Little love for libra. And how amazon plans to take on its new highend echo speaker. We begin with that fresh facebook news. The ftc has approved a privacy settlement with the social media giant, fining facebook about 5 billion. This marks the most significant axiom yet against facebook over a series and send the company reeling from one crisis to another. I want to bring in kurt waggoner, who covers facebook for us. He joins us on the phone. In washington we have naomi, who covers corporate influence. We know about the amount of the fine, tell us more about any other Additional Details that will be coming along in the settlement . That is the key. Facebook had said i believed it was in april they set aside 3 billion for this very purpose and the fine could be up to 5 billion. This was something the company was prepared to handle. They also made 56 billion in revenue. The additional will be the details on whether or not any agreement includes something that could limit the Data Collection the company has or any of the targeting capabilities. The repose that would pose a longer problem for facebook. There was speculation there could be personal penalties for Mark Zuckerberg in particular. That has been a point of contention through this whole discussion through conversations i had with people. The facebook poll facebook folks dont want Mark Zuckerberg to be personally implicated for anything and dont believe there is a precedent for that with these kinds of settlements. The ftc, there are members of the group that really want to hold Mark Zuckerberg plus feet to the fire. That has been a bit of a point of contention route a lot of these conversations to date. By far the biggest fine from the ftc to date. You have to go back to 2012 when they find google 22. 5 million. My inbox filling up with Opposition Group saying this isnt enough, for facebook this is a slap on the wrist. Its a drop in the bucket. What is the general take on the action that the ftc had actually taken here . Just like you said, privacy groups have already come out and said a significant fine is an important tool for the ftc to use in this case. Whats more appropriate is that agency take make structural changes. They are saying this is appropriate, but its not enough. We would like to see a real meaningful action and penalties imposed on facebook. In terms of the way it handles privacy users. We are going to be waiting for more details. I know you will be trying to get them for us, whether or not there are any structural penalties facebook faces. Naomi, please stay with us. Speaking of big tech in washington, josh holly is going to war with silicon valley. The lawmaker introduced a bill that was stripped Tech Companies of the immunity they received from legal liability for user content. His idea to make big Tech Companies prove their political neutrality to maintain you maintain neutrality failed to be taken seriously. Trump praised the bill before a group of lawmakers. This is a this as the Company Continues to face criticism for conservative voices. What do you make of the ascension of josh holly. He has made the splash in washington in the tech policy world before introducing that bill, which got a lot of skepticism from conservatives who said that giving the government too much power. The Tech Companies were very wary of what josh holly has done so far. They cherish that immunity. Its how they operate, its how they get protected from lawsuits. He has definitely become controversial very quickly. Josh holly at the social media summits with the president yesterday had some very strong words. They got these special deals from the government, a special giveaway. If they want to keep their special deal here is the bargain, they have to quit discriminating against conservatives. This is a familiar argument we have been hearing for some time. Does having the president backing holly taking on this particular issue mean that anything might actually change . I dont think so. Republican lawmakers and President Donald Trump have repeatedly talked and complained about bias by Tech Companies. We have to see meaningful light dish meaningful legislation get a lot of traction. What we are seeing is a political dynamic where they are going to complain about alleged biases from Tech Companies, but not necessarily do much policy wise to address that issue. Naomi makes for us in washington. Senator holly is not the only one with a bone to pick, the social media senator also attended trump our social media summit on thursday. Among a litany of issues regarding tech regulation, blackburn is calling on snap in particular to take steps to protect younger users. She called the disappearing videos hr predators dream and says the Company Fails to provide parents with adequate warnings of adult content. I sat down with senator blackburn to discuss the antitrust debate and talk about biggest concerns over snap. There are cases where present where predators, pedophiles have been arrested, convicted, they abused snap to coerce and and snare children, threatening to put their mood their video on social media. This is something parents need to have the tool to turn this off. There need to be explicit instructions for parents how to handle this. The other thing is the snap map, application that is there. These children can be identified and their feed can be identified with their location. The third thing is the discover section. I am horrified when i look at some of the information children can get into through that feed. And with one click or one tap, what these children could be exposed to is awful. What kind of legislation specifically do you consider proposing or do you think you can accomplish to fix some of these specific issues . Yes, and yesterday we talked a bit about this. And that social Media Outlets are going to work with us on this. Privacy legislation is a big one here. May concern that individuals have the right to allow the social media platform to access the data. And needs to be explicit and the social media platforms ought not to be able to disallow use of their service. They have made billions of dollars off your data. Data is a valuable resource. As we work through this issue, im working im looking forward to working with them to be certain that we addressed the issue of privacy and Data Security, responsible usage, antitrust censorship, competition, all that needs to be reviewed so we are ready to move forward as we see five phoebe and Kerr Marshall isaiah in. He also met with a very early. Facebook employee who argued facebook should be broken up. You said the meeting was refreshing. He said this guy knows a thing or two about what is coming next for big attack. We cant just move fast and break things. Given he has argued to break up facebook, we have senator Elizabeth Warren arguing to break up several big Tech Companies. Do you think big Tech Companies need to be broken up . I think what we need to do is have a good discussion about what it is going to look like, what the marketplace is going to look like. In the next 10 years, 20 years, what we are suffering from his congress has not taken an action to put any guard we are guard rails in place. Light touch regulation is going to be best, and its best to do it a step at a time. Lets look at privacy, where they change what we have access to and see how that changes their business model. Lets exercise some preemption on Data Security and breach notification. Put in place and enforcement. Have that one regulator, the federal trade commission, which is in charge of regulating privacy. Lets see where we get as we take these steps. I think doing these one at a time so we are working in conjunction to be certain that we keep the marketplace robust, that we encourage innovation, that we do not stifle innovation. I think its responsible of us as legislators to do that. Senator Marsha Blackburn of tennessee. The president has a favorite currency and it is not bitcoin. Why the markets dont seem to mind that the president plays favorites there. This is bloomberg. Emily President Trump has kept up the offensive, lashing out at Facebook Cryptocurrency plan libra, the president taking aim at the libra proposal on twitter, writing, i am not a fan of bitcoin or cryptocurrencies, whose value is highly volatile and based on thin air, facebooks currency will have little dependability. We only have one currency in the usa, its called the United States dollar. I want to welcome back the chief commercial officer with your reaction to the president passwords. I think its interesting we hear the president talking about bitcoin the last couple of years. Its a global currency. Libra coin, bitcoin. The u. S. Dollar is strong, so when people want to percent of their assets encrypt out but if you are in thailand, indonesia or argentina, you want 5 , 10 percent, 20 , you need Global Commerce to spend money around the world. He is partially correct about that. From a global perspective, libra and bitcoin serve a real value. Other lawmakers are incredibly skeptical. They have skewered facebooks plan. Is this going to be an issue . I think they are upset at facebook for other issues. They are going to have to explain next week when they go to capitol hill. Facebook needs explaining to them. One option is to start in asia or outside of europe or america. Bloomberg spoke with Morgan Stanley earlier about this issue of cryptocurrency. Take a listen what she has to say question has to say. The regulators will require any new entrant into the Payment System to operate under the rules that exist for all the banks today. You cannot have an offramp that enables you to circumvent these rules. Especially when you were talking about reserve currency. Facebook trying to get around something. Money transmissions, licensing america. All that is going to take time. Facebook has the work cut out. There is no work circumventing this stuff. There are folks out the industry itself, saying this could this could destabilize the blockchain. Do you agree . I think it brings credibility to the whole industry. This will make regular more clear to the existing coin blockchain companies. It makes more people accessible. The ability to quickly and easily and securely secure a purchase im sure we will have you back. We are going to be covering the Facebook Libra hearings next week. David marcus, the cocreator of libra, testifies before Congress Next week. Coming up, who watches the watchmen . If the u. S. Government has its way it wont be chinese made surveillance cameras. Racing to ban them. This is bloomberg. Emily its not just huawei equipment u. S. Government has problems with, its racing to remove Chinese Security cameras from its own agencies and office. U. S. Agencies have five weeks to rip out chinese made surveillance cameras. They have to do so to comply with the ban imposed by Congress Last year that tying to the threat of spying from beijing. Lets head to washington to speak with the Vice President of Government Affairs from the cybersecurity firm. Are these cameras much of a threat . Congress thinks they are. There have been several measures that would that would seek to ban these. And also recipients of federal grant money. How can the government meet this deadline . One of the things for scout has found, we work for a lot of the federal agencies. One of the things we do is automated detection of also all assets on their networks. And so increasingly, agencies are reaching out for tools like ours to help them do that in an automated manner. The key is all agencies have not implement it a tool like this. Despite the agencies that dont have this automated detection tool, they are probably going to have the hardest time finding and removing them. Its going to be relegated largely to a paperbased drill. Its not very efficient and not very secure. There is this question whether chinese surveillance really is as dangerous as the Trump Administration and the u. S. Government currently seems to believe it is. I would say in particular, cameras like these mentioned, they are mentioned by manufacturer. They sit in a privileged place. They perform a desk perform an important function to these agencies. There is a big concern if there are no known vulnerabilities associated with those devices. The threat of that data being brought back to an adversary would be extremely serious. How quickly do you expect this to happen . Given the challenges you have laid out . There is ambiguity in the legislation as to whether the agencies are procuring the equipment or to remove it. Certainly given other statements by the u. S. Congress, it is their intention that the agencies would remove these completely. The challenge is that it is very difficult for any organization to detect these nontraditional, these noncomputer devices in the network. Computers can run software that allow them to be scanned and monitored. The internet of things devices and operational technology, network equipment, they cant run that software. One of the inherent problems is they are difficult. Their concern is for the agencies that dont know it is there. They dont know if they are going to be compliant with the ban. Thank you so much for joining us. We are going to talk about amazon and alexa, getting ready to bring the noise. Amazon plans for a hifi Smart Speaker that could have users turning it up. We are going to dig more into the ftc settlement, a record 5 billion fine. This as facebook faces multiple investigations from other agencies, including the doj, fcc, and an antitrust investigation from the ftc as well. This is bloomberg. Emily im emily chang and this is bloomberg technology. Hey, alexa. Crank it up. That is what amazon is hoping you will be telling alexa to do. The ecommerce giant is planning to introduce a highend speaker to fend off rivals. As you can see, echo still has 54 of the u. S. Market share. That number is expected to drop this year and next. To tell us more, mark gurman. What do we know about the new highend echo . Mark this is something they have been working on for quite some time. It is designed to fend off competition from products like google. The thing to know is the homepod, sonos one, and google home max have not been that successful on their own. This is amazon saying we need a device that has as good Audio Quality as these ones to stay on top of the game right now as they are according to your chart. Emily can amazon create something as good as Audio Quality as sonos . Mark for sure. Everyone else has done it. Google, apple. All those Smart Speakers. They all pretty much sound the same. Id be shocked to see if amazon could not pull it off. It will be a little wider, maybe taller. They need that because one of the key components to all of these sounds, the woofer and tweeters, the actual circular speakers. They need a bigger woofer that creates more space and the additional tweeters. Right now, the amazon echo has one tweeter. This one will have four or five tweeters which should be comparable to the homepod. Emily lets talk about sonos. Do we know anything about they have made highend speakers for a long time. Certainly, many people have had sonos speakers in their home. I think we have lost mark gurman. All right, mark gurman is no longer with us. You can check out that story at bloomberg. Com. What we are going to talk about now more is facebook and the record fine from the ftc 5 billion. We dont know more about it but Alistair Barr is likely with me on the set. Tell us the nuts and bolts, what we know. All we know is the 5 billion number. Alistair we know the ftc commissioners voted 32 on that, with two democratic commissioners voting against it. We have been having a debate. 5 billion for sure and a split commission which is not ideal. They like to have 50 on these types of things. Emily there was some dissent. Alistair totally. It could mean we will have a debate of what happens on monday because if it is just a 5 billion fine and nothing else, facebook shares will go up a lot because it will be a huge relief and they have 45 billion in cash. Emily and the critics saying that is a slap on the wrist. Alistair it could be because it is two democratic members of the ftc, that suggest to me it is probably just a fine and nothing else. What it could be is things like, you cannot collect this kind of data. When you do, you have to tell people about it. That will really change facebooks business model. If it is just 5 billion, it will continue making money. Emily we forget the open investigations into facebook. The doj and the fcc have investigations into facebook having to do also with the Cambridge Analytica scandal. The washington, d. C. Attorney general is looking into facebook data and privacy issues. The ftc has been assigned facebook as a potential target for its antitrust investigation. Are the hits going to keep coming . Alistair i think this one was a really big hit. I think the risk, there could be a really big risk on the doj side because they have a lot more power than the ftc to take action. In that case, the doj is likely looking into what facebook set about Cambridge Analytica and whether it committed fraud or made some other sort of mistake that could take it from a civil fine into some other type of realm. Not saying they did anything like that, we dont know. That is the type of thing the doj does look into and we