The start of it as we continue to watch alphabet shares essentially unchanged today, jon. Yeah and our ylan mui is there in washington who joins us with more. 170 million now in the context of facebook maybe doesnt sound like a lot, but thats a lot for the ftc right . The ftc is quick to point out this is the largest penalty ever collected under this privacy law that protects children when they are surfing the web and when theyre online the settlement was actually split between the ftc and the new York State AttorneyGenerals Office 136 million will be going to the ftc, about 34 million going to the new york a. G. And during the press conference i would be on the lookout for some very tough rhetoric from regulators weve heard from new yorks a. G. Saying she felt that youtube put children at risk and abused their power. We already had a statement from the ftc chairman saying theres no excuse for the violations that youtube is alleged to have committed. So i think that youre hearing a very strong tone out of regulators here in washington, but of course the critics are going to say, you know, wheres the bite wheres the actual teeth in this settlement will youtube actually have to change its Business Practices in a meaningful way and to implement strong conduct relief in settlement of an action brought by the ftc and the new York State AttorneyGenerals Office for the alleged violation of the childrens Online Privacy protection act, commonly known as coppa coppa requires that certain websites and apps get parents consent before collecting personal information from children the definition of personal information includes cookies used in behavioral advertising the coppa rule applies differently to thirdparties serving behavioral ads versus creators of child directed content. While the content creators are strictly liable for coppa compliance, thirdparties are subject to coppas requirements only where they have actual knowledge that the website or service theyre serving the ads to is child directed to put it in context for todays case, youtube as a general audience platform is not directly strictly liable under coppa for the content of the videos uploaded by others to its platform unless it has actual knowledge that the content is child directed our complaint alleges numerous instances in which youtube and google had actual knowledge of the childdirected nature of channels and videos on the the youtube platform this is the basis for the ftc to find that google and youtube violated coppa our order accomplishes three important purposes first, it imposes a substantial monetary judgment of 170 million with 136 million going to the federal trade commission as a civil penalty and 34 million going to the state of new york. The 170 million judgment is 30 times larger than the largest coppa civil penalty the ftc has ever previously obtained it is three times larger than any privacy penalty assessed against google anywhere else in the world, and it is ten times larger than the Civil Penalties we have obtained in all of our 31 prior coppa cases combined. A penalty of this magnitude sends a strong signal about the importance of childrens priv y privacy. Second, the order requires the companies to refrain from using or benefitting from the data that they previously collected from child directed videos or channels third the order imposes additional obligations on google and youtube that go beyond the requirements of coppa. The order requires youtube and google to notify channel owners about their potential coppa obligations. It also requires youtube to develop a system or a mechanism through which channel owners must identify their child directed content on the youtube platform so that such content can be treated in a coppa compliant manner this is particularly significant because coppa does not require platforms such as youtube to determine whether the videos posted by others are directed to kids or not. Going forward, youtube and google will automatically have knowledge of and coppa liability for all child directed content directed through this mechanism. In this way the order prevents youtube anding gastr google frog a blind eye to the existence of kids content on the youtube platform finally, youtube must provide annual training about compliance with coppa for employees that deal with the channel owners none of this is required by law. No other company in america is subject to these types of requirements, and they will impose significant costs on youtube. This case sends strong messages to thirdparties like youtube, channel owners, and the Business Community as a whole for youtube and other thirdparties like it that serve ads, they cant market their ability to get child viewers on the one hand and disavow knowledge that children are using their service on the other. They cant rate videos as kid directed for one purpose and then say they have no coppa liability when they collect information from kids watching those videos for those who create child directed content to upload on youtube, the message from todays case is that the ftc considers these videos and channels to be websites or Online Services directed to children under the rule and thus strictly liable for compliance with coppa once our order has been effective for a period of time, the commission will conduct a sweep of the youtube platform, determine whether childdirected content is being properly designated as such in order to ensure that the channels themselves are complying with coppa. And that is ftc chair owe recei Joseph Simons detailing the action, the settlement that requires al phabets youtube to pay this 170 million settlement lets bring back in our ylan mui. Ylan it strikes me how the chair is talking about how this only requires youtube to follow these rules. It raises the question, what about instagram . What about tick tock what about so many of these platforms that are popular with kids regulation isnt legislation, where does this leave the rules . Yeah, so i think that the hope of the ftc at least is that this settlement could serve as a deterrent and perhaps a model for other companies in the space. You heard him talk about ensuring that youtube does remain accountable for the provisions of this childrens privacy law. He said that he doesnt want youtube to turn a blind eye to the content that is on its site, and it set up this system that requires the content creators, the users of the site, to sort of selfdesignate and to identify the content directed at kids thats important for two reasons, one because theres been criticism already so far about the size of this fine. Simons said that cost to the business of setting up that system, that should be considered as a significant cost of doing business and added to that dollar amount of the civil penalty of 170 million, and in addition, it ensures that youtube and perhaps others will not be able to escape the very clear provisions and protections of this privacy law. However, theres a lot of debate amongst the commissioners about whether this provision actually creates a sort of back door system within youtube that if youtube can just point to the content creators and say, hey, it was their job to determine whether or not this content was directed at kids, their job to follow the rules, not ours, perhaps youtube could escape some culpability there but here you hear simons very adamantly arguing that they want to ensure that youtube is aware and is designating and does not turn a blind eye to whats being posted on its site. Yeah, ylan, definitely right out of the gate simons there stressing the size of this coppa fine compared to all the other ones before. Ten times larger than all of those cases combined, just to put that number in perspective thanks for joining us and breaking down this conference as it continues Julia Boorstin has more from los angeles as well. Youtube itself has been coming out and outlining the changes its going to make due to this situation with the ft clrks as well reporter thats right, the ceo of youtube posted a blog post talking about how theyre going to be working with lawmakers, and they are going to be taking additional steps to comply with coppa, and to make sure theyre doing what they can to protect children making big changes about the way they collect data from kids using their service, the way they target ads, also saying that in addition to asking content creators to selfidentify, theyre also going to be using machine learning, using technology to try to identify any content targeting kids making a lot of changes there. One thing theyre really trying to do is move kids away from their regular youtube platform and onto youtube kids, which is a separate place with content just for kids, which will be much easier to make sure theyre complying with the rules analysts told us they do not think this is going to have any impact on the Financial Performance of the company because the fine is so small in comparison with alphabet, google and youtubes revenue, the company is so large that it just will be a drop in the bucket for them the real question is whether this could dissuade content creators from wanting to create content for kids because their simply not going to be able to make as much money from advertising. Youtube is creating 100 million fund to create original content for kids well see whether if youre a mom creating content with your kids and have been making a pretty penny from youtube, youre not going to be seeing as much revenue from youtube. Well see how that shifts things. Certainly the fine itself, as you said, 1 100 of 1 of their 2020 revenues. Julia boorstin, ylan mui, thank you for that well turn to the rally. Stocks in the green led by the tech sector. Chips on pace for their best day since about the middle of august our next guest advising to stay long in tech joining us this morning, wedbush head of tech, and ubs Global Equity strategist keith parker good to see you both. Good to be here. Whats your general take . Obviously some positive headlines overnight for the global market. August was an exhausting month i think we saw 60 of the days in the month had 1 plus moves, and that shows were in a defensive mode thats carrying oifr into early parts of september as well i think main strategy at least amongst the tech and dedicated investors i speak to is to avoid the blowouts the cloud sass complex, valuations got extremely stretched to the upside, and i think the pain that was witnessed last year in q4 of 2018, thats fresh on a lot of guys minds. So really yeartodate, protection has been at the forefront of the majority of conversations and guys are looking for more value pockets in the sector, whether its in the memory complex or payment side even comcast and the cable side, activision within the video game space guys are scared of the more kind of crowded trades. Keith, whats your take on this if youre searching for growth, especially as Interest Rates continue to move lower here, that tech continues to look attractive would you be taking a more broadbased approach here, or would you be doing more individual stock picking yeah, i think at this phase of the market where the amounts we saw yesterday, factor in falling below 50, you start to see some cracks typically in leadership, and i think we saw some signs of that last year in the Fourth Quarter where some of high flyer tech names had sold off pretty hard. I think youre much more in the phase of being selective within the tech sector, and the to the point about value, though, and thinking in terms of aggregates, tech dividend yield plus buyback yield is really only second to financials, so you have that high yield plus growth, so there is definitely pockets of value plus growth where you can potentially ride out some of the market volatility amidst the backdrop of slowing growth and another round of tariffs coming on board in september. Joel, talk to me about the macro picture impacts tech we see this brexit drama, the plot thickening every day. That is the risk increasing, or is it decreasing in a way because now a Nodeal Brexit perhaps more unlikely. Ask then when you see whats happening in hong kong, is it good that now theyve pulled that extradition bill entirely, or you know, the fact that the protesters now say, no, we wanted more than that, does that mean increased risk for tech overall . I mean, to some degree. The pulling of the extradition bill one more overhang removed, and guys dont have to wake up and have discussions on what the next policy move out of that region is going to be. Brexits approaching well see what kind of happens there. Again, the big, the gorilla in the room remains the state of china u. S. Trade, and obviously now weve been pushed out to middecember on another round of tariffs that should be implemented. But end of the day, it just seems like china and u. S. Are going to be in kind of this tug of war for the foreseeable future and knowing trump and his track record, hell probably see some sort of big humongous deal prior to the election, but again, sectors like the semiconductors, High Conviction buying is going to be nonexiste nonexistent. When theres policy by tweet, youre at risk on any given day of getting blown up or caught offsides on a trade. Youre going to see guys a little bit more nimble, priced sized smaller than historically until this overhang is removed. Is the u. S. On track to be making investments right now giving the macro backdrop here, or are there other opportunities to be had looking globally i think u. S. Remains a acccoe holding in a portfolio giving its total yield of buybacks plus dividends is high, if not the highest across the world, and growth remains above many parts of the world, and the defensive characteristics, whether its staples, health care, and dechb defensive growth remains high across the region. U. S. Tends to outperform significantly. Until we start seeing credible signs of that turning point in markets, u. S. Remains a core holding, but we do see pockets of value starting to open up weve seen some risk repriced. You mentioned brexit, also italy, italian politics, europe amongst Top Performing regional indices over the past one month, and i think part of that narrative is some reduction in very elevated uncertainty. Certainly september is going to give us a lot to juggle from the Central Banks to a lot more. Guys, thanks, good to see you. Keith. Hurricane dorian continues its slow trek up the southeastern coast of the United States and Contessa Brewer is back at hq with the latest in the daylight after the storjs the video coming in from the bahamas is really stunning the Prime Minister says some areas have been decimated. The red cross estimates nearly half of the homes on grand bahama and abaco island are gone the official death toll stands at seven, but listen, so many people are unaccounted for at this point, and were learning even shelters were destroyed during the storm unbelievable video infrastructure, which is critical to recovery is crippled bridges are gone the grand Bahama International airport in freeport is under water. The western air terminal there serving regional flights and private planes crumpled. The port in freeport is a critical hub Buckeye Partners has a 26 million barrel Petroleum Storage terminal there, and the company says its first task is to account for its employees and their families it has pledged to bring in needed supplies to the island as soon as its safe. Right now dorians path is still slighting up the coast just offshore orlandos theme parks have reopened the airport there is still closed for a few more hours. It looks like orlandos airport is planning to reopen in about 45 minutes seaports in jacksonville, savannah, charleston are closed. Charlestons airport plans to close at 3 00 today. Jetblue mentioned in a filing it expects to see a slight negative impact on its thirdquarter revenues because of dorians impact hurricane warnings are now in place for charleston, myrtle beach, wilmington with an expectation of extreme coastal flooding and storm surge through the end of the week, and i just want to remind you, next week marks the anniversary of florence, which of course inundated wilmington in the surrounding regions with water, cause aed a lot of damage there now this one is making a beeline toward wilmington. Jon. Yes, indeed, that is rough. Thank you. We are getting a market flash as well, dom chu has that at hq. It has to do with oil crude has been climbing steadily throughout the course of the session for wti and brent. Heres some news that could affect it further. The Treasury Department has designated a large Iranian Petroleum shipping network as one that supports and finances terrorism. This is through the Islamic Revolutionary guard corp. And through hezbollah, the militant group in lebanon iranian officials are kreegzingly seeking to deceive customers into buying iranian oil and warning the Maritime Community against dealing with sanctioned individuals and groups so a new issue from the Treasury Department coming out. It could have an effect on oil prices well find out later on today as this develops. Back over to you thanks, dom chu. And when we return, more than 30 u. S. State attorneys general preparing an antitrust investigation into google. We will ask Dan Rosensweig his thoughts on that and the youtube settlement next. Stay with us fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. The tech lash out of washington is ramping up 38 u. S. State attorneys general putting an antitrust case together against google. This follows the youtube ftc settlement we just saw moments ago and we saw the senator of oregon suggesting that executives in another era might have faced jail time joining us former yahoo chief operating officer, Dan Rosensweig. That yahoo