Speaker 1: From Mahart. We're Innovation of Money and Power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Heinder, Bluemog's World TAD quarters in New York.
Speaker 3: Ed Ludlow, who's on assignment in some valley.
Speaker 4: This is Bloomberg Technology. Coming up.
Speaker 3: We'll bring you the latest on microsoft sixty nine billion
Speaker 3: dollar deal for Activision as.
Speaker 4: As companies they get a new shot at winning over
Speaker 4: the UK on the acquisition.
Speaker 3: Plus, we'll speak to one analyst who says metas threads
Speaker 3: look at add what eight billion dollars in revenue per
Speaker 3: year in the next couple of years. We'll discuss and
Speaker 3: the big four accounting firm KPMG and partners with Microsoft
Speaker 3: for a multi billion dollar partnership to incorporate you guessed
Speaker 3: it during to of AI into its business. We sit
Speaker 3: down with the KPMG CEO, Paul club Over. In the UK,
Speaker 3: the Antitrust Watchdog has said that a new merger investigation
Speaker 3: into Microsoft's sixty nine million Activision deal when it may
Speaker 3: be needed if the duo restructure their deal to try
Speaker 3: and reverse that previous UK veto for more. Let's bring
Speaker 3: in bloombergs Ley and Nylan, who's just been all across
Speaker 3: the competition analysis of this deal, And I mean, is
Speaker 3: this a good thing to go back to square one.
Speaker 5: In this case? It actually is. So the UK had
Speaker 5: vetoed Microsoft and Activision before effectively blocking the deal, but
Speaker 5: after yesterday when a US court said the deal can
Speaker 5: move forward, the UK sort of agreed to give it
Speaker 5: a second look, which is pretty unheard of. But in
Speaker 5: order to do that, they said Microsoft and Activision need
Speaker 5: to restructure it a little, so they're not looking at
Speaker 5: exactly the same thing. So Microsoft and Activision are going
Speaker 5: to make an offer to the UK and sort of
Speaker 5: restart negotiations over whether they might approve their deal.
Speaker 3: But in many ways people have sort of said that
Speaker 3: the FTC and I'VE regulators have got a bit of
Speaker 3: a win on their hands already because they have force
Speaker 3: changes to the way in which well competitors might be
Speaker 3: able to access the games eventually owned by Microsoft, called
Speaker 3: a duty being the key one. What are the ways
Speaker 3: could they alleviate any anxiety around a lack of competition?
Speaker 5: Yeah, so this is one of the things that the
Speaker 5: judge here in the US made a big point of
Speaker 5: is that the regulators had already won a little bit
Speaker 5: by getting Microsoft to offer these ten year deals to
Speaker 5: a lot of its rivals. So those deals they have
Speaker 5: with like Nintendo and Valve, the PC gaming company, and
Speaker 5: they've also offered them to some of the people who
Speaker 5: do streaming streaming games as well. But the thing about
Speaker 5: the UKCMA is they really hate what they call behavioral remedies.
Speaker 5: So like when a company is just offering to do
Speaker 5: something like a ten year contract, they want something what
Speaker 5: they call structural, So they want Microsoft or Activision to
Speaker 5: actually offer to sell something off. So Microsoft and Activision
Speaker 5: are now sort of in the position of trying to
Speaker 5: decide what it is that they might be willing to
Speaker 5: sort of, you know, cleave off from their main deal
Speaker 5: in order to sort of play kate UK regulators overall.
Speaker 3: Does this feel once again that kind of big text
Speaker 3: almost winning here in terms of getting these deals through.
Speaker 5: That's a good question. I mean, the FTC is expected
Speaker 5: to appeal as soon as this afternoon, so it's not
Speaker 5: technically over here in the US, but yeah, I mean,
Speaker 5: the antitrust laws are definitely not really able to take
Speaker 5: on the tech stuff. You know, we already had the
Speaker 5: FTC losing earlier this year in the Meta within case.
Speaker 5: Although the difference with the UK is, you know, they
Speaker 5: have a little bit of a better law, it's a
Speaker 5: little bit harder to appeal, So you had them blocking
Speaker 5: Meta Giffee. So Meta is now actually going to have
Speaker 5: to spin off Giffee, even though the CMA was the
Speaker 5: only place in the world that had to pose that deal.
Speaker 3: Interesting this backward look at some of these big Dealslea
Speaker 3: and Ilan, thank you so much for bringing it to us.
Speaker 3: And interestingly we go to dig into Meta in particular.
Speaker 3: We just finished that conversation earlier on Meta. Let's dig
Speaker 3: into that company in particular, because we have been all
Speaker 3: over Threads.
Speaker 4: Of course, more than one hundred million people signing up.
Speaker 4: I'm sure plenty more than that now and.
Speaker 3: It is sort of for many becoming a Twitter alternative
Speaker 3: and add on and over the next couple of years,
Speaker 3: one analyst sees that Threads can reach close to two
Speaker 3: hundred million daily active users and generate well about eight
Speaker 3: billion dollars in an annual revenue. Joining us now is
Speaker 3: that analyst Mart Mahoney ever caught II Sceenior Managing Director.
Speaker 3: You've now form rating on Meta three hund and fifty
Speaker 3: dollars price target.
Speaker 4: Interestingly, it's no longer your number.
Speaker 3: One top pick because of the rampant, rapid rise in
Speaker 3: the share price that we have seen on the back
Speaker 3: of this year.
Speaker 4: Really, but mark the threads.
Speaker 3: Eight billion sounds like a lot, but it's not compared
Speaker 3: to the annual revenue in total.
Speaker 6: Yes, well all there.
Speaker 2: I agree with Carolina, like where you are set it up?
Speaker 2: Could they get the eight billion in revenue? One of
Speaker 2: the biggest, the easiest part of their math, if you will,
Speaker 2: is the revenue that they could get per user. On Twitter,
Speaker 2: as a documented history, they were generating about twenty dollars
Speaker 2: in ad revenue per user Meta. Facebook also has a
Speaker 2: documented history here they've been able to generate monetization levels
Speaker 2: two to three x that of Twitter. And I don't
Speaker 2: think it's because they spam ads all over the user.
Speaker 6: Interface a little. Maybe they do a little of that.
Speaker 2: It's because they are much better at targeting and matching
Speaker 2: advertisers with users. They are able to find relevant audiences
Speaker 2: for advertisers and marketers can put relevant ads against and
Speaker 2: they're able to track.
Speaker 6: The performance of those.
Speaker 2: That's why you've got almost ten million advertisers that are
Speaker 2: on There's a lot of these are small businesses obviously.
Speaker 6: That are on Meta.
Speaker 2: So yeah, they'll be able to better monetize if they
Speaker 2: get the users. The question is whether they will or
Speaker 2: not be at one hundred million ramp is outstanding.
Speaker 4: When do you think we might see that switched on?
Speaker 3: We know Mark Zuckerberg himself and we've heard from Amasara
Speaker 3: as well saying, look, we're not going to think about
Speaker 3: putting the advertising out there until we have a line
Speaker 3: of sight on a billion users. Do you think that's
Speaker 3: really what they're going to.
Speaker 6: Be I take him at their word on that.
Speaker 2: Since these numbers that we're talking about, even that eight billion,
Speaker 2: I know that sounds like a big number.
Speaker 6: That's only kind of a mid single digit percent.
Speaker 2: Impact FREMDA, So it's not like they need the ad
Speaker 2: revenue near term. In fact, I think the absolute genius
Speaker 2: strategy here would be show no ads, you know, like,
Speaker 2: bring more and more users onto Threads and what the
Speaker 2: Threads experience has got to improve dramatically. I assume it will.
Speaker 2: I assume they'll be easier for us to use it.
Speaker 2: For the great things that we've used Twitter for in
Speaker 2: the past. When Uber cfo the news came out that
Speaker 2: he may be resigning. If you go to Twitter, if
Speaker 2: you'd gone to Twitter, you would have found plenty of
Speaker 2: relevant news articles about it.
Speaker 6: If you've gone the threads, you wouldn't have.
Speaker 2: Seen anything like there's that real time news element that's
Speaker 2: really great magical about Twitter. So there's some of that
Speaker 2: that needs to be built at threads. When I just
Speaker 2: find interesting to set up here for meta is I
Speaker 2: think Twitter as an asset has been fundamentally underinvested in
Speaker 2: for a couple of years, not just since Musk took
Speaker 2: over the company, but for a couple of years, both
Speaker 2: on the advertiser side and on the user side. That
Speaker 2: created the opportunity for Threads that can just bring in
Speaker 2: so many new users from its existing database.
Speaker 6: It's existing user base, it one and a half billion users.
Speaker 4: Well, the race is now on.
Speaker 3: Therefore, and it feels as though Twitter has been making
Speaker 3: changes in terms of brand safety to a large extent,
Speaker 3: and at the same time they've got this sort of
Speaker 3: window before meta does turn on the advertising switch. To
Speaker 3: an extent, how much do you think you know Twitter
Speaker 3: is so embedded as our lifestyle and our use case.
Speaker 3: Can Threads really keep the site gest going.
Speaker 1: Well?
Speaker 6: I guess we should if we.
Speaker 2: I think the sober assessment is we should assume that
Speaker 2: Twitter will be the leading real time news public town
Speaker 2: square communications platform for the next five to ten years.
Speaker 2: They probably will maintain that leading position. But it's so
Speaker 2: interesting that there's this opening created, so it is possible
Speaker 2: that Threads they can come up with a better product.
Speaker 2: It's not better than the Twitter now, but could.
Speaker 6: They make one that's better. They certainly have the potential
Speaker 6: to do that.
Speaker 2: They've got the engineering talent to do that, and they
Speaker 2: can certainly bring in a lot more users.
Speaker 6: And there's a.
Speaker 2: Couple of really simple things that they've done. I mean,
Speaker 2: you think about the challenges that Twitter has had. It's
Speaker 2: onboarding challenge for a lot of people is real, like
Speaker 2: what do I get out of Twitter? It just seems
Speaker 2: like a delusion of information? How do I find something useful?
Speaker 2: I think Threads has made it easy for people to
Speaker 2: come in to find followers and to find people to follow,
Speaker 2: either friends, people that they know, and then and they've
Speaker 2: done it in a way that maybe seems more I
Speaker 2: don't know, user friendly, that's less caustic as an environment.
Speaker 2: That's something that still needs to be addressed on Twitter.
Speaker 2: It's been a long standing battle on Twitter how to
Speaker 2: get some of that uncivil commentary off the site.
Speaker 6: So there's a real opportunity here for threads. That's what
Speaker 6: I'm more intrigued by.
Speaker 2: It's all potential, But these one hundred million users in
Speaker 2: less than a week, we've never seen that before.
Speaker 3: Mark here we have a conversation about competition being added
Speaker 3: for many, it's a worry about competition being taken away.
Speaker 3: I'm thinking of Meta is I think in a closed
Speaker 3: room tomorrow and the EU having to try and vindicate
Speaker 3: marketplace in particular, and how they haven't reduced unfairly competition there.
Speaker 3: How much is regulation aheadwind to all of the big
Speaker 3: tech names right now?
Speaker 2: It's going to be a constant presence, constant headwind going forwards.
Speaker 2: If I simplify all this, Caroline, I think about three
Speaker 2: types of regulation. There's kind of monopoly power regulation, privacy,
Speaker 2: and then.
Speaker 6: Third is kind of social health kind of sort of regulation.
Speaker 2: When it comes to Meta, there's no monopoly regulatory risk.
Speaker 2: I mean, if there was a real if there really
Speaker 2: was a monopolistic power at Facebook, you never would have
Speaker 2: had TikTok. We obviously had TikTok, so that if there's
Speaker 2: a new social media there's nothing to stop people from
Speaker 2: creating a new social media outlet and.
Speaker 6: For driving traffic there if they have a really good service.
Speaker 2: TikTok prove that the other issues are more serious, the
Speaker 2: privacy issues. But I think Facebook has kind of come around,
Speaker 2: it's relatively reasonably address that.
Speaker 6: And the social health impact of Facebook that's waxed. And
Speaker 6: when I think we had a point where we over.
Speaker 2: Dramatized, dramatize the impact of social media on social health,
Speaker 2: there are plenty of other parts of media that have
Speaker 2: positive and negative impacts on social health. So I just
Speaker 2: sort of think we've moved away from that. Maybe we've
Speaker 2: also matured a little bit how we think about those risks,
Speaker 2: So they're going to be long standing. It comes with
Speaker 2: the territory because you've just invited everybody to make a comment, and.
Speaker 6: Not all those comments are going to be good.
Speaker 4: Mam Ma Hainey have a core II analyst.
Speaker 3: We didn't even get onto your uber perspective. Your top
Speaker 3: pick interesting on the Domino's News today. We thank you
Speaker 3: so much, of course, Mart mahoney for evercre is. I meanwhile,
Speaker 3: coming up, I've got to discuss that big deal KPMG
Speaker 3: and Microsoft entering a multi year, multi billion dollar AI
Speaker 3: and cloud services agreement.
Speaker 4: We discuss the.
Speaker 3: Announcement next KPMGCO booknot And meanwhile, let's just look at
Speaker 3: what's happening with Shopify out more than a percent. But
Speaker 3: let's go to the nitty gritty. They fascinate story that
Speaker 3: this company is basically putting a price tag on time.
Speaker 3: Rolling out calculator embedded in your calendar if you're an
Speaker 3: employee there then estimates the cost of.
Speaker 4: Any meeting of three or more people.
Speaker 3: Basically, the company's new internal tool is trying to push
Speaker 3: you to be more productive take away what they project
Speaker 3: to be three hundred and twenty two thousand hours of
Speaker 3: meetings this year by basically putting a price tag on it.
Speaker 4: It's expensive, folks. This Bloomberg.
Speaker 3: Both for accounting firm KPMG has just announced a multimillion
Speaker 3: dollar commitment in Microsoft cloud and AI services over the
Speaker 3: next five years, and it's expected though to bring in
Speaker 3: more than twelve billion dollars in ALID revenue. Joining us
Speaker 3: now to discuss the partnership as Paul Knups KBMG CEO
Speaker 3: and so talk to us this commitment, but to bring
Speaker 3: more in I'm assuming this is all a productivity boost.
Speaker 1: Well, you know, you think about the velocity of change
Speaker 1: right now, Caroline, and the speed of innovation and generative AI.
Speaker 1: Many of us weren't even talking about it nine months ago,
Speaker 1: and now it's all anybody wants to talk about. It's
Speaker 1: amazing that veloci of change and speed of innovation. So
Speaker 1: to co develop solutions with Microsoft for all of our businesses, AUTIT,
Speaker 1: taxs and advisory that we can bring to market. Some
Speaker 1: of the solutions already under development and some are in
Speaker 1: nascent stages, but we're really excited about the power of
Speaker 1: that partnership or we can bring to market in the
Speaker 1: future working together with Microsoft. So we'll spend two billion,
Speaker 1: Our invest two billion over the next five years on
Speaker 1: AI and cloud, and we expect to generate about twelve
Speaker 1: billion dollars of additional revenue over the next several years
Speaker 1: through cybersecurity solutions, through cloud migration, and also through new
Speaker 1: innovative applications that use GENERAI.
Speaker 3: So with your own workforce, having the early access to
Speaker 3: Microso three sixty five copilot the Azuo Open AI service. Ultimately,
Speaker 3: will you have a competitive edge? Will others follow your lead?
Speaker 3: Will they also do deals with Microsoft?
Speaker 1: So there's no doubt they will. This is not an
Speaker 1: exclusive arrangement, and we are going to be investing in
Speaker 1: generative AI across the board, so we're looking for additional opportunities.
Speaker 1: But we think our long standing relationship with Microsoft, which
Speaker 1: dates back to two thousand and our history of working
Speaker 1: with them as a partner, even going to market with
Speaker 1: them with twenty five hundred clients as joint clients, that
Speaker 1: we have an edge in the sense that we have
Speaker 1: that long, strong history of development and we're going to
Speaker 1: idate with them the power of their technology with the
Speaker 1: power of our knowledge experience in advisory, tax auditing is
Speaker 1: a really great combination for ensuring that we can solve
Speaker 1: our clients' most complex problems that actually also help our
Speaker 1: communities in society be better.
Speaker 3: How are you selling this to your workforce because a
Speaker 3: lot of anxiety is out there that AI is going
Speaker 3: to take our jobs.
Speaker 7: Right.
Speaker 1: Well, if I look at the forty years I've been
Speaker 1: at KPMG and I think about the history of technology,
Speaker 1: I haven't seen a technology disruption. I think this is
Speaker 1: the greatest technology disruption in many decades. I haven't seen
Speaker 1: one yet that's caused a loss of workforce on a
Speaker 1: growth space. It's on a net basis. So I actually
Speaker 1: believe that workforces over time will grow with generative AI.
Speaker 1: We're going to need more people to interpret results, to
Speaker 1: co develop solutions, to develop solutions. We need more data scientists.
Speaker 1: We're going to need a lot of quality and cyber
Speaker 1: assessments of the information that the generative AI applications produce.
Speaker 1: So as I think about that history of technology disruption
Speaker 1: and what it's done to workforce, it's actually generated economic
Speaker 1: activity that should allow for us to grow our workforces
Speaker 1: in the future and actually also put some of those
Speaker 1: mundane routine tasks that people don't enjoy doing and upscale
Speaker 1: people to do more interesting, creative things.
Speaker 3: And you've been out to the executives that you work
Speaker 3: for the clients, and they seem to agree. They're also saying, look,
Speaker 3: this is actually going to add to employees, this is
Speaker 3: going to add to our productivity. That's right.
Speaker 1: So you know, we just completed surveyed recently where eighty
Speaker 1: percent of executives said that this would be a major
Speaker 1: disruption seventy five percent. It's be their top emerging technology
Speaker 1: for the next eighteen months. And there's general agreement too
Speaker 1: that was going to add headcount over time. So we
Speaker 1: feel pretty confident that it will also reduce stress because
Speaker 1: some of these mundane task again will no longer have
Speaker 1: to be done by people, and they can then provide
Speaker 1: more value added advice, do more creative things in the
Speaker 1: work environment.
Speaker 4: He as to having more exciting work. I'm excited. I'm interested.
Speaker 3: Though you've readferenced cyber and the way in which you're
Speaker 3: going to be using general to AI. There a lot
Speaker 3: of the worries, and there's been this quick adoption by
Speaker 3: companies to use open AI team with Microsoft, but they
Speaker 3: don't want their own workforce using it because they're worried
Speaker 3: about their own data and it's somehow ending up in
Speaker 3: the data tropes that are going to be in my
Speaker 3: own chat GIPT.
Speaker 4: How have you dealt with that? The privacy angle.
Speaker 1: So when we use a chat GPT version, we use
Speaker 1: it in our own secure environment, not the open source
Speaker 1: application that's out there, which provides a lot of protection.
Speaker 1: And we also really value the enterprise protection security that
Speaker 1: Microsoft brings to us. So we want to use AI responsibly,
Speaker 1: ethically and in a very secure environment. As we develop
Speaker 1: these solutions, we're going to ensure that companies have that
Speaker 1: same kind of security, governance and architecture built around their solutions.
Speaker 1: That's going to be very important for the future because
Speaker 1: there are those concerns along with concerns around data accuracy too.
Speaker 3: Well, we continue to see how that is monitored and
Speaker 3: improved on and iterated and as you say, a big
Speaker 3: disruption that we're in. Thank you so much coming on
Speaker 3: and talking about the deal. Surely is the KPMGCO.
Speaker 4: Time.
Speaker 3: Now I'm talking tech first. Up China based hackers. They've
Speaker 3: reached a series of email accounts link to government agencies
Speaker 3: in the US and Europe. Now the hackers accessed and
Speaker 3: exported unclassified Microsoft data number of accounts plaus Chip designer
Speaker 3: ARM is in talks within Vidia to join a group
Speaker 3: of potential investors to anchor its initial public offering. According
Speaker 3: to the Financial Times, now in Video, which is a
Speaker 3: long time partner of ARM, is seeming to invest in
Speaker 3: a valuation of thirty five to.
Speaker 4: Forty billion dollars as being reported.
Speaker 3: Meanwhile, in a Musk will hold an event broadcast on
Speaker 3: Twitter spaces focused on artificial intelligence, and he's invited two
Speaker 3: prominent US House warmakers, Democrat and Republican state leaders.
Speaker 4: We'll speak with.
Speaker 3: Musk for about forty five minutes tonight some pm Eastern time,
Speaker 3: mean while.
Speaker 4: Let's talk about AI a little bit.
Speaker 3: More, because today's big take how AI can make politics
Speaker 3: more dangerous, with AI holding the potential to supercharged dissemination
Speaker 3: of misinformation in political campaigns, among other things, we really
Speaker 3: want to dig into that, the highs, the lows of
Speaker 3: aiding bags emily bound for more great peace and at
Speaker 3: this moment, how we already seeing AI sort of becoming
Speaker 3: involved in campaigns already.
Speaker 7: We absolutely are. We're seeing it from the local level,
Speaker 7: the state level, and we're definitely seeing it at the
Speaker 7: federal and international level. So there have been instances of
Speaker 7: pretty convincing deep bakes, so that is pictures and videos
Speaker 7: that aren't real but look very real circulating in campaigns,
Speaker 7: you know, up and down the board.
Speaker 3: We're also, though, of course, going to sort of supercharge
Speaker 3: not only potential disinformation, but go supercharge the workers who
Speaker 3: are trying.
Speaker 4: To activate campaigns as well.
Speaker 3: How are we already see sort of productivity being top
Speaker 3: at the moment.
Speaker 8: Yeah.
Speaker 7: So for the big take piece I've published today, Laura
Speaker 7: Davison and I talked with congressional staffers, campaigns staffers, lobbyists,
Speaker 7: and politicians, So the people who make up to Washington
Speaker 7: and ask them, how are you using AI? And we
Speaker 7: found it's already being used in a really widespread way.
Speaker 7: So lobbyists are using it to create the first drafts
Speaker 7: of campaigns. Congressional staffers are using it just to get
Speaker 7: the first draft on a page of speeches. The generative
Speaker 7: AI still isn't sophisticated enough to write bills, but we're
Speaker 7: not that far off.
Speaker 3: Okay, So look, there are some positives to all of this,
Speaker 3: but Washington in and of itself is also iying AI
Speaker 3: and the regulation of AI pretty seriously. Can they tackle
Speaker 3: its own influence within their own sphere of political campaigns.
Speaker 4: Yeah.
Speaker 7: Senate Majority Leader Chuck Schumer just today said that this
Speaker 7: is going to be one of the most difficult challenges
Speaker 7: that Congress has ever faced, is trying to regulate this
Speaker 7: very complicated and nascent technology. They're right now just sort
Speaker 7: of in the talking phase. They're having briefings to get
Speaker 7: lawmakers up to speed with what AI is, how it's
Speaker 7: being used by our federal agencies, and how it's being
Speaker 7: deployed by the tech sector. So we're still very early on,
Speaker 7: but they really don't want to repeat the mistakes that
Speaker 7: they need with social media, where they were kind of
Speaker 7: asleep at the wheels. Social media grew and grew and
Speaker 7: now it's a pretty much an unregulated space.
Speaker 3: Amni Bambaum, great, big take, go read it online for
Speaker 3: I feel like enough to have a terminal.
Speaker 4: Thank you very much.
Speaker 3: Indeed, welcome back to Blue Meg Technology. I'm Caroline hid
Speaker 3: in New York. We won't we want to talk a
Speaker 3: little bit more about Microsoft and Activision Blizzard. We can
Speaker 3: start with perhaps the way in which gamers are being affected.
Speaker 3: We're worried about competition. Who are playing the games. Hispanic
Speaker 3: Black Americans are actually playing video games more than other
Speaker 3: ethnic groups might have been considered, according to an annual study.
Speaker 3: There's changes that stereotype that largely as white Americans that
Speaker 3: are the industry's most enthusiastic consumers. Joining us on this
Speaker 3: and indeed the deal more broadly for Activision and the
Speaker 3: competition out there being to Cecilia Dinestasio, We're so pleased
Speaker 3: to have you in the brit studio and first of all,
Speaker 3: debunks and myths for us who are playing these games.
Speaker 4: Who is worried? Who is anxious about how they get
Speaker 4: access to Cool of Duty?
Speaker 5: Yeah, that's a great question. So it is true.
Speaker 9: The stereotype is true that most gamers are white and men.
Speaker 9: Seventy two percent of gamers are white men. However, white
Speaker 9: Americans are not the most likely people to be playing
Speaker 9: games in the US. A new study from the Entertainment
Speaker 9: Software Association showed that Americans who are Latino, who are black,
Speaker 9: who are Asian American are significantly more likely than white
Speaker 9: Americans to be playing video games like Call of Duty.
Speaker 3: We've known that more women are playing in various whether
Speaker 3: it's on mobile or on console. Is that being reflected
Speaker 3: in the games? Is that more diversity within the characters
Speaker 3: that are being played?
Speaker 9: About half of gamers are women, that's true, and increasingly
Speaker 9: gaming companies are realizing that it's productive to their bottom
Speaker 9: line to make games that really appeal to a wider
Speaker 9: audience than traditional and so we're seeing more protagonists in
Speaker 9: triple A games.
Speaker 5: These blockbuster games who.
Speaker 9: Are women who are non white, and that's something that's
Speaker 9: been really celebrated across the gaming industry and also brought
Speaker 9: a lot of new gamers into the fold.
Speaker 3: Let's talk about whose console you might be playing and
Speaker 3: what's been so interesting as we go through the twists
Speaker 3: and in terms of the Microsoft Activision deal, is it
Speaker 3: seems as though, I say, Sony's stranglehold on consoles has
Speaker 3: in launch pop been why Microsoft's allowed to make this.
Speaker 4: Deal, right, Yeah, it's really interesting.
Speaker 9: Microsoft has argued for a long time that it's had
Speaker 9: a third place in the console wars, the so called
Speaker 9: console wars between Sony its PlayStation, Nintendo its Switch, and
Speaker 9: then Microsoft with its Xbox console. And Microsoft has been
Speaker 9: working very hard to diversify outside of just its console business,
Speaker 9: including through its PC gaming offering the Xbox App on
Speaker 9: PC and also cloud gaming, which allows people to play
Speaker 9: Microsoft's games across mobile devices, tablets.
Speaker 4: Smart TVs.
Speaker 9: And at the same time, what the FTC determined yesterday
Speaker 9: is that actually, when it comes to call of duty,
Speaker 9: Microsoft isn't really incentivized to block off the game from
Speaker 9: competitors like Sony because Microsoft actually, in a large way
Speaker 9: relies on Sony consumers PlayStation gamers to play Call of
Speaker 9: Duty with people.
Speaker 4: On Xbox, so for now, clearly in their interest. Great
Speaker 4: to have you.
Speaker 3: Thank you for breaking it all down, Cecilia Dinastasio, with
Speaker 3: all that great reporting. Meanwhile, let's stick on the deal,
Speaker 3: whether or not Microsoft is eventually going to be able
Speaker 3: to get its hands on Activision for sure. Britain's antitrust
Speaker 3: watchdog said that a new merger investigation into that sixty
Speaker 3: nine million dollar deal may be needed to reverse its
Speaker 3: previous veto joining US now for more about this, as
Speaker 3: Public Knowledge policy director and competition Charlotte Slayman, thank you
Speaker 3: so much, Charlotte for joining us. And of course you
Speaker 3: have a history of working with the FDC, you understand
Speaker 3: some of the concerns around competition. When you saw that
Speaker 3: the particularly the judge in the US in San Francisco
Speaker 3: had given the clear for now in the US at least,
Speaker 3: what did you think.
Speaker 10: It's a disappointing result for consumers. You know, once the
Speaker 10: FTC brought this case, we were really hoping that it
Speaker 10: was gonna be a win on the preliminary injunction. I
Speaker 10: do think the FTC might continue to fight the case.
Speaker 10: But this is certainly a loss.
Speaker 3: Okay, interesting and I where's many have felt that actually,
Speaker 3: even though the FDC lost in this way, they have
Speaker 3: managed to force the hand of Microsoft to make some changes,
Speaker 3: and indeed so have UK regulators. Do you think why
Speaker 3: don't you, for example, think that that's been enough.
Speaker 10: Yes, and there's also a settlement in the European Union
Speaker 10: where they're going to be giving some licenses for other
Speaker 10: cloud gaming services to be able to use Call of Duty.
Speaker 10: So that's great, that's progress, But we would still be
Speaker 10: concerned about the competitive impacts of the merger. You know,
Speaker 10: it's not just about Call of Duty. It's also about
Speaker 10: the next big game. And I'm concerned about independent gamers,
Speaker 10: independent games studios having the same opportunities to reach customers
Speaker 10: and for those gamers to have access to those games.
Speaker 10: So there are to be broader anti competitive impacts that
Speaker 10: we're concerned about, and I think Call of Duty isn't
Speaker 10: the only thing that needs to be fixed.
Speaker 3: And of course, as you mentioned, deal hasn't yet done.
Speaker 3: FTC could appeal. We also know that the UK they
Speaker 3: might have to stop from basically scratch once again, coming
Speaker 3: with different ways in which they can alleviate the previous
Speaker 3: veto to the deal. What could they do do you think, Charlotte,
Speaker 3: to alleviate some of those concerns that you have.
Speaker 10: Well, I think it would be very difficult to address
Speaker 10: this merger with behavioral remedies. With a settlement. I think
Speaker 10: that's still on the table. But you know, those settlements
Speaker 10: are often time limited. The settlement in the European Union
Speaker 10: is for ten years. Now, a lot can happen in
Speaker 10: ten years. There could be innovation and new competitors coming up.
Speaker 10: But I think about past mergers where we've seen a
Speaker 10: ten year settlement agreement and that ten years actually ends
Speaker 10: up going by really fast, and then consumers are left
Speaker 10: with a more consolidated market. So I think enforcers need
Speaker 10: to be really careful in making sure that they're only
Speaker 10: agreeing to a settlement that is really going to solve
Speaker 10: the problem.
Speaker 3: And sort of here in lies if you look at history,
Speaker 3: what the FDC is trying to do. They're almost trying
Speaker 3: to unwind the shift of this particular regulatory authority and
Speaker 3: the way in which it views deals and the way
Speaker 3: in which it views the adverse effects of polygopolies or
Speaker 3: monopolies or size and scale, because it isn't just all
Speaker 3: about consumer and prices. It's about more than that. It
Speaker 3: feels like for the current guys of the FTC, are
Speaker 3: they going about this is Lena Khan, to put it blunly,
Speaker 3: going about this the right way to take on these
Speaker 3: big deals. Try and take big hits and then be
Speaker 3: losing them.
Speaker 10: Well, of course it would be better to win, but
Speaker 10: when you take on those big hard cases, you're going
Speaker 10: to have some losses. And I think you know, we
Speaker 10: all know that that is part of it may end
Speaker 10: up being a long process. I've been really frustrated that
Speaker 10: Congress hasn't gotten more involved, because that is what we
Speaker 10: really need. These cases are showing that the law isn't
Speaker 10: where it needs to be, and so we really need
Speaker 10: Congress to be able to act. There was so much
Speaker 10: attention and excitement about antitrust in Congress last year, and
Speaker 10: it didn't come to fruition. They didn't pass any new
Speaker 10: anti trust legislation except to give more funding to the agencies.
Speaker 10: We really need stronger anti trust laws in the US
Speaker 10: to be able to have competitive markets.
Speaker 3: Some would say, but that's on Congress. Potentially in the UK.
Speaker 3: What model do you want to see what changes from
Speaker 3: a legal perspective.
Speaker 10: Yes, So, in particular with this case, it seemed like
Speaker 10: the court got tripped up on the idea of a
Speaker 10: vertical merger. So it's not a traditional horizontal merger where
Speaker 10: maybe a game studio is buying a game studio. This
Speaker 10: was a provider of consoles, subscription service and cloud gaming
Speaker 10: buying a game studio. So the court saw it as
Speaker 10: a vertical merger and talked a lot about how vertical
Speaker 10: mergers may have pro competitive benefits and are rarely stopped,
Speaker 10: But that is not the same as having a presumption
Speaker 10: in the law in favor of vertical mergers. Vertical mergers
Speaker 10: can be illegal under antitrust law, but it's clear from
Speaker 10: this judge and others that that needs to be more clear.
Speaker 10: The FTC is working right now on new merger guidelines,
Speaker 10: and I think that will be an opportunity for them
Speaker 10: to educate judges and make this more clear that vertical
Speaker 10: mergers can be really harmful. But that's also an area
Speaker 10: that Congress could help with.
Speaker 3: Could that not just be politicized though, because many would
Speaker 3: see this as a relatively Democrat heavy FTC.
Speaker 10: Well certainly there are no Republican commissioners at the FTC
Speaker 10: right now, but I think again that's on the Republicans
Speaker 10: in Congress who need to move forward with that has
Speaker 10: been a lot of bipartisan interest, especially last Congress there
Speaker 10: were multiple bipartisan bills that passed through the Judiciary Committee
Speaker 10: with bipartisan votes. So I think Republicans are also interested
Speaker 10: in antitrust enforcement. They're recognizing that that's actually how we
Speaker 10: get a free market functioning correctly.
Speaker 3: Charlotte, it's great to get your tak Thank you so much,
Speaker 3: of course your previous expertise while working there to see
Speaker 3: and now with Public Knowledge and Policy director there Charlotte Slim,
Speaker 3: thank you. Coming up, thank you, Let's discuss how American
Speaker 3: Express let's try to take on the world with the
Speaker 3: helplesome FinTechs. We're on that next with Amex's Raymond Shova.
Speaker 3: This is Blomberg. So it's been four years since an
Speaker 3: American Express claimed its cards are now accepted at just
Speaker 3: as many places as rivals Visa MasterCard right here in
Speaker 3: the US. But it's now looking to do something very
Speaker 3: similar overseas and to that, and it's been partnering with
Speaker 3: some of the world's biggest fintech companies, the latest being
Speaker 3: world Pay, which will help it sign and manage new
Speaker 3: merchants to accept American Express. More broadly, in the United Kingdom,
Speaker 3: I can Express, Group President of Global Merchant and Network Services.
Speaker 4: That's Raymond Jobar joins us now for more.
Speaker 3: Raymond, you are the man who basically goes around getting
Speaker 3: merchants to take AMEX and look, this must be a
Speaker 3: big deal to get world pay. Has this been the
Speaker 3: theme to ensure that the likes of Stripe and the
Speaker 3: likes of Square are enabling my ability to use ames
Speaker 3: in the UK not only in.
Speaker 6: The UK Caroline, but around the globe.
Speaker 8: Partnerships with third party processors and FinTechs like Square, Stripe
Speaker 8: and Addie and world Pay, they really have been helping
Speaker 8: to fuel our growth. They represent eighty percent of the
Speaker 8: merchants that we have on our network and represent twenty
Speaker 8: percent of the overall volume. But it's growing really, really
Speaker 8: rapidly and gives card members far more confidence to pull
Speaker 8: out their card at the point of sale and feel
Speaker 8: comfortable that it'll be accepted.
Speaker 3: FinTechs have really therefore managed sort of accelerate this, but
Speaker 3: there's also been on the ground getting salespeople in front
Speaker 3: of certain types of merchants to bring them round to
Speaker 3: using AMEX.
Speaker 4: How has that role gone?
Speaker 3: What kind of companies, what kind of sellers are coming
Speaker 3: to your platform?
Speaker 8: Well, what we started on this journey a number of
Speaker 8: years ago in response to our car members. Our origins
Speaker 8: are primarily around travel and entertainment, and what we recognize
Speaker 8: as our car members wanted to use their cars far
Speaker 8: more places we provide rich incentives for them to use it,
Speaker 8: and in response to that, we needed to move into
Speaker 8: everyday spend categories, a lot of smaller shops in retail.
Speaker 8: And as we started down that journey, we deployed what
Speaker 8: we call a hybrid acquiring model that means our proprietary
Speaker 8: teams signed and manage the largest merchants, let's say the
Speaker 8: twenty five percent of the merchants that represent eighty percent
Speaker 8: about eighty percent of our volume, and then we deployed partners,
Speaker 8: both traditional third party processors as well as FinTechs to
Speaker 8: go out and sign and manage that long tail. And
Speaker 8: it's been a terrific growth story. Since twenty eighteen, we've
Speaker 8: more than tripled the number of locations that are accepting
Speaker 8: American Express, and that gives card members far more confidence
Speaker 8: to pull.
Speaker 1: Out their card.
Speaker 8: And we have the desire to eliminate the question do
Speaker 8: you accept American Express.
Speaker 3: And not just well on the way to not just
Speaker 3: in luxury places which often sometimes you think of a
Speaker 3: more well lucrative, higher earner, higher spender using AMEX, but
Speaker 3: you're going to discount stores, You're going to cobblers in
Speaker 3: the UK key cutters to get them to accept Amex.
Speaker 3: And to that en, how much has data been driving us?
Speaker 3: How much has technology almost been the driver of where
Speaker 3: you go, where you put your your resources to work well.
Speaker 8: Data is one of the things that makes American Express unique.
Speaker 8: We both issue the cards, many of the cards that
Speaker 8: our card members carry, as well as we have direct
Speaker 8: relationships with merchants, and that creates a tremendous amount of data.
Speaker 8: And one of the universal truths that all businesses care
Speaker 8: about is they want to find new car, new customers.
Speaker 8: And we can use that information than the data that
Speaker 8: we have to allow merchants to market into our premium,
Speaker 8: high spending card members. And to your point, whether it's
Speaker 8: Tescos or Timson's here in the UK or many smaller
Speaker 8: merchants everyday spend categories. We want to make sure that
Speaker 8: we have coverage everywhere where our card members want to spend.
Speaker 8: But also we can help them grow by allowing us
Speaker 8: to be a very very efficient marketing channel so that
Speaker 8: they can market into our premium card member base and
Speaker 8: find new customers. And it's something we call annex offers,
Speaker 8: and it's powered by the unique and rich data that
Speaker 8: we have by being both the issuer of the cards
Speaker 8: and having those direct relationships with merchants.
Speaker 3: Why do this now, Raymond, when we're thinking about an
Speaker 3: economy that's a little bit tougher, when we're thinking about
Speaker 3: people spending in a more and different manner, How why
Speaker 3: make this drive?
Speaker 4: Why make this commitment to be more overseas in your manner?
Speaker 8: Well, two things. First, in response to our card members,
Speaker 8: our card members wanted to be able to use their
Speaker 8: card in far more places. So we started down this
Speaker 8: journey in the US, as you mentioned, to reach parity.
Speaker 8: That meant in the US ninety ninety percent of the
Speaker 8: merchants that accept credit cards now accept americanspress and internationally.
Speaker 8: We wanted to make sure we were in the places
Speaker 8: where our card members live, work and travel too, so
Speaker 8: we focus the teams on some very important international cities
Speaker 8: and we've made material progress. As I mentioned, we've more
Speaker 8: than tripled the number of locations that accept American Express
Speaker 8: since twenty eighteen, and we continue to have upside above that.
Speaker 8: And now's a great time to do it. And American
Speaker 8: Express has been around for one hundred and seventy three years.
Speaker 8: We've been through all types of cycles. We were operating
Speaker 8: in a cyclical environment and good economies of bad economies.
Speaker 8: We know we need more coverage and give our car
Speaker 8: members greater confidence to pull out their card at the
Speaker 8: point of sale.
Speaker 4: Raymond Jobell, great to have some time with you. Thank you.
Speaker 4: You get back to work in the UK.
Speaker 3: American Express Group, President of Global Merchant and Network Services.
Speaker 4: We appreciate the time