Amazon is in the crosshairs facing antitrust. Margaret vester prepares for a summer finale to her fiveyear crackdown on u. S. Tech giants. But first, to our top story, big tech in the eye of the storm on capitol hill. Facebook, amazon, apple, google, all appearing in washington to answer lawmakers questions. The first to be baked over the raked over the coals, facebooks david marcus was the david marcus. The cocreator of the cryptocurrency project. Senator Brown Facebook is dangerous. Now, facebook might not intend to be dangerous, but surely they do not respect the technologies they are playing with, like a toddler who has gotten a hold of a book of matches. Their motto is to move fast and break things. We would be crazy to give them a chance to experiment with peoples bank accounts. David we will take the time to get this right. Wouldnt it be easier and safer if people could inexpensively secure money transfers through their smartphones just like they do for so many things today . That is what libra is about. I do not trust you guys, so instead of cleaning up your house, now you are launching into another Business Model with calibra. David we have designed this network so that facebook does not and will not control currency. Will you commit that facebook will not develop preferential incentives that unfairly help calibra, in terms of whatsapp and messenger, that they will support thirdparty . David senator, i want to clarify, which is every time you start with i want to clarify gives me great pause. Emily the senator expressing skepticism about the facebook money. Senator john warner joins us from capitol hill. So, senator, after hours of questioning, what are the biggest red flags that you see, the biggest concerns that you still have, about this project . Senator warner well, lets start with the fact that i think watching technology distributed even the possibly of cryptocurrencies, it has some positive upside, but i think we have to be careful. We are talking about the possibility that facebook might dominate this otherwise very disruptive technology. Facebook already has 2 billion users. It has all of these advantages. We have seen facebook over the last decade plus do what i call catch and kill, where any new entrant into the marketplace, facebook would either copy or go out and directly acquire, and here you have this Blockchain Technology that might be able to come in and disrupt, and, again, it appears facebook is using the same strategic effort to say, lets bring some other players in, create this libra network, and then use their market power to create the wallet, where a lot of the transactions will take place. They call it calibra, and my fear is it would give their wallet solution a great deal of undue advantages and, frankly, mr. Marcus today, i know he wanted to clarify, but it seems like some of these questions should have been yes and no, and i came away with still a lot of questions that need to be answered. Emily right. So you were not satisfied with david marcuss answers. What would your answer be to Mark Zuckerberg, the ceo of facebook . Senator warner my answer would be that blockchain offers an awful lot of opportunities, but you have a burden of proof, facebook, to make sure, one, that we get it right in creating this new network, two, that it is safe. Mr. Marcuss comment that for every crypto dollar, there would be another dollar or another currency on a 1 1 backing it up, thats basically absurd when there is no such requirement in the banking system. It seemed to me, as well, where you have had facebook not be a good steward of so much personal data already, the idea that they would create this new network and not build in implicit and explicit things for their product is a strange when he said a third party wallet came around, and people do not want to use the socalled Calibra Facebook product but a third party, they would be willing to transfer the keys, transfer the data, do the technical transfers to that third party, that was a positive. My hope would be that facebook would bring that same kind of supporting approach to the legislation that i put forward for their existing tools. Emily so, look. There were a lot of issues that came up, issues that facebook has been dealing with, misinformation, election hacking, fake news. Would you like to see Mark Zuckerberg testify before congress on libra, specifically, and again on some of these issues . Senator warner this is the circumstance with facebook, and my office works with facebook on a regular basis, and we are trying to get that, and we have made some progress. They have made progress, for example, on some of the disclosure products about facebook political ads, the same rules we have disclosure around tv and radio ads, but there are technical issues, and my background is in telecommunications. I hopefully bring a little bit of expertise here, where we can bring more transparency to this marketplace, whether it is about data valuation, whether it is about data portability and interoperability. They have not yet been willing to lean in and acknowledge what they would be willing to support. Mr. Zuckerberg has said he realizes there need to be some rules of the road for facebook in its current applications. What we have not seen yet is that level of specificity as to which rules of the road it actually accepts, so before we open up this whole new area that could have transformative efforts on the way we transact business in terms of blockchain and cryptocurrency, facebook has got to be proving that they are willing to accept certain rules of the road or regulation around their existing products before we go into this whole new realm. Emily meantime, you had facebook appearing at a Committee Hearing along with google, apple, amazon. Do you think facebook should be broken up . Senator warner listen, i am not at that point in time in terms of breaking up some of these companies, but i have not taken that off of the table, because i think there may be ways to add more competition if we have more of this transparency and data portability and interoperability. I think we could step back from some of the breakup because if we put in place appropriate privacy protections, the way europe has done already, i think we could have some more forward leaning if facebook was willing to acknowledge, or twitter, for that matter, when youre being communicated with by a bot versus a human being. I think it would take the pressure off, at least vis a vis facebook and others. If we do not see them roll up their sleeves and give us some framework and so that americans or, for that matter, folks around the world have a little more transparency, a little more protection of their data, know what data is, in effect, being sucked out of them already, and what that data is worth, then i think we have to look at more radical solutions. Emily meanwhile, investor peter thiel has called out google for what he calls seemingly treasonous work with china. We do not have specific evidence for his allegations, but the president is now saying that the administration is going to look into googles work with china. Does that concern you . Senator warner well, it concerned me when a group of folks at google did not want to work with our Defense Department but were willing to partner with some of the Chinese Tech Companies who were, quite frankly, creating an almost orwellian social credit system, where they monitor the behavior of the chinese population, 1. 3 billion people, in ways that are, frankly, the antithesis of everything that we in the west would support. I think that is one of the reasons why you have seen 2 Million People a few weeks ago in hong kong go to the streets rather than have the Chinese Communist party system and that kind of orwellian network take over hong kong, as well, so i do think there is some explaining that google needs to make. The google ceo, he said they are backing out of some of those partnerships, and they are willing to continue to work with the u. S. Government, so i think mr. Thiels and mr. Trumps statements are a little overthetop, but i think it is incumbent on these companies to go the extra mile to earn peoples trust. The truth is these Companies Got so large, so quickly, i am not sure they fully understood the full ramifications of what they were dealing with, and, quite honestly, the regulators and us in government have been slow to catch up, and instead, we have seen a foreign nation like russia come in and willynilly use youtube, facebook, twitter to massively intervene in our elections, and they continue to massively intervene in trying to pit one american against another, and generally, these companies have been slow to acknowledge that and be a more active participant in bringing about these kinds of appropriate regulations and appropriate rules of the road. Listen. I do not want to regulate out innovation. I think innovation is one of the great things. I have been a venture capitalist longer than i have been a politician, but i do think with great power comes great responsibility, and so far with some of these companies, we are not seeing that appropriate stepping up and taking responsibility. Emily all right, senator warner, virginia senator, i appreciate you stopping by. Coming up, facebook answering tough questions about its cryptocurrency on capitol hill, another round tomorrow. Will libra ever get off the ground . More on the highlights next, and if you like bloomberg news, you can check us out on the radio and on our app and on sirius xm. This is bloomberg. David the reason we designed libra in such a way that facebook would only be one of hundreds of those in the Libra Association and would have no special privilege means you would not have to trust facebook. Trust is primordial, and we have made mistakes in the past, and we have been working and continue to work very hard to get better, and we have invested in a number of programs, notably on Election Integrity and a number of other issues. Your question is whether i would trust all of my assets in libra, and the answer is yes, i would. My question was do you trust this enough to make your compensation paid for in your currency . David senator, i would, because it is, in fact, 1 1. Emily david marcus, the cryptocurrency cocreator, before democratic and republican senators, who grilled him about their ability to guide data and finances, and Sherrod Browns exchange about a lack of trust in facebook a huge part of that conversation. Lawmakers compared the social media giant to a toddler playing with matches and blasted it for violating consumer privacy. Senator brown called the cryptocurrency plan delusional. Marcus tried to reassure lawmakers that they would take things slow. Joining us from washington, mark wagner, our bloomberg reporter who was in the hearing today, and in new york, we have got joyce lai, an attorney for consensus of Blockchain Companies focused on the cryptocurrency ethereum. We just spoke to senator warner, one of the senators who was not satisfied with his answers. Paint the picture for us. What was happening in the courtroom today . Mark yes, there were a number of senators, similar to senator warner, who really just do not trust facebook right now. I mean, the trust deficit is incredible, to really see there were some senators who just plainly said, we do not trust you. Why should we ever trust you with a new currency . Why dont you fix your other problems before you start creating new ones . It sets the standard that no matter what facebook does, they have lost so much trust at the moment that it is hard to imagine this is going to take off in the way they want it to. Emily now, joyce, there is a problem that there is confusion not just about what facebook is planning on doing but about cryptocurrency, in general. As someone who understands and works in the cryptocurrency industry, what are questions you have after hearing what david marcus had to say . Joyce i think for the cryptocurrency, the industry here, some of the outstanding questions that i have, i think a lot of them are, you know, waiting for david marcuss response to the senators questions. I would like to have the senators understand that, yes, there is skepticism against facebook, but there are also a lot of different projects out there, a lot of different blockchains, for example, ethereum, which people should explore, and we have to work to solve some of the social problems, going forward, i hope to see that everyone uses facebook as a catalyst to really look into all of the different projects that are out there in the world. Emily there is a question though, kurt. Given the sort of the vehement deficit, do you think it will get off of the ground . Kurt there is a deficit, and i did not really appreciate that until today, being of the room and seeing senator after senator nailing it home that they do not trust facebook to do this the right way. Facebook is really saying all of the things you would expect and want them to say. They are saying, we want to work with regulators. We want to put in protections for consumers and making sure there are other Companies Making decisions. This is not a facebookonly product. These are the things you want them to be saying, but nobody seems to care at that point. Today was kind of a little bit of a turning point for me as someone who has covered this for about a month to really feel like, wow, the pushback is more intense in person than maybe what you have read online. Emily and, joyce, not only in the united states, other countries like india saying they do not what libra in our country. Does facebook need the buyin of other countries if they want to have a currency that can be used everywhere . Joyce yes, they definitely need to get the buyin from wherever they are operating, making sure everyone is on the same page before you proceed in operating in which every jurisdiction you plan to, so, yes, while they do need indias consent and buyin before they can operate in india. It is possible they have talked to different places and talked to different regulators there, and it is possible they have gotten something from them. Emily bitcoin today in the bitcoin plunged today in the middle of this hearing. Are you at all worried about what facebook is planning to do here, that it is affecting the rest of the industry, and could it hurt the work you are trying to do . Joyce i am not worried about that. I think we are all in for the longterm. We are here because we are enthusiastic about what the technology can do for society in like a 20year, 30year term. Emily david marcus in for another round tomorrow before the house. What are we expecting . Kurt i am told to expect even kind of kookier questions. I think there are twice as many members of that committee than there were today, so having sat through one of those hearings before, i do think it is going to be even maybe a little bit more aggressive than what we saw today. There is going to be a lot of pushback, quite frankly, and i am sure that they will be prepared for it. Emily all right, bloombergs kurt wagner, and joyce lai. We will look into google, President Trump taking peter thiels side. We are Live Streaming on twitter. Be sure to follow our global breaking news network, tictoc on twitter. This is bloomberg. Emily on monday, conservative billionaire peter thiel claimed google was doing seemingly treasonous work with china. He found a fan of his comments in President Trump. President trump i would like to recommend, including to like our attorney general, to take a look. Google is with china in not a very positive way for our country. Emily to discuss, in new york, a guest, and in our studio, a reporter who covers tech for us. He not only said that google is doing seemingly treasonous work but that google could have been infiltrated by foreign spies from china. Is there evidence to back up peter thiels allegations . Not that i have seen. Googles response for months, we have seen similar statements, less aggressive, from the pentagon some months ago, google saying microsoft and amazon, our biggest competitors in cloud, actually have a presence in china. They have research centers. Google has been out of the market for years. They have certainly tried, and that is what they referred to. We suspect, or mark warner mentioned this earlier, that they rejected a pentagon contract and at the same time revealed they were working on a search product in china. Emily so in a statement, google said, we do not work with the chinese military. We are working with the u. S. Government, including the department of defense, in many areas, including recruiting, health care. Peter thiel in the past has expressed interest in investing in Chinese Companies and is on the board of facebook, a huge competitor to google. He has got a fan in the president himself saying, now we need to investigate. Mark i think thiels view on this is similar to a lot of mainstream, american views, what to do about the chinese influence. That is a little rich of thiel to be saying this with his facebook connection and all of the things facebook has been trying to do so, so hard over the years, to have the connections in china that google has. Emily right. Talk to us about that, because Mark Zuckerberg has famously visited china, famously has been learning mandarin for a very long time. How is it different than what they had tried to do in the past . Google has been more successful. Zuckerberg embarrassed himself by running in tiananmen square, the site of the infamous massacre, during the day when the pollution was quite bad. Basically, he has taken all of these small but craven steps to try to show people in beijing that he is a friend of china, and google was in china for a very long time. The a. I. Presence they have there is larger than googles. Emily should they be worried about the president s fresh ire . I do think, thinking about their future as an a. I. Company, that is a concern for them. Emily all right, mark and joyce, thank you both. Coming up, breaking up big tech. Facebook not the only one in the hot seat. Google was also on the hill today along with apple and amazon. This is bloomberg. Emily this is bloomberg technology. Im emily chang in san francisco. Back to our top story big tech testifying on capitol hill. Facebook created a rare bipartisan moment in congress with senators on both sides of the aisle skewering a plan to create a digital currency. Facebook is dangerous. Now, facebook might not intend to be dangerous, b