17/01/2018 BBC Business Live


17/01/2018

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This is Business Live from BBC News

with Ben Thompson and Sally Bundock.

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The bosses of Facebook,

Twitter and YouTube face a grilling

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over the spread of extremist

material on the internet.

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Live from London, that's our top

story on Wednesday 17th January.

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As the internet giants go

from strength to strength,

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do they need to play a greater role

in tackling extremism?

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That's the question they'll face

in Washington today.

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Also on the grapevine...

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as protectionist policies over wine.

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And we'll be getting a bird's eye

view on the world of aerial imagery.

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We'll be speaking to the boss

of a company helping businesses

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manage acres of land from the skies.

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Today we want to hear

whether you think the social media

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giants are facing enough scrutiny?

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Should they face greater

censorship or is this

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an invasion of free speech?

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Let us know.

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Just use the hashtag BBCBizLive.

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Bosses of YouTube, Facebook

and Twitter will attend a hearing

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in the US later aimed at tackling

the spread of extremist

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content online.

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All three of the platforms have

already taken measures to prevent

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terrorist propaganda but politicians

around the world say

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more needs to be done.

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Last year, Facebook said it plans

to boost its team of moderators

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by more than 3,000.

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And Google says it'll increase

the number of people monitoring

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content to a total of 10,000.

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Meanwhile Twitter has already

removed around a million accounts

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related to terrorism.

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It's a big concern for

governments around the world.

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In Germany for example,

firms can be fined over $60 million

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if they fail to take

down extremist material.

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In the UK, ministers have suggested

tech giants could face punitive

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taxes if they don't do more

in the fight against terrorism.

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With me is Richard Kramer,

Founder and Managing

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Partner, Arete Research.

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Good morning. What will be achieved

at this hearing, if anything?

I

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don't think much will come out of it

other than the thundering of

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politicians over the role of social

media. I think those companies are

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playing, running a very fine line

between being traditional

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publishers, which they really are,

and saying that they are simply

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neutral platforms for conversation.

This is the difficulty. We can't

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seem to come to a conclusion across

the board with regards to the answer

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to this issue. Ben was talking about

what companies will do to monitor

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material on their platforms, as it

were, but how do we solve the

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problem?

There are two parts to the

problem. Part of it gets solved why

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it being commercial issues for the

companies. Twitter has sales that

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are down despite the Trump effect

they were expecting. They are not a

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brand safe platform given people can

anonymously say almost anything on

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the platform. Looking at a company

like Facebook, they have wrestled

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mightily this year with their role

in elections and the spread of fake

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news. They have pledged to self

regulate. What politicians will be

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looking for is whether these

companies will be serious about

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their commitment to regulate their

own platforms, or they will have to

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step in themselves. .

The issue with

Facebook, we will wait to see what

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Robert Mueller will find out, who is

leading the special investigation

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into US elections and possible

interference from Russia. Where do

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we end up in terms of how the

platforms will be managed, if they

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are managed at all, and by whom.

Will it be an outside body or an

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onus on the companies themselves,

and if it is, at what expense will

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it be to them?

In terms of the

expense, it's something the

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companies can afford. Google has

$100 billion of net cash, Facebook

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has about $40 billion. It doesn't

come from the traditional stream of

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revenue, like the BBC. I'm sure when

you started as a journalist you were

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given strict instructions about the

type of language you could use on

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air. Those platforms have not

restricted themselves in the name of

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free speech on the conversation they

want to have.

The people using those

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platforms are not employees of the

organisation. As a BBC employee I

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have a duty of care. Somebody

putting out a tweet doesn't have any

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sense of that. It's just sharing

their opinion.

Looking at Google for

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example in the United States, they

do offer a television service, and

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in that sense they are a traditional

publisher. These companies behave

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very much as traditional publishers

do, but they don't want to have the

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same regulatory regime or

obligations as traditional

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publishers do. I think it's only a

matter of time before there is some

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balance struck between the public

content and what is separated out as

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the comments of individuals on the

platforms, in the same way as you

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have rules for comments sections on

newspapers.

Thank you for your

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analysis and thoughts, Richard. It's

a tricky problem to try to resolve.

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We would like your ideas and

comments and thoughts. A lot of you

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getting in touch already, keep them

coming in.

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Let's take a look at some

of the other stories

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making the news...

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British luxury brand Burberry has

reported a 2 percent drop in revenue

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for the three months

to end of December.

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It comes after sales in Europe

slipped against a year ago,

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when a fall in the pound helped it

perform well in its home market.

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Nestle will sell its US

confectionery business to Ferrero

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for almost $3 billion as it focuses

on healthier products.

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The Italian company beat out Hershey

and others for the candy unit,

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which includes brands

like Crunch and Butterfinger.

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The maker of Nutella will now

become the world's third

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largest chocolate company.

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Nestle says it wants to focus

on bottled water and baby

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food for future growth.

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Ford has reported earnings

for last year that came

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in below expectations.

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And its forecast for this year

is also lower than forecast.

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The car maker's shares

fell more than 2%

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in after hours trading.

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The firm said higher costs

for metals and other materials,

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as well as currency

volatility, could cost it

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$1.6 billion this year.

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Australia has filed a trade

complaint against Canada

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to the World Trade Organization,

over its strict rules

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on imported wine.

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This follows a similar complaint

by the United States last year

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over the same issue.

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Leisha Santorelli is in

Singapore with more on this.

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It's interesting how so many people

can get so animated about wine, but

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it's a big export for Australia.

Absolutely, both the US and

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Australia want equal access to

Canada's wine market because it is

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worth an estimated $7 billion. A

very important market for them. The

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complaint by Australia about Canada

to the WTO is the first time they

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have done it in the history of the

organisation. Canada is Australia's

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fourth biggest wine market, and in

the complaint Australia complains a

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number of provinces in Canada

discriminate against wines produced

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overseas. The provinces in question

are British Columbia, Ontario,

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Quebec and Nova Scotia. Many

provinces implementing higher prices

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as well as sales taxes on imported

wine. In British Columbia for

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example, imported wine has to be

sold in a separate section of the

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supermarket. Basically, it's a store

within a store and it even has a

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separate cash registers, so it might

prevent people going to buy foreign

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wine. Australia's Trade Minister, in

the complaint, in the press release,

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has said Canada's protectionist

policies has the potential to

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threaten jobs in Australia and so

under WTO rules, because of the

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complaint, Canada has 60 days to

settle it before it can be escalated

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further.

They just need to sit down

over a bottle of wine and sort it

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out.

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Hong Kong stocks hit their highest

ever level in late trade

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on Wednesday, a day after posting

a record close despite losses

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on Wall Street, where investors

cashed in after a strong run of data

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and ever-rising markets.

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In Europe - expected to follow that

downbeat mood from Wall Street too -

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suggesting we might see some sort

of pullback from those record

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highs we've seen of late.

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The US market given a boost by the

tax cut in the United States.

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And in the back of the mind

of investors is the potential US

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government shutdown at the weekend -

if the row over budgets

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doesn't get resolved.

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A small dip in oil prices also

one to keep an eye on.

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More on that ina moment,

but first Samira has

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the details about what's ahead

on Wall Street today.

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On Wednesday, the US

Federal Reserve, America's central

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bank, will release the beige book.

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It is published in advance of Fed

meetings and is reallly

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a compilation of economic conditions

as reported by each Federal Reserve

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Bank across the country.

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So why is it called the beige book?

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Well, the cover is beige, of course.

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Bank earnings continue on Wednesday

with Goldman Sachs and Bank

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of America reporting.

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Trading revenues are expected to be

weaker but most analysts are pretty

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optimistic about banking as a whole.

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One reason of course

is the continued economic growth

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and the Federal Reserve continuing

to raise interest rates.

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The other big factor contributing

to better results for banks

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is the passage of the tax reform.

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We were just having a chuckle over

her explanation of the beige book. I

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didn't know that, and I'm the

central bank geek!

I knew it but I

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have spent a lot of time stood

outside the Federal reserve.

There

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is a lot going on, as ever. What's

catching your attention? A lot of

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people watching Bond markets right

now.

That seems to be where investor

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attention is right now. They have

been very quiet over the last few

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years and have done very well as

investors focus on a middle view

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outcome. Some of those factors seem

to be changing and bond markets are

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weakened since the year end and

investors are focused on that. As

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our governments, given as the price

of money they are borrowing gap.

If

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bond markets are weakened, what's

the impact?

It increases the price

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of money for governments. So they

have to pay more to settle their

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debts. Governments have been

borrowing cheaply for a long time.

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But every bit of borrowing in the

private sector is priced of the

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government bond rate and that rate

has gone up in the last few weeks.

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That is the centre of attention for

investors, as to whether it's an

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opportunity to buy, or whether it's

a turnaround from 20 years of bond

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market strengths and we have seen.

A

word on Carillion as the saga

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continues. The fallout of supplies.

Inter service is a firm that is very

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similar to Carillion.

It does some

very similar things, particularly in

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the support service side. There is a

lot of focus on that business. Some

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of it is the nature of the business.

Long-term contracts can be quite low

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margin so in essence those companies

are guessing how the contract will

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progress over the length and there

is a lot of debate how one accounts

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for the contract. They are different

companies, but at the end of the

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day, it's the nature of that sort of

business, and it's under some

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scrutiny at the moment.

Richard, you

will be back later in the programme

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to talk about all sorts. We have

lots of interesting stories coming.

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Still to come...

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We'll tell you how you can keep

a close eye on your business

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from thousands of miles away.

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You're with Business

Live from BBC News.

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Let's get more on the Carillion

story.

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It's deadline day for private

contractors who supplied

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construction firm Carillion,

which collapsed on Monday.

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48 hours later,

they are having government support

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withdrawn, leaving some

with huge unpaid bills.

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BBC business correspondent

Jonty Bloom joins us now.

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Talk us through this end of

deadline, what does it mean?

It

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basically means people working on

private sector projects are left

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swinging in the wind. They don't

know if they will be paid. They

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don't know who will take over the

contract. It's very worrying for

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them. And also many subcontractors

for Carillion, and there will have

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been thousands, if not tens of

thousands, will be looking at its

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books and basically what the

accountants are saying is they will

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be lucky if they get 1p in the pound

of the money Carillion owes them.

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They will have to write off all that

money they were due from the company

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they were expecting to earn, because

they will not get it.

In the

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meantime, shares in Interserve have

fallen today.

It's difficult to say

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if they will be the next Carillion,

but they are a similar company and

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they have also put out a profits

warning. The similarity ends there.

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Carillion had expanded very rapidly,

with large overseas contracts that

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hadn't been paid. They ran out of

money and the banks and government

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refused to support it any further.

It went very quickly from a company

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that people thought was worth

hundreds of millions, if not

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billions, to a company that owed

billions of pounds. No sign that

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Interserve is like that, but the

worry is most of Carillion's value

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was those contracts. When it's

turned out the contracts were not

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making money, the value plummeted

very quickly.

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Thank you so much. Jonty Bloom, one

of our team in the business unit

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trying to stay on top of this

Carillion story.

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Speaking on Radio 4 this morning,

Carillion executives should forego

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their bonuses. It seems incredible

this is even being spoken about but

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the shadow Chief Secretary to the

Treasury has adjusted that should be

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the case, they say they are owed

them, but he is then the moral point

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is that they should not take their

bonuses. The full interview is on

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the website.

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You're watching Business Live.

0:16:220:16:23

Our top story - bosses of YouTube,

Facebook and Twitter will attend

0:16:230:16:26

a hearing in the US aimed

at tackling the spread

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of extremist content online.

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All three of the platforms

have already taken measures

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to prevent terrorist propaganda

but politicians around the world say

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more needs to be done.

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What if there was a sort of baby

monitor for businesses

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that allowed companies to check up

on their projects, even if they're

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not on site to see them?

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Our next guest has a firm that lets

companies do just that.

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It uses the latest technology

to access more than 150 earth

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satellites from commercial operators

that can curate 10 million square

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kilometres of new images every day.

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The construction industry is key

to their client base.

0:17:130:17:15

They monitor more than 15,000

construction sites over

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the Middle East, North Africa,

China, North America and Europe.

0:17:180:17:24

With us is Corentin Guillo,

the founder and Chief

0:17:240:17:30

Executive of Bird.i.

0:17:300:17:34

Nice to see you. Thanks for coming

in. As soon as I heard about your

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company today and read the

information, I thought, why do I

0:17:380:17:43

need you?

There is Google maps. I

think that's a good question and one

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we ask, but what you have to keep in

mind is that that is just a snapshot

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of the planet and the data is very

out of date. In the main cities in

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the world, the data is replaced

every six months, outside cities,

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every two years and outside that,

every five years. We have satellites

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which are available but not access

markets.

Give us an example of where

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this would be useful.

The

satellites, I think it is

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interesting to understand how the

satellites work. They orbit around

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the Earth on a global basis, but

they also depend on weather

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conditions. He could get access to

satellite images all over the world

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but the countries in the Middle East

are good for this because the

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weather is good. At the start of the

bird.i story, we discovered that

0:18:380:18:42

construction companies in the Middle

East are really ready for this

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technology because the market there

is growing so quickly that they

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cannot keep up-to-date with it.

We

have been looking at pictures of the

0:18:500:18:56

Middle East and when you see a

construction site, you can zoom

0:18:560:18:59

right in and see what work has been

done, what is still outstanding. But

0:18:590:19:04

why can't you use something like

Skype? They could hold it up on the

0:19:040:19:08

ground and show you? What do you get

from this that you can't get from

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other technology.

I think the main

value of this is that its evidence.

0:19:130:19:17

You have a photo that shows you what

it looks like today and you cannot

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argue with this. It takes a lot of

time to call contractors if you have

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15,000 sites. With the satellite

imagery and the information we

0:19:280:19:33

extract, you have an up-to-date view

of the site and you are also told

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when the site starts and stops to

progress.

When you told me about the

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costs of it, I must admit, I

thought, wow, that's expensive. But

0:19:430:19:49

to an individual, it's expensive,

but to businesses, it's not really,

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is it, in terms of what it is saving

them?

No. For individuals, they are

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not educated to start using this

type of business because they have

0:20:010:20:05

Google maps and that is enough. But

for businesses, using this

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differently, consuming the images

could cost you 5000. We have a

0:20:170:20:24

system where people can subscribe

and then they pay the one price to

0:20:240:20:31

find all the images.

You are a

Frenchman he decided to start your

0:20:310:20:36

company in Scotland? Why?

When I

started the company, I moved from

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being at the London Oxford area to

Scotland because they build more

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spacecraft than any whereas in the

world. They have fantastic

0:20:500:20:57

universities and talent there and I

knew I could not do this on my own.

0:20:570:21:02

Richard Dunbar, our other guest in

the wings is cheering what you just

0:21:020:21:06

said.

The Scotland connection.

0:21:060:21:10

Thanks very much for coming in. It's

been absolutely fascinating.

0:21:100:21:16

We are going to talk more about what

is in the newspapers, specifically

0:21:160:21:21

about the US and how the tax cuts

that are affecting people. Before

0:21:210:21:27

that, how you can get in touch with

us.

0:21:270:21:30

Stay up-to-date on the BBC's

business live page with information

0:21:300:21:35

from our team of editors right

around the globe. We also want to

0:21:350:21:39

hear from you. Get involved on the

BBC's business live page.

0:21:390:21:44

Business live, on TV and online.

What you need to know, when you need

0:21:520:21:56

to know.

So, we asked you to get involved and

0:21:560:22:00

you have done today. It has been

brilliant to your views on our top

0:22:000:22:04

story which has been about the likes

of Twitter, Facebook, YouTube

0:22:040:22:09

getting a grilling in the United

States about extremist material on

0:22:090:22:13

their platforms.

What have people been saying? Trevor

0:22:130:22:18

says, no, no more regulation because

who defines what is extremist?

0:22:180:22:21

Another one said would it really

sells the problem because then

0:22:210:22:27

another one just springs up. If you

regulate one, you have to regulate

0:22:270:22:31

them all.

Lies shouldn't be unchallenged,

0:22:310:22:37

assuming all of the material is

false, some of it is not.

0:22:370:22:43

Another one says terrorism is go too

wired now for anything to generate

0:22:430:22:49

clicks.

More on that later when they are

0:22:490:22:55

called to account over the spread of

online extremist content.

0:22:550:23:01

Richard is back, as promised. Why

are Facebook, Twitter etc in the

0:23:010:23:07

news for other reasons today?

They

are very well run companies, we all

0:23:070:23:17

use their products, but there is a

lot of focus today on the media

0:23:170:23:20

power that they have and whether

that power is being properly used. I

0:23:200:23:26

think the regulators are firmly

parked on these company's lawns and

0:23:260:23:34

what's important is that these

companies have led to the rise in

0:23:340:23:39

the markets Wall Street, and if that

charge was to falter at all, that

0:23:390:23:45

would have implications for the

broader stock market.

They certainly

0:23:450:23:49

have led the charge, there is no

doubt about that. The share price

0:23:490:23:53

increase last year was quite

something. With those in your

0:23:530:23:57

portfolio, you'd be loving, wouldn't

you? Their profits have followed. I

0:23:570:24:02

know Twitter, our previous guest was

saying is not doing so well, but the

0:24:020:24:05

rest of them are, aren't they?

They

are. You are absolutely right. We

0:24:050:24:11

are starting to see profits and cash

being generated by these companies

0:24:110:24:16

and expectations of decent profits

and cash flow going forwards. If

0:24:160:24:22

regulators and politicians tanks are

parked on the lawns, that is a

0:24:220:24:25

problem for these companies, I

suspect.

Shall we talk about the

0:24:250:24:36

Markel sparkle, as it is being

called?

The story is that what

0:24:360:24:52

Meghan Markle wares will drive

business.

How do they work this out?

0:24:520:25:00

I suspect it would be getting rather

than forecasting.

I know the wedding

0:25:000:25:06

well contribute to the economy but

the point of this article is that it

0:25:060:25:10

overtakes Kate Middleton.

Time will

towel. It is interesting that both

0:25:100:25:15

Kate and Meghan, the whole group

have used that power to promote

0:25:150:25:23

British business and expertise, they

recognise the power they have and I

0:25:230:25:27

think they have used it well over

the years.

What are you going to be

0:25:270:25:30

doing on maybe...

Maybe 18?

0:25:300:25:36

I'm not sure. I should have

researched it.

0:25:360:25:41

It is a Saturday, isn't it, so no

day off.

0:25:410:25:46

No, we are not getting a day off.

That would have boosted the economy.

0:25:460:25:50

Or maybe it wouldn't.

I await

instructions on what I am doing on

0:25:500:25:57

that day.

Did you find out the date?

No, I didn't.

0:25:570:26:03

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