Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim
Speaker 1: Fox along with my co host Lisa Bramowitz. Each day
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Speaker 1: All Eyes on Washington, d C. On a number of fronts,
Speaker 1: I want to start with the latest House Speaker Paul
Speaker 1: Ryan has announced that he will not seek re election
Speaker 1: in November. We are expecting to hear comments from him.
Speaker 1: He's going to make a statement and we will be
Speaker 1: clearing that live as well as the question and answer
Speaker 1: session after that. Here to give us a sense of
Speaker 1: what the context is around Paul Ryan's uh decision not
Speaker 1: to seek reelection is Marty Shanker, chief content officer for Bloomberg.
Speaker 1: Marty put this in a perspective to us, why now, Well,
Speaker 1: it's interesting timing. About a month ago there was a
Speaker 1: Politico magazine piece which suggested that Ryan was not going
Speaker 1: to stand for re election, which the people around him
Speaker 1: vigorously denied. And so now a month later it's true. Um,
Speaker 1: I think Paul Ryan has basically decided that this is
Speaker 1: a I mean, you never wanted the speaker job to
Speaker 1: begin with. You sort of took it out of uh
Speaker 1: dedication to the Republican Party. And it's a very really
Speaker 1: tough job. He's by a lot of measures, he's done
Speaker 1: a really good job, especially in fundraising. A lot of
Speaker 1: people were concerned about his ability to raise funds for
Speaker 1: Republicans in the context of his predecessor Bayner, but he's
Speaker 1: actually outraised him by quite a bit. Okay, I just
Speaker 1: want to push back a little bit because a lot
Speaker 1: of people are suggesting that Paul Ryan is not going
Speaker 1: to seek reelection because his chances of winning are increasingly slim,
Speaker 1: and that this sort of is a harbinger moment for
Speaker 1: the Republican Party and sort of seeks uh sort of
Speaker 1: sets the stage for a Democratic win in the midterms. Well,
Speaker 1: one of the UH inside Washington prognosticators right after Ryan's
Speaker 1: announcement this morning, moved the district Paul Ryan's district in
Speaker 1: Wisconsin too likely Republican from solid Republican, So at least
Speaker 1: in that view, UH, he he may have had a
Speaker 1: more difficult time, but he will still expected to be
Speaker 1: re elected, and now his departure makes it less likely
Speaker 1: that's going to remain a Republican seat. So you know, yeah,
Speaker 1: he may have he may have had a more difficult time,
Speaker 1: but he won by I think a seventy percent margin
Speaker 1: last time around, and I think it was pretty safe
Speaker 1: seat if he wanted to take to keep it. Hey, Marty,
Speaker 1: I want to pick up on something having to do
Speaker 1: with the Republican Party. And you mentioned, you know, his
Speaker 1: success at fundraising for the Republican Party. What kind of
Speaker 1: Republican party does he leave behind for his successor to manage, well,
Speaker 1: like it or not, it's a Trump Republican Party. And
Speaker 1: as you know, I mean, many people both in the
Speaker 1: moderate wing of the Republican Party and Democrats certainly have
Speaker 1: been very critical the leadership of the Republicans for not
Speaker 1: being more vocal in their opposition to some of the
Speaker 1: policies that Donald Trump is pursuing. Um. That said, they're
Speaker 1: inexcellably tied to this president, and UM it becomes even
Speaker 1: more interesting in the context of the Mueller investigation. That's
Speaker 1: exactly where I wanted to go with this. I mean,
Speaker 1: one speculation is that how speaker Ryan is stepping aside,
Speaker 1: or at least announcing his plans to do so, in
Speaker 1: order to take a harder stance on President Trump. Do
Speaker 1: you think that there's any merit to that? No? Okay, great,
Speaker 1: and asked an answer, Um, no, but I really don't
Speaker 1: think I you know, Uh, Paul Ryan has said that
Speaker 1: the Special Prosecutor Mueller should be kept in the job
Speaker 1: and complete his his inquiry. Um. He hasn't had a
Speaker 1: full throated criticism of Donald Trump's comments on it. Uh. Probably,
Speaker 1: you know, Democrats would like him to be more vocal.
Speaker 1: But I do not think he's making this decision so
Speaker 1: that he's now free to talk about it. I don't
Speaker 1: think you'll be seeing any real profiles and courage out
Speaker 1: of this guy. Um. That said, this has coming at
Speaker 1: an interesting point. It's an inflection point in the Mueller
Speaker 1: investigation and certainly in President Trump's anger toward Mueller as
Speaker 1: well as uh Rod Rosenstein. And I'm just wondering, you know,
Speaker 1: does this sort of have implications for the GOP's willingness
Speaker 1: to push forward or criticize, or say censure President Trump
Speaker 1: for any consequences that might emerge from firing Rosenstein. Well
Speaker 1: as a very practical matter of the fact that he's
Speaker 1: not running for re election means that if Donald Trump
Speaker 1: were to fire Rosenstein, Mueller, Sessions, etcetera. It would if
Speaker 1: it did, and it would create a constitutional crisis. Paul
Speaker 1: Ryan could just basically throw away any political implications to
Speaker 1: a stance on that move. Uh So it would as
Speaker 1: a practical matter, free him from many political considerations. Then
Speaker 1: it would just become essentially a moral, conscious decision on
Speaker 1: his part of what standy takes um in in the
Speaker 1: constitutional crisis that wouldn't ensue from that. We're speaking with
Speaker 1: Marty Schenker, he is our chief content officer for Bloomberg
Speaker 1: as we await comments and a statement from Paul Ryan,
Speaker 1: current Speaker of the House, representative of the Wisconsin First
Speaker 1: and he will be announcing that he will not seek
Speaker 1: a re election for that position. We're also going to
Speaker 1: be bringing you live cover to Mark Zuckerberg, chief executive
Speaker 1: of Facebook, second day of his two day testimony before Congress.
Speaker 1: Um and Marty, I'm sorry to keep harping on the
Speaker 1: Republican Party because that you know, they're the ones who
Speaker 1: are going to be left after Paul Ryan exits in January, UM,
Speaker 1: the rating for the president has actually gone up, right.
Speaker 1: I mean we're talking about his favorable rating has climbed
Speaker 1: eight percentage points since before the election. Uh, in terms
Speaker 1: of Republicans, and I'm wondering what positions we can expect
Speaker 1: the Republicans to take as a result that the Speaker
Speaker 1: Ryan is no longer going to be there to put
Speaker 1: on the brakes or even add any kind of institutional
Speaker 1: or traditional Republican UH perspective. Well, you still have Mitch
Speaker 1: McConnell as a Senate leader, and he in some ways
Speaker 1: speaks for the Republican Party. And in Congress in general,
Speaker 1: you have McCarthy and Scalise who are still the you know,
Speaker 1: the whip and the number two person in the House
Speaker 1: who has been maybe going to take Speaker Ryan's position
Speaker 1: if the working theory is that McCarthy will try to
Speaker 1: do that. Actually he sought that position before Ryan, uh
Speaker 1: and could not garner enough votes, and then that's when
Speaker 1: they turned to Paul Ryan as a unifying force for
Speaker 1: the Republican Party. So it's probably he's the front runner,
Speaker 1: but he's by no means a short thing. And there
Speaker 1: are very fervent Trump supporters in the House who may
Speaker 1: think that it's time for a truly pro Trump Republican
Speaker 1: to take the leadership in the House. Don't forget the
Speaker 1: mid terms are in November, well before Paul Ryan leeds office.
Speaker 1: So um, it'll be a completely different context when the
Speaker 1: decision it will have to be made, whether in fact
Speaker 1: it will be majority leader or minority leader of the
Speaker 1: House when that time comes. All right, So we're right
Speaker 1: now completely focused on Paul Ry. In about a half
Speaker 1: an hour ago, we were completely focused on the relationship
Speaker 1: between the US and Russia over Syria and some kind
Speaker 1: of impending missile attack that President Trump is promising via
Speaker 1: Twitter on Syria in response to the chemical attacks. Where
Speaker 1: are we with that? Has everybody just simply forgotten about that?
Speaker 1: Has this sort of turmoil complicate matters if at all? Well?
Speaker 1: I don't. I don't know that the political elements of
Speaker 1: Paul Ryan's decision not to run for re election has
Speaker 1: any impact at all on Syria, But the markets certainly
Speaker 1: haven't forgotten about it. Um, it's interesting that the markets
Speaker 1: haven't actually gone cataclysmically panicked over this. There's obviously a
Speaker 1: negative reaction, but it's not hug Why is that surprising
Speaker 1: to you. Well, I mean, you know, when you have
Speaker 1: a president of the United States via Twitter essentially saying
Speaker 1: we're going to take military action in an area of
Speaker 1: the world where the Russians and the Iranians personnel who
Speaker 1: have warned a ends doing that, it's could be very unsettled.
Speaker 1: You'd wonder why the SMP down only four tens of
Speaker 1: a percent, why it's down only ten points, and why
Speaker 1: oil is only up less than less. My theory is
Speaker 1: that the markets are looking at this in some ways
Speaker 1: like the tariffs issue, that yes, there's a lot of
Speaker 1: bluster and a lot of strong talk, but ultimately that
Speaker 1: he might walk this back. My own personal theory is
Speaker 1: that there are there could very likely be a conversation
Speaker 1: between Donald Trump and Vlader air Putin. They spoke very
Speaker 1: recently in the last couple of weeks that might actually
Speaker 1: bring bring us back from the brink of military action.
Speaker 1: I mean, that would be consistent with the way Donald
Speaker 1: Trump likes to operate. Threaten, gets concessions, and back off.
Speaker 1: You know, there's sort of an interesting twist here with
Speaker 1: the United Kingdom coming out and saying that they're not
Speaker 1: sure that the Syrian government did wage a chemical attack
Speaker 1: at all, and that they're not going to cooperate with
Speaker 1: the u US until they have better evidence. How does
Speaker 1: that factor into that, Well, that's pretty interesting coming from
Speaker 1: the UK, who are not even sure that the nerve
Speaker 1: agent that was used to attack the UK espionage victim
Speaker 1: uh was really from Russian origin. So, you know, I
Speaker 1: just think that's political rhetoric. But it might just be
Speaker 1: political rhetoric. But that means that the US does not
Speaker 1: have the UK on its side, and any kind of
Speaker 1: altercation in Syria, even as France says that they're going
Speaker 1: to go alongside the US, that from a strategic standpoint
Speaker 1: is significant. Yes, it makes it much less politically acceptable.
Speaker 1: I guess in a global context for Donald Trump to
Speaker 1: take union ladder reaction in Syria, Um, I think the
Speaker 1: real danger is the Russian response. Right, If the US
Speaker 1: was to take military action and in some way involves
Speaker 1: Russian troops that are on the ground, it could escalate
Speaker 1: in a way that no one really wants but no
Speaker 1: one can control. So it's a very dangerous situation in Syria.
Speaker 1: And if Donald Trump decides to go forward without allies,
Speaker 1: it becomes even more dangerous. Well, in the danger also
Speaker 1: becomes as you mentioned, that Iran has proxies if indeed
Speaker 1: it does have actual military forces in Syria, and that
Speaker 1: Moscow and Vladimir putin visiting with the head of Iran
Speaker 1: in Turkey just last week, I believe in Turkey and
Speaker 1: ally of the United States. Yes, it's very complicated, um
Speaker 1: as we all know. And there's also a report from
Speaker 1: ap earlier this morning that a high level delegation of
Speaker 1: Russian officials have arrived in Syria. Now is that a
Speaker 1: kind of shield situation or it's suggestive of the Russians
Speaker 1: are really doubling down on their commitment to a side,
Speaker 1: you know. And and just to sort of add a
Speaker 1: complication to this whole backdrop are the sanctions that the
Speaker 1: US has placed on Russia, Russia calling it uh ageing
Speaker 1: economic war on them. And you are seeing the assets
Speaker 1: in Russia plunge, the ruble continuing to lose value versus
Speaker 1: the dollar. Uh. You saw you know, bond yield spike up,
Speaker 1: and they canceled a bond auction because they didn't want
Speaker 1: to try to raise money in this environment. Not just wondering,
Speaker 1: I mean how much does that sort of up the
Speaker 1: anti here and sort of raise the possibility of military conflict. Well,
Speaker 1: you know, I do think that when in the context
Speaker 1: of the world stage, the way the US can truly
Speaker 1: pressure Russia is not through foreign diplomacy, not through the UN,
Speaker 1: but on economic sanctions. Um Vladimir Putin enjoys great popularity
Speaker 1: within the among the Russian people, but a weakening ruble,
Speaker 1: if it's over an extended period of time, will cause
Speaker 1: real economic pain, and that is the way to get
Speaker 1: Russians change their behavior. Most foreign policy experts say sanctions
Speaker 1: are the really only effective way of changing their baby
Speaker 1: and taking a look at, for example, of the my
Speaker 1: Sex ten, which is the stock exchange in Russia actually
Speaker 1: higher today, up about nine tenths of a percent adjusted,
Speaker 1: and indeed, right, yeah, trying to get your money out,
Speaker 1: that's a different, different story. Let's bring in Billy House,
Speaker 1: a congressional reporter for Bloomberg News. Billy, I want to
Speaker 1: just touch on that first. Did that strike you as
Speaker 1: well as sort of the most noteworthy thing he said?
Speaker 1: That was very noteworthy, especially when you have some of
Speaker 1: his own House Republican colleagues, led by Devin Junior as
Speaker 1: the House Intelligence Chairman, working right now to try to
Speaker 1: hold both Uh rosen Stain and Sessions in contempt. So, uh,
Speaker 1: Paul Ryan can say that, and he said he's had
Speaker 1: assurances that Mueller would not be attacked or fired by
Speaker 1: the White House. Let's let's see what happens. Though he's
Speaker 1: a lame duck. Now, what does this? What? What does
Speaker 1: this due to the race for his position? And given
Speaker 1: that we've got the mid terms between now and when
Speaker 1: the next Congress takes take session, that's a good question.
Speaker 1: I mean, right now it's been all whispers between the
Speaker 1: number two House Republican and Kevin McCarthy and the number
Speaker 1: three Steve Scalise. But with Paul Ryan leaving this early
Speaker 1: are announcing he will be leaving this early on. I
Speaker 1: think only Tip O'Neill, ever, UH was the last one
Speaker 1: to not be forced out or to go out in
Speaker 1: some scandal um. It leaves a lot of other potential
Speaker 1: candidates time to start seeing what kind of chips they
Speaker 1: could collect or call in, and so perhaps names like
Speaker 1: House Freedom coccas Chairman Mark Meadows, a friend of Trump's
Speaker 1: or even Jim Jordan's or others who may be more
Speaker 1: moderate might have time to build some sort of coalitions.
Speaker 1: I think a lot of people on Wall Street are
Speaker 1: trying to figure out, Okay, well, how does this affect policy?
Speaker 1: How will this directly feed into implications for any cutbacks
Speaker 1: in social programs to reduce the deficit, or any ability
Speaker 1: to pass infrastructure planning? Can do you have any insight
Speaker 1: into that? I think, first of all, that was gonna
Speaker 1: all be very difficult anyway in an election year. Uh,
Speaker 1: the Republicans have lost special elections dating back to two
Speaker 1: thousand eleven on just stating they wanted to vouchize Medicare
Speaker 1: and that sort of thing. But now that we have
Speaker 1: a lame duck speaker and he may think there is
Speaker 1: a lot of good will that would help him get
Speaker 1: that those policies through, I'm more inclined to believe that
Speaker 1: he's now a lame lame duck and none of that
Speaker 1: will happen. So who emerges the leader during this period
Speaker 1: between the now and the election of a new one.
Speaker 1: I think we have uh multiheaded monster for the next
Speaker 1: few months where nobody's actually leading. All right, Billy House,
Speaker 1: thank you so much for joining us, and good luck
Speaker 1: with all the future coverage as we continue to monitor
Speaker 1: who is going to take over house speaker Paul Ryan's position,
Speaker 1: as well as the implications for policy and the ongoing
Speaker 1: Moler investigation. Thank you here just give us a sense
Speaker 1: of what we should be focused on from what we've
Speaker 1: heard so far. As Paul Sweeney, US director of Research
Speaker 1: and senior Media and Internet analyst for Bloomberg Intelligence, Paul, how,
Speaker 1: how is Mark Zuckerberg fired on day two? I think
Speaker 1: he's generally doing a pretty good job here. You know,
Speaker 1: over at past a couple of days, the stock is
Speaker 1: actually traded fairly well, So I think, uh, he hasn't
Speaker 1: done any damage here. And um, you know, I think
Speaker 1: the big challenge for Mark here over these two days
Speaker 1: is too you know. Number one, you know clearly acknowledge
Speaker 1: that Facebook now has a handle on the full scope
Speaker 1: of what the issues are here as it relates to data.
Speaker 1: And I think you know, that realization didn't really occur
Speaker 1: really into the last couple of months, I think in
Speaker 1: terms of the scope of their responsibility here. Um, So
Speaker 1: I think he needs to get that across. I think
Speaker 1: he is getting that issue across. And then the second issue,
Speaker 1: maybe more importantly is that Facebook is equipped um to
Speaker 1: deal with these issues. Um, And you know. Most importantly
Speaker 1: that they do not need to uh incur regulatory oversight
Speaker 1: by Congress or any other body. I think that's one
Speaker 1: of the big issues that Facebook and you know, tech
Speaker 1: and social media and the internet, um, you know, trying
Speaker 1: to forcedall as long as possible. Paul Swiney, this shares
Speaker 1: a Facebook. They're down about six tenths of a percent.
Speaker 1: What a reference in particular report that was put together
Speaker 1: by Deloitte, and they worked with Facebook in order to
Speaker 1: do this. This goes back to two thousand and fourteen.
Speaker 1: But for reference, uh, they said that Facebook has enabled
Speaker 1: more than two hundred billion dollars of economic activity and
Speaker 1: four and a half million jobs around the world. Can
Speaker 1: you like in Facebook to the Internet itself? And that
Speaker 1: perhaps that is why this is such a interesting and
Speaker 1: focused piece of information, because so many businesses live on
Speaker 1: Facebook as if Facebook were the Internet. Yeah, it's um,
Speaker 1: you know again, Facebook has over two billion users on
Speaker 1: a monthly basis on a global scale there obviously everywhere,
Speaker 1: with the notable exception of China, uh, you know, and
Speaker 1: so they are truly you know, touching you know, so
Speaker 1: many households, so many lives in so many different ways
Speaker 1: that the social media hum of which Facebook is a
Speaker 1: larger social media platform, has really become one of the
Speaker 1: main um utilities of the Internet at large. It used
Speaker 1: to be simply, uh, you know, search was probably the
Speaker 1: utility that people utilize the most on the Internet. Um,
Speaker 1: but it's really I think social has become you know,
Speaker 1: kind of the key aspect. And so I guess I
Speaker 1: was getting out here with the economic effect is it's
Speaker 1: not just sharing you know, family photos and details of
Speaker 1: what you did on your vacation. It is perhaps two
Speaker 1: people who do not know each other enjoying, let's say,
Speaker 1: playing bridge online and through an app that they join
Speaker 1: through Facebook. They then are able to play bridge with
Speaker 1: each other. That becomes an economic relationship for not only Facebook,
Speaker 1: but also for the companies that are building those specific apps.
Speaker 1: And Mark Zuckerberg reference Zinga for example, the online game creator.
Speaker 1: Is that an accurate description? It is? It is an
Speaker 1: accurate description, and and so you know, and it's something
Speaker 1: that you know, I'm not sure. Um. A lot of
Speaker 1: the regulators, a lot of the politicians, the folks asking
Speaker 1: the congressman, asking the questions over the past few days,
Speaker 1: a couple of days, you know, fully appreciate that, and
Speaker 1: I think that is one of the reasons that whenever
Speaker 1: there's discussion about, uh, you know, a regulation of the
Speaker 1: Internet coming from Congress, uh, that is what people that
Speaker 1: is one of the main pushbacks, which is the Internet
Speaker 1: and social media have created so much opportunity for people
Speaker 1: and so many jobs and so much uh economic growth
Speaker 1: that you know, this is the last thing this industry
Speaker 1: needs is regulatory oversight. But now what's happened in the
Speaker 1: last couple of months is just the privacy issue has
Speaker 1: really reared. It's it's u ugly head here. And we've
Speaker 1: seen privacy regulations out of the EU over the years,
Speaker 1: and they're getting stricter and stricter all the time, affecting
Speaker 1: companies like Facebook, and Facebook wants to forestall anything like
Speaker 1: that happening here in the States. All right, thank you
Speaker 1: very much of Paul as Sweeney. Paul Sweeney our director
Speaker 1: of North American research for Bloomberg Intelligence. So we've been
Speaker 1: listening to Mark Zuckerberg testified before the House Energy and
Speaker 1: Commerce Committee. He was answering questions from A. Doris Matsui,
Speaker 1: the congresswoman of Democratic congresswoman from California representing Sacramento, and
Speaker 1: one of the issues had to do obviously with the
Speaker 1: privacy controls that are afforded to people who actually use
Speaker 1: a Facebook and the ability of commercial organizations, whether they
Speaker 1: be businesses or indeed political organizations, to actually access that
Speaker 1: information and then target information that would be directed to
Speaker 1: to specific interests that they might have. I want to
Speaker 1: bring in our own Shia ovid Are Bloomberg Technology Gadfly
Speaker 1: columnists to give us a little bit more detail about
Speaker 1: the congressional hearings, and as Shira, I just want to
Speaker 1: note that I believe that there is a quote from
Speaker 1: uh from one of the gad fly commists meaning you yes,
Speaker 1: that says Facebook will keep failing users trust as long
Speaker 1: as its business is based on unrestrained hoover ng of
Speaker 1: as much user data as possible. UM does anything that
Speaker 1: Mark Zuckerberg said that you heard contradict that. I don't
Speaker 1: think so, and in part because he rather gracefully avoided
Speaker 1: directly tackling that question. So what Mark now been saying
Speaker 1: for two days is essentially, UM, people own all the
Speaker 1: data that they put out there on Facebook, and they
Speaker 1: have complete control over where and how it's shared, which
Speaker 1: is not really true. So, look, the business model of
Speaker 1: Facebook is based on um collecting information from what people
Speaker 1: voluntarily put on their Facebook pages and things that people
Speaker 1: are not really aware that Facebook is also getting from you,
Speaker 1: including um, almost every web page you visit, the apps
Speaker 1: on your phone, the location as you carry your phone
Speaker 1: with you across the world, UM, information on what you
Speaker 1: purchase in stores that advertisers are taking with them to
Speaker 1: target ads. And this it also includes. And this was
Speaker 1: interesting because Doris Matt suey Uh, the congressman from California,
Speaker 1: mentioned what happens afterwards. In other words, you may own
Speaker 1: your data, but once your data is used by a
Speaker 1: commercial interest, you really don't have any It's it's a canard,
Speaker 1: this issue about ad ownership. Nothing that has happened to
Speaker 1: Facebook in the last two days or three weeks of
Speaker 1: controversy has changed its ability and willingness to collect large
Speaker 1: amounts of activity and information on Americans and you and
Speaker 1: people around the world and use that to target auts.
Speaker 1: And that's the central problem with Facebook is that it's
Speaker 1: business model is dependent on its ability to have relatively
Speaker 1: unrestrained data collection. Okay, so on a scale from one
Speaker 1: to ten, ten being best and one being worst. How
Speaker 1: would you grade yesterday's performance of Mark Zuckerberg and I'm sorry,
Speaker 1: ten is the best? Yeah, ten's the best. I would
Speaker 1: say it was about an eight. What about today? It's
Speaker 1: it's less good today. It seems like a the questions
Speaker 1: are more partisan and pointed today and they're a little
Speaker 1: less polite. Um. And Zuckerberg looks visibly tired, which is
Speaker 1: probably reasonable given the day he had six hours. Yeah,
Speaker 1: he took the break, now, you know that's sorry, Right,
Speaker 1: we waved off the break yesterday. Today he took it. Um.
Speaker 1: You know. One thing that I'm struck by is as
Speaker 1: this is going on, and some might call political theater,
Speaker 1: others might call it, you know, an informational session, whatever
Speaker 1: you want to however you want to characterize it. With
Speaker 1: the tip of both headlines, Cross saying that the European
Speaker 1: Union privacy head said that we are at a start
Speaker 1: of a new data privacy era and that European Union
Speaker 1: watchdogs are creating a social media working group and data
Speaker 1: rights in some ways, Is this the side show to
Speaker 1: what's really happening, which is probably really led by Europe
Speaker 1: right now. Look, I think it's been true for a
Speaker 1: long time and continues to be true that European regulators
Speaker 1: and European consumers two are much more skeptical about data
Speaker 1: collection of Internet companies, including Facebook and Google and others,
Speaker 1: and the European regulators have taken the lead on all this.
Speaker 1: They are very informed. Um, they are very harsh critics,
Speaker 1: and yeah, I do think they are leading the world
Speaker 1: and leading their colleagues in Congress, who today UM asked
Speaker 1: several times about this new European data protection rule and
Speaker 1: whether and how Facebook would implement that in the United States,
Speaker 1: which I think was interesting that they're looking to Europe
Speaker 1: as kind of a model. Can we just maybe just go,
Speaker 1: you know, go one step deeper on that, because having
Speaker 1: said that, is that because the governments in Europe already
Speaker 1: have all of the data they want and more on
Speaker 1: their citizens, the ability to uh, basically enforce the carrying
Speaker 1: of identity cards or registration and local police stations. I mean,
Speaker 1: you know, you go and you try to live in
Speaker 1: any kind of municipality in the European Union, or indeed
Speaker 1: in any European country outside the European Union, and you're
Speaker 1: gonna end up in some governmental office pretty quick, pretty quickly.
Speaker 1: Rather um, that identifies who you are, where you are,
Speaker 1: what you do, why you're there, on what job you have.
Speaker 1: So it's not as if they are doing this out
Speaker 1: of some ultra degreason for personal privacy, but it may
Speaker 1: be because the government doesn't want any competition when it
Speaker 1: comes to Facebook. Yeah, that's a fair question. I don't
Speaker 1: think I know enough about the data collection policies of
Speaker 1: European governments to answer that question confidently. I do think though,
Speaker 1: there is genuine concern among European regulators about commercial entities
Speaker 1: and um what information they get from their citizens, and
Speaker 1: some of it may be trying to protect European companies
Speaker 1: from competition from American companies Internet companies. You know, there
Speaker 1: is no really big and powerful global internet companies based
Speaker 1: in Europe with you. Yeah, it's a little bit of
Speaker 1: a different animal, but yeah, there is no sort of
Speaker 1: Facebook or Google of Europe, or at least not the
Speaker 1: size of Facebook and Google. So there may be some
Speaker 1: some competitive issues at play here, But mostly I think
Speaker 1: it is genuine concern on the part of European regulators
Speaker 1: and governments to protect their citizens. So aside from what
Speaker 1: we've talked about so far, what are the highlights to
Speaker 1: you until now. Um, Look, I I think the highlights
Speaker 1: to me are that there is now general agreement, although
Speaker 1: the devils and the details, from both Facebook and lawmakers
Speaker 1: both Republican and Democratic, that there needs to be some
Speaker 1: more regulation of Facebook or other internet and social media companies.
Speaker 1: And look, I don't I'm skeptical that anything will happen,
Speaker 1: but the fact that again all of those sides Democrats, Republicans,
Speaker 1: and Facebook itself have acknowledged the vague need for regulation
Speaker 1: that feels like a watershed moment. Okay, So then who
Speaker 1: is going to be responsible for that, because it's not
Speaker 1: going to be Congress, right, Yeah, I don't know. I mean, look, um,
Speaker 1: this is this is a mid term election year. It
Speaker 1: seems hard to imagine that anything will get substantive, will
Speaker 1: get past this year. And then, honestly, Facebook maybe just
Speaker 1: hoping to play out the clock that by next year
Speaker 1: Congress will have moved on to something else. Shira the
Speaker 1: Uh the consent decree that the that the Federal Trade
Speaker 1: Commission has with Facebook was referenced several times, and several
Speaker 1: times Mark Zuckerberg didn't seem to have any detailed knowledge
Speaker 1: of that consent decree. Uh does that surprise you. Yeah,
Speaker 1: it was a little bit strange. I suspect he was
Speaker 1: probably trying to avoid getting himself trapped in some line
Speaker 1: of questioning that he couldn't control. Um, but yes, it
Speaker 1: did seem odd that, For example, he he was asked
Speaker 1: whether Facebook had to pay a financial fine from the
Speaker 1: FTC in two thousand eleven, which they did not. The
Speaker 1: FTC does not really have the ability to do that
Speaker 1: in the case that happened to Facebook, and it was
Speaker 1: weird that he couldn't answer that. So what are the
Speaker 1: implications here for the other big social media companies? I mean,
Speaker 1: I'm a little bit horns So on the one hand, um,
Speaker 1: the other Internet companies like Google and Twitter have kind
Speaker 1: of gotten a past the last few weeks as the
Speaker 1: world's attention has focused on Facebook's crisis, But they have
Speaker 1: almost exactly the same basic issue issues as Facebook, which
Speaker 1: is their business models are dependent on harvesting data and
Speaker 1: using that data about people to target ads. They have
Speaker 1: also faced numerous questions about whether they strike the right
Speaker 1: balance between um, uh, you know, creating a free and
Speaker 1: open exchange of ideas online and making sure that people
Speaker 1: aren't being harassed incited into violence or otherwise abused on
Speaker 1: their platforms. And again, Facebook, Google and Twitter and others
Speaker 1: all have those same issues, and they, at least for now,
Speaker 1: haven't had to tackle those. Sure O, thank you very
Speaker 1: much for being with us our Bloomberg Gadfly columnists for
Speaker 1: all things technology, great columns on Facebook and great coverage
Speaker 1: of Facebook. And of course we're always following you on
Speaker 1: Twitter at shira Ovi Tape. Thanks for listening to the
Speaker 1: Bloomberg P and L podcast. You can subscribe and listen
Speaker 1: to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform
Speaker 1: you prefer. I'm pim Fox. I'm on Twitter at pim Fox.
Speaker 1: I'm on Twitter at Lisa Abramo. It's one before the podcast.
Speaker 1: You can always catch us worldwide on Bloomberg Radio