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Quest Means Business
At Least One Dead in Strasbourg in a Shooting Incident in France; Fireworks Erupt During Meeting Between Trump and Top Democrats; Gunman Kills Five at Church in Brazil; Former Canadian Diplomat Reportedly Detained in China; Russian Bombers in Venezuela for Training Exercise; Google CEO Sundar Pichai Faces Questions from U.S. Congress; Verizon Says its Media Business is Essentially Worthless; Huawei CFO Back in Court; Chinese Firms Boycott U.S. Goods to Support Huawei; Lyft and Uber Prepare for 2019 IPOs; President Trump Speaks to the Press After Clashing with Top Dems at the White House. Aired 3-4p ET
Aired December 11, 2018 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: It is the last hour of trade on Wall Street with tweak in between. Up at the beginning, dwindle, dwindle,
dwindle, but the most of the afternoon, most of the day, this backwards and forwards between profit and loss. Obviously, the final hour will be
extremely important.
The broader market, the S&P, the techs, they are all up. Not hugely, but gains, there are to be seen because this is what's been moving the market.
The pound, it slips as Theresa May faces threats at home, but she may have an ally, a new ally overseas. Those markets are moving after Donald Trump
warned he would be proud to shut down the U.S. government. And don't be evil, Google's Chief Executive testifies on Capitol Hill.
We are live in the world's financial capital, New York City on Tuesday, December 11th. I am Richard Quest and I mean business.
Good evening, after a day of shuttling throughout Europe, Britain's Prime Minister might have found someone who is willing to her Brexit ordeal. The
E.U. Council President, Donald Tusk said in a tweet late today, the E.U. is willing to help Theresa May, it is just a question of how.
That came after a day that the British Prime Minister spent trying to win some kind of concession from Brussels on her Brexit plan. Concessions that
would allow it to be passed by the U.K. Parliament, and throughout still insisting that her deal would prevail.
(BEGIN VIDEO CLIP)
THERESA MAY, BRITISH PRIME MINISTER: The deal we've negotiated is a deal of honest referendum, an honest result of the referendum and it is the best
deal available and this is only deal available.
(END VIDEO CLIP)
QUEST: So the only deal available and the best thing available, that was all Theresa May's aim. Unfortunately, by the time she spoke, she had
already gotten answers from many European leaders, not, nigh or a simple no. The German chancellor, Angela Merkel, said - or through her spokesman,
there was absolutely no room to re-negotiate. The European Parliament's top negotiator, Guy Verhofstadt said, it described as being out of the
question.
And the Commission President who's a real hard liner on this, Jean-Claude Juncker said there is no room whatsoever. Remember, he has been largely
driving the Brexit formula, if you like, that the British have found unpalatable.
The Prime Minister Theresa May was not taking no in any language for an answer. She made full use of the free movement of Europe's sanguanarian
(ph) to put her case to directors and leaders directly. So first of all, she went to the Hague to meet Mark Rutte, the Dutch Prime Minister who told
me last week there is no room for any maneuver.
(BEGIN VIDEO CLIP)
MARK RUTTE, DUTCH PRIME MINISTER: Richard, we did all the tinkering we could. Both Theresa May as well as the 27 European Union countries moving
forward. We did everything we could, but there are clear red lines. Theresa May and her government wanted to stop with the movement - free
movement of people across Europe. There was a clear red line in the Brexit talks from the London government side.
There was also a clear red line that there could be no hard border within the Irish Sea and there could be no hard border. This was both the U.K.
and the European Union waiting to avoid a hard border between the Republic of Ireland and the province of Northern Ireland.
So given those deadlines, this is the only deal possible.
(END VIDEO CLIP)
QUEST: The only deal possible and the Prime Minister, Theresa May went from the Hague onto Berlin, friendly welcome although she had some
difficult getting out of the car. The door was locked from the inside or some such thing, anyway, it's given lots of comments about being stuck in
the backstop.
And then to Brussels where she met the President of the Council. None of this bodes particularly well for the Prime Minister. So when she went to
Brussels and she received this sliver of hope, things seemed to improve, or at least look up. Donald Tusk, the President said clear that the E.U. 27
wants to help. The question is how?
Erin McLaughlin is in Brussels. Erin, I have looked at these things for years as indeed you have, when I saw that phrase, that is the key that
unlocks the ingenuity of the fudge ...
[15:05:10]
QUEST: ... that they could use to help.
ERIN MCLAUGHLIN, CORRESPONDENT, CNN: Hey, Richard and ingenuity really is what's needed here, given all of the red lines being drawn. I also thought
it was interesting what Tusk also had to say in that tweet that he had a quote, "long and frank discussion with Prime Minister May" raising eye
brows and those adjectives "long and frank."
They are seen as icy language here in the E.U. in diplomatic circles. So where we go from here is unclear given what President to the Commission
Jean-Claude Juncker had to say earlier today that there will be no reopening of this negotiation, no change that legally binding texts with
respect to the backstop.
So the question is what can we expect out of the Brexit summit scheduled for Thursday other than some sort of vague declaration in which the 27
commits to trying to help avoid that backstop implementation, it does not seem like they're willing at this point to move beyond that. And of
course, we're going to have to wait and see if anything changes between now and then, which raises another question. What does Theresa May really
accomplish from this diplomatic push other than buying herself more time to create more pressure there in London?
QUEST: Erin, we're also watching events in Brussels. Thank you. As Theresa May tried to rescue her deal, the pound fell victim to the churning
rumors of a no confidence. Sterling slips to a fresh 20-year low. It was at $1.25 and of course, it had a sharp fall yesterday and the reason
Sterling fell are these reports that Theresa May could face an imminent leadership challenge.
Now, that's not confirmed at the moment as CNN's Matthew Chance is outside the House of Parliament. This question of a leadership challenge. It's
believed that the so-called 1922 Back Bench Committee, let's not get into the reason why it is called that but that they have received enough letters
requesting a vote, what's your understanding there tonight?
MATTHEW CHANCE, SENIOR INTERNATIONAL CORRESPONDENT, CNN: Well, of course it is not the first time, Richard, if you have been following this that the
1922 Committee has suggested it has sufficient letters to mount a leadership challenge, a leadership challenge to the Conservative Party.
But it has not been made public yet. We are waiting to see what develops over the next 24 hours, to see whether there is a challenge now that
emerges to Theresa May's leadership of the Conservative Party.
She spoke about it earlier in Brussels. She said, she was not prepared to address it and had not been listening to it because she's focused on sort
of getting the kind of increase assurance, additional reassurances as she called it in terms of the hard border or the backstop that's been so
controversial to prevent a hard border in the Ireland.
But, I mean, I've spent the last couple of days outside Parliament here with all these protesters. These are sort of pro-European protesters.
They don't want Britain to leave the European Union. But throughout the day, there have been anti-European protesters as well.
One of the things that's really emerged is that both sides have become very much entrenched in their positions. We saw the ruckus situation inside the
House of Commons with that platform divided outside. The protesters are divided. The nation is divided. It is difficult to see whatever Theresa
May brings back from Brussels this time, that it is going to be enough to convince either side or any of the sides in fact. So it's a very difficult
situation she's in.
QUEST: So, in that situation, we know and humor me, Matthew, we know that there is this deadline of March the 29th, next year, and we know that
before then there is other deadlines particularly in the financial world, 90-day notices or 30-day notices, all have to be accommodated. So what
happens next?
CHANCE: Well, that is the big question, isn't it? And unfortunately, Richard, I will try to humor you, but I don't have a conclusive answer to
that, and it's not just me, none of us do.
We are in sort of uncharted political territory here. We are expecting that by January 21s to give you another deadline, the deadline by which
there should be a meaningful vote in Parliament on the deal that Theresa May has formulated. That this deal will be eventually presented to
Parliament. It was meant to be today, yesterday, she deferred it to some unknown point down the road. It is only after that has been accepted or
presumably rejected will the other options start to really unfold.
[15:10:05]
QUEST: Matthew, thank you. Good to see you. Matthew Chance, keep warm. It looks very cold in London tonight. Joining me now from London is
Stanley Johnson, a former member of the European Parliament and father of the former Foreign Secretary Boris Johnson. Good to see you, Mr. Johnson,
as always.
I think both sides, all sides can agree this is a mess with no easy solution and the possibility of a leadership challenge to Theresa May. If
there is - go ahead.
STANLEY JOHNSON, FORMER MEMBER OF THE EUROPEAN PARLIAMENT: It's a mess, Richard, I would say it is a mess of our end making. It is hard to imagine
we could reach this kind of situation that we are in now. I am frankly, I saw this as you know, as a remainer that I say by all means give it the go
and let's try to get a decent deal, but what we have in the terms of the government's proposal, Mrs. May's proposal is really completely
unacceptable and I think that is what the House of Commons express and she ran. She ran for it. That's all you can say.
And I take a cynical view of this. I think she was very happy to see the vote postponed because her tactic now is to say let's get us close as we
can to the deadline in the hope that in the end, we'll be able to coral this fawn through. I think that is totally the wrong approach. We can't
afford to have the deal as proposed by the British government. This is a deal that could be a country trying to join the E.U., not a country leaving
it.
QUEST: Do you think the Prime Minister should go?
JOHNSON; I think we have to have a change of leadership at this point because it is perfectly clear to me that she a weight to her deal. Nobody
seriously believes that she's going to come back from Brussels with anything that will change the reality of what she has proposed. It won't.
It will only get us nearer what I see to be on a cliff edge and that cliff edge is this deal is being accepted.
So yes, I think, I say so with sorrow, it is time for a change because only a change now can force a general election if you would like or force a
change of policy. I can't see it as much as I hate to say so, Mrs. May will not get the change of policy we need.
QUEST: You will not be surprised by my next question. If she goes, should your son, should Boris Johnson run?
JOHNSON: I very much hope he will. He has had a clear view, he's had a clear view recently and by the way, I think you know, I say that not
because I want him particularly to run because I cannot believe we can go ahead with the proposal we have. Now, his view is for heaven's sake, let's
get rid of this Irish problem. Let's say, put it at one side, put it if you like into the whole negotiations of the free trade agreement and so on
and so forth.
There will be technical solutions possible. We have been driven far too long by the Irish and we have to get away from that and I think only a new
face can do that whether that face is Boris or someone else, who can tell.
QUEST: So in this scenario, as you may have heard my colleague, Matthew Chance outside of Westminster, it is very difficult to see the way forward.
On the one hand, that meaningful say has to take place so something has to go before Parliament. On the other hand, companies are now having to say,
there are various deadlines, 60 to 90-day deadlines are getting ever close to having to be sorted.
And at the same time, the whole matter has to be wrapped up by March the 29th.
JOHNSON: I very much agree with you. I think, honestly, it was completely irresponsible of the Prime Minister at that point not to have the vote
yesterday. I mean, to say, yes, we don't know and she hasn't had a clear commitment to have it by January 21st.
QUEST: So a second vote.
JOHNSON: No, that's not what I said?
QUEST: No, I am asking you --
JOHNSON: I think it's irresponsible of the Prime Minister --
QUEST: No, I am asking you.
JOHNSON: It's one of the options. Second vote is absolutely one of the options. I would say another option would be a general election which then
throws up a configuration in the British Parliament which does permit political decisions to be taken, proper political decisions that means we
have a minority government or a coalition government and that coalition of course is propped up by 10 members of the DUP, so a new election would
indeed throw up something else. That's my thing. I see it possible. I see a new vote or an election.
QUEST: What's your preference? What's your preference?
JOHNSON: My preference would be to have an election. By having an election, a clear election so there's a leader on one side who says we want
to have Brexit in a way that means Brexit and there is somebody on the other side who says, "No we want to stay in the E.U." That would be the
best.
QUEST: Good to see you sir, as always, looking well. Thank you for joining us.
JOHNSON: Always a pleasure.
QUEST: Thank you.
JOHNSON: Thank you.
QUEST: Strong gains across Europe. The stocks after Monday's sharp drop on the delay of Brexit vote. All the major indices followed the U.S.
nation's stocks higher overnight.
[15:15:05]
QUEST: British stocks were up some 1.2% which when you think about it, is remarkable. The chaos that's in the U.K.'s government and in the economy,
and yet stock rose 1.25%.
A story that we are developing, at least one person has been killed in a shooting in Strasburg in France. We are getting details. It's only just
happened. We are waiting for more. What we know, six people are reported to be wounded. A police spokesman says the shooter apparently is still at
large. The police have closed off some streets. We'll follow it closely. When we have details, we will let you know.
Donald Trump extraordinary, extraordinary scenes in the Oval Office as he spars with his Democrat rivals and investors can't make up their minds
after his latest threat to shut down the U.S. government.
And Sundar Pichai's seat in front of the U.S. Congress is no longer empty. The Google's CEO is defending his company against accusations of political
bias. This is "Quest Business" live from New York.
There you are. We have three gainers at the moment, the market is swinging through an enormous 500-point range. We are in the "Quest Means Business"
trading post. This morning, that was up and then it was down. And now, it has been up again, but now, it is actually extending its gains.
The market having struggled to find the direction today, at least, has now found it. The issues of fear of a government shutdown, U.S.-China have
launched formal trade talks. I think at the moment, we will see it green because that's where we are as we head - and let's hope it sticks to that
for the moment.
The emotions that are moving the market. If you look at the Fear and Greed Index, it is showing extreme fear, the justification of which we need to
talk about because the markets have turned lower after Donald Trump clashed on television with top Democratic leaders.
The U.S. President says he would be proud to shut down the government over border security.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: And I am proud and I will tell you what - I am proud to shut down the government for border security,
Chuck because the people of this country don't want criminals and people that have a lot of problems and drugs pouring into our country. So I will
take the mantle. I will be the one to shut it down. I am not going to blame you for it.
[15:20:07]
TRUMP: The last time you shut it down, it didn't work. I will take the mantle of shutting down. And I am going to shut it down for border
security.
(END VIDEO CLIP)
QUEST: Players at the stock exchange, Phil Mattingly is in Washington on Capitol Hill and Phil to you first, whilst Clare talks up the numbers,
extraordinary, what did you make of it?
PHIL MATTINGLY, U.S. CONGRESSIONAL CORRESPONDENT, CNN: Yes, it's not something you ever see on television. I think that was the interesting
element there as those were kind of usually the behind the scenes negotiations. Maybe, a little bit more divisive than what we're used to
seeing. It was playing all live out on camera.
I think, Richard, it underscores the reality right now and that's that the two parties, the Democrats by Nancy Pelosi and Chuck Schumer and President
Trump on the other side are very deeply entrenched and they haven't figured out a way to bridge a gap right now. And with 10 days until the government
shuts down, something is going to have to dramatically change to enable them to stop the shutdown.
Here is what I will say, what we saw was certainly explosive. It was certainly wild. It's certainly something you are used to seeing. That
said, and Richard, you know these types of things quite well. That blow up was necessary for people to eventually settle down and come back to the
table and try to figure out if there is a path forward.
The big question right now is, given the issue -- the wall -- which is such a divisive issue between the two parties, and given what we saw today live
on television, will cooler heads eventually prevail? And right now, I am talking to aids in both parties involved in these negotiations and they
just don't know right now, Richard.
QUEST: Stay with me, Phil. To Clare Sebastian at the Stock Exchange, at the market, how did it react in real-time? Talk me through to what
happened?
CLARE SEBASTIAN, CORRESPONDENT, CNN: Well Richard, I think first of all, we have to point out that this day perfectly exemplifies one of the core
causes of volatility that we're seeing in this market. They are watching negotiations both on trade and on government spending play out in real
time.
Just as Phil says, this isn't something you usually see on television. It's also something you don't usually see on Twitter when it comes to trade
talks playing out. We saw the peak of the day, it was about 935 five minutes after the open, fueled by a tweet from Donald Trump saying that the
negotiations with China were going well, trading, future announcements, but they didn't get anything substantial off the back of that, and that's why
you see that trailing off throughout the day, compounded by that lunchtime meeting that we saw in the Oval Office.
There's just too much risk really of people to come back in, but having said that, they are struggling for direction in the last hour. I think
there is a sense that the markets do not want to go back to the lows that we saw in the middle of yesterday.
QUEST: Phil Mattingly, both sides, perhaps the President and Chuck Schumer who were the most - were playing to the cameras, you could see they were
very well aware of that.
But I was also impressed by the way in which neither the leader-elect nor the Minority Leader were overlord or bowed by the Presidency. I got the
distinct feeling of both sides doing what they saw as their constitutional responsibilities.
MATTINGLY: I think there is no question about that. I think when you talk to Democrats whose bosses were in the room today, they recognize that they
are empowered over the electoral results of just a month ago. They know that, particularly in the House, they are moving into the majority, and I
also think they recognize that this is what their party wants.
Just for this President side of things, him to have this fight over the wall, him to go after Democrat in a personal manner is what his base wants
for Democrats on the wall with President Trump. They want that as well.
I think it is important to note, Richard, that this does not mean that this is the next two years in a nutshell that these parties will never be able
to negotiate. This is part of the process. And to your point, these individuals have their own respective power in their own branches of
government and they are allowed to have a candid exchange of views. We are just not used to seeing them necessarily.
QUEST: And one final point there, Phil Mattingly, I suppose Washington is talking about how the fact that the Vice President said nothing, didn't
open his mouth, didn't move a muscle of his face.
MATTINGLY: Yes, he is pretty good with the poker face on that one. You know, interestingly enough, he came to Capitol Hill to meet with Senate
Republican shortly after that meeting and he was asked what his thoughts were on it. He said it was a candid discussion even after reporters left
the room.
But with Vice President Mike Pence, it's always worth noting, he very rarely says publicly what he's thinking. He waits until behind the scenes
and I think we certainly saw an example of that today, Richard.
QUEST: We wondered whether he had fallen asleep or popped off. All right, thank you, good to see you. Ben Phillips is here, the Chief Investment
Officer at EventShares. Good to see you.
BEN PHILLIPS, CHIEF INVESTMENT OFFICER, EVENTSHARES: Thank you. Good to see you.
QUEST: All right, the market, the market, the market, the market. What does it make of all of these?
PHILLIPS: I mean, we are looking at a market - what the market is telling us is still this kind of fine balance where we have been range bound really
for the past couple of months and what we are seeing is that there is - you showed the Fear Index before I got in here and I think that is - the market
is fearful now.
QUEST: What are you fearful of?
PHILIPPS: Global trade, I think is the number issue. That's the number one thing probably we are fearful of and we try to check our emotions,
right, and manage objectively, but trade is an issue.
QUEST: Right, but as you can see from the chart of today. What explains a morning strong open of 500 points swing. That might be the norm, but what
explains it?
[15:25:08]
PHILIPPS: I think there are traders and I think a lot of the systematic traders that are selling into strengths, so they are programmed to be de-
risking still right now. So if there is a rally, they are selling into that and pushing that rally back down, and then, I don't know what causes
the afternoon buy in, but it seems like it's pretty common and you see some afternoon buyers coming in.
QUEST: No, we have seen programs that have sold into the market, buy into it --
PHILIPPS: They've made a little money today.
QUEST: When it's a price that you could live with.
PHILIPPS: I think you have to look through the short term. You have to look through this.
QUEST: Look through that, tell me what we need to look into.
PHILIPPS: Yes, so I think we need to look at trade and really watch that and see are these negotiations actually materializing into anything. China
made some small positive steps today. This is the first that we have really seen them doing somewhat of what the U.S. is asking them to do and
that's - we don't want to just sell you more goods or buy more goods and have transactional trade, we actually want structural changes in the
Chinese economy so that China 2025, that's where we saw them making some notes. They might change their views there, less focused on intellectual
property theft for example.
QUEST: In all of this, is there - does Brexit, I mean, I always get the feeling that the markets sort of say, "Oh well, it is just an overhang."
It's like a nasty smell coming from the sewers, you don't know what it is or where it is coming from, but you wish it would just go away.
PHILIPPS: Well, if it's that foul, I think it's - I think you are right. I think the markets are maybe putting it to the side right now and I think
it's something we haven't focused on from a policy perspective moving overall markets and risk assets.
So think you're right, the market is looking at us, it is kind of already happened. The market has priced it in. We have kind of evaluated that,
but I am a little skeptical actually longer term if that's the right play.
QUEST: Or it could consider to blow up, it could certainly blow up next month for 27 ...
PHILIPPS: People could wake up one day and say it matters now.
QUEST: Look, it is the 11th of December. We are not supposed to be having this sort of days of the market.
PHILIPPS: There's holiday parties and cheers and toasts.
QUEST: So what's gone wrong?
PHILIPPS: I think we've had a couple of years of this march upward in even almost a decade of this march upward and so volatility returns and people
get a little panicky and I think that's where we are right now as people are fearful, there is a little more panic and quick to sell.
QUEST: And we had a guest here yesterday who was very pessimistic about what next year looks like. Didn't quite say a bear market, but certainly
said that the best gains have gone. Do you subscribe to that, too?
PHILIPPS: It is tough and it's tough to call that kind of view like one year out, there is so much uncertainty in the next 90 days with this China
trade truce. That's what matters. We don't know exactly how confrontational Congress is going to be with the Trump administration
either. So that's something we're going to watch here in the next 90 days.
There is a lot that's going to happen between here and March that's going to matter for markets. I can't tell you where we are going to end up one
year from one. I think it's a little foolish to try to do that.
QUEST: Glad that you came in today to help us understand it.
PHILIPPS: Thanks for having me.
QUEST: Please come back again.
PHILIPPS: Absolutely.
QUEST: Thank you very much. As we continue tonight, political bias, censorship in China and data privacy. Google's CEO faced the U.S.
Congress. He defended his company, and you will hear how in a moment.
[15:30:12]
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's a lot more QUEST MEANS BUSINESS in just a moment. When the
chief executive of Lyft tells us his company can overtake Uber. And get out your phones and with cnn.com-slash-join. We're about to ask you about
Google's chief executive of having him to testify on Capitol Hill. Cnn.com-slash-join, this is Cnn and on this network, the facts will always
come first.
At least one person has being killed in a shooting in Strasbourg in France. Cnn's affiliate "Bfm" now saying nine people are wounded and the shooter is
still at large. The police have closed off some streets near the Christmas market in the center of the city. We're continuing to follow the story and
we'll let you know of any developments.
It was meant to be a friendly and eventful meeting at the White House between the top Democrats and President Trump, but instead it turned into a
full scale squabble. The leaders took turns tossing insults at each other with President Trump saying he would be proud to shut down the U.S.
government if he does not get funding for a border wall.
A gunman opened fire at a church in Brazil, killing five people. Police say three people were hurt before the gunman turned his weapon on himself.
The Metropolitan Cathedral in Campinas remains closed while the police investigate.
A Canadian employee of the International Crisis Group has reportedly been detained in China. That's according to the nonprofit organization.
Michael Kovrig was also formerly a Canadian diplomat in Beijing and Hong Kong. The Chinese government hasn't commented on Kovrig's detention or
where he may be.
A pair of Russian strategic bombers on a training exercise in Venezuela have been welcomed by officials as peacemakers. The U.S. Secretary of
State Mike Pompeo has criticized what he calls two corrupt governments squandering public funds while a lot of people suffer.
Now I'm opening up our question of the day at cnn.com-slash-join, and get out the phones and the question we're asking about, when tech companies get
too powerful. Now where there was once an empty chair on Capitol Hill now sits the chief executive, the two Google CEO Sundar Pichai face questions
from the U.S. Congress on Tuesday.
A few months ago, attempts to get him to testify was so contentious, a Senate Committee put an empty chair in his place at the hearing. Today, he
was grilled about data privacy and political bias against conservatives. He claims it gets Google's business interest to have any such bias in its
search results.
(BEGIN VIDEO CLIP)
SUNDAR PICHAI, CHIEF EXECUTIVE OFFICER, GOOGLE: I lead this company without political bias and work to ensure that the products continue to
operate that way. To do otherwise would be against our core principles and our business interests.
(END VIDEO CLIP)
QUEST: So our question today at cnn.com-slash-join, which tech company is the biggest threat to governments? Is it Google, Facebook or Huawei? Voting
is now open and you'll see the results update live on the screen. Which of the three do you think is the biggest threat? Google, Facebook or the
Chinese phone maker, second largest in the world by the way, Huawei.
There are about 40 million results if you search for Google scandals. Today, there were three main burning issues that bothered lawmakers. One,
data privacy, lawmakers ask Pichai about how much data Google collects from its users especially on Android phones -- they developed Android.
[15:35:00] Two, good Chinese ambitions, anything that Google does in China will be subjected to Beijing's censorship. So Sundar Pichai told Google
has no plans, no plans to launch a search product. Alleged biased conservative lawmakers have been holding hearings throughout the year,
saying that tech giants are biased against right-wing views like the Twitter and Facebook chiefs before him.
He strongly denied the case. Our media correspondent, chief media Brian Stelter was following it all. What did you make of it?
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: I think he was able to come away mostly unscathed. There were some smart questions about data privacy,
but for the most part, there were some foolish questions and some inane questions from U.S. lawmakers who don't know how technology operates.
And look, I get it, they're not the only ones, right? Many Americans, many people around the world don't know how Google's search box works. Don't
know why they get the results they do. But it was disappointing, we didn't see a tougher questioning of Google, instead we heard some random questions
about why would I search my name? Lawmaker X.
Why are the stories all negative or it may have something to do with what you're doing lawmaker X and not with the results on Google.
QUEST: Did this -- did this hearings also suffer somewhat from the fact that we've had so many of them.
STELTER: Well --
QUEST: I mean, it's hard to get angry with everyone, and it's particularly hard to get angry with somebody very quietly spoken and thoughtful and
respected like Sundar Pichai.
STELTER: And he was very effective, he was able to maintain a calm demeanor --
QUEST: Yes --
STELTER: And I think the polling --
QUEST: He's a calm man.
STELTER: He is, and that benefits him in this environment. We see on the screen his polling results, Facebook by far viewed as the most dangerous,
the most threatening. That is reflective of the past year of scandals. You know, where Google has -- remains mostly above the fray. I think
that's partly because of the company's relationships with users.
It's not quite as in your face as Facebook, doesn't feel quite as --
QUEST: Right, it was --
STELTER: Provocative as Facebook which you know is giving away so much. Look, I think Google, you get a lot of value from Google, a lot of benefits
from Google and that comes through.
QUEST: Right, Google, I mean, not wishing to be disrespectful to anybody else. But Google -- when you put in what you want, 99.9 percent of the
time, you'll get something reasonably relevant.
STELTER: It helps you, it makes your life better --
QUEST: And --
STELTER: Right.
QUEST: You know, I couldn't tell if there was any bias if I'm asking for a new washing machine. You know, if I have some best washing machines, I'll
look on a list.
STELTER: Right --
QUEST: And one assumes that the algorithm is such that it's not biased to one verses the other.
STELTER: That's right, I think you're right. And yet, they think the hearing said it did show that Google still needs a lot to do to educate
people further about how to use these tools.
QUEST: I need to move on because I need to have your views on Verizon. Verizon put out a notice today --
STELTER: Yes --
QUEST: To the market --
STELTER: Shocking --
QUEST: That basically says Oath, which is their vehicle through which they bought Yahoo, AOL and a few other things, basically it's worthless.
STELTER: It is a breath-taking announcement. They've written off $4.6 billion of the media business, basically saying that's worthless. And this
is I think two things, one is the effects of Facebook and Google. The digital duopoly which have sucked up so much ad revenue and made it harder
for digital brands to compete.
But mostly, this is about mismanagement and bad strategy by Verizon. Trying to buy up all these media enterprises, and now just a couple of
years later, looking around and saying never mind, we don't want to be in this business after all.
Now, our parent company here at Cnn, AT&T is going in a different direction by leaning into media, trying to own more media like this channel Verizon
is back in a way, Verizon saying it doesn't work for us, we're going to focus on infrastructure.
QUEST: So why -- so why is AT&T right and Verizon was wrong? Why will round off things and not fall foul --
STELTER: Yes --
QUEST: Of exactly the same problem.
STELTER: Well, let's check in 10 years and see if it works. Here is what I think AT&T is thinking. They're buying up "Hbo" and "Game of Thrones".
They're buying up Turner and Cnn, big entertainment and news assets, mostly television and film. What was -- what was Verizon doing? A lot of digital
media, a lot of websites, the Yahoos, the AOLs, lots of websites, it's harder out there for these websites.
We're coming into another Winter here in the U.S. with layoffs that lots of digital media companies because of a digital duopoly, Google and Facebook
sucking up ad revenue, and because they're not the kind of subscriber relationships online that people have with TV.
QUEST: And it gets worse, as those that have got the money spend money on production, therefore Netflix and I know Apple --
STELTER: And Apple and all the rest.
QUEST: Yes --
STELTER: That's right. I also think the other thing about Verizon is that they are looking at this or saying we're going to focus on infrastructure,
we're not going to be in media. But it does show sometimes in media, mergers aren't the way always, bigger is not always better. This is one of
those cases where they bought up a lot of assets and just could not do anything with it.
QUEST: Good to see you, sir.
STELTER: Me too, thanks --
QUEST: Thank you very much indeed. The results of the voting and we're going to keep it open, but as you can see so far, I think it'll be
difficult to change it. After the break, Huawei's CFO facing her third day of bail hearings. Chinese companies are calling for a boycott of Apple
products.
[15:40:00] (COMMERCIAL BREAK)
QUEST: Cnn.com-slash-join for our question of the day. Which company -- which tech company is the biggest threat to governments, Google, Facebook
or Huawei? Now, the company's CFO Meng Wanzhou is back in court for her third day of bail hearings which -- decision in a matter of hours.
It's been 10 days since she was arrested in Vancouver in Canada, and now faces extradition to the U.S. Meng is accused of helping the company dodge
U.S. sanctions on Iran. With the arrest, some of Meng's -- some Chinese companies are now urging their employees to boycott U.S. goods like Apple
in support of Huawei.
Daniel Ives comes -- technology sector and investment firm Wedbush Securities. It's good to see you, sir.
DANIEL IVES, MANAGING DIRECTOR OF EQUITY RESEARCH, WEDBUSH SECURITIES: Good to be here.
QUEST: Look, as I saw it -- I mean, already the Chinese government have said there will be consequences, there will be repercussions. What are you
expecting them to be?
IVES: Well, look, the jury is still out in terms of ramifications especially for a name like Apple. And look, you saw Chinese court in terms
of the Qualcomm-Apple situation. So I think right now, U.S. tech companies are very white-knuckle going into this period because you have the tariff
situation, and now with this, definitely feels like it's a straw that could bring the camel's back.
QUEST: What exactly is it they're afraid of? I mean, I've heard -- I saw reports in the newspaper saying that one warning is tech -- U.S. tech execs
should avoid going to China.
IVES: I think it's more about -- from a demand perspective. Is and there was what could the Chinese government do in terms of trying to kind of put
hurdles around U.S. technology coming from a supply chain perspective from a demand perspective --
QUEST: Doing -- by doing what?
IVES: So look at -- you know, you look at Apple iPhone, right? I mean, you have a Chinese court that rules against the Apple and the Qualcomm case.
You know, the timing very interesting. That's obviously for Apple where they get a quarter incremental revenue from China. That's a gut punch.
So there now is worries about protectionist from a technology perspective and also trying to kind of fan the flames in terms of consumers not buying
tech products and what the potential ripple effect it is in the semiconductor space.
[15:45:00] QUEST: Now, when do you think we'll see some evidence of this? Because one wonders whether the Chinese are actually thinking about what is
the right response. They've said there'll be repercussions, one imagines if the Canadians-slash-the Americans don't do something, the Chinese have
to respond.
IVES: Yes, and that's why I think everyone is watching Vancouver very carefully because any sort of -- you know, I think any sort of impact there
could be felt in Shanghai and across Silicon Valley. And right now, if you're U.S. tech CEO, I don't think you're running to meet your trip to
Shanghai any time soon.
I think right now, this is definitely -- look, it's an important period to take a step back. The demand is key from a technology perspective for
China, and especially Apple's sort of front and center with the -- you know, with the bulls eye on their back.
QUEST: Right, and this plays into what our earlier guest was saying, that the biggest uncertainty at the moment for markets generally at the macro
level is China trade.
IVES: Trade, because --
QUEST: So the last thing you really needed no matter the rights and wrongs of her detention and whether her Huawei broke sanctions was the arrest of
the CFO.
IVES: If you said to me, the worst thing that could possibly happen here, this would be pretty close to it because the last thing you need to come
out of G-20 was anything that throws a wrench in it. And as a U.S. tech investor, the last thing you want to see your China headline is negative.
QUEST: As a U.S. tech investor where you see Amazon down 30 percent, 32 percent, you see Apple off, it's nearly -- it's nearly bouncing down 20-
year lows. And you see time and again, all these big names. At what point does it stop? Or there are those that believe that there's another 10
percent or 15 percent to come off.
IVES: Yes, I think -- I think right here, it's really range-bound until we have a better understanding of China. It comes down -- the 90-day comes
down, if the tariffs get increased in a 25 percent, it's a whole new ball game. So I think right now, you're cautious, we're still buyers of Apple
in particular, but this is definitely white-knuckle period.
QUEST: If you could vote because you had your phone, which tech company is the biggest threat to governments, Google, Facebook, Huawei?
IVES: Well, given right now, if you look, you know, you'll get 5G, Huawei when -- like importantly in 5G right now, 5G is the most important, it goes
back to the Qualcomm, Broadcom and a Huawei.
QUEST: Good to see you sir.
IVES: Great, seeing you.
QUEST: According to those of you who voted at cnn.com-slash-join, most of you think Facebook is the most dangerous to governments, Google and Huawei
are more or less tied for second and third. But overwhelming, I can't remember a question where we've had quite such an over today.
An upstate on the situation at Strasbourg where at least one person has been killed, Cnn affiliate "Bfm" is now saying ten people are wounded, the
shooter is still at large, and the police have closed off some streets near the Christmas market.
President Macron is monitoring the situation and has dispatched his Interior Minister to Strasbourg. This is Cnn.
[15:50:00] (COMMERCIAL BREAK)
QUEST: The race to go public, rideshare apps Uber and Lyft are both planning to IPO sometime next year. Now, Uber currently has a 60 percent
market share, Lyft is 23 percent enviable in most other industries. But Lyft is eyeing and expanding into bikes and self-driving cars.
And the co-founders believe that soon Lyft will overtake its biggest rival. That seems Laurie Segall most unlikely now.
LAURIE SEGALL, CNN SENIOR TECH CORRESPONDENT: Look, I think there's always been this huge competition between Lyft and Uber, although arguably, you
can argue -- well, you could say Uber's had a pretty bad couple of years.
They're trying to get back, but they still have the market share. I had a very candid conversation with Lyft's co-founder John Zimmer and he opened
up about what it's like to be the underdog and why he thinks they have a competitive edge. Take a listen.
(BEGIN VIDEO CLIP)
JOHN ZIMMER, CO-FOUNDER, LYFT: Looking back, I have a lot more perspective than I had in the moment. I think at the moment it was scary. One, we
cared so deeply as we do today about our mission to improve people's lives with the world's best transportation.
And you had this entity that had 30 times the amount of cash as you'd want it to destroy you, and it was very clear. They were willing to go to
whatever means to do that. You know, I think what really got us there, one, is this partnership I have with Logan, the team members that we
brought in where they knew from day one that we were the under dogs.
They had to believe in the mission. And so we were I'd say more hungry, the why behind our work was stronger than I would say, you know, other
companies. And we just kept grinding and pushing to the point now where we know how markets have more market shares than they do. And I think that's
because of that focus on people.
SEGALL: But you think at some point you'll be able to overtake Uber market's share?
ZIMMER: Absolutely.
SEGALL: When do you think that will happen?
ZIMMER: No predictions, but it's -- it will happen.
SEGALL: How do you ensure that -- then this is such a basic question, but it seems like we keep having ask it. How do ensure that you know, that
your riders are safe?
ZIMMER: Well, the first thing is when we started Lyft six years ago, we said we want to build the safest transportation for our loved ones to get
around in. So, we looked at what other modes of transportations, whether it was taxis, limos or transits. What they required of drivers and
passengers.
And then we created a new benchmark. So for hired vehicles prior, it was about $750,000 of insurance, we set it at a million dollars, some required
background checks, some didn't, we required background checks for driving record check as well as criminal background checks.
SEGALL: What did you learn from all those mistakes?
ZIMMER: I've learned that, like focusing on us and us guiding our own course, us, setting the safety standards is important rather than looking
to others.
SEGALL: OK, I want to read you something. I want you to actually read it. It's something you wrote at the time.
ZIMMER: All right --
SEGALL: These two quotes, it's something you wrote at the time.
ZIMMER: "This isn't a time to gloat. The faults of our competition don't do anything to deliver a better experience for customers."
SEGALL: And you wrote that when Travis Kalanick was ousted from Uber --
ZIMMER: Yes --
SEGALL: Why did you write it?
ZIMMER: I was walking around the building and thinking about my own failings and thinking about failings of the team, we've been at battle with
this entity that thought they could kill us and that they should kill us, and then that -- Uber was having challenges.
And I thought this of all the moments, this might be one of the most important moments for us to show who we are and why are we doing this? It's
not just to win, it's not just to beat them, it's to serve our customers and our drivers. And so nothing changed about how we were serving our
drivers and passengers in that moment.
And I thought it was a great moment to share with the team that we remain focused on serving the people that make our business possible.
(END VIDEO CLIP)
SEGALL: And it's interesting having interviewed almost back-to-back the CEO of Uber and the co-founder of Lyft, very different ethos at the
company. And I will say John Zimmer has a background in hospitality, not a background as a Silicon Valley engineer, and I think that definitely plays
out on how the companies are run.
QUEST: Sure because hospitality requires you to be hospitable.
SEGALL: Yes --
QUEST: Sounds obvious, but you know what I mean.
[15:55:00] SEGALL: Yes, look, and I think Uber has ran into a lot of trouble because it's been deemed so competitive, that it took the
competitive edge at winning at all cost. And I think Lyft hasn't done that. Now, we'll see when they both go public, and you see Uber owns the
majority market share, it's been -- it's been rough for Lyft, but they have been gaining in the last couple of years as Uber has fallen behind.
QUEST: Ultimately though, do customers care? I mean, when I pick up my phone to get a car -- you know, we have the black cars in New York, the
sedans for years --
SEGALL: Yes --
QUEST: Apple and Trip 777 always -- they're still around.
SEGALL: Yes, look, I think at the end of the day, customers just want to do what's easiest to do, and I think people will in many times they do go
to Uber in many times. That being said, I know that a lot more folks have made the switch to Lyft or are using Lyft as an option over the last couple
of years because of some of this stuff that's happened.
QUEST: Good to see you, thank you.
SEGALL: Good to see you.
QUEST: An update on the situation in Strasbourg where at least one person has been killed in a shooting. Cnn's affiliate "Bfm" now saying ten people
are wounded, the police say the suspected shooter has been identified and they're chasing him through the center of the city.
The shooting happened near the Christmas market. President Macron is monitoring the situation and has sent his Interior Minister to Strasbourg.
We'll take a break, have a little moment after this.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: You know, one of the problems that people don't talk about, you have a tremendous medical
problem coming into a country, communicable disease -- tremendous problems. People don't want to talk about it, I don't like talking about it, but
these are the difficulties of what they want to do.
So we want strong borders, we want people coming into our country legally through a process. We want people that are going to love and help our
country, and I don't think they feel the same way or maybe they just don't want us to get a vote. You know, it could be that, too because it's hard
to believe that they don't want some form of protection.
And with that, I have to say I thought it was a very good meeting. When you left, when the press left, we had a fairly long meeting and we really
discussed a lot of great subjects.
Mike, come on over, Mike Pence, come on over, Mike.
UNIDENTIFIED MALE: (INAUDIBLE) --
TRUMP: I don't mind, no, you know what? I could have debated Chuck Schumer for a long period of time because he was saying it's yours, it's your idea,
and then finally, he said, what -- I don't mind, I don't know, what do you think? What do you guys think?
I don't mind having -- a border security on my side. If we have to close down the country over a border security, I actually like that in terms of
an issue.
END
