President Trump tweeted his administration "will take a look" into Google, after billionaire investor and Facebook board member Peter Thiel accused the tech giant of helping the Chinese military. Jason Moser, senior analyst at The Motley Fool, discusses the development.
Trump Administration to 'Take a Look' at Google After Thiel Accusations
July 16, 2019
FULL TRANSCRIPT
TIM STENOVEC: Joining us now is Jason Moser,
TIM STENOVEC: a senior analyst at The Motley Fool.
TIM STENOVEC: Uh, Jason, given everything we know about Peter Thiel,
TIM STENOVEC: his relationship with Facebook,
TIM STENOVEC: Palantir, um, should this- [OVERLAPPING]
KRISTEN SCHOLER: Trump.
TIM STENOVEC: His relationship with Trump, thank you.
TIM STENOVEC: Um, what's your reaction initially to,
TIM STENOVEC: uh, President Trump's announcement,
TIM STENOVEC: that tweet this morning?
JASON MOSER: Well, I mean, I think Tim, you,
JASON MOSER: you made a couple of important points there, um,
JASON MOSER: in, in Thiel's, uh, relationship with Facebook.
JASON MOSER: Obviously, he is on the board at Facebook
JASON MOSER: and we know his political leanings of course,
JASON MOSER: because he's, he's, uh, not held back, back either.
JASON MOSER: Perhaps he's exhausted, uh,
JASON MOSER: hearing Facebook
JASON MOSER: getting dragged through the mud day in and
JASON MOSER: day out because Facebook really
JASON MOSER: has been a punching bag for,
JASON MOSER: uh, such a long time for,
JASON MOSER: for the privacy reasons that
JASON MOSER: we've been talking about for, for so long.
JASON MOSER: Uh, so sometimes when you get tired hearing,
JASON MOSER: uh, your company getting dragged through the mud,
JASON MOSER: the easiest thing to do is to deflect
JASON MOSER: and try to put the attention elsewhere.
JASON MOSER: And I mean, on the one hand,
JASON MOSER: it is always worth considering that
JASON MOSER: these are big companies with big networks.
JASON MOSER: When we're talking about Facebook
JASON MOSER: and Alphabet, Twitter, all,
JASON MOSER: all of these companies that,
JASON MOSER: that have these global presences
JASON MOSER: where all this information,
JASON MOSER: uh, changes hands every second.
JASON MOSER: Uh, but I mean,
JASON MOSER: treason is a very,
JASON MOSER: very serious word here.
JASON MOSER: Uh, so I think you need to be very careful when you use
JASON MOSER: that language to at least have something to back it up.
JASON MOSER: I mean, according to Google,
JASON MOSER: they are not, uh,
JASON MOSER: pursuing markets in China.
JASON MOSER: As a matter of fact, I think they had
JASON MOSER: some employees last year
JASON MOSER: that protested that very Dragonfly Project,
JASON MOSER: uh, so they shut that down.
JASON MOSER: It does seem like Alphabet as a company,
JASON MOSER: is trying to steer away from
JASON MOSER: those polarizing types of positions.
JASON MOSER: So whether that's helping the US military
JASON MOSER: or pursuing a market in China, I,
JASON MOSER: I just- it kinda feels like
JASON MOSER: the pot calling the kettle black to a degree
JASON MOSER: because it's- you know not that long ago we had a lot of
JASON MOSER: people accusing Facebook of treason in some capacity.
JASON MOSER: It's, uh, very interesting times I guess.
TIM STENOVEC: I mean- interesting times. Let's not forget the,
TIM STENOVEC: the bombshell report uh,
TIM STENOVEC: in The New York Times last year,
TIM STENOVEC: talking about the way that Facebook had
TIM STENOVEC: secret data sharing agreement with handset makers;
TIM STENOVEC: including none other than Huawei, a,
TIM STENOVEC: a company that President Trump
TIM STENOVEC: has called a national security threat.
KRISTEN SCHOLER: Right.
TIM STENOVEC: I mean, this is out of control.
KRISTEN SCHOLER: Speaks perfectly to- deals on motivations,
KRISTEN SCHOLER: right, as a board member of Facebook.
KRISTEN SCHOLER: Jason, what I'm wondering is,
KRISTEN SCHOLER: for a company like Google,
KRISTEN SCHOLER: broadly for these tech companies,
KRISTEN SCHOLER: but let's focus on Google right now.
KRISTEN SCHOLER: Do you think the analyst community is
KRISTEN SCHOLER: pricing in this political risk,
KRISTEN SCHOLER: that this could send the stock
KRISTEN SCHOLER: lower that lawmakers could step in and try to
KRISTEN SCHOLER: break up these companies
KRISTEN SCHOLER: and that the Trump administration
KRISTEN SCHOLER: might have its way in considering Google treasonous?
JASON MOSER: Uh, I would say
JASON MOSER: speaking on behalf of the analyst community,
JASON MOSER: at least from my perspective,
JASON MOSER: we've kind of become numb to this kind of stuff.
JASON MOSER: I mean, years ago we always
JASON MOSER: talked about geopolitical risk when it came
JASON MOSER: to- when it comes to certain companies and you have
JASON MOSER: to acknowledge that's always going to exist.
JASON MOSER: It seems like over the past three years or so
JASON MOSER: no company has been immune, uh,
JASON MOSER: to the tirades of this current administration,
JASON MOSER: and so I do think the market prices is in to a degree.
JASON MOSER: I think the market also recognizes that this, perhaps,
JASON MOSER: is more of a short term issue that will
JASON MOSER: likely be resolved with a change over, uh,
JASON MOSER: i- in, in the administration whenever that happens,
JASON MOSER: whether it happens in 2020 or 2024.
JASON MOSER: Uh, I think that we wait- we,
JASON MOSER: we haven't- we more heavily weigh
JASON MOSER: these businesses on their strengths.
JASON MOSER: Whether it's Facebook in the size of the network,
JASON MOSER: or whether it's Google and the,
JASON MOSER: the quality of the search.
JASON MOSER: I mean, I'll say I get Facebook and Alphabet are both
JASON MOSER: recommendations in my augmented reality service here.
JASON MOSER: And while I keep an eye on these,
JASON MOSER: these types of issues,
JASON MOSER: they certainly don't affect my longer term thesis
JASON MOSER: with the businesses as we see their pursuits in tech,
JASON MOSER: whether it's visual intelligence
JASON MOSER: or augmented reality or anything like that.
JASON MOSER: So these are geopolitical concerns that
JASON MOSER: will resolve themselves in time I believe.
JASON MOSER: Uh, but there's no question, it
JASON MOSER: creates a little chaos in the near-term.
TIM STENOVEC: Yeah, and, and, and I think it's fair to say apart from,
TIM STENOVEC: um, President Trump's most recent tweets on the subject,
TIM STENOVEC: uh, it comes at a time where
TIM STENOVEC: big tech is under scrutiny uh,
TIM STENOVEC: from lawmakers for various reasons.
TIM STENOVEC: Name the company and we can,
TIM STENOVEC: we can name the reason.
TIM STENOVEC: Uh, what is broadly speaking of
TIM STENOVEC: regulatory risk to big tech right now?
JASON MOSER: Well, I mean, the question- I
JASON MOSER: think the discussion has always
JASON MOSER: been it's revolved around antitrust,
JASON MOSER: and- and frankly, I think that's a bit misguided.
JASON MOSER: I think that when you look at
JASON MOSER: these companies and what they're doing today,
JASON MOSER: the services that they're providing to us,
JASON MOSER: I mean they're- they're wonderful services in many cases.
JASON MOSER: And in most every case,
JASON MOSER: we're not really even paying for it.
JASON MOSER: Uh, so I think that really the discussion needs
JASON MOSER: to center more around privacy,
JASON MOSER: and I think that's the near term risk for
JASON MOSER: these companies as they sort of make their way
JASON MOSER: through that landscape so to speak and try
JASON MOSER: to deal with these issues on
JASON MOSER: privacy and how they're going to cope,
JASON MOSER: uh, with these privacy concerns
JASON MOSER: going forward because you know,
JASON MOSER: on the one hand,
JASON MOSER: we do want our privacy,
JASON MOSER: we wanna know that some
JASON MOSER: things that we're doing out there,
JASON MOSER: I mean, are not going to be put under a microscope,
JASON MOSER: uh, but by the same token, you know,
JASON MOSER: a lot of people were living their lives
JASON MOSER: on Facebook every day,
JASON MOSER: and Facebook is not twisting their arm to do that.
JASON MOSER: So what is a reasonable expectation there?
JASON MOSER: I'm not sure.
JASON MOSER: Everybody's using Google Maps, and Waze,
JASON MOSER: and Google search every day,
JASON MOSER: but what is a reasonable expectation for privacy there?
JASON MOSER: I think we need to figure that out that to
JASON MOSER: me is- is the near term regulatory risk,
JASON MOSER: not so much an antitrust case.
KRISTEN SCHOLER: I assume. Okay. Speaking of antitrust,
KRISTEN SCHOLER: um, even though you think the focus
KRISTEN SCHOLER: is different and more on privacy,
KRISTEN SCHOLER: we are getting this antitrust hearing
KRISTEN SCHOLER: later today and this is when lawmakers are going
KRISTEN SCHOLER: to basically map out
KRISTEN SCHOLER: the investigations going on
KRISTEN SCHOLER: into the biggest tech companies,
KRISTEN SCHOLER: uh, that actually is not getting the headlines
KRISTEN SCHOLER: today that the leework hearing with Facebook,
KRISTEN SCHOLER: uh, and Mr. Marcus
KRISTEN SCHOLER: is the one that is leading the headlines.
KRISTEN SCHOLER: But when we get that- that hearing later today,
KRISTEN SCHOLER: are there certain questions,
KRISTEN SCHOLER: certain points that you're focused in on in terms of what
KRISTEN SCHOLER: these probes might reveal about
KRISTEN SCHOLER: these tech companies and what it
KRISTEN SCHOLER: could mean for their business.
JASON MOSER: You know honestly, I- I mean,
JASON MOSER: I think we've been talking
JASON MOSER: a lot about this Facebook fine, right?
JASON MOSER: They were just fined five billion dollars
JASON MOSER: worthy FTC for this privacy,
JASON MOSER: uh, bungle from a time ago.
JASON MOSER: One thing I've- I've come to believe is,
JASON MOSER: that, you know, when we talk about punishments,
JASON MOSER: typically a punishment is made in order
JASON MOSER: to alter or change a certain behavior.
JASON MOSER: And in this case,
JASON MOSER: whether you're talking about Facebook
JASON MOSER: or Amazon or Alphabet,
JASON MOSER: I don't know that there really is
JASON MOSER: a monetary fine that will change their behavior.
JASON MOSER: Not unless you add a couple of
JASON MOSER: zeros to that five billion number.
JASON MOSER: So really, I think it needs to be
JASON MOSER: less about a monetary fine,
JASON MOSER: and more about coming up with a simple framework and
JASON MOSER: understanding of what these companies
JASON MOSER: will do with our data,
JASON MOSER: what we can expect as consumers, and you know,
JASON MOSER: I- I just saw something a-
JASON MOSER: across the Twitter feed a little while ago,
JASON MOSER: where Amazon actually was explic- explicitly
JASON MOSER: offering customers 10 dollars for access to their data,
JASON MOSER: and saying, hey listen,
JASON MOSER: we want to do some more stuff with
JASON MOSER: your data to make your experience better,
JASON MOSER: and of course we're gonna do
JASON MOSER: some- some additional things with it,
JASON MOSER: like send you different marketing, uh,
JASON MOSER: material or whatnot based on your behavior,
JASON MOSER: but it was very explicit.
JASON MOSER: They were saying, you- were going to give you
JASON MOSER: $10 in exchange for this.
JASON MOSER: So I think just making it a bit more
JASON MOSER: transparent in
JASON MOSER: understanding our protections as consumers.
JASON MOSER: I- I'd really like to
JASON MOSER: see them dig into that because I feel
JASON MOSER: like the monetary fund's completely missed the point.
KRISTEN SCHOLER: Um.
TIM STENOVEC: Uh, Jason Moser a senior analyst at The Motley Fool.
TIM STENOVEC: I anticipate that Amazon will likely
TIM STENOVEC: get significant interest by offering money for that data.
TIM STENOVEC: I mean, consumers I don't think are educated
TIM STENOVEC: typically about what these companies are
TIM STENOVEC: doing with their data or they don't care. [OVERLAPPING]
JASON MOSER: Like just $10. I don't know,
JASON MOSER: I'm hanging up on the $10 figure.
JASON MOSER: That's- that's, uh, a small amount of money.
TIM STENOVEC: Yeah.
KRISTEN SCHOLER: Jason, [OVERLAPPING] we don't mean to cut you
KRISTEN SCHOLER: off here but we do have to go,
KRISTEN SCHOLER: [LAUGHTER] [OVERLAPPING] uh, we wish we could
KRISTEN SCHOLER: keep talking about this.
TIM STENOVEC: Always great to see you Jason,
TIM STENOVEC: thanks for joining us on this today.
