Live on Bloomberg TV

00:00I'm Emily Chang and this is the best of Bloomberg technology where we bring you all our top interviews from this week in tech . Coming up next our big tech in the firing line of the U.S. government also that Facebook Apple and Amazon may be set to face anti-trust probes. Plus the scrutiny overshadowed Apple as it rolled out its new software and hardware plan at its annual developers conference. We will bring you the key takeaways from WDW D.C. are the key to Amazon locking down its deliveries. We take a look at the e-commerce giant's plans. But first to our top story. Shares of Alpha that Facebook Apple and Amazon tumbled at the start of the week after news broke they could be the target of U.S. antitrust probes in Google's case. The Department of Justice is mulling an investigation into potentially anti-competitive tactics by the search giant. The DOJ also now reportedly has jurisdiction over a potential Apple probe. Meantime the Federal Trade Commission would oversee a look into whether Facebook practices harm competition in the digital market. Google and Facebook make up more than half of digital ad revenue in the United States their closest competitor Amazon has about 9 percent of the market. Amazon doesn't dominate the digital ad market but does own up to half of the e-commerce market. We've also learned a potential Amazon probe would fall under the oversight of the FTC. Sally Hubbard director of enforcement policy with the Open Markets Institute and Bloomberg senior executive editor for Global Tech Brad Stone joined us for reaction what we have here is a kind of political reality not necessarily or not yet a legal one. I think you know the the the tech environment now is big and complex and to some intimidating and so are our two antitrust enforcement agencies the DOJ and the FTC have met the kind of divvy up the playing field so to speak. But Sally does this mean they will or that a investigation into any of these companies could be imminent. I'm cautiously optimistic that there will be investigations because the FTC and the DOJ don't ordinarily talk about divvying up matters unless they plan on doing an investigation. The process is called clearance and they don't normally have clearance discussions unless they plan on doing something. Now to be clear you're optimistic because you are in favor of breaking up all of these companies or believe there's a case they should be broken up. I'm in favor because I think they need to be at a minimum investigated and you know once all of the different anticompetitive conduct is unearth at that point I think that's when you decide the best remedy whether it's breaking up whether it's bringing them U.S. v. Microsoft style case. I think there I wouldn't take breaking up or unwinding illegal actions acquisitions off of the table. But I think the first step is to investigate. So I'm optimistic that they're investigating now. Brad is there any difference in the way any of these companies are being explored that we know of . Yes I mean there absolutely has to be right. The cases would be completely different. They're all different companies different . You know Mark market strategy is different levels of domination in their respective industries. But you know I think what we're seeing here is a kind of a rare political consensus in Washington you know not just among folks like Sally at the Open Markets Institute but on the left and the right on Capitol Hill. I mean you have senators like Josh Hawley of Missouri kind of talking into this ethereal way about how tech is bad maybe not a source of innovation but a source of peril for the U.S. economy. Of course there are folks on the right who think that the social media companies are unfairly biased folks on the left who worry about you know how foreign entities have used these companies to manipulate our elections very much an overarching sense that something needs to be done. I think what we're seeing is the FTSE and the DOJ reacting. So Sally how much of this is the result of what the White House or President Trump himself wants to happen and how much is it the result of some sort of bipartisan consensus that something needs to happen here. I think it's more a result of the mounting pressure around the globe. I mean what we're talking about here are matters that Europe started investigating 10 years ago. So the US is really late to the game. There are jurisdictions around the world who have been investigating these companies. So I think it's just mounting pressure from consumers from the left and the right side of political spectrum. And finally the political will to enforce our antitrust laws. Bloomberg's Brad Stone and Sally Hubbard with the Open Markets Institute. Well the U.S. House Judiciary Committee is getting in on the action as well with hearings and an actual investigation into big tech . What's the difference between the agency's actions and Congress. Bill Baer a former assistant attorney general in charge of the Antitrust Division of the U.S. Justice Department explained that process will play out publicly and is unlikely to have a major impact on what the Federal Trade Commission and DOJ will be doing if they decide to investigate those tend to be highly confidential non-public on the merits. And in divorce as much as possible from whatever political debates may be going on on the presidential stage or up for reaction we spoke with Charlotte Sleiman with the policy council for public knowledge. Prior to that she worked in the anti-competitive practices division of the Federal Trade Commission along with Bloomberg Intelligence a senior analyst for antitrust litigation. Jennifer So it is simply procedural. But I do think it also indicates that an investigation is likely. This is the type of process that they don't often go through if they're not going to open an investigation soon. But it could happen that they end up not opening an investigation here. So Jennifer how are the agencies different and is the objective ultimately exactly the same. You know ultimately both would be conducting broad investigations both what would I mean both the law enforcement agencies FTSE and DOJ as well as the House Judiciary Committee. But the difference is the FTC and DOJ are looking at conduct to understand whether any of these companies have engaged in conduct that goes beyond just aggressive competition and actually crosses the antitrust line and has harm to the competitive process and consumers. If Congress can look a little bit more broadly and they can look at not just conduct but also how our economy has changed with technology and whether or not the antitrust laws themselves can handle policing these companies and whether legislation is needed or some sort of a change to the antitrust laws to rein in the power of these big tech companies and the DOJ of course we know now has oversight of an investigation into Google and Apple while the FTSE takes Facebook and Amazon. You know Charlotte I'm curious about the role of Congress here. Is that just for the public to have these hearings and to do this investigation. Or could that lead to policy and regulatory changes. Right. I think that's exactly why the congressional process is going to be crucially important here. So the agency process as Bill Baer said earlier is going to be secret and the public is not going to have a lot of insight into what's going on. But I think there's a good chance here that there are additional problems caused by these companies that are not antitrust violations but are different types of problems. And we do not have an expert regulator for digital platforms. So having a more public process in Congress could build a record to have some new legislation to address these problems. Now Jennifer are any of these four companies a bigger risk than any of the others or at bigger risk for what being broken up or you know being regulated. You know I think it's really difficult to say because antitrust investigations are very fact intensive. So really it depends on the facts and what the conduct is that the Federal Trade Commission or Department of Justice finds that they don't like and what the proper remedy is to fix that problem. Usually those remedies are fairly narrowly tailored but for instance if let's say there was legislation like the type of legislation that Elizabeth Warren has been talking about where we all rule that a company cannot run a marketplace and also be a participant on the marketplace well then a company like Apple would have a bigger risk or Amazon would have a bigger risk because they are companies that run a marketplace but also compete on that marketplace. So Charlotte look at the possible penalties be. I mean I know this will take years to play out but what are the scenarios here possibly at the end of a five seven 10 year plus road. Right. That's a great question. At the FTC we like to say remedies not penalties. The goal is always to promote competition and it is often not actually intended to be a penalty but some remedies. Of course I think divestitures will be on the table . It may even be significant divestitures like a breakup although that is probably unlikely. That's still seen in the courts as a very severe remedy. Another remedy might be interoperability requirements. I think that's a major way of promoting competition these markets are characterized by network effects . So the more people who are connected to the network the more valuable the network is. But if you make that network open up and allow other competitors to interoperate that can address that network effect power and create more competition. That was Charlotte Lehmann of public knowledge and Bloomberg's Jennifer we kind of apple shut off the next generation of software and features at the Worldwide Developers Conference but the announcements were overshadowed by the threat of government scrutiny. And if you like the news check out on the radio listen on the Bloomberg at Bloomberg com and in the US on Sirius XM. This is Bloomberg Apple unveiled a new era for apps and its software at its annual Worldwide Developers Conference involving the Mac Pro Siri and even breaking up items. There's Apple senior vice president of software engineering Craig Federici talking about the new version of OS 13 is a huge release packed with lots of capabilities but we know that nothing is more important to our iPhone users than performance. So this year we worked top to bottom in the system making everything faster that you do the most things like unlocking with face I.D.. Now 30 percent faster but on one of its most important days of the year the tech giant was upstaged by a report of a possible antitrust probe led by the U.S. Department of Justice. Bloomberg tax Mark Gurman and tech Dallas's research president Bob O'Donnell gave us their reaction . There was nothing about it. You know and it was you know it's developers like they're the most enthusiastic fan boys and fan girls that there are an Apple event. So there was a lot of noise and clapping for just about everything that you know and Apple showed particularly for dark mode which you know I mean let's be honest it's not that big of a deal it looks a lot worked terminal. Well there you go. It looks cool. That's great. But you know it was interesting because it was a classic case of Apple showing you know that the glitzy kinds of things they do so well and yet also playing some serious catch up on some other areas. You look at things like Apple Maps you like didn't I see that in android like you know three years ago. So you know it was one of those cases but all in all I think you know there's enthusiasm there they're trying to do some interesting things. They recognize the mistakes they're actually pulling apart big products like i tunes in Iaw is now there's ise West and Iow for the phone. So you know I think they're kind of resetting themselves in a couple of different areas but all in all you know it was a reasonable event to be I'm a Harvard guy so Mac Pro I thought was very cool. What about the 1000 dollar stand. There were some snarky comments about that. Yeah. So that's the talk of Bloomberg today. So this new Mac Pro is its base six thousand dollars fifty nine ninety nine. And then there's this new display which is five thousand forty nine ninety nine. But the display doesn't come with the stand. So I'm not really sure what you do. Emily maybe you want to come to my house and hold it up will work but you buy this stand. Extra thousand dollars to put it together . I cost more than a thousand. Just see you. Right. Let's talk about what you know the significant software changes as you've reported going into this new era for the way we access apps a new era for iTunes or you know sort of going its own way essentially. Talk to us. So a few of the highlight things one is iPad OS. So to date you had IOW a train on the iPhone the iPod and the iPod Touch. So what Apple did is they decided to rebrand the version that runs on the iPod and sort of frame it as its own OS for all intents and purposes. It's the same IOW as before. They're just changing the name and adding a few new features for iPod users to make it more like a computer. And that's great. But it's to be seen if people are actually gonna start ditching their Maxim pieces for iPads in large numbers because of these changes. Bob how significant is this. Well Mark brings up a great point it was the same question I had as I'm sitting there watching this live is like you know they make these advancements to make the iPod much more computer like although missing the mouse stool which is critical. But you know so it does become this interesting gray area that you've got between iPads and Mac OS now obviously on the high end you know Mac and Apple can push you know the Mac Pros in for people who really want to put in that middle mainstream ground . They're creating more and more question marks. And of course then there are all the developments around Project Catalyst to enable iPad apps to run the Mac. So you know there's a lot of crossover which you know some people say is good. Other people say wait a minute that's kind of confusing. And even with iPod Os you know if I'm a developer now I've got to develop for five different OS as if I really want to support all of Apple Watch OS TV OS Iowa's iPod OS and Mac OS the idea to make it easier for developers. Yeah exactly. Thank you. That's a good point here is that there is this what they're calling now Project Catalyst that's the public name internally for years. And we first reported on this two years ago actually was called marzipan. So the idea is you can develop an iPad application and now run it on the Mac as well by clicking a tool box in the developer kit. So that should mitigate that a little bit. And the thing about the mouse. So apparently you can connect a mouse as an accessibility feature not for most users but the thing that I want to know is watching this keynote. Some of these gestures and new features are actually kind of confusing like I feel like I'll be able to get the hang of it pretty quickly you guys were able to get the hang of it pretty quickly and the people at Apple who are developing these things obviously know what they're doing. But what about mainstream users. Right. What about people coming to the iPod for the first time people ditching Macs and PCs for these devices. I think it's going to be difficult to sort of get a hang of all these new gestures. Well I wonder if it's going to be a sort of gender big generational behavioral shift. Well I think there is . I think there's some of that. And you know because you're right. I mean even the demo the guy trying to grab the text you know didn't work once or twice. So clearly I think there are things you know then Apple used to talk about how you'd shake your device. I mean yeah you get these weird changes over time in terms of interactions that are all efforts to overcome the fact that certain pieces of it aren't quite there on some devices right. So you've some devices you have standard means of interacting with them and other touch only devices they're trying to figure out other ways to move forward. You know generally Apple is quite good at coming up with these things but it is still hard to make these changes exactly as Mark discussed . They play to privacy. They play an our evolving health offerings. There's a new more natural completely computer generated Siri. Right. But Mark what do you think about this antitrust issue. I mean we don't know a lot about it. We just know that if a probe happened it would be the DOJ. Yeah. I mean I was thinking about this earlier and I think Apple even though they're in the crosshairs it's because they are a big tech company. But one of the things they see on stage and this is one of the things I happen to believe is they're not a tech company like the others. If you look at the iPhone market share the iPhone market share is way less than 50 percent globally right. You look at iPod market share that has come down. You look at Mac market share. The Mac. If you just looked at it from a pure market your standpoint is technically a flop. Right . So if you look at the Apple TV that has low market share the Apple Watch is high market share. But in terms of the general anti-trust behaviors that you might normally look at you know Apple doesn't hit a lot of those checkboxes even though they are the gatekeeper for all of the apps that are used on any Apple device. That is true. But I think they do make a good argument given that it is their store now. They did try to put in some places in terms of the new app store developments here to make it a little bit more open. They came out with a lot of new developer tools today and they could easily say you know we're going above and beyond any other platform here in order to you know be inclusive to developers. So I think I see the oil on the surface it could be an issue. But if you really look deep in it I think Apple on this one just on this one maybe has a good argument that was Bloomberg's Mark Gurman and Bob O'Donnell technologies research precedent coming up. If Amazon gets its way you may no longer be looking out your window for the delivery man instead. You may just be looking up at the sky. This is it was just about six years ago when Amazon was touting its ok to copter a drone that was going to bring packages right to your doorstep. Well that still hasn't come to pass. But this week the e-commerce giant unveiled a new A.I. enabled drone to use and test deliveries of small household goods. Amazon says it was built with components designed to meet FAA regulations. In April alphabet subsidiary wing became the first drone company to win FAA approval to operate as a small airline and it's planning its own delivery tests. Bloomberg's regulation editor John Morgan and Tom Forte a senior research analyst at D.A. Davidson talked about the news with Bloomberg's Taylor Riggs going back in time when Amazon first talked about drone delivery on a network television show. Our viewpoint was that they were trying to basically break it Do I believe of FedEx and U.P.S. to the extent that we saw and still see kind of the cost of delivery as the Achilles heel of Amazon's business model to the extent etc. to U.P.S. were able to raise their rates every year even during the Great Recession. So I think the fact that it's taken six years to get this far. Now you argue this far I mean essentially almost like a beta test for drone delivery suggests that the technological hurdles any regulatory hurdles are still quite significant for this rollout. But I do think when you think about its ability to empower now one day time delivery and its ability to offset some of that inflationary pressure from FedEx. Yes this is an important initiative for Amazon. John you heard Tom on the phone talk about regulatory hurdles. We do know that they need FAA approval. Any indication of sort of what the timeline for that might be. No they've been working behind the scenes. We know that the Federal Aviation Administration gave them permission to do some testing now but there's still a ways off in coming up with a complete regulatory package that will govern how this business will be conducted . But as often happens in these high tech industries the regulators and policy makers tend to stand back and sort of let the technology evolve and then come come along and set some rules for the road. But so far we don't know quite when that can be done. But we do know they're working on it. Tom talk to me a little bit more about how this fits over on in Amazon. I mean so often we talk about their high gross profit margins like Amazon Web Services. How does this drone sort of fit into your overall thesis for the company where do you expect it to sort of start to make money. Sure absolutely. So to the extent that Amazon is able to employ technology to materially improve their shipping cost I think this is a big profit generating opportunity for Amazon. And if you look at their recent performance what you're seeing is a mix of third party unit sales on the platform which has been beneficial to their profits as they get higher margin and when someone else sells on their platform they collect commission rather than Amazon itself. So to the extent of lower shipping concert this could be a boost profitability. John talk to me a little bit more about alphabets wing. We know that back in April that was the first to get approval Amazon really seems to trying to be playing catch up a little bit. What do we know about how different this is from alphabets wing and how alphabet has sort of been leading the stage on this. No we haven't we've been sort of waiting for Amazon to pop up the alphabet had been more public. We saw those tests last year where they were delivering popsicles and very those to test platforms to customers. But here here's Amazon finally the company that we most associate with rapid delivery of consumer products finally has rolled out this technology which is somewhat different if you may recall. And I think the video there reflects the alphabets program involves lowering the goods from a hovering drone with a sort of a rope and pulley Amazon's taking a different approach they're actually going to come to your lawn and land or come within a few feet of the ground so that required a lot more technology. And you know they've included some artificial intelligence that they say will allow them to spot clotheslines and pets and things like that and land safely . Tom I finally want to ask you in the last conversation we were talking about the probes in some of the anti-trust in breaking up some of these monopolies. This of course seems to be Amazon's another foray into helping sort of gain on pricing power and sort of insulate themselves from other pricing pressures. Is this the right move at the right time what sort of backlash do they face now is there are some concerns about a monopoly. Sure there are definitely in the white paper which is published on the convergence of tech and retail. The death of Amazon one of the things we talked about was regulatory risk . So specifically would the company be required to separate the heat up. Yes it is the well we don't think that would be a material drag in the long term performance. You have to get stuck instead of one and then to the extent that I think it's long. Amazon for example they've recently dropped the practice of requiring third party sellers to offer products on Amazon at the lowest price for starting that with something where they may have been caught on trust. So to the extent this is more about enabling sales and Amazon to the extent that they offer good opportunities for third party sales in the platform I don't think this would trip it etc.. That was Bloomberg's John Morgan and Tom forte of D.A. Davidson. Coming up Google announces a multibillion dollar deal to buy data analytics firm looker. Is at the right time for emanate as antitrust scrutiny ramps up in Washington. We're live streaming on Twitter. You can check us out at technology and be sure to follow our global breaking news network took to Twitter. This is Bloomberg best welcome back to the best of Bloomberg technology. I'm Emily Chang. Google announced it's agreed to buy looker data sciences for two point six billion dollars expanding its offerings to help customers manage data in the cloud. The deal is Google's biggest since it acquired the smart home company Nest Labs for three point two billion dollars back in 2014. Bloomberg scared to think joined us with all the details I'm not even sure if I would call this a big acquisition at least in terms of Google's size right. I mean two point six billion dollars definitely a lot of money but when you're talking about the cloud world where we've seen acquisitions such as GitHub and red hat just in the last you know seven eight months this is pretty small and I think it was a lot of pressure on Google to do something to kind of expand its size. You know at least from the analyst community investor community and you know we can all debate whether Google actually cares what those people have to say. But this acquisition was maybe not as big as a lot of people were hoping for expecting and you know as you explained in the intro there I mean this is sort of just a bit of an incremental change. It's a product that many Google cloud customers were already using and they'll now be able to sell on together. Meantime we just we're looking at some graphics they're showing past Google acquisitions and one of their biggest acquisitions Motorola didn't turn out so while some would argue that the nest acquisition hasn't been a success you know otherwise DoubleClick YouTube potentially weighs all YouTube for sure. DoubleClick for sure turned out to be phenomenal acquisitions but I wonder if Google is scared of its own track record. Yeah I mean I think you know Google generally believes that it can solve its own problems right. I mean this is an engineering focused company it's a company full of you know essentially the smartest people in the world who think they really have the right answers for things and a lot of products that they've developed in-house have also been really successful chrome and of course you know search ads which is potentially one of the most successful tools ever developed in history at least if you look at pure profit. And so I think generally the attitude within the company is to build rather than buy and but of course not all solutions you can build on your own. Now of course Google is third to Amazon Web Services and Microsoft in the cloud. They've got a new CEO Thomas Carrion who you spoke to today I told you many people asked us for many months are you rushing to do acquisitions. We've been very disciplined in building our sales go to market capability our own products and we've chosen looker as a very complementary technology that a lot of customers will find value in very quickly. What do we have to say to you about buy versus build when it comes to gaining share in the cloud market. Yeah I mean obviously Thomas Carrion would not tell me what his acquisition strategy is what is Eminem's strategy is going forward but it is true I mean most of what he's been talking about despite being asked about and the nay to his own admission has been about building his own sales force focusing and narrowing Google clouds focus on a few specific industries and really getting really good at selling into that right. As I said Google is an engineering organization. They haven't always had a strong sales culture. That's what he's trying to build. And I think truly I mean if we take them at their word that is going to be their focus right now and maybe these more bolt on smaller incremental acquisitions will be the norm rather than a large transformational one. Meantime right you could call it a smaller more incremental acquisition but at the same time you've got Washington turning the screws on big tech examining potentially Google Alphabet for four antitrust issues is now the right time to be doing a deal like that. Yeah I mean I think this deal obviously was it was under works. You know obviously before this weekend when when we saw the latest news about a Department of Justice investigation into Google regarding antitrust I think it's important to note that in the cloud Google isn't dominant at all. You know they're far behind Amazon and Microsoft and they've had trouble closing that gap and they're still very very far from meaningfully catching up to those two two companies in the cloud space. So I think you know truly looking at cloud is not going to be the approach that that regulators will take. But of course in this political environment you know facts don't really matter that much. And I'm sure that there will be at least some people who use this as another sort of political point to try to show that Google is either thumbing its nose at regulators or that it's just going to beg Bloomberg's Garrett de Vic there. Meantime Google is leading the way in the business of streaming games through the Internet announcing pricing and a raft of new titles for its stadium service ahead of its competitors. I spoke with Phil Harrison vice president at Google about the I think what we are offering is an incredible value for gamers because remember they don't have to buy any hardware that isn't a custom game console or high NPC that normally costs hundreds of dollars that they have to get for one hundred and twenty nine dollars you get a controller limited edition controller. You get a four K streaming Chromecast you get the full destiny to experience from our friends at Bungie and three months of stadia pro it's an incredible value and then gamers can play the games that they want to play without having to go through the hassles of downloading and installing and patching and updating and all the rubbish that sits around traditional consoles and pieces today. We're facing a bit of subscription overload. I mean with all of the entertainment streaming subscription certainly there are many other gaming alternatives. You know what's going to convince gamers to choose Google. Well I think what stadia represents is a phenomenal value. The games that games will get to play they can use on any screen the TV the P.C. their laptop their tablet and their phone. No other games service does that . So the value is incredible. But we also recognize that not everybody wants to subscribe. So in addition to the stadium Pro which is nine ninety nine a month the stadium base which is free and they can buy the games and play them when they want to. Are you trying to get exclusives. Of course. Yes we have recently announced the formation of stadia games and entertainment which is our dedicated game development organization led by a very renowned industry veteran Jean Raymond. And she will be building out our exclusive content for four stadia plus we're working with a number of party companies to bring their games to stadia exclusively right now. So game shipping is on the rise you've got Microsoft and Sony doing something together and park partnership you've got Apple arcade potentially your price could impact the price that they decide on their services what are you expecting from the competition and how are you positioning yourselves relative to that. Well first of all I think this is just a general trend in a general movement in the industry as we move towards a streaming future. The technology is there now and obviously Google has some extraordinary capabilities in this area. We've been investing in data centers for 20 years and so stadia is really standing on the shoulders of giants of the technology that built and created YouTube and a lot of other very very high performing services that serve billions of users around the world. So the timing is ready now to deliver a very very high quality experience to gamers stadia allows you to stream it up to 4 k 60 frames per second. That's only possible because of the innovations that we've made in the data centers . Think game streaming will take over before there's a new generation of consoles. I think game streaming gives players an alternative and I think it is definitely a future direction for the industry but it isn't going to happen to everyone overnight . And so I think that the good news is is that the innovation means better games it means better content for players. So what a great time to be a gamer. Does the innovation also work with multiplayer games. I mean there's some skepticism that streaming will work on a multiplayer experience be better than a console be better than a computer. And can you do it better than Microsoft and Sony. The great thing is that when you have a streaming technology the multiplayer experience is even better because all of the players are on the same technical back end they're all inside the Google back and all of the players are connected by the same proprietary Google technology using our own fiber networks of which there are hundreds of thousands of kilometers worldwide connecting all of our data centers. So actually the experience for multiplayer will be far better than you can get on traditional historical platforms. And how would you rate the experience now. I mean this is a technological problem right that you've been working on. How much of the kinks have you worked out how seamless is it. We've been working on this for a number of years. We've been testing privately inside of Google for a number of years. We tested very publicly last year with Project stream partnering with Ubisoft to bring Assassin's Creed all to see which is a very very demanding graphically rich title. We learnt a lot from that experience testing with hundreds of thousands of people . And now what we are able to do is to innovate even more in the way we compress the data and bring that high quality experience into people's homes . Phil Harrison vice president at Google coming up the rise of digital dissidents in China and how they are testing Beijing's Great Firewall. We'll discuss next. This is the regime of China's President Xi is one of the most restrictive. The internet has ever seen Beijing spends about one hundred eighty billion dollars every year on surveillance and censorship tools like its Great Firewall. But these tight controls are being tested by a new group of tech savvy activists . Bloomberg Businessweek Editor Jeff muskets joined us with the story. Some like the folks at Great Firewall work this loose collective of activists who've been up and running since about 2011 do their best to provide a jumping off point for people who are in China who want to use either through browsing tools or social media different kinds of sites that they normally don't have access to if they abide by China's rules of the road. But our reporters Shelly Banjo and Lulu Chen for this story also spoke with a lot of folks including laborers who maybe say it's spinning her days planting trees and spraying pesticide. We've also become sort of unlikely activists as it gets tougher and tougher to speak up online. Now I was living and working in Beijing for the 20th anniversary of the Tiananmen Square massacre and that was about the same time that Facebook got shut down and Twitter got shut down and any time we I was at CNN at the time aired a story about Tiananmen Square showed video of Tiananmen Square that would be blacked out in China. How has censorship changed or increased under the regime of Xi Jinping . It's always been there to a certain extent but what is fascinating is that it's gotten more restrictive not less . Absolutely. He certainly made good on his annual promises to crack down harder and harder on most of the ways in which people are allowed to express themselves online in China . Interestingly though some of the biggest tools at his disposal to do that including know very publicly cracking down on Apple to force them to remove hundreds of VPN or virtual private network apps from their app store. Proven not counterproductive then at least not successful. Now there was this sense when I was there and this is now 10 years ago that young Chinese students for example were much more concerned about getting a job more concerned about the economy than they were about political freedom. Do you get a feeling that that is changing or that you know there is more of a pushback against Xi Jinping regime. I think you're probably right that there are a lot of people who are still very happy to sort of put their heads down and not become targets. I think that the lesson of this story which I have written here is that it's it can be a very lonely fight. And so the folks who either place the Great Fire people are operating from the shadows or folks like these these laborers who are willing and indeed have spent time in jail for complaining online about even things that their local government officials are doing you know tend to argue that the case they're making is one to try and slow the censors down or to get people to think twice about the compromises they're making but few have any illusions that they're really turning the tide. This tech started mounting its defense against U.S. antitrust scrutiny long before the Department of Justice and Federal Trade Commission divided oversight of the biggest tech companies. The big four have been spending big on lobbying and have continued to staff their in-house legal teams with numerous antitrust lawyers who've served in the government in the first quarter of this year alone. Amazon Facebook and Google have spent a combined 11 million dollars on lobbying to discuss in New York Bloomberg Businessweek Max Chacon. And in Washington our Bloomberg best traffic reporter David McLaughlin. So David is there a sense that these companies foresaw what could happen here possibly given what was happening in Europe and started to prepare years ago. Well you definitely get the sense talking to people close to the companies down here in Washington. Outside lawyers in their policy shops that something like this was almost inevitable. I mean there was sort of a was sort of a feeling that some of these companies were resigned to some action in one form or another. And so you had some of the companies sort of pointing at one another about who is most at risk for an investigation. So I think a lot of that this comes down to the fact that this has been so much in the atmosphere here in Washington there's been so much criticism of the companies both on Capitol Hill among antitrust lawyers and economists. You can go to the conferences almost once a week it seems now where this is a subject that's being talked about and that's what the companies themselves officially saying. I mean we're getting dribbles from outside counsel from sometimes sources within the company but do we have an official party line . No I mean. I mean officially I think these companies are you know very conscious of the you know of the ways in which they've kind of let people down and we've seen that messaging come out of you know Facebook and Google most clearly where you know you have a lot of lots of talk of sort of responsibility and and we need that you know sort of a renewed focus on our role as society just to build on what David was saying you know a couple of years ago when we saw Mark Zuckerberg going kind of around the country on this sort of weird photo tour where he was you know posing with Iowa farmers. Everybody's kind of scratching their head saying you know what is he doing. And I think in retrospect it's pretty clear he was preparing for you know this coming storm and I think when you look back and think about you know Tim Cook's stepping out over the last few years and and becoming more of a voice a lot of these tech leaders you know years ago started to realize that this was coming and started preparing and started working sort of the public relations levers. Interestingly there was speculation about Zuckerberg running for president back during that time which now seems a lifetime ago. David talk to us about the people that are joining these legal teams who are they they're coming from the DOJ former DOJ folks and elsewhere within the government. Yes so many of these companies have hired over the last few years well before this week's news A number of anti-trust lawyers who worked at the FTC and the Justice Department. And these are people who have experience in conducting investigations and do into conduct as well as mergers. And they also have a very large public relations and policy shops here where they conduct their lobbying on Capitol Hill and then in addition to that they all have very prominent law firms armies of lawyers who would be ready to go to work if this thing if this scrutiny turns into a real investigations. In addition to industry trade groups now Max you know the idea that we seem to be getting from sources who are talking about the company's position here is that these companies will try to make the case that they are actually better for competition than not that they support small businesses that they support competition between small businesses. Do you think Washington is going to buy that argument. So it's hard to say. I mean it depends on how you look at it it is 100 percent true that you know online advertising has created opportunities for smaller businesses . And the other thing that's hard about this you know from an antitrust perspective is you know antitrust laws you know mostly focused on consumer harm. All of these companies well sorry Facebook and Google are offering services for free. Amazon of course is all about low prices. It's easy. It's sort of hard to see how you make an argument it's raising prices. Now the one issue the vulnerability for these companies is they all depend on these big dominant networks. So if you want to buy a search advertisement there is only one company Google that will sell you search ads pretty much. I mean there's some smaller players but they but the amount of market share is tiny. If you want to be in social media there is one company. If you have an app you know there are two options Apple and Google. So. So the fact that they have these dominant platforms is going to be I would I would predict the focus of any antitrust sort of criticism or inquiry still ahead how one company is bringing to organ transplants and pioneering what you could call medical miracles. This matching organs to donors is a challenging process and shortages can mean life or death. Today there are currently over one hundred thirteen thousand Americans waiting on the national transplant list. But finding a donor isn't the only obstacle . Roughly one third of organ transplants are rejected by a recipient's immune system. Molecular diagnostics company CAC RTX is improving that process by bringing A.I. to transplant care. The company is developing a genetic test to match organs with recipients as well as technology to monitor the immune system post operation. KERRY CEO Peter Mac joined us to discuss . Well there are really two big issues in organ transplantation as you were mentioning. On the one hand you need to match an organ to a recipient and then after transplantation you need to care for that patient throughout the lifetime of that patient . We are applying very novel sequencing technology in order for matching the organ with the recipient and then after that we are using the same sequencing technology to careful these patients detecting rejection episodes early making sure that clinicians have the information to treat patients and to prevent rejections episodes to occurring in the past. And so the sequencing technology actually work and how is it different from a matching process without your technology. You know this is next generation sequencing it's really the future in diagnostics . We're applying this technology to match an organ with the recipient on a very very granular level. We do that in organ transplantation in bone marrow transplantation and in transplantation overall. Now in the post transplant area we can actually detect the DNA of the transplanted organ in the bloodstream of the recipient. That's a very novel technology and the cell feed DNA technology is revolutionizing how we can care for patients because it detects detect rejection episodes earlier. Now you add on this an artificial intelligence platform that allows clinicians to have a deeper insight in an aggregating all the various data streams and it allows them to make better decisions and potentially detecting issues so much earlier than they can do today. So how much are you improving success rates. What are the numbers. We have a very clear focus as an organization to improve patients lives by three years. Now we're very early in the ability to impact this but we are building an amazing platform at CARE RTX in order to do so. We can focus on immune modulation. We can focus on that tyranny and compliance making sure that patients are actually taking their meds and seeing their doctors on a regular interval and then afterwards we also can focus on standardization and precision medicine individualized the care that the individual patient receives the perfect care for that individual patient is really what we are all about acuity X so we are applying precision medicine tools to the field of transplantation. We have built a tremendous platform to deliver and partner with the transplant ecosystem to make that available to two transplant patients. Your revenue grew 85 percent year over year. How does this scale. How do you get this technology accessible to more patients more recipients. You know this is a really an amazing growth story. We have built this tremendous platform in transplant medicine over the last 18 months. We have already achieved 5 percent patient penetration in kidney transplant patients in the US. We see this as a 2 billion dollar market opportunity. When we talked about this 2 billion dollar market opportunity for five years ago people were wondering why is that . The reason is that these transplant patients really live for 10 to 15 years and there's a recurring revenue opportunity for us on testing these patients throughout the lifetime of the patient. So care RTX has a model that follows these patients over a very long period of time which financially is very attractive but much more important. We are changing patients lives by making sure that we are detecting rejection episodes early so scientifically very interesting. Yeah. How do you expand this technology. Is there any intention or any ability to expand this beyond organ transplants. No absolutely you have . On the one hand transplantation is a unique opportunity in the context of being at the pinnacle of medical science. You call that the miracle of medicine and it truly is. But if you think about it really innovation happens at the at the top of the innovation curve. So if you have innovation at the top of the pyramid. This will allow us to learn a lot for other areas. We are doing now in transplantation about the top 200 medical centers in the United States are doing transplantation. Now once we have built an ecosystem that allows us to have artificial intelligence and augmented intelligence relationships with these centers integrate into electronic medical records we can roll that that platform out into many areas that was CAC CEO Peter Mac. And that does it for this edition of the best of Bloomberg technology. We will bring you all the latest in tech throughout the week. You can tune in every day 5:00 p.m. in New York 2:00 p.m. in San Francisco and reliable streaming on Twitter. Check us out at technology and be sure to follow our global breaking news network to talk on Twitter. This is Bloomberg .

No schedule data available.

'Best of Bloomberg Technology' Full Show (06/07/2019)

Catch-up with the latest technology news from around the world with host Emily Chang from Bloomberg's San Francisco studio. (Source: Bloomberg)

More From Bloomberg Technology
All episodes and clips