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Quest Means Business
President Trump Calls for Lawsuit Against Social Media; Iran Foreign Minister: U.S. is in No Position to Obliterate Iran; French Prosecutors Say There Were No Signs of Criminal Intent in Notre Dame Fire. Aired 3-4p ET
Aired June 26, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST, QUEST MEANS BUSINESS: The closing battle on Wall Street just 60 minutes away. And this is how things are
looking. We are up, but barely. A roller coaster sort of session. The numbers involved aren't very large, but we are holding on.
Interesting to see if we hold those gains as we get to the closing bell, because those are the markets. And these are the reasons why. Donald
Trump is en route to the G20 in Osaka. He's armed with threats for almost every one of his allies. Big tech companies don't escape the President's
wrath. He is now calling for Federal lawsuits against them. And chip stocks are soaring. Micron finds a way to work with Huawei. We are live
in the world's financial capital, New York City on Wednesday. It is the 26th of June. I am Richard Quest. Yes, I mean business.
Good evening. Tonight, it's Donald Trump versus the world or so it would appear. The U.S. President is on his way to the most important Summit of
the year. It's the G20 being held in Osaka in Japan. And the U.S. President has lashed out at his perceived enemies at home and abroad.
Despite a range of crises from Iran to the trade war into a public fight with the Fed, it's been the best June for the Dow in decades. And the
President says countries around the world have been taking advantage of the U.S. He'll set them straight at the G20.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: I am meeting with Russia. I am meeting with China -- countries. We are meeting with many
countries. We have many things -- we've been ripped off by everybody over the years. They're not ripping us off anymore.
(END VIDEO CLIP)
QUEST: "They're not ripping us off anymore." The President was in a combative mood ahead of his flight to Japan. On China, he says he won't
make a deal unless Beijing opens up. He will be meeting President Xi Jinping at the G20 and he blamed his predecessors, Obama and Bush for
putting him in this situation in the first place. He says more tariffs are at the ready.
And then to Vietnam, which is benefiting from the trade war with China. He says the Vietnamese are almost the single worst abuser of everybody on
trade.
Europe was next -- worse than China, according to the President. And Silicon Valley, well, Donald Trump says tech companies should be sued for
trying to rig the 2016 election against him.
And finally, his nemesis, du jour, Jerome Powell at the Fed. "I made him," Trump says, "Now he's trying to prove how tough he is." The President says
he can fire Powell if he wants to. All right, David Gergen.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Hello, Richard.
QUEST: Where do you want to start with that? First of all, I mean, that's a Vietnam only last week, two weeks ago, he was praising how companies
would be going to Vietnam.
GERGEN: Yes or moving towards us, and he wanted to be the one man who runs a country. He has been trying to get rid of all of them or quiet down all
the dissonance and take all the power to himself. Now, he wants to be the one man running the world. What you see is someone say, here's what --
here's what the future is, unless you do it, I'm going to blow you in one way or the other. I'm going to penalize you, you're going to get hurt,
starting with China.
Now, you know, the fact is, he is -- he has got a lot of problems with the Fed in part because he has talked himself into a trade war with China.
QUEST: You've talked about the Fed, just listen to what he had to say about the Fed.
(BEGIN AUDIO CLIP)
TRUMP: We have a man that doesn't -- he doesn't do anything for us. Nobody ever heard of him before. And now, I made him and he wants to show
how tough he is. Okay, let him show how tough he is. He's a -- he is not doing a good job. I have the right to demote him. I have the right to --
I have the right to fire him. I never suggested I was going to do that. I do have the right to do it. But let me just tell you, he has to lower
interest rates for us to compete with China.
(END AUDIO CLIP)
QUEST: The President is obsessed by reminding everybody that he has the right to fire people.
GERGEN: Yes.
QUEST: Why?
GERGEN: Because he wants to be the one man who runs the world. And if he can fire everybody, everybody is acting in key positions. Yes, he can
brush them off and dismiss them. But let's come back to the Fed. This is pretty serious. I don't think most Americans yet appreciate how important
the independence of the Fed has been to our economic performance.
You know, before we had the Fed, Congress made a monetary policy and we had boom and bust cycles. You know, we have boom periods, but we have terrible
depressions that came along regularly. And that's why Congress, you know, over a century ago, created the Fed and made it an independent body.
QUEST: What is startling about this with the Fed is the divergence over previous Presidents who wouldn't even talk about it.
[15:05:08] GERGEN: That's right.
QUEST: If you ask the President, you give me the words, if you ask about the dollar or ask about the Fed, what would they say?
GERGEN: Yes, they would say nothing. They would basically say it's not my province. But I've been in a room, I've been in the Cabinet, in the Oval
Office when Presidents have exploded about the Fed, but then they calm down, and what their economic adviser start to say to them, I remember Bob
Rubin doing this very clearly with Bill Clinton, for example.
He said, "If you go out and bang on the Fed, and say they've got a lower interest rates, the acoustic et cetera," you only challenge their manhood.
There's only one way to respond to a challenge and that is to go the other direction.
And they will -- it will cost you basis points upon basis points. If you go out and publicly attack the Fed. That hasn't yet happened, but Powell
is under pressure.
QUEST: Right. But is the President, do you think looking to create Powell the scape goat?
GERGEN: Yes.
QUEST: So that he can turn to the public next year? And say it would have been fine. But for the man who can't answer that.
GERGEN: This is the question about. It's like -- he is setting up -- the most important things going on the White House right now is to win
reelection. Everything else revolves around that.
And if he's got three percent growth, but he looks like he's still down 10 points, what does he want to get to? He wants to get four percent or to be
able to say, Powell, the Federal Reserve, they they'd just done what I wanted them to do, we'd be at four percent growth, we'd be at five percent
growth.
QUEST: It's a very persuasive argument.
GERGEN: It's a persuasive argument.
QUEST: Because the Fed probably did err on the side too much of caution in raising rates too high.
GERGEN: I agree with that. I agree with that. But the more you look like you're bullying the Fed, the less confidence people have in the natural
arc. How do businesses plan if the President may be on the verge of firing the Fed Chairman? Not well.
QUEST: All right. Back to the G20. The G7, last year -- I think it was last year. I've lost track, the Canadian G7 where he stormed off a day
earlier at the end. I mean, what's going to happen in Osaka? Do you think that they will -- is he going to chest beat and brow beat or will we see
that other ability of Donald Trump, which is to become chameleon charming?
GERGEN: Yes. Well, you know, the biggest meeting he has got obviously with Xi on Saturday in Osaka, right? A 90-minute meeting he is going to
have. And this is where they're going to get to trade talks back on track or not.
And I thought up until today that they'll reach an agreement. Trade talks will start again. It will be very, very difficult, but at least they'll be
talking.
Today when he comes out and makes him bully Xi and bullies China that becomes less possible for Xi. His manhood has been challenged, too. You
can't run the world by yourself.
QUEST: Is the situation deteriorating?
GERGEN: Yes.
QUEST: With this President?
GERGEN: Well, I think what we're seeing now is accumulation of unsolved problems. Problems we thought we had a breakthrough with North Korea, we
thought we'd have a breakthrough, you know, with the Chinese. We thought we'd have a breakthrough with Venezuela. We thought we'd have a
breakthrough with Iran.
All of those things are not happening and now, to go after Europe, too? It's good to see you, Richard.
QUEST: Good to see you as always. Thank you, sir.
GERGEN: Okay, as always, sir.
QUEST: All right. To the markets, let me show you what's been happening over there. Well, first of all, we'll just stop on the way with the Dow.
We are -- we've barely moved, two points since we started a few moments ago.
U.S. stocks are rising. They are rising on the optimism that there will be trade talk progress at the G20. Reports say the U.S. could suspend tariffs
on China during any such negotiations.
Tech stocks are showing the biggest gains, and driving the gains -- look at this, Micron Technology at 12 percent, four and change. The memory
chipmaker is up strongly after it announced it had found a way around the U.S. ban on Huawei and said it had resumed shipments to one of its largest
customers. That boosted the rest of the chip sector as well.
Clare Sebastian is with me. We need to understand. We need to understand, Clare, what this work around is? But before we do, what do they supply?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: So they supply essentially -- they are a big supplier of microchips both in things like servers and in
mobile phones and things like in China and China, of course, the world's biggest consumer of semiconductors.
QUEST: So how did they find this workaround?
SEBASTIAN: So I think -- I wouldn't necessarily call it a workaround. There are exemptions to the restrictions of placing Huawei on the entity
list. It's things like if a product is produced outside of the U.S. or if contains less than 25 percent U.S. made parts.
There is an attorney I spoke to today said, it's not up for interpretation. This is actually in the letter of the law, but it just takes a little bit
of time for them to work out which of their products are actually exempt.
And there's a lot at stake here, Richard. The penalties, if it's civil penalties, it's up to $300,000.00 per violation. If it seems to be
criminal, so if they knew what they were doing was wrong, then it could be up to -- it could be in the millions.
QUEST: Maybe I may have not been following as closely as one should. Just remind me what the U.S. restriction on the Huawei actually is at the
moment?
SEBASTIAN: So they have placed Huawei on what's called the entity list. This is a Commerce Department tool, which basically means that if U.S.
companies want to supply them, want to export any of their products to Huawei, they need to get a license to do it.
[15:10:06] SEBASTIAN: Obviously, there are as I said, some exceptions to that. But essentially, that led to an industry wide and the semiconductor
industry - an industry wide blockade. They all stopped suddenly, because as I said the risk of getting it wrong are so high, and they spent the last
few weeks working out what they could do.
QUEST: Okay, so they've clearly found what they can do.
SEBASTIAN: Right.
QUEST: How easy would it be for the administration to close those -- I mean, loopholes, it sounds like they've done something crafty, but you
know, what I mean. Tighten the restrictions, so that which is possible is no longer?
SEBASTIAN: So they could. And in fact, the Micron CEO said on their earnings call last night that they say -- that they are not out of woods
when it comes to uncertainty. There's still considerable uncertainty around this. They don't exactly know the volumes of product or the time
span of things they're going to be able to ship to Huawei and they don't know when the administration is going to turn around and change its mind
and add more restrictions.
There are other tools they can use, the Treasury Department for example, has the SDN list which is even tighter restriction than the entity listen
from the Commerce Department.
QUEST: And in terms of Huawei's business, in terms of the sales it does in the United States, the phones that it might ship here?
SEBASTIAN: Right. Well, I mean, Huawei -- it was from the very beginning, it was defiant about this and said we will survive this blacklist, but it
is starting to show the cracks. The sales were down from the middle of May to middle of June about 40 percent. They are losing potentially access to
Facebook apps, to Google Apps. This is going to considerably reduce the attractiveness of their phones worldwide. And also 5G I think will be
impacted by the U.S. entity list.
QUEST: Good to see you. Thank you very much indeed, as always.
Stay with technology and Blackberry wants to boost its business with Beijing. The former phone maker is walking the tightrope between its Five
Eyes customers and trade tensions with China.
Eleni Giokos spoke to the Chief Executive earlier, John Chen. And Chen says there is room to grow in the software industry.
(BEGIN VIDEO CLIP)
JOHN CHEN, CEO, BLACKBERRY: This year, we will do about a billion dollars -- a little bit over a billion in software, and it particularly
cybersecurity and security software. And I think there's a lot of room to grow in that space.
Hardware is -- it is reasonably a difficult market, especially like you talk about the supply chain right now because of all the U.S. and Canada,
U.S. and Mexico and U.S. and China, we have a lot of discussion on different part of the supply chain. And I think -- I'm actually a little
bit glad that we are not in the hardware today because of the logistics and the supply chain thing part of the problem.
ELENI GIOKOS, CNN BUSINESS AFRICA CORRESPONDENT: Absolutely. Okay, so national security, one of the big things that is playing out when it comes
to negotiations between the U.S. and China regarding the trade negotiations, how do you see this playing out? And is it affecting your
business in any way?
I know you're in the software game, but you've got customers around the world?
CHEN: Yes, good question. You know, because of the fact that Blackberry is a big supplier of mobile software and security software to the Five Eyes
countries, the countries that share intelligence, and most of all the G20 countries, we don't do a lot in China, part of them was for export reasons,
part of them is you know, the Chinese government also wanted to have a control of their own security system, which we respect.
I would like to do more with the Chinese government, but at this point in time, we haven't done that. And so given that, we're not really highly
impacted at all.
GIOKOS: You said earlier that you want to get into China, you wouldn't like to work in China, how soon can you pull that off? And can you do it
knowing that, you know, your home base is basically you know, going up against the Chinese in a sense? We are seeing retaliation on both sides?
CHEN: Yes, yes, of course, we will have to work, you know, collaborative with all my major customers and in U.S. and Canada, and U.K. and Australia,
and so forth. So this is why we haven't been big in China or get any traction there.
But you know, I'm hoping somewhere around the world that we could work on things that are not -- that I don't know, maybe as sensitive. So this is
just something that is that desire more than what we're doing today.
GIOKOS: We've had earnings out today, you're up 23 percent on revenue and coming through a transient $67 million, it largely was in line or slightly
beat analyst expectations, but you still lost making -- you brought that down to around, you know, sitting at about $30 million. That's pretty good
in the sense, but you're still lost making, how are you going to reverse these losses and get into profitability?
CHEN: We have been profitable for many, many years. And we actually are profitable on a non-GAAP basis by making a penny a share, but a big part of
the reasons is because we are making a big investment in a company called Cylance, cybersecurity like artificial intelligence company at $1.4 billion
a quarter ago. So we're just absorbing that that company and this is why when you said we have a loss, but on a non-GAAP basis, we are actually
making money.
(END VIDEOTAPE)
QUEST: John Chen over at Blackberry. Coming up next, Wayfair is shaken into action. Some of its workers have taken a stand against making a
profit from selling to a migrant detention center. In a moment.
(COMMERCIAL BREAK)
[15:18:16] QUEST: To the story, walking off the job in solidarity with asylum seekers. Workers at the online retailer, Wayfair took to the
streets outside the company's Boston headquarters. They are not the only angry ones. Top Democrats including Congresswoman Alexandria Ocasio-Cortez
and Elizabeth Warren have criticized the online furniture company from profiting from selling beds to a migrant detention center.
CNN has learned the Wayfair plans to donate $100,000.00 to the American Red Cross. They are trying to address the employee backlash. It's become a
much more urgent issue in the U.S. because part of this image.
A moment of silence is appropriate for the death of a father still holding his daughter face down in the waters of the Rio Grande as they tried to
come to the United States for what they hoped and believed would be a safer life.
Cristina Alesci is with me. The juxtaposition, of course of the two is, what is the offensiveness about all of this, but you know, as a business
program, I'm bound to ask you, what did Wayfair wrong?
CRISTINA ALESCI, CNN BUSINESS POLITICS AND BUSINESS CORRESPONDENT: Well, I mean, that is up for debate right now. Clearly the employees feel like
Wayfair did something wrong in actually selling these beds to a nonprofit that operated an immigrant facility. You know, one of these centers where
they hold migrants where there's much debate on whether or not the conditions are safe and sanitary and whether these people being treated
with respect.
[15:20:02] ALESCI: This is not an uncommon position for a company to be walking this line in this administration. We've seen a number of companies
get caught in this controversial debate on immigration and how to handle migrants in this country.
I will say in the case of Wayfair, what happened was Wayfair, in response - - in immediate response to this was, look, we cannot prohibit selling based on the political beliefs of our employees and it issued a statement pretty
much saying that yesterday.
This morning, I broke the news that it planned to donate $100,000.00 to the American Red Cross without mentioning by the way that it was profit from
the sale of that bedroom furniture that was going to the migrant facility.
QUEST: You know, I can now -- I can see the argument both ways if Wayfair doesn't sell it, somebody else will. And if the beds and whatever it is
that was not bought, then the conditions which are already appalling, would be worse.
ALESCI: Would be worse. Right, and that's certainly an argument you can make. The other argument that I've heard people make close to the company
is where do you draw the line, if you allow your employees political leanings to determine what, who you can and cannot sell for? It's a
slippery slope, you know, abortion is a big issue.
Do you start -- do you not sell to religious institutions that, you know, are anti-abortion? So the line becomes very gray, and it's arguably a
slippery slope for companies.
On the flip side, this is such a controversial issue for --
QUEST: That's the point.
ALESCI: And the image that we -- that very disturbing image is haunting everyone today. So there are arguments to be made on both sides. At the
end of the day, companies are going to have to figure this out.
I mean, last year, you remember, the airlines told the administration, please stop using our airplanes to transport migrant children. So the
companies -- I hear this every day behind closed doors from CEOs and executives who are terrified that they're going to find one of these
problems underneath their operations.
QUEST: But this is -- I mean, whenever you can talk about transgender bathrooms in the Carolinas --
ALESCI: I coverered that story, too.
QUEST: Right, there was a certain commonality of view amongst companies, then you go to the issue of say, the abortion issue, which is now of course
taking place in one of the states. And finally, you end up at this one where there is real horror, the inhumane treatment. But if you're a CEO,
what do you do?
ALESCI: Well, here's the thing. Yesterday, when this happened, customers took to Twitter basically with screenshots of their deleted Wayfair
accounts. This stock price took a hit.
So when you have a backlash like that that's hitting your bottom line. Unfortunately, we're talking about profit here at the end of the day. So
that is a motivating factor.
QUEST: I wonder whether it really matters if that's what motivates you in the end to do what's right.
ALESCI: Yes.
QUEST: Good to see you, as always, thank you. Excellent reporting. The border issue is likely to dominate the first debate of the 2020 primary
season.
Senator Elizabeth Warren has already been to visit children in a U.S. detention center at the border with Mexico. She's among tonight's 10 White
House hopefuls competing in the first event.
Democratic frontrunner Joe Biden, along with Bernie Sanders and Kamala Harris are among the heavy hitters on Thursday night's lineup.
The key topics in addition to the border crisis, taxes, including how to write off student debts, climate change, Green New Deal, and of course,
universal healthcare. Gloria Borger is CNN's chief political analyst, she joins me now. Good to see you.
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Good to see you.
QUEST: So, let's just wrap up if we may the border issue. And yes, I guess, you know, the Democrats will be united in condemning the
administration for what it's doing. But will they actually have a plan? It's fine to say we don't like what you're doing. But if there are
hundreds of thousands of people that are coming across the border, don't you have to have a plan?
BORGER: Well, the House today just passed a four and a half billion dollar bill, which deals with some of the issue, honestly, immigration reform,
true comprehensive immigration reform, we do we deal with the entire issue. But you know, Congress and the President have not been able to agree on
that. And the Senate will pass a separate bill.
The question is, will they be able to resolve their differences and do it quickly? The President spoke to the Speaker of the House today. They seem
to be trying to work on it. The picture seems to be moving people, but I wish I could say, "Oh, sure they're going to get it done tomorrow."
QUEST: So tonight in the debate, what do they do? What does each of those candidates do to try and distinguish and differentiate their position?
[15:25:06] BORGER: Well, I think the Democrats largely agree with each other about what to do when it comes to asylum and what to do when it comes
to immigration. And what they will do this evening, I believe, is attack the President, which is why you see so many of them.
You mentioned Elizabeth Warren going down there to kind of look at the conditions and they will say, this is the President's fault, we haven't
been able to get real reform, et cetera et cetera and building a wall is not the answer.
So they're not going to take on each other.
QUEST: So where will they take on each other?
BORGER: When will?
QUEST: Where? What will be the moment there are sparks?
BORGER: Well, don't forget, tonight, Elizabeth Warren is front and center. She is not on the stage with Bernie Sanders, whom she might disagree with,
or Joe Biden, whom she might disagree with. They are on the next night.
So tonight, what each of these people have to do is introduce themselves to the American public, it's a job interview. A lot of people don't know who
they are. And Congressman Ryan, the other day described it perfectly. He said, it is speed dating with the American public. And that's exactly what
it is this evening.
I'm not so sure they're going to be attacking each other because when you do that early on, and if you're on the attack, you're the one who doesn't
look good. So don't expect to see a lot of that.
QUEST: Will any of them have learned from the way Donald Trump behaved in -- because there were 17 of them and I always remember, Dan Quayle, after
he got the nomination, saying, "This man is a winner. He took on 17 of his party's best and beat them."
BORGER: Right. And maybe you would do that in the general or as it gets closer, and you have fewer candidates. But right now, right now, what a
candidate has to do, who is not well known is say, "Hello, this is who I am. This is what I stand for and this is what I can do."
For example, the Governor of Washington State, Jay Inslee, a lot of people don't know who he is, but he is a single issue candidate on climate change.
So a candidate like that would talk about what he stands for. And what these people have to do, what Warren is working on, we are told is kind of
condensing all of her policies into a minute.
Don't forget, there is not a lot of time, she will get more speaking time tonight, because people might talk about her, and then she gets to respond.
But I don't think they're going to attack her.
They might say, you know, I disagree with you on, on how you're approaching healthcare or education. But I don't think it's going to be frontal
attack.
QUEST: As the process moves on, the Biden strategy of ignore your opponents and concentrate on the opponent. And I mean, you could end up
with them old trying to do that couldn't you?
BORGER: Right, but I'm not so sure Biden can hold on to that strategy for very long. No, because, you know, they're trying to protect him, it seems
to me, and you can't look like your campaign is trying to protect you. You have to look like you're going to go out there and fight.
So he doesn't want to inspire attacks from other Democrats, although he will get it on the second night. He will. He will, because they disagree
with him on a lot of things. And he's had position changes.
But I think right now, the President has done a lot to elevate Joe Biden, but Biden has to come out there and prove that he is really working for
this.
QUEST: So finally, and as we start with the process, we've covered a few elections.
BORGER: A few.
QUEST: What do you make of it? Do you get excited at this point? As it gets underway, just sort of --
BORGER: I do. Look, I love elections. I'm a political junkie. I have not yet seen the candidate at the Democratic side that pops out at me.
QUEST: Really?
BORGER: No. That says this is the person to take on Donald Trump. That has to develop over time. It's not one of these things where Donald Trump
stood out like a sore thumb during his primary, but it worked for him in the end, right?
It worked for him. We haven't seen that yet this time. So I'm looking forward to all these debates to see who comes out that way.
QUEST: I'm looking forward to having you help us.
BORGER: Thanks a lot. Thank you.
QUEST: As we continue tonight, President Trump wants to beat Europe to the punch. He's suing big tech. Busy day.
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, a lot more QUEST MEANS BUSINESS in just a moment. Facebook and
Twitter send more executives to Capitol Hill. Donald Trump says they could face federal lawsuits. The companies, that is not the executives.
And everyone from Shake Shack to Taylor Swift wants a piece of the pride week. The CEO of GLAAD will be with me. Whether -- has Pride become too
commercial, is it all about the money? And from companies that don't really stand for what's behind it, before all of that, this is CNN and here, the
news always comes first.
Insulting, illegal and confrontational. Those are some of the things Iran's Foreign Minister has called the U.S. after President Trump
threatened to retaliate for any attack on America with obliteration. Javad Zarif told CNN, the United States is in no position to obliterate Iran.
French prosecutors says there are no signs of criminal intent in the fire that devastated the world's famous Notre Dame Cathedral in Paris. But they
are opening an investigation into possible negligence, saying a burning cigarette could be to blame. They're also looking into whether an
electrical malfunction sparked the fire.
Australia says it's providing consular support to the family of a man reportedly detained in North Korea. Australia's Department of Foreign
Affairs says it is aware of reports he's being held and is seeking urgent clarification on the matter.
President Trump says it could be time for U.S. government to bring lawsuits against big tech. The companies -- though Europe doesn't get there first.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You have a woman in Europe, I won't mention her name --
MARIA BARTIROMO, FOX BUSINESS NETWORK: Right --
TRUMP: But she's actually considered to take Jean-Claude's place --
BARTIROMO: Oh --
TRUMP: Because Jean-Claude at some point is retiring. She hates the United States, perhaps worse than any person I've ever met.
BARTIROMO: Wow.
TRUMP: What she does to our country, she's suing all our companies, you know, look, we should be suing Google and Facebook and all that which
perhaps we will, OK?
(END VIDEO CLIP)
QUEST: The person he's referring to is Margrethe Vestager who could well be still in the running to be the new president of the commission, but
that's one side. The new threat comes at a tense time for the industry. Facebook and Twitter executives were grilled today on Capitol Hill about
what they're doing to counter misinformation.
[15:35:00] It's the first public hearing since the release of a manipulated video featuring the house Speaker Nancy Pelosi. Donie
O'Sullivan joins me. What would -- I mean, this idea of suing. Why does the president want to do it before Europe gets their first and what is he
suing for?
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Yes, that's not entirely clear what the president would want to sue these companies for. Donald Trump
sort of frames the argument against big tech and perceived conservative bias against conservatives in a first amendment free speech setting.
The fact is the first amendment does not apply to these companies. Facebook, Twitter, Google can all regulate and moderate these platforms as
they see fit under current law. So, there is a broader conversation to have on the roll that these companies play as the modern public square.
But the angle that Trump's coming at, it doesn't --
QUEST: But Europe also been -- Europe has also been aiming to at least enforce against these companies. So, are we likely to see a race to the
courts?
O'SULLIVAN: I don't think so. There's you know, I think here in the United States, we are seeing a bigger conversation even today.
Conservatives saying to these platforms, you guys are suppressing our speech and we want to basically regulate you more. So, it's the
conservatives, it's the Republicans who are saying we're going to enforce more regulation here whereby you guys can't run the platform as you see
fit.
QUEST: And also this idea of suing them because of -- for damages over the 2016 election, how realistic is any of this?
O'SULLIVAN: I mean, I think even with the president's comments this morning, it wasn't precisely clear what he was getting at. You know, these
companies have been -- we're likely to see Facebook getting a big FTC fine because of privacy violations here. They're obviously going to -- they
have a lot of challenges when it comes to anti-trust on both sides of the Atlantic.
But when it comes to the freedom of speech issue, that seems further down the road. And in fact, Mark Zuckerberg actually wants these -- wants the
government to step in and give them some more guidance on speech. He says we shouldn't in Silicon Valley --
QUEST: No, why should they take all the blame when the government can shoulder some of it too. But at the end of the day, wasn't all of this
inevitable? The speed with which these social media networks grew, nothing had ever been seen like this before. So, it was inevitable that regulatory
environment would lag the actual reality.
O'SULLIVAN: Yes, I mean, I think we saw a certain euphoria with all new tech, but particularly with this -- with these social media platforms since
the Arab Spring, and that was seen as a good thing -- good thing initially, and then we started to see how social media could be used in ways that
weren't so positive.
So definitely, I think there's -- the regulators are very far behind on this, we're now seeing that Facebook is really staffing up in D.C. and in
Brussels, they want to -- they want to now be a part of the regular framework --
QUEST: Right --
O'SULLIVAN: They want to be able to help right this.
QUEST: And if we look at Nick Clegg of course, his first major speeches, he's the chief spokesman now for Facebook. If we look at those first
speeches, have -- we're in Brussels.
O'SULLIVAN: That's correct, yes, and he's -- yes, they are engaging in Europe, but also as much in D.C. Clegg has an interesting approach when it
comes to Facebook. He's out there very much on these sort of offensive sort of saying that the media and others are blowing out of proportion the
sort of bad things that Facebook has been responsible for.
But then when you start to scratch the surface, you see that they have a lot of cleaning up to do in house, so it will be interesting to see how
Clegg's language changes.
QUEST: Good to have you with us, thank you very much --
O'SULLIVAN: Thank you --
QUEST: Indeed. Now though, our next guest left Silicon Valley, he wants to help companies that make things for regular people. The new chief
experience officer at Publicis Sapient joins me next. What does a chief experience officer actually do? That's one of the first questions we need
to establish in a moment.
[15:40:00] (COMMERCIAL BREAK)
QUEST: Well, welcome back. Mark Zuckerberg is due to speak at the Aspen Ideas Festival in the next hour with his company facing crisis on many
fronts. He'll discuss government regulation and privacy. Now, the next guest turned his back on Silicon Valley, now, he wants to work with the
next generation of tech companies at one of the world's most famous advertising houses.
John Maeda is in the C-suite joining me now, good to see you sir, thank you. He is the --
JOHN MAEDA, CHIEF EXPERIENCE OFFICER, PUBLICIS SAPIENT: Good to be here --
QUEST: New chief experience officer at Publicis Sapient. What does the chief experience officer do?
MAEDA: Well, the best way to understand it is to understand what a Publicis Sapient does, which is, it takes technology and brings experience
to it. Kind of like this set, it's a full experience, but it's only as good as a technology inside it. And so my job is to be able to melt those
two together with the fluency that I bring.
QUEST: The -- one thing a Publicis is being a very traditional conservative French advertising and consultancy group. So, this is to some
extent a different -- not a different direction but an advancement.
MAEDA: Well, it's the -- it's the part of the Publicis' network, Publicis Sapient, that is the technology company. And a simple example is how I
hadn't heard of it until last year, but I know that I was in the airports, and the airports I see McDonald's getting more technologically fluent.
Screens everywhere, mobile app, et cetera.
I was like, how did they transform themselves? That's the kind of thing a Publicis Sapient does.
QUEST: One of the fascinating areas of your work is the opposite of the start-up, isn't it?
MAEDA: Yes --
QUEST: You have a name for that.
MAEDA: The End-Up.
QUEST: The End-Up. Now, I love this, explain.
MAEDA: Well, you know, a start-up wants to grow up and end up successful. A company that's established has ended up successful but wants to know how
a start-up does its stuff.
QUEST: Right, and the danger is the End Up ends up looking like your parent's disco dancing.
MAEDA: Oh my gosh, you say that so perfectly. You want to be the cool parent is my point. And so to be a cool parent end up, you have to inject
yourself with start-up technology.
QUEST: How -- which traditional companies do you think have done that best? Name some companies that you're really impressed with the way, you
know, whether it'd be a GE or a McDonald's that you say, that has managed to give itself the cachet of a start-up entrepreneurial spirit?
MAEDA: Well, they are trying really hard. And it's hard --
QUEST: Too hard.
MAEDA: And it's hard because innovation in a big company is a bad word. When you're in a big company and your title is innovation, it means you
might like go away during a recession. So, the challenge for the End-Ups is to embrace transformation, the technology as not a risk, but a core
essential competence.
QUEST: Do you think that makes a difference if technology is already part of your -- you know, the company's DNA? For example, airlines --
MAEDA: Yes --
QUEST: You know, airlines, they're obsessed by data, they're obsessed by technology and obviously obsessed by safety. But even airlines are having
difficulty understanding how these new technologies and new distribution channels can benefit them.
MAEDA: Right, well, you know, airlines are technology-oriented, but I learned in the process of about living with Publicis Sapient is that this
company was the one that figured out how to do the online reservation seating thing.
[15:45:00] That came from Publicis Sapient a long time ago. So, technology -- airplane company can -- has to fly airplanes, but the systems
have to come in, you need a turbo assist and that's where this kind of company comes into play.
QUEST: Do you prefer working with end or start-ups, End-Ups or start ups?
MAEDA: Oh, I love end-ups because that's the way most of our economy was built, and they're having a hard time playing the start-up game.
QUEST: And when it comes to working with companies --
MAEDA: Yes --
QUEST: Do you prefer pure tech app based or some of that -- or a company that makes something or a table, a garment --
MAEDA: Indeed --
QUEST: A suit --
MAEDA: Right --
QUEST: That has to adapt technology into it?
MAEDA: I'm so glad you asked that question because the reality is that an app is not enough, it's the entire experience. Like your beautiful studio
here, every piece of it is technology but also experience. So, it isn't just about what you can see here, it's also the infrastructure of this
studio. So, it's the whole stack.
QUEST: Thank you very much indeed for coming in, much appreciate it --
MAEDA: Thank you --
QUEST: Thank you very much --
MAEDA: OK.
QUEST: Look, you can see our wonderful studio here, magnificent now. Coming up, the world's biggest brands show their colors, it is pride week.
World Pride in New York, 50th anniversary of the stonewall uprisings. The problem is the critics say the event that was once a force for social
change has become a corporate cash grab. The CEO of GLAAD is with us after the break.
(COMMERCIAL BREAK)
QUEST: You can't miss it wherever you are in New York -- in fact around the world in London, Singapore, Sydney and suddenly here in New York in the
last week. In store windows and shop fronts around the world, and it is rainbow flags everywhere. And the reason, of course, it's -- June is
always pride month.
But June this year, well, the celebrations are much greater because they culminate this weekend with parades planned in major cities around the
world, and here in New York there, of course, it is World Pride. The celebrating -- we're commemorating the 50th anniversary of the stonewall
uprisings in the city.
This year more than ever, major corporations are going out to show their support the LGBTQ-plus community. So, what have you got? You've got fast-
food chain, the Shake Shack is adorning its drinks with rainbow toppings. Colgate is encouraging customers to smile with pride and Spotify is
releasing special playlists celebrating LGBT artists.
[15:50:00] Even as I came in today from New York Airport, the ground on the floor of the carpet had all been painted in rainbow. Not everyone is
happy that the corporates cash-in. Critics say Pride has become too commercialized, a rival march is being staged here in New York, its
organizers called the main event of corporate extravaganza.
Joining me in the C-suite, Sarah Kate Ellis is the CEO of the LGBT right GLAAD. Corporate extravaganza. How do you balance the inclusion, you need
corporations on board because that brings acceptance within society. How do you balance it?
SARAH KATE ELLIS, CHIEF EXECUTIVE OFFICER, GLAAD: So, I think it's important that you're not just using the community as a marketing tactic.
This is about joining -- being a good citizen and joining a movement and not just marketing to a community for the month of June. What are you
doing the other 11 months of the year?
What have you done internally? What are you policies? So, you have to look internally first and foremost and see, do you support your own LGBTQ
employees and then go external.
QUEST: Right, but that -- I mean, let's say Google, for example, in San Francisco which is asking -- I mean, Google is -- in the company are asking
for Pride to delist Google over various problems because they say exactly that, the company is not walking the walk.
ELLIS: Well, many companies -- we work with many companies and we evaluate whether or not they're walking the walk and talking the talk. And I think
a lot are trying to -- it's also really important, P&G is a great example. They explored their history on being LGBTQ inclusive. And what they
discovered was they actually weren't. And they put a film together with CNN specials about that and exposing themselves.
QUEST: If you walk through the mole here at Hudson Yards where we are or anywhere, the places are wash with rainbows. Does it -- does it satisfy
you? Does it please you or does it somewhat frustrate you that these are just jumping on the bandwagon? Which is it?
ELLIS: I think it pleases me overall because I know that as corporates embrace the LGBTQ community, they're embracing us as employees and they are
embracing us outwardly and that builds acceptance.
QUEST: That acceptance, there're some serious issues about that. Your latest numbers suggest that amongst the youngsters, the level of acceptance
is down. Why is this the case?
ELLIS: So we went back after we got, that was shocking news, and we went back into the field and we did focus groups and we found two reasons for
that. One is the Trump effect. We're seeing, you know, since he came into power, we've had 114 attacks on the LGBTQ community from his administration
both in rhetoric and actual policy rollbacks.
And our youth are impressionable. That's leaving an impression on them. So, we're losing them that way. The other way that we're losing them is
that more and more LGBTQ youth are saying that they are LGBTQ, right?
QUEST: Right --
ELLIS: So, it's a 20 percent. And what we're finding is that that's confusing to the non-LGBTQ youth. They're coming into more contacts, so
that's education.
QUEST: So when straights come up against the community, they tend to be questioning and wary rather than accepting. Not the norm, but it's the
gist of it.
ELLIS: Well, it's also different identities than we've seen before --
QUEST: Yes --
ELLIS: Right? We've seen lesbian and gay primarily, and now we're seeing more bisexual, pan-sexual, transgender, gender non-conforming and those are
confusing to people who aren't identifying that way.
QUEST: Do you think that creates an even greater confusion for corporations as well because it's almost to the point where, right, we've
got our policies in place for the gays and the lesbians. We know what we're doing over there, that's a safe policy, we can get away with doing
this stuff.
But now there's an entire raft of things that we have to clamp on to that, and we don't know what to do.
ELLIS: I don't think so. I think it's treating people as human. It's really kind of essential and normal to do, and it's just seeing people as
individuals and that's what we have, a revolution of individuality.
QUEST: We need to talk finally about international issues. I mean, Kenya's Supreme Court voted, decided not to decriminalize, Botswana
recently did. I travel, again, more than most, the discrepancy between say, the U.S. and Europe and other parts of the world, particularly in
Africa, is dramatic.
ELLIS: Yes, and I think that is why corporates embracing Pride in the LGBTQ community is so important because it's still criminal in 70
countries, right? And these global companies can have a true impact and a lot of these companies also -- it's the only safe haven for LGBTQ people
when they are international.
QUEST: Listen to this, Taylor Swift, have a listen.
[15:55:00] (MUSIC)
QUEST: So clear, you're glad.
ELLIS: Yes, well, it's a surprise.
QUEST: Was it really?
ELLIS: It was, we worked with --
QUEST: Girl, come on!
ELLIS: We worked with her for years and she's been an avid supporter of the community, but we did not know that we were going to be in her next
song.
QUEST: Well, it can't go wrong with that, can you?
ELLIS: No, and that helps with our youth, right, and building acceptance because she's a pop culture icon, a living legend, and so many youngsters
look up to her. So, I was very excited for that.
QUEST: Happy Pride, good day --
ELLIS: Happy Pride, thank you --
QUEST: Thank you very much. We'll turn to our agenda of ordinary matters, thank you. Let's look at the markets, how they are closing -- over here,
look at that. A nice balance sort of market, anyway, we've given back the gains, we were up 38 points, so we're just barely positive I doubt -- I
don't know, it's too touch and go to say.
Intel is at the top, Travelers is at the bottom, Boeing has put on a bit of a few good gains, that's the way the markets are looking at the moment, and
overall, here you have a roller coaster of a session, essentially, what they've been looking at is whether or not anything is going to come out of
the G-20. We'll take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, we brought you two stories that shows the position of companies. Wayfair which of course is in trouble over
selling furniture to a migrant detention center. And our last discussion on Pride, corporations globbing on to the Pride LGBTQ agenda, and then
wondering why it all goes wrong when the actual policies of the company for their staff, employees and products don't actually meet that which they
say.
It's all about knowing where your value and where your moral compass is. We've talked about this so often, it's one of the things we really look at
closely here on QUEST MEANS BUSINESS.
Whether it's Wayfair which seemingly has done nothing wrong, but gets into terrible trouble, but then makes good by providing -- giving the profits
away or companies plastering everything they can with rainbows and wondering why the gay community don't love them because they otherwise
aren't following through for the rest of the year.
And that is QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable.
(BELL RINGING)
The bell is ringing, oh, we're down, we're down on the Dow, the day is done.
END
END
