. amazon is going into many other businesses that's what it's all about is using their strength in se ecommerce to go into new businesses and it's interesting that amazon, another huge tech giant is the one that is challenging or could challenge in the future the duopoly that facebook and google has i don't know that's a great argument because lawmakers are looking for the smaller players, how these guys may be stifling
competition on their side. i'm not sure how effective that's going to be, but i expect that pichai could fall back on that certainly. >> be interesting. certainly shares seem unconcerned at the moment right now as fang is holding up well ahead of that hearing. thank you. who better to talk about this than roger mcnamee and author of "zucked. i think we know who you're most interested in today. >> carl, actually i think this is a broader day and we should all pay attention to it. i think there's an opportunity to recognize that the moment is very different from all the past hearings we have seen on capitol hi hill, george floyd has caused a moment of national self reflection and i think one of the core things here is that
relative to the economy we have seen that optimizing everything for the shareholder interest which has been fantastic for investors for 40 years left our economy to respond to a pandemic, right? we had trouble producing cotton swabs, ppe, getting enough medical testing in place our supply chains that were really fragile, our health care system was designed for elective surgery. not for dealing with public health and these problems in combination with say half the work force being underemployed or unemployed leaves us with an opportunity to ask maybe the priority should be different and i think that context is going to be really central to what happens today i mean, you're right i have spent a lot of time focussing on facebook, but the real issue here is the tech has the same values that we see throughout the economy the entire economy is more concentrated from an economic power perspective than it's been for 100 years.
and as a result, we have fewer choices. we have less flexibility and adaptability to deal with change like a pandemic. and i think we're going to see that coming up repeatedly in the context of the hearing today >> interesting, roger. it's an interesting lens of course, fewer choices, yes, but more powerful choices arguably, lower costs. >> oh, yeah. >> job creation, you'll hear all that today. >> we're going to hear all of it but let's remember, so amazon which i think says it has 1 million direct employees that work for it, one of the core issues for amazon is the customers do incredibly well but the employees there have been issues related to compensation, related to the work rules under which they operate and when the pandemic came along, we had issues of outbreaks in the amazon facilities. and again, this is -- there's nothing amazon is doing that other companies in the economy
aren't doing the difference, i think, is only that at this moment in time tech because of its influence on our culture is being put to the test first. but these questions are questions that should be asked in every area of the economy i don't want to pretend i know how it's going to turn out i just think that's what we're really going to wind up debating here. >> good morning, roger it's jon i'll take the other side here as i do to keep this interesting and hopefully tease out perspectives i would argue that a couple of things that amazon is doing that the broader economy isn't doing is raising wages hiring a whole lot of people during her pandemic and investing billions of dollars they say and we'll see over time where this actually went into safety precautions i would also say that these companies, just as a consumer, these companies have been among the best at pandemic response whether you're talking about google making google meat more freely available, helping people
to find resources, you're talking about facebook allowing people to communicate, you're talking about amazon actually getting us products without us having to go into stores and touch stuff and apple with its technology sort of enabling all that stuff the consumer might argue, oh my goodness, i need what these technology companies offer more than ever so that i don't get sick >> so jon, this is going to kill you i agree with every single thing you said there in my opinion amazon has revolutionized the economy in some really great and profound ways the issue is their impact 40% of independent retailers have gone away in the year since amazon was created. amazon is not solely responsible for that, but they've had a big impact on it the question is should there be some kind of balance i think there's really the question we're asking here in my opinion what amazon has done is completely brilliant and there's an argument it should be treated like an electric utility
its service is so valuable that it should provide that distribution system to everyone. and that's a conversation we should be having again, i'm not suggesting they don't deliver a lot of value quite the opposite all of these companies are successful because they deliver value, but they are very focussed on a set of priorities that are choice they don't benefit equally and don't benefit everyone in any case as a consequence, i think with the economy down the way it is, with so many underemployed or unemployed we want to ask those questions. i'm confident that's on the minds of a lot of members of congress today this is the beginning of what's going to be a very long process. there's nothing going to come out of today that's going to be decisive these guys are very well prepared they're very smart people. they have a lot of good around their product. they have a lot of love from consumers. but at the same time, there are serious harms that come out of
this and we should have the good without the bad. >> uh-huh. we'll see how effective the questioning is, roger. you're going to stick around while we take a quick commercial break as we're about half hour away from the hearing. session highs here as the nasdaq is up a full percent don't go away. apps are used everywhere... except work. why is that? is it because people love filling out forms? maybe they like checking with their supervisor to see how much vacation time they have. or sending corporate their expense reports.
we feel good about the markets. we feel good that the pc market looks strong we have a great gaming cycle that's coming up with the new game sconsoles so we look at that and we say, hey, despite the uncertainty, we have a very strong road map. our customers want to partner more deeply. and we see revenue growing now 30% year over year. >> and that was amd ceo lisa su exclusively on ""squawk on the street"" earlier this morning. shares are up close to 14% this
morning. that stock getting dangerously close to $100 billion market tap, guys. i would note that it's up over the past week close to 25% after those intel woes we told you about last week. you're stunned into silence. i can tell you that it is quite a dramatic move for amd, especially heading into the holiday season, guys and especially as apple has talked about getting off of intel chips. we will be back with roger mcnamee after the break as we await today's big hearing. stay with us oh, we love our new home. neighborhood's great. amazing school district. the hoa has been very involved. these shrubs aren't board approved. you need to break down your cardboard. thank you. violation. violation. i see you've met cynthia.
welcome back let's get back to cnbc josh lipton taking a look at apple with the company's app store most likely in focus if for today's hearing. josh >> a uniquely american company that's how tim cook is going to describe apple today at this hearing. telling lawmakers that apple does not have dominant market share in any market where apple does business. saying, as much as we believe the iphone provides the best user experience, we know it is far from the only choice available to consumers cook will also make the case that competition is alive and well on his app store. noting, after beginning with 500
apps, today the app store boasts more than 1.7 million, only 60 of which are apple software. as for app store fees, cook is going to push back, arguing that for the vast majority apps developers keep 100% of the money they make and that when apple does charge a commission, it's comparable to or lower than most rivals. so is that going to be enough, though, to satisfy critics listen, we know there's no doubt the app store is a power house sensor tower says in the first half of this year u.s. consumers spent nearly $15 billion in mobile apps and that apple generated more than 60% of that. and some lawmakers are talking very tough here. representative david cicilline called those app store fees highway robbery. back to you. >> josh, it seems to me that a central question here with these hearings that congress is going to have to answer is more of a theory of anti-trust question is how do you define a market in
the tech era if it's all smart phones, sure, apple doesn't have anything close to monopoly or monopoly power, but if sticky ecosystems are themselves a market, then maybe so, right? >> so, it's interesting. hardware clearly you're right, john cook made this case about 46% of smart phone shipments in the u.s. in the first quarter were apple, according to third party research my understanding is, you know, even you were a monopoly, that's an interesting question, too as i understand it, u.s. judges have ruled for a long time if you're a monopoly that's only a problem if it results in harm or quantifiable consumer harm we'll see where this goes. when you read through the analyst notes, i cover this company, i don't hear a lot of concern about regulatory scrutiny investors aren't too concerned when it comes to apple they may be worried about google or
facebook that stock has surged 30% in the past few months. the worry is would the united states government ever really bring a formal claim against apple in such a way that the app store business is in some type of risk. it's sales and margins at risk the app store is about 30% of that faster growing higher margin services segment. right now it looks like investors don't appear too worried, guys. >> josh, thank you roger mcnamee still with us. i'm not sure people shouldn't be worried at all because again as we learned in elementary school. sure, courts have to worry about precedent, right they're interpreting the executive branch is -- but congress makes the law if they decide to make new anti-trust laws that are relevant to tech then maybe they end up tackling these question are sticky ecosystems markets in and of themselves. we practically know if you have an iphone or ipad you're not looking at android apps.
that's like having to drive to a different state to buy groceries. you're dealing with the ecosystem you got. does apple have a responsibility to treat competitors differently within its sticky ecosystem? >> jon, i think the place where apple's situation is weakest is relative to the way it promotes its own apps over competing apps within the app store the truth of the app store is that it allows apple to maintain better security and better privacy on its platform. the tight rules are a huge part of why they have 46% of the market so i'm -- my guess is that a thorough analysis will say that the app store itself is fine the issues they'll focus on are the way that apple promotes its own payment systems and its own apps above everybody else and there may be an argument over the fee. i think tim cook is actually right on the fee when you compare it to things like cellular phone carriers and cable companies. but at the end of the day, this is a political thing
and he may be vulnerable on that issue. i look at apple being in a completely different class from google and facebook but also amazon with google, you've got the situation now that, what, more than 40% of searches, the stuff above the fold takes you to another google page. they're using search to close off the open web they're using their browsers to do the same thing, to effectively not only get control of the web but to get control of how cookies work so how the advertising industry works and use their control of the back end of advertising to prevent anybody from understanding what's going on. and that combination defines anti-trust by the old metrics, which is to say the sherman act, the clayton act the federal trade commission act. >> you know, roger, i think apple from my analysis has potentially a separate issue here which is mission creep on its app store rules.
when this started apple is saying, hey, look, developers you need our payment systems to have smooth payments you need our security. you need all these things if you're going to have a good experience yes, as you adopt these things you're going to pay us a cut because we're providing these tools for you. but more recently with this hey controversy, hey didn't want to use apple's payment system but apple was saying, you know what, you have to. base camp, you have to use our base camp system if you're going to charge consumers anywhere on the internet then you need if they're going to sign up through apple to an app you need to use our payment system you need to give us a cut. to me, that's different. they didn't want to use apple's tools but apple is saying you better and you better pay us for that at the same time. >> that exact issue occurred with amazon relative to kindle books and to netflix both of which simply created apps that went around the app store which is i think in the end what hey did as well i think that that was much a due about nothing that particular
controversy. they were able to get the solution they wanted in, what, 72 hours i mean, in a true monopoly, hey would not have had a choice. i actually think apple's handling the politics of this terribly because they're allowing situations like allowik that to appear to be more systemic and bad than they really are but this is a political thing. apple needs to be smart on how to handle it it maybe take things not actually different from what you see on the sectors and get in fact punished for that behavior, because they're not as politically engaged. comcast has legions arguing its position apple has more hand off. >> roger, tim cook does have
experience testifies before congress i'm not sure if you go the a chance to see his prepared remarks, but he refers to the fact that apple has very strict privacy controls i know that you have taken issue with the way facebook handles privacy. how much do you think apple will be relying on that as a defense, that they are more upstanding when it comes to protecting consumers' privacy >> i think it's incredibly important. at the end of the day, the app store is the way they implement their control of privacy and actually security as well. to my mind, there is a path for them, which from an investor's point of view, this is really good news. there's a very straightforward path for apple to end the behaviors that are really problematic and still have the ecosystem it wants to have, which is why consumers find of devices in the first place the 46% buying iphones are
buying iphone because they are more secure, more private and because of how well everything works together that is the app store in action. it should be possible for apple, with relatively small hit to earnings, to get rid of the advantage they get from bundling the apps, or at least showing more prominently the app store and the way they do the same thing with apple pay at the end of the day, it's going to be a matter of negotiation, but i think that part of apple's argument is not just a good argument, it's substantively. >> all ight. roger, you're going to stay with us, and we're going to take a quick brk,ea as we get closer to the hearing. we're back in two. and etfss for any amount you choose instead of buying by the share. all with no commissions. stocks by the slice from fidelity. get your slice today.
zuckerberg saying in those remarks that facebook has a range of rivals in the advertising space, and that thanks to its scale, it's been a valuable tool for consumers as well as for small businesses zuckerberg also points to the challenge from china, warning, china is building its own version of the internet focused on very different ideas, and they are exporting their vision to other conditions. zuckerberg defense the acquisition of instagram and whatsapp
i'm curious of your thoughts on specifically zuckerberg talking about the threat from china. what do you make of that especially right now >> i think mark's argument is nonsense so when we look at the issues for tiktok, it really relates to the fact this is a product designed tocapture personal data, and then to manipulate personal behavior, which is very successful tiktok is actually not materially better at that than facebook or youtube or instagram. it seems that we need to look at all of these products. i think all of them are a threat to national security when i look at, for example, yesterday's -- that piece of disinformation about covid, that fake news conference what, 14 million people or 16 million people saw it on facebook before they can't get it down? more than 20 million people saw
it across all platforms. that is really dangerous stuff that had to be viewed through a national security lens when i look at the china thing, i would assert that united states' great advantage is entrepreneurship we can have thousands of different ways of going at an individual problem mark is trying to argue the best way to deal with china is to have three little chinas -- amazon in retail, google in its category, facebook in its category i think that's nuts. i don't think that's the right way to compete with china. i think that is essential a false choice. >> he's also going to try to position facebook, roger, as the tip of the speer in innovation, $10 billion a year in r&d, a.i., v.r., okculus, in addition to hi
agnostic view that these they shouldn't be -- i wonder how far you think that's going to take them >> i think that's going to get him completely fried i don't see how any member of congress can look at youtube, instagram or facebook, or even twitter today, without raising issue of, wait a minute, we have a massive outbreak of white supremacy, an the george floyd murder has really exposed how dangerous that is. we have all of this disinformation undermining the nation's pandemic response those things are originating inside these platforms they're being amplified by people using these platforms the platforms have chosen not to or been unable to do anything about it either way, that's a huge problem. i think that mark's argument they should not be involved in making these choices about what
should be -- i agree with. where i disagree is he's designed the algorithms to grab our attention, to effectively energize our emotions, and the content that does that best is hate speech, disinformation, and conspiracy theories. so he is profiting from these theories the issue in this hearing is that his tiese eadvertisers hasr else to go in that context, stop hate for profit, which is ha had a enormously successful campaign you know, it's not really about getting advertising revenues away, it's about calling the connection between advertising and hate and now, to the connection between facebook and the monopoly it has over advertisers, who will naturally be forced to go back, because they can't run their business without them we'll see if advertisers are
having a true awake in this. roger, thank to you, but especially today, trying to understand in advance an important hearing. jon and julia, ordinarily we would have gotten the facebook earnings tonight that got pushed into tomorrow, in part because of they hearings, but we will get qualcomm and young after the paypal let's get to the judge inch welcome to our breaking news d. as the kruismt os of the biggest tech companies testify for the first time we expect any mihm tim cook, jeff bezones, and -- we do have our investment committee with us today to walk us
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