20/03/2018 BBC Business Live

This is Business Live from BBC News

with Rachel Horne and Sally Bundock.

The social media giant Facebook

loses nearly $40 billion in market

value as it launches a review

into the data-mining firm

Cambridge Analytica.

Live from London, that's our top

story on Tuesday 20th March.

Shares in Facebook suffer their

biggest one day fall since 2014!

Will the Cambridge Analytica

story force the social

media giant to rethink

its lucrative data policy?

Also in the programme....

Uber suspends all tests

of its autonomous cars after a woman

in Arizona was killed in a collision

- we'll take a look at what's next

for driverless technology.

The markets were down yesterday,

Europe is back in the green today.

We will tell you why. As shoppers

continue to desert the high street

we will speak to the boss of a

clothing retailer hoping to benefit

from the boom in online sales.

As always, we want to hear your

thoughts on any of the stories

on today's programme.

Data-sharing, driverless cars...

Online retail.

Get in touch.

Just use the hashtag #BBCBizLive.

Hello and welcome to Business Live.

Shares in Facebook slumped

as the social media giant faced more

questions from US and UK politicians

about its privacy rules.

There are calls for boss

Mark Zuckerberg to explain how

Cambridge Analytica acquired

and used Facebook

users' information.

The British firm is accused

of using the personal data

of 50 million Facebook members

to influence the US

presidential election in 2016.

Although Facebook has

denied any wrongdoing,

investors are concerned -

Facebook shares closed

down almost 7% lower,

wiping almost $37 billion off

the social network's market value.

In the UK, the Information

Commissioner Elizabeth Denham

is seeking a warrant to look

at the computers used

by Cambridge Analytica.

The data firm denies any wrongdoing

and insists it followed

the correct procedures,

but nonetheless it was suspended

from Facebook last week.

The BBC's Emily Maitlis spoke

to Cambridge Analytica's chief

executive on Newsnight.

She asked him whether he thought

his firm had influenced

the outcome of the Brexit vote

or US presidential election.

Well, of the Brexit bowled... In the

Trump victory we were involved in

the Trump campaign, as I made clear

for very many months now. We managed

everything from research, to date,

to analytics, to all the digital

marketing and the television

marketing undertaken. So we had a

role that was called to some of the

functions delivered to the campaign.

And do you feel you have skewed

democracy by playing a part in that?

By providing campaign services to a

candidate who had been fairly

nominated as the Republican

representative of the United States?

How is that possible? So you think

that Hillary Clinton is allowed to

have a campaign team and Donald

Trump isn't?!

That is the chief executive of

Cambridge Analytica speaking to the

BBC.

With me is Jane Sydenham,

Investment Director

at Rathbone Investment Management.

Good to see you, Jane. Give us your

take on the reaction on the markets,

Facebook shares down quite a bit, no

big surprise given the story?

Not at

all. I think this has been the

worries investors have had for some

time, at some point there are likely

to be some constraints and

regulation about the kind of

information and the access that some

of these companies have to

individuals' personal information.

We are starting to see, obviously,

in Europe, the introduction of GDP,

a European directive all about

restricting access to personal

information. This is a growing worry

which may start to affect these

companies and unconstrained access,

not just Facebook. Alphabets, Google

etc, they all have access.

This is a

wider concern for the whole industry

who may have had a feeling they

could use all this information as a

real way to make money and it is

looking like that could no longer be

option?

I think that is right. It is

very easy to forget how quickly

these companies have grown and

become such an essential part of our

lives and there has not been much

thought about whether or not it is

right for them to have so much

access to so much information. I

feel that is about to change.

As you say, the European directive

which comes in in May, many

businesses are trying to get their

heads around this. There will be new

legal requirements on them when it

comes to the data they have about

their are and what they do without.

In terms of us going about our

day-to-day business, we do not think

about it that much, and yet these

stories come about and we think,

hang on, what is happening to

information about me and where is it

going?

Exactly right. We go on to

all these different websites and do

what we want to do and do not think

about who else is gathering our data

and what they might be doing. I

think this will raise that awareness

with the general public. I think the

new legislation will raise that.

Everyone has been written to

(INAUDIBLE)

And how it will affect them, going

forward.

Thank you for now, Jane.

(INAUDIBLE)

We will touch on it later.

Let's take a look at some of

the other stories making the news...

Taxi hailing company Uber has

suspended all tests of self-driving

cars after a woman in Arizona

was killed in a collision.

She was crossing the road

with a bicycle when she was

struck by the vehicle -

which was running in what they call

autonomous mode, although there

was an operator at the wheel.

It is the first time a pedestrian

has died in an accident

involving a self-driving car.

The company co-founded

by the disgraced movie mogul

Harvey Weinstein has

filed for bankruptcy.

The move is intended

to facilitate a buy-out offer

from a private equity firm.

The firm also announced that any

victims of, or witnesses to,

Mr Weinstein's alleged sexual

misconduct will be released

from non-disclosure agreements.

Saudi Arabia is scaling

back its ambitions for a public

offering for oil giant Aramco,

moving ahead with a listing

next year solely on the

Saudi stock exchange.

That's according to

government officials.

The decision has come in part

because of concerns about legal

risks and also because the need

for a bigger listing has been

negated by rising oil prices.

Let's look at how the markets were

faring overnight. Shares in Asia at

the ever so slightly, the Dow in New

York was down, some investors

concerned about the prospect of

stiffer regulation for the tech

sector after Facebook came under

fire about reports of improper

access to user data.

So lots of investors selling

and taking profit on tech stocks.

And don't forget new Federal Reserve

chairman Jerome Powell's kicks

off his first policy meeting today.

Investors still split on whether we

could see three or possibly four

interest rate rises this year.

Europe was down yesterday but has

opened up this morning. Keep an eye

on the FTSE.

UK inflation figures

for February due out.

At last measure it was 3% -

today's reading is expected

to fall slightly.

We'll keep an eye on that.

And Joe Miller has the details about

what's ahead on Wall Street Today.

After stock markets made a bumpy

start to the week, investors might

be looking for signs of stability on

Monday. It so, maybe FedEx can offer

one. The parcel delivery giant is

widely expected to continue its

strong run of earnings reports when

it releases numbers for the first

quarter. Forecasts are for as much

as a 15% jump in profits compared to

the same period last year. There

have been worries that FedEx will

soon face a fierce competitor in the

shape of Amazon. The online Bailey

Mes is

planning to delivery network which

would directly challenge the likes

of FedEx and UPS is. FedEx seems to

be readying for the fight. I meant

it announced a new investment to

build a customer return service for

merchants using its network.

Chinese President Xi Jinping has

given the closing speech

at the National People's Congress,

saying China's development was at

a critical stage and the country

could not be complacent.

China is still the world's

second largest economy,

but it's suffered a slowdown

in recent years.

Beijing is worried that businesses

are taking on unnecessary risks.

Last month, the government took

control of the fast-growing Chinese

insurance group Anbang over fears

about its financial health.

Meanwhile, China faces other threats

- US President Donald Trump has

called for a better trade deal

with China, and announced a 25%

tariff on imports of steel and a 10%

tariff on aluminium.

With me is Jinny Yan,

Chief China Economist

at ICBC Standard Bank.

Nice to see you again. I know you

listened to the speeches today, it

was not just President Xi but also

the Premier, they both are quite

interesting things to say. Give us

your take?

I think it was very

revealing. First of all, with a new

set of ministers in place already

announced over the weekend, the

speeches really unveiled what China

is focusing on going forward. For

me, what is really interesting is

the fact that the focus is not just

on how China is going to steady and

grow its economy, it is very much

shifted on reining in the risks and

also how to deal with international

relations. I think as you see from

the key ministerial posts announced,

it is very interesting to see that

these people are exactly that in

place to deal with the challenges

facing China.

The comments were very

much in opposition to the noises we

have heard from United States, China

talking about opening its economy.

How easy is it for International

businesses to take access of the

open economy?

I think China has been

trying to open its economy and

business sector to lots of

industries, particularly the service

industry. This is what China needs,

it needs education, health care,

pension systems. For me, one of the

most interesting things is that as

Chinese companies have opened up

internationally, more and more

experience in terms of her domestic

companies are opening abroad has

given China some insight into how

China needs to open up to

international companies.

When you

say China is more open and

interested in the services sector,

what about the area when it has

strengths and does not really want

competition like technology. Over

the years, companies like Microsoft,

Apple and Google have struggled to

feel they have a level playing field

in China. Will that change?

It's

Maybot it is all about competition,

all about letting the markets work

at its best -- it may, but it is all

about competition. Chinese companies

are rising but that is because

perhaps they understand consumers,

very much so in China. That is not

to say international companies

don't, but I think clearly for

Chinese companies they can navigate

to the market much better than

international communities.

Thank you

for your time and analysis, Jinny

Yan.

Some breaking news about Sarkozy,

the former French president, Nicolas

Sarkozy. He is being held in police

custody today for questioning by

magistrates looking at allegations

of Libyan funding for the 2007

election campaign, that is according

to an official in the French

judiciary. A lawyer for Nicolas

Sarkozy could not be reached

immediately for comments. Former

French President Nicolas Sarkozy

held in police custody over

allegations of Libyan funding for

his 2007 election campaign. More

during the day on BBC News.

Still to come...

Taking on the fashion giants!

We'll speak to the boss of one

online clothing retailer hoping

to take market share away

from the likes of Asos and Zara.

You're with Business

Live from BBC News.

Consumers could see prices fall

by up to 1.2% if Britain

were to abolish all tariffs

after Brexit, that's according

to a new report out today

by the Institute for Fiscal Studies.

Joining me now is Simon

French, Chief Economist,

Panmure Gordon & Co.

Thank you for joining us on the

programme. They are saying that

prices could fall if tariffs are

abolished, but on the flip side

other costs could wipe out any

savings?

You are absolutely right,

Rachel. In your introduction to the

programme you mentioned we get the

inflation data at 9:30am, it will

suggest prices are going up much

faster than the benefits identified

in the IFS research. 1.2% is the

maximum amount consumer prices might

come down if the UK uses its

freedoms outside the customs union

to reduce tariffs third-party

countries. We have already seen at

2% increase in consumer prices since

the referendum, so definitely a

two-handed answer to your question.

If we were to reduce all of the

tariffs, some are used to protect UK

industries?

Look at the story

dominating markets in the last few

weeks, the steel and aluminium

tariffs suggested by the Trump

administration to protect US

industry. Bring that back to the UK

and large parts of the UK

manufacturing base in particular

have a tariff system to third-party

countries enabling their industry to

remain competitive. Clearly if the

UK chooses a path of unilaterally

reduce its own tariffs, that will be

quite difficult for those companies

to remain competitive.

In the meantime, should I ask you,

what is the feeling among your

clients and colleagues about the

so-called Brexit breakthrough agreed

yesterday, the transition

arrangement? Do you feel people are

feeling more confident about the

near future, ie business leaders?

Actually, I do. There were some

decent upsides in the transition

agreement, albeit that we will have

to wait until probably the third

quarter of this year before it is

all agreed. There is the overhang of

the Northern Ireland question. From

an investor 's perspective, a bit

more certainty, the reduction of a

risk of a cliff edge on March 2019

which is extended to December 2020

and also the right for EU nationals

in the UK remaining unchanged during

transition is important for

employers communicating to their

workers.

Thank you.

You're watching Business Live.

Our top story...

Shares in Facebook slumped

as the social media giant

faced more questions from US and UK

politicians about its privacy rules.

There are calls for boss

Mark Zuckerberg to explain how

Cambridge Analytica acquired

and used Facebook

users' information.

Both companies deny any wrongdoing.

When it comes to shopping,

the rise of online retailing

seems to know no bounds.

That's especially when it comes

to online luxury fashion for women.

According to one study,

the global market will grow

to around $12 billion this year.

In fact, online sales are predicted

to make up around 18% of luxury

sales for women in the US and UK.

The online world is becoming

increasingly attractive

to upmarket e-tailers -

like the founders of online

fashion retailer Baukjen.

Since being launched in 2012,

it's seen growth skyrocket.

I spoke to the CEO,

Geoff van Sonsbeeck,

and he explained why

he started the company.

We started 15 years ago.

It's a very family run business.

I do it with my wife who is called

Baukjen, very confusing.

15 years ago, we launched

a brand called

Isabella Oliver and six years ago

we launched a womenswear

brand called Baukjen.

What was your inspiration

for your company?

It was really the belief that modern

life is changing quickly,

the modern woman is much busier

than ever, and we felt

that we could design a brand

and a collection that she could rely

on and could trust as a good friend

to help her to curate

a collection that you can mix

and match, could reuse a wardrobe

she already has and to always

be on trend and very

efficient and versatile.

And we believe that there

was a need for an affordable

contemporary premium brand.

There was definitely...

There are plenty of contemporary

premium brands, but we felt

there was a gap in the market

for affordable contemporary

premium brands.

There was a great advantage

that we have been

e-tailors from the start,

from the go get.

It means that we have a different

cost structure and we can allow

to have more of these gains,

to be feeding it back to the product

itself and invest in the quality

of the product.

There are many ways to go.

We could of course compromise

on the quality and we do not want

that and we could of course produce

predominantly in the Far East

and we do not want that either.

So we produce particularly

in Portugal and we do that not just

because the mile per garment is more

sustainable, which is important

to us, but also, it allows us

to order a relatively small

quantity and get back

into the products very

quickly and in doing so,

we carry less risk of having

the wrong stock in the wrong place

at any time, which is a typical

problem in the fashion industry,

which drives the cost up

and the consumer will feel it.

And we're not having it, we can pass

that gain onto the customer.

So far, you are not

a bricks and mortar seller,

you are entirely online.

Why have you made that decision?

Well, that remains to be

the question, if you like.

Our heritage is in e-commerce.

When we launched our first brand,

we were the first fashion vertical

in the UK and we have always

believed in that, that there

is a way to reach the customer

via digital and now digital

is everywhere and I increasingly

believe the customer will want

also in a real bricks

and mortar sense.

We are being approached

by department stores, UK mostly,

but international as well,

and we are very excited

about going into concessions,

so that is what we are exploring

now, to add concessions,

the John Lewises of the world,

to add that to our current

e-commerce infrastructure.

Give me a global

perspective of the company?

You are based in the UK, you do some

manufacturing in Portugal.

What countries are you involved in?

We largely produce in Portugal.

The whole business

itself is in the UK.

Kentish Town, we have about 60

people, about 15 nationalities,

and we have a warehouse in Luton

of about 20 people, so the whole

infrastructure is in the UK,

but we import everything straight

to our warehouse and then we ship

all our global orders from Luton

directly to the consumer.

In terms of size, about

a third of our business

is international and two thirds UK.

That was the CEO of Baukjen. We

mentioned earlier Uber has suspended

all its self driving cars. A woman

has been killed. This report from

San Francisco. It was late Sunday

night when according to the police

and Lane was struck by Uber cosmos

driving car, the 49-year-old was

crossing the road but not using the

pedestrian zone, there was a driver

behind the wheel, but Uber said the

vehicle was in full autonomous mode.

She was taken to hospital but died

from her injuries. Taking to

Twitter, the chief executive of Uber

said the news from Arizona was

incredibly sad, we are thinking of

the victim's family as we work with

local law enforcement to understand

what happened. As part of its

licensing agreement, it must keep

detailed logs. Although she is the

first pedestrian to be killed by an

autonomous vehicle, her death comes

a year after Uber temporarily took

it self driving cars off the road

following an accident that left a

Volvo on its side in Arizona. The

programme was later reinstated.

There are so many motor vehicle

deaths in the US and generally every

year and the ultimate goal of self

driving cars is to eliminate those

entirely. But these are complex

systems that are just starting to

navigate the roads.

Arizona has

positioned itself as a testing

ground for the new technology but

incidents like this will no doubt

concerning those who do not believe

the systems are yet safe enough to

be on the roads.

Many of you have been in touch. We

have been asking for your views on

what happened and how you feel about

self driving vehicles, if it has

changed your opinion. They tweet

from Jack, a developing technology,

I see it as good for people like me

who would physically struggle to

drive, but driverless cars will

happen, a long way off. And another

saying, wait to see what caused the

accident. To date all accidents

involving self driving cars have

been human error. 1.2 million people

are killed on the road globally

every year, I would imagine it is

possibly more than that... In

incidents involving humans behind

the wheels. He is saying, it gives

us some perspective. We promised

Jane would return, discussing all of

this. It is an interesting time

because we have talked about

Facebook, concerns about that, a

real flurry out of technology stocks

yesterday.

It is another question

mark over the development of

driverless technology and probably a

delay. Longer before these cars are

out on the road and making a

difference to our lives. It is

technology that is coming, no doubt

it will happen, but it is clearly

sadly... It will mean there will be

a delay. There is a price quite

often with lots of things like this.

When I think of what Virgin Galactic

experienced when they were saying...

Testing technology, it is not known,

very tricky. This report in the San

Francisco Chronicle saying the

police chief says that there was no

fault by Uber. The preliminary

investigation, they mention it was

travelling at 38 mph in the 35 mph

zone. It is difficult to know

whether or not the accident would be

avoidable anyway.

This is exactly

why all the testing needs to go on.

Very sad consequence this time.

This

story in the Financial Times

newspaper today, one in seven EU

companies are moving supply chains

out of the UK, we were talking

earlier and also yesterday about

this so-called Brexit breakthrough,

the transition arrangement agreed by

David Davis and Michel Barnier on

Monday, it is interesting how

companies have been busy sorting

themselves out, making plans

regardless?

Many have to just

because it takes them a long time to

reorganise their business. We only

have a year, really, until we leave.

In some cases, it simply is not long

enough, companies have ready had to

make the decisions and start to put

plans in place, it is all about

time.

In the article, head of policy

and trade saying the point of no

return for many companies to get

ready for Brexit has already poor

tee past.

Yes, that is what we are

hearing from our clients -- it has

already passed. There will be others

who will now say, yes, we have a bit

longer, we can wait to see how it

works.

Interesting to see the

response with sterling with regards

to that yesterday, talk us through

that.

Any sense that there was a

little bit more certainty, markets

will welcome it. What is interesting

as it is the uncertainty that is

more damaging for markets than the

final outcome. In some ways, even if

it is a hard Brexit, as long as we

know it is a certainty, markets.

To

respond. -- markets will start to

respond. Just a reminder, judicial

sources saying the former French

President Nicolas Sarkozy has been

taken into police custody to answer

allegations about illegal funding of

his presidential campaign in 2007,

more on this throughout the day here

on BBC News. That is Business Live,

thank you for your company, we will

see you again tomorrow.