Arrangement underway for the white house, who directed the National Security team to maintain a high state of diligence. It will be coverage of the inauguration at 10 00 a. M. Eastern. Caroline coming up, the chipmaker in the crosshairs. We break down the case against qualcomm as the fight over licensing heads to the court. . D will snap open up the secrecy under the spotlight, and affairs to go public. In the tangled web, Succession Plan with several companies in total disarray. Colonel charges from j wiley. And first to the lead, a bloomberg skip, u. S. Regulators filing against qualcomm for using unfair practices. Digging into the details, the federal trade Commission Said they force apple to exclusively use it facetime in return for lowering the rate charged. The World Biggest maker of semiconductors was under investigation by the fcc. A major fine was possible. Swift on the news. Shares tumbling 5. 6 at one point, down 4 , 4 billion wiped off the capitalization. Now we have cory johnson, Bloomberg Technology who broke this story. The new piece of information in is the apple claims that seem to be here. The fact that this is slightly competition. Cory what is the bombshell today. We have had general accusations, obscure accusations, but this is like specifically saying no, qualcomm, you used your position to basically force apple to take your chips, and that was competition. Caroline this is an ongoing scene. South korea last month seem to be fighting to the tune of less than 1 billion. Cory it hits at the heart of the Business Model for qualcomm. Part of this is inventing chips they think are great, then making licenses for people to install those chips. They gained influence by having a standard written specifically for qualcomm chips. This does get to the heart of the model, the relationships they have with companies they dont, and there is no one bigger than apple. Caroline it is a special model that qualcomm has actually developed here. How much can i fight this in the court . Ian the record is also flawless. They never lose. It sounds, when you look at the headlines and trouble they have had over the years, they have only ever lost one case against qualcomm five or six years ago. Everything else gets here after year, they do a deal to pick up on what cory said, what the license, the fundamentals are going to do, what happened with the chips and chip design, that is another bit of it. What today has tried to establish for the first time is a link between those two things. That is the biggest threat to their business so far. Caroline if we are thinking of losers and winners here, the thought that maybe they do end up being thought as guilty, rather it might seem to occur, who does help . Do shop smartphones get cheaper . Cory if phone makers to shop around for the chips that is one of the most fundamental components of the phone. If they can shop around, there would be lower prices. Were the vendors, was apple or samsung, able to go out and find the safest chips for connecting their phones to the network, or were they compelled to go to qualcomm because of other power it has in the marketplace . Caroline who is doing the talking . Is apple or executives there coming to the fcc saying we have been hard done by . 25 if you read around page of the filing, there is a lot of specifics about agreements between the companies, deals that were signed, renegotiated, resigned. Hard to imagine that came to the fcc and that they didnt get that information from somewhere. Cory an apple has everything to gain here. Apple would like to play the providers against each other. They are unable to do that according to this component. Caroline so do we see any share reaction . Ian intel revenues last year managed to get slowly ordered. We take those away from qualcomm from the first time in the history of cory in the apple phones. Ian can the apple phones. A lot of beneficiaries there. They have just faded away. Caroline give us a timeframe here, something they are talking about over the course of weeks or years . Ian years. You have to think it is a court case. It will not just endure, go to court. You have all of what that entails. Qualcomm cannot afford to let us go. They will have to appeal this as far as they possibly can. Youline cory, are surprised we did not see more than 4 billion . Cory the other aspect is, it was friday. We have another administration in. This is a democratically controlled fcc. That will change on friday. The result will be to members, which is very explosive, by statute five members, and the party that controls the white house will be able to control that organization with three members there. So that is one of the reasons you saw this happen today, because they want to get it done. You saw a strenuous response from the republicans. She very unusually published her complaints, setting the groundwork for how the fcc would look as early as next week. Caroline the battle continues and commences. Thank you, great to have you back in the house. Later in the hour, we had to the World Economic forum in davos, switzerland. We talk about what a new president means for the company. Deutsche bank has reached a final settlement with the u. S. Justice department over the handling of mortgagebacked securities leading up to the crisis. They agreed to pay 7. 2 million. That is according to the doj. We spoke with the person at deutsche bank. He stressed Technology Going forward. Up placing we end our best technology. We are not sure of the fundamental product of nature products will change much. We dont think the demands of our clients will change too much. That will help us protect ourselves and the new technology to improve our controls. Caroline how will snapchats Parent Company transition to a Public Company . We will look at road ahead. And a reminder that all episodes of Bloomberg Technology are Live Streaming on twitter. Check us out at 5 00 in new york , 2 00 in San Francisco. Caroline a story that we are watching, apple is raising App Store Prices in the u. K. As much as 25 . The plunge in the pound for the new brexit vote. He will now cost 99 pence. Raised the already price of half a product, occluding the iphone. Including the iphone. Snapchatted last week, is going to london despite the brexit concerns. They are gearing up for an ipo, and snapchats secretive culture is now coming into focus. The ceo convinces investors of the potential. They have been reluctant to release details not required to do cold. Joining us is alex. And in San Francisco, sarah. Is this an interesting turn of events . If you are an investor getting into the snap ipo, it is hard to details that is legally necessary. Sarah that will be one of the linchpins for this offering Going Forward, their secretive company, and they are really young. Youll recall right now they are confidentially. Some people have been able to get their hands on this. Until we see the actual s1, we will not have that public. We dont have the Balance Sheet or things like that. It all pays into the really close to the vest culture that evan siegal has maintained. When you look at this offering, it is a social media company, the last one to go out was twitter. There was kind of an overhang, because twitter did not lay out a huge strategy when it went public. I kind of came back to bite them later. That kind of game back to bite them later. When they hold onto this stock, they will need more strategy wise than what evan is usually willing to give out. Caroline sarah, this is some that you have been running up against for years. Evan siegel on background reporters and notably, not even doubled holding much to his own team. Sarah being an employee for snapchat is like being someone in terms of what you get to know. Employees dont get a heads up on what products people are working on. They dont get to use their phones at the new years party. Little things. The offices are not incorporate in corporate places like google. They are scattered around various office buildings. There are no offhand meetings like are the staple of startup culture here. So a lot of people are kind of in the dark with snapchat about where the company is heading. Evan siegal will have to tell investors on the roadshow not just about where the company has been, but where it is heading. Like alex said, this is the time to explain the longterm vision for what snap is and can be. Caroline certainly, alex, investors will need some soothing if they cant get much control of the overall company. Maybe evan siegal is copying mark zuckerberg. Alex it is a lot of trust in that have to be put into evan spiegel. And what we are talking to, he is a visionary ceo. Trust him, he has won the millennial cohort over now. They will have to with this kind , evaniated Employee Base is the guy who is in control. He is the one who sees the full picture of what is going on, and is a big cap. App. They also have to control the information flow. We have seen that come out in the ideal progress itself. Ipo process itself. Eas if it keeps leaking. A lot of owners is going on evan onus is going on evan. After the mishaps with the very big founder led companies, it is a big task to ask of investors. It is the First Tech Company in a long time, but the longterm investors you really want to buy into these public offerings, they are the ones they need to convince this is a company to buy into, not for the ipo or the next year but the next five to 10 years. To do that, they have to get on spiegel. Caroline what are you hearing about how well the culture change goes with evan spiegel . Does he really understand what it is like being public . Sarah the nature of how the company is run so far, probably give as Little Information as we can. For evan, what is it worth it to on whatxpound more steps is going to plan to do, given like you mentioned earlier the threat from facebook . Facebook has copied snapchat over and over. The instagram product, the story product named after the snapchats stories. They already have 150 billion daily users, the same number of people snapchat gets for its global audience. There is some product secrecy and Business Vision secrecy, right, but even when we talk to people who know the kind of information he is giving investors, the bare minimum, they dont let people into the full jon lester they have to. Theyto the fold unless have to. So some companies have been trying to spread the message as best they can, but until we see the s1, the roadshow, it is very unclear where this company will guide us for a long term. Anyone can give us the information if you can. Thank you very much for your time. Now on wednesday, Federal Reserve chair janet yellen will appear right here in San Francisco to talk about monetary policy. Bloombergs monetary coverage begins at 12 00 p. M. Pacific caroline prints media may be undergoing upheaval, but the ceo credits on your event unpredictable new events with this. He spoke from us in denver, switzerland. , switzerland. Instability in europe, a wildcard, it should be a great year for news. When we think about the new business, Raw Materials we make money out of, it will be plenty to run. Caroline thompson went on to say they have not given final numbers for the last quarter, to numbersbscribed they have never seen before. Companies worldwide are trying to prove u. S. Job creation to president elect trump. Now they are seeing repercussions at home. One is foxconn the largest they are trying to assure china they will not pull capital out of the country. They have about one million workers in china. The interest of potential u. S. Expansion after the ceo wanted to invest 50 billion in the u. S. To create 50 billion jobs. We are lucky to have this man right here in San Francisco. You just put out a story about this. How much did foxconn promise . Not at all. This is the funny thing about it. Were heook at the words met with donald trump, they never promised to invest any more money in the u. S. They merely said they will look into it, and they are looking at the possibility of maybe investing in the euros in the u. S. The ceo is not committing or over committing, but he is willing to let the u. S. Administration, the trump administration, believe they will. Foxconn will want incentives. They built out their whole factory and Manufacturing Base in china on the back of incentives. Wherever they go, they want tax breaks, cheap land, cheap power, supply of labor and all those things. Difficult in the u. S. If donald trump and tim cook one that, they will do it. Want that, they will do it. If they stay in china, they are promising what he has been promising anyway. There is not a lot of change there. Caroline it depends on how crucial foxconn is to china. With 7 million workers, they have a capsule in the mainland. More than 75 billion have been noncash accept. Assets. 75 of their, assets are in china. One million workers. They are very important for china economy. They are actually the largest exporter out of china in terms of commodities or actual fiscal products. There is a lot of companies in china, but it is such a large company, they are crucial not just to china alone but very specific areas in china. Caroline kind of interesting they seem to be playing trump here in the way you will see slew of people come work year. But he had them over here to try to give some sort of hope to donald trump. How much hope on the ground, our people worried about the president elect or Chinese Companies . Tim there is the idea of a trade war, and the u. S. Wont win. But there is also a concern that china retaliates, china may make it difficult to import into china. Look at apple. China is an report Growth Market for everybody. The u. S. Has to decide how that will work. What is interesting is jack ma and others are friends. They talk a lot. They are probably talking about the strategy for dealing with president elect donald trump and his policies that give importance to those countries to bring them together. The u. S. To be big, but dont bet too much on it. Shouldf these promises be taken with a grain of salt, because lots of big numbers are coming out that you need to drill down into the reality of those numbers and whether they will play out. Caroline it is great to have you here for the week. It is great digging into the story. I urge people to go look at the gadfly. Thank you for joining us. The door is revolving at a few major tech companies. Former microsoft ceo as president chief operating officer. He will be overseeing a new phase of growth to the chinese search giant. Main focus has been artificial intelligence. Mattel is reaching outside the toy industry. The president and ceo meeting with others. Says the of appointment is effective february 8. Sinclair, a board member, will stay on as executive chairman. Get another revolving door, one of Silicon Valleys biggest players may be looking for a new job. He has been a voter for donald trump. This is according to a report from politico. Still to come, we had back to the governing governing data most. Davos. We talk about the Incoming Trump administration. This is bloomberg. You are watching Bloomberg Technology. Lets get to your first word news. Eu exitg to start talks, and it says britain may e. U. To free itself from governance and to stop paying into its coffers. The fbi has arrested the wife of the killer in the orlando and a club shooting. She is charged with obstructing the investigation and providing material support. Her husband, omar mateen, killed 49 people in a popular gay nightclub. Turkey has arrested the gunman who killed 39 people on new years eve. The suspect is described as an Islamic State militant who was captured in istanbul, where authorities also found almost 200,000 in cash. Military has confirmed one of its strategists mistakenly bombed refugee and eight camps. Camps, and some of them included doctors without borders. And a volcano has been spewing into the sky. They have been watching it after placing it on watch in june. News 24 hours a day powered by more than 26 hundred journalists and analysts in more than 120 countries. I am haidi. The dollar was falling after down. Talk it lets go over to paul. Paul, good morning. Paul good morning. It has been open for about 90 minutes, and it is flat right now, which is not so bad, considering the implications of a hard it a hard brexit weighing on the market. A couple of stocks worth watching at the open, bhp billiton, after a minister said may be operational again, and west farmers has an earnings update. They are expected to bring in 135 million and one hundred 40 million on stronger than expected production after a coal prices. At in south korea, a Company Investing in the u. S. Over the next five years. That is some of what we are watching in the asian pacific. Sydney, i am paul. This is Bloomberg Technology. I am caroline hyde. With a matter of the u. S. Antitrust division filing against a company, a lawsuit saying qualcomm forced apple to use its processes. This was in return for lowering it charged. Royalty taking a look at reaction, shares plunging dramatically in the session, closing down about 4 . That was 4 billion dollars that was wiped off in terms of market cap. We met up with erik schatzker. How they are reconciling the Incoming Administration. Democrats and republicans, but we are all americans, and we win. To the admin is ration in democracy, there are differing points of view. We want more jobs. We want great trade agreements. We were really happy when the about ourtweeted satellite system. When there is alignment, we will work hard together, and when there is disagreement, we will also express our point of view. Reporter what do you disagree on right now . Paul i would say immigration. I would not say that we know enough to say that we disagree, but i think that the American Dream and the notion of the melting pot has caused the best and the brightest to come to the united days and give us innovation, and i think that is an advantage for the company, so that is one that i single out. Reporter anything that president elect donald trump has personallyffects you or otherwise . Call no one wants to have a trade war. For example, in china, where we have sort of gotten through our difficulties there, were trying to be a liaison, helping the situation, helping promote understanding, so i think that is an opportunity for us. Yourter to the degree that can do that, who do you reach out to in the Incoming Administration to help give qualcomm a voice . I think there are a lot. It is a broad range of people, the Transition Team in the new administration, but you look at us as democrats, but we have plenty of republicans in well, and the senior team is pretty well mixed. There are relationships there. We have been working for a very long time. Are happy to see the foes focus on innovation and the focus on intellectual property and these sorts of things. Reporter is the industry well represented with peter thiel . Necessarily not Silicon Valley represented. There were some concerns. From many people in the tech community. Personally, i do not have a relationship with peter thiel. I certainly see him at conferences, but it is good to have someone on the inside who understands tech. He was talking about no innovation in smartphones. What do you think . Paul i disagree. We have the gigabit coming down to your pocket and Virtual Reality, and you do not have to have extra stuff around. It uses the camera, and you can walk around and use Virtual Reality right away. Reporter so what would have motivated him to say that if you say you can walk around like that in your pocket . Paul whether they are not,ating as fast or people like to handicap this. Well, this is happening, this is not happening, but what is going on behind the scenes is there is a lot of technology being created, and 5g is an example. They will be ready for missioncritical applications, like health care, automotive. They will be ready for the internet of things applications, industrial uses, and we are interested in agricultural uses. Of the rural parts world, can they have tags on all of their cows so they know where they are wondering off to . Reporter what about the biggest ever semiconductor acquisition, with the regulatory pressure you are still under in a number of localities around the world . Paul so we think that is a very complementary thing. A lot of synergies. Get concernedple from a regulatory standpoint, and there is also concern if you are getting too vertical or getting into a market and having too big of a stick, but i think this is complementary. Reporter if asked, would you be willing to spend off the manufacturing facilities . Our first is not thought. I am not sure why someone would ask us to do that, but we will listen to what the regulators have to say, for sure. Pretty profitable. They have been depreciated. So we are happy about those. Caroline that was the qualcomm chairman speaking with erik schatzker. Now, another store we are watching. The Facebook Ceo Mark Zuckerberg in court to defend them against allegations that oculus stole the technology. Along with Key International intellectual property. They completed their acquisition with full awareness that their tech was misappropriated, it alleges. This could be at the forefront of the Virtual Reality boom. Coming up, a rightwing scandal shaking up the power structure in samsung with a massive investigation. Next. And a quick programming note. With all due respect will be taking a look at the key issues facing the Incoming Trump administration at 9 00 p. M. Eastern, 6 p. M. Western. And we have more beginning at 10 00 a. M. Eastern and 3 p. M. In london. This is bloomberg. A value of 1 billion after the latest funding round, money invested in a series d zoom. G round for samsung is facing some serious challenges within its ranks. A monthlong investigation into the board member and heir apparent jay y. Lee, who may be arrested to two allegations of bribery. Peter joins us live from tokyo. Fascinating. Of jay y. He arrest mean for would it samsung and its leadership . Peter the special prosecutor was set up to investigate the broader scandal that has been brewing in south korea for months now. Has been park impeached, and investigators are looking at how the Biggest Companies in korea were paying money to a confidant of parks and what they were getting in return, and they have honed in on samsung. They are looking at tens of millions of dollars given to theyfriend of parks, and were checking into allegations that samsung paid this money, including one billion won for a horse for the friends daughter, with a very important Succession Plan at the company. Caroline if that is thrown off track, who can step in . Family members . Peter these are early things. Samsung has denied the allegations. They say this money was not given for any influence. Instead, they say it was for sports activities. Jay y. Lee took over the job, lee kunhee, and he is not y. Lee, if able to take the job, there are in Samsung Electronics who are trusted. One or two of them could be considered if jay y. Lee is not able to fill the duties street he also has a daughter who runs the hotel chain for samsung. To fill the duties. He also has a daughter who runs the hotel chain for samsung. And then there is a son who could take on the duties if not the daughter. These things are being discussed in april in an area fashion. And thencaroline seeing those incarcerated working, to actually retain some control when in jail. He did, indeed, and up in jail, could he still run the company . Peter that is right. I think to western ears, we see Something Like this, a prosecution, a criminal prosecution, which sounds so serious in the case of korea, this is something that has actually happened a number of times before. At least five big leaders have been convicted in the past. They have been convicted, and they came back to their companies. It does not mean that they would be disqualified in the long term. That certainly would not be the case for jay y. Lee, who has not been prosecuted yet, but there are situations were they have gone into jail and continued to run their companies from jail, so that is the dynamic in korea. Caroline and the father, the father of jay y. Lee, was convicted himself of criminal activities. Peter that is right. That is right. He was convicted early on and pardoned by the president , and he came back to run the samsung group. Similar kinds of allegations of bribery and the like, so in the case of jay y. Early. Ain, it is samsung has denied that there was any kind of ill intention with these. Investigation continues caroline peter, from tokyo, thank you. Coming up, the facebook head of european operations, and targeting in 2017. This is bloomberg. Some breaking news for you. As we said earlier, qualcomm being sued by the ftc, with allegations pertaining to licensing. They say it was based on misconceptions, and they said they had responded in a statement, saying u. S. Regulators are, in fact, wrong. Meanwhile, facebook has just revealed a massive survey. The social media giant unveiled the organization of economic coordination and development. There is the Vice President , nicola mendelsohn, who talked about the takeaways of the survey. Where the business is right now, what is interesting is the outlook for six months on. Much more confident. Anyone can go to the survey and take a look at Different Countries and how they are feeling. One of the things that stuck out to me when i was looking at it is that the uks Small Businesses were feeling much more confident than the rest of europe. To look when we start further into the survey, you can see that businesses are really more likely to be working internationally, to be selling around the world. That is Something Different with the mobile technology. You know, when i was growing up, my parents had a small business, and my grandparents had a small business. Only sell in the geographical vicinity of the areas they were in. But now, with customers, you can actually sell anywhere in the also, and the survey looked at the challenges businesses are facing in that respect. Caroline what about the postbrexit vote, the election of donald trump . Did you see that coming to the the u. K. And other businesses . businesses in the u. K. Are feeling very confident. One of the things that struck me is how women and how female Business Owners are feeling at the moment when it comes to their businesses and their outlooks, as well, and actually, a lot of that is really contrary haveat we might conventional wisdom say. Businesses that maybe market online, we might not necessarily think that they are being run by women, but, actually, what this is telling us is that women are actually using online tools to market their business and to grow their business more so than men, and why that matters, why that is important, they are the businesses more likely to be trading internationally, and crucially, they are the businesses looking to get to more people in the nottoodistant future, so a very strong correlation and the digital economy. Caroline and what is the role of facebook rolling forward . Caroline and what is the role of facebook Going Forward . Want to bese you much more enterprise focused . Nicola we take our responsibility with the way we work with our partners around the world very seriously. Where that came from was different organizations coming to us and saying to us, tell us about how you run facebook as a business, and the way we run facebook as a business, we use messengers, to connect around the world and to work in an efficient way around the world, so that is where it came from. It came from partners saying, tell us what you do, and now we have companies around the world who are using this as a way of bridging the gap from the ceo to the person on the factory floor, and we have seen abuses of all sizes. Nt sizes is it can allow really great efficiency between the ceo and the different people within the organization. Caroline i like how you mentioned responsibility there. You talked about your responsibility to your partners. The responsibility of facebook, particular when it is postu. S. Assuring it does not allow echo chambers to build and that it can fight back against terrorist data or pictures or video and, indeed, some of the fake news. Can you tell us a little bit about what you think the responsibility of facebook is now in 2017 . We do take our responsibility in this area very seriously. It is something that matters to us. People can, and connect to the things that matter to them, and if it is on the issue of a hoax or Something Like that, we have talked a lot recently about the things we are doing to address that issue, and one of the things that we are doing is making it simpler for people if they see something out there that they think it is a piece of information that is not right or a hoax, they can report it. Looking at parties around the world to do fact checks, so it is something that we are working on and are aware of, and we do take responsibility. Facebookshat was nicola mendelsohn. Remaking the media landscape, but it comes at a cost, particularly as competition heats up at amazon. More on netflix ahead of the earnings, and the numbers do not lie. The third quarter, netflix added 3. 5 million streaming customers in total, topping estimates domestically and internationally. The company has 39 million more customers around the world on top of the u. S. Customers. It was just 16 a few years ago, a huge difference. You can see the growth rate. That is the international line, outpacing the more mature u. S. Market, which is the white line. There is a 50 50 revenue split. An overseas expansion, netflix owns global rights to most of the content. And there are the originals that were telecast last year, 1 5 were on streaming services, such as netflix. That is a much bigger piece of the pie from just five years ago. Of course, this original content comes with a higher price tag than reruns. Costs haveent doubled, topping 5 billion in 2016. Whatever happens with the results, netflix will definitely be a stop to watch. On average, the stock price has moved in 15 in either direction after each of its quarterly reports in the last seven years. We will see if netflix can keep that subscriber growth going. The report after the closing bell on wednesday. Caroline that does it for this edition of Bloomberg Technology. We have more great voices coming out of davos, with a representative from paypal joining the program. Live streaming on twitter, check us out weekdays at 5 00 p. M. In new york and 2 00 p. M. In San Francisco. That is all for now. This is bloomberg. Announcer from our studios in new york city, this is charlie rose. We begin this evening with a look at president elect Donald Trumps plans. In an interview this weekend with washington post, he said he was almost done with his plan Affordable Care act. They held both on repealing the law. In the interview, trump said his plans goal was to provide insurance for everyone and to negotiate directly on medicare and prices