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This is Bloomberg day Break Weekend, our global look ahead at the top stories in the coming week from our Daybreak anchors all around the world. Straight ahead on the program, and look at some key inflation data in the US what it could mean for FED policy moving forward, Plus a look at earnings from the computer software Giant Oracle. I'm Tom Busby in New York.
I'm Caroline Hebcker in London, where we're following europe Central Bank as it navigates an unprecedented time in the region.
I'm Paul Allen in Sydney, looking at next week's IBA decision and Australia's social media band for teams.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven three on New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Sirius XM one twenty one, and around the world on Bloomberg Radio and the Bloomberg Business.
At Good day to you. I'm Tom Busby, and we begin today's program with a look at some key inflation data on the heels of a big bounce back in US job creation last month. November's Consumer Price Index out on Wednesday eight thirty am Wall Street Time. The Producer Price Index for last month comes one day later. For more on what to expect, we're joined by Edward Harrison, author of Bloomberg's Everything Risk newsletter. Edward, thank you so much for being here.
Good to talk to you.
Tom Well.
Now, inflation has come a long way down over the past two years, still has a long way to go before hitting the Fed's long established target of two percent. So what are you expecting to see in October's CPI number this week?
We're expecting to see the year over year number for CPI tick up ever so slightly to two point seven percent from two point six percent. And when you look at the core number, taking out food and energy, the expectation is it's going to be roughly the same as it was last month, which is three point three percent. Both of those are based on zero point three percent
rises on a monthly basis. Now, obviously two point six percent going up to two seven and three three are not that great numbers, but it's still coming down enough that I expect that the FED will still cut interest rates in December if the data come out as expected.
Wow, only about half a Wall Street thinks is with you on that one, But there is a lot of hope. Well, let's talk more about those numbers and what's behind this stubbornly high inflation, because, as you said, two point seven percent year over year overall, it's good, it's not great. So what are the big factors that are keeping inflation so high?
Well, it's definitely not food and energy, right, because if you you know, without food and energy, three point three percent versus two point seven percent a year on year with food and energy, Really it's about you know, core services and housing in particular. Those are the things that are still you know sticky, and you know sticky at
a level of over three percent. And so what that means is is that as twenty twenty five develops, you know, the cuts that we've been seeing at every single meeting by the FED are going to come to an end in about a week's time. You know, the week after this, we're gonna see the FEDS dot plot and they're in that it's going to tell us what they expect, how many rate cuts that they expect. The market is now pricing in actually about three rate cuts for twenty twenty five.
So let's just see what the what the Fed says when they come out with their data a week from now.
Yeah, that's a biggie. This is a meeting December seventeenth, eighteenth, the big decision, you know, to either hold steady or as you expect another quarter percent, you know, twenty five basis point cut.
Is that what you're thinking, Yeah, you know, and that's that's pretty much in line with the market. We can talk a little bit about the jobs numbers that we saw last week, but on the basis of the jobs numbers, immediately after the jobs numbers came out, the swaps market, which shows what the market is expecting the Fed to do, went from like, you know, sixty percent odds of a
cut to over eighty percent odds of a cut. So this number, the CPI number, this is going to be the one that either solidifies it or makes it a little bit murky. But word eighty percent, So that says that likely we're going to move towards eighty five ninety percent if the number is in line with expectations.
Wow, so that jobs report really did a number you think for the FED, Well, let's talk about it. Two hundred and twenty seven thousand jobs added. It looks like maybe we've exercised the ghost of those devastating strikes, a couple of really bad hurricanes. I mean, is this, Hey, we're back in business now after that dismal October number.
Well, you know, it does seem that way to me. The number, the two twenty seven number comes with fifty six thousand of net revision upward from the last two months before that, and now we're at about one hundred and seventy some thousand a month over the last three months.
That's up by fifty thousand. So you might think that those numbers would make the market spooked, but actually it wasn't because if you look at the household survey, the unemployment rate went up, So the unemployment rate went up from four point one to four point two percent. And if you've listened to what these FED speakers are saying, Chris Waller is one that I was thinking about. Another
one is the Atlanta Fed Raphael Bostic. They're basically saying, you know, unless the data are really terrible, we want to have a preventive cut going forward. Same thing from Austin Gouldsby of the Chicago Fed, they're all saying that, you know, this meeting, yes we're going to give the cut, the market's priced it in, but then going forward we're going to be a little more circumspect.
So three rate cuts in a row to end twenty twenty four year thinking, but twenty twenty five definitely dialing back on that more aggressive rate cut strategy exactly.
And you know, a lot of this, remember, is about the real interest rate. That is is that as inflation comes down, the FED is saying, unless we bring rates down, then it's going to be restrictive, not necessarily for those companies that can go out and borrow money in the capital markets, but for small businesses that are getting their loans based upon these rates. We really need to bring them down in order to be less restrictive for those companies.
Well in November, CPI data out there coming Wednesday, PPI on Thursday, and our thanks to Edward Harrison, he's the author of Bloomberg's Everything Risk newsletter. We turned out to earnings from one of the biggest names in technology, software giant Oracle putting out its Q two results on Monday. Will the artificial intelligence boom continue to fuel oracles year long rally and for more we're joined by Ana rog Rana Bloomberg Intelligence Technology Analysts. Ana Rok, thank you so
much for joining us. Shares of Oracle have skyrocketed this year, mostly on a cloud infrastructure services. So what do you expect to see in this earnings report on Monday.
Yeah, I think we'll listen to more of the same in a sense that cloud infrastructure revenue should continue to go up. The question is going to be by how much and whether the revenue recognition is being held.
Back by the shortage of supply, which is, you know, the GPUs that are sold by Nvidia, whether they're able to get their hands and do enough of them.
So when you look at somebody like an Oracle, it has a massive backlog right now, and we'll get to that in a second how it has them backlog. But the problem a lot of these cloud infrastructure providers are facing is their data center capacity as well as their hardware capacity is still a bottleneck, which is people are sending work for them, but they're not able to fulfill that demand. And that's where Oracle also is at this point.
So a shortage of GPUs stressed data centers. But now Oracle has built more data centers, hasn't it, including plans for a nuclear powered one. It is just go go go for them. Are they keeping up? Are they going to meet demands?
See? The thing is, it's unlike just you know, buying GPUs, which is also in a shortage. Data centers take time. You just can't spin up a data center overnight. It takes a few years to build one. What companies are doing right now is taking their role data centers and retrofitting them with new equipment, new cooling technology, new GPUs, new hardware in order to run some of these workloads, but in order to create the new one, that takes time.
And actually that's what's benefiting Oracle in one way because Microsoft has this relationship with open Ai, and open Ai is sending more and more workloads to Microsoft's cloud product, which is called Asher, and Microsoft is seeing that shortage. So guess what it's doing. It's tapping into Oracle and saying, hey, can you be my subcontractor and I can lease into your data center and run some of the workloads over there.
And that's really how you know the Oracles laughing about it because it's having to service it's one of its bigger competitors and partners, so it's getting a lot of work from Microsoft also at this point. So that is that is the big story for Oracle, then we think it is going to be the big thing for at least the next couple of years.
Well, Oracle not only Microsoft, It also had deals with Google, and just a few months ago a big deal with Amazon Web Services was exactly correct, Yeah, exactly, yeah, tell me about all those deals.
It is the same deal. Basically. What it is saying is if you get a command or a workload and you don't have capacity to do it, send it my way. I will be your subcontractor and you can run it in my data center and you will pay me for it. So it's a good thing for Oracle that it has this capacity, it has this data center. And as I said in principle, the only thing that's holding back all of them is that there's a shortage of GPUs and
the processing capacity. There is another thing that's helping Oracle. Frankly, I talked about one thing as an outsourced for the three companies that we mentioned, but there is another element that a lot of startups are also going to Oracle and saying, you know what, I just want to go out and experiment on this cloud infrastructure, and Oracle is giving them a good deal giving them, you know, because remember from a market size point of view, Oracle's cloud
infrastructure is fourth in size. The biggest one is Amazon, then Microsoft, then Google, and Oracle, given its large wallet, if we can fund set billion dollars of capital expenditures, is now, you know, in our view, the fourth biggest cloud data center company.
But is the cloud data center becoming more not just the management what it used to be, becoming more of the cash cow for Oracle?
Yeah, it is. Oh no, no, it's growing very well. It's growing somewhere north of forty percent. I think Consensus has that product to grow by fifty percent this particular quarter that's going to be on Monday. So from a revenue point of view, they are gaining.
As much market share as possible.
Whether they are making enough money, that's okay for them, because it's okay to take to buy it at a cheaper price or taking even of a big loss on that end, only because they have some other products that are highly profitable. Their old business of core database is very profitable. They have other applications, cloud applications, on HR customer service management. They are very profitable. So it has is it is really one of the most profitable software
companies out there. It's okay for them to lose a little bit money on the infrastructure and service. I don't think they lose money there because since those financials are not publicly available, even if they make less money on that compared to the database, that doesn't matter because in totality it's adding to the overall revenue base of the company.
Well, a lot to watch for Q two results from Oracle out on Monday. Our thanks to Anna rod Rana Bloomberg Intelligence and Technology Analysts, and coming up on Bloomberg day Break weekend, we'll look ahead to Europe's Central Bank decision as it navigates an unprecedented time in the region. I'm Tom Busby, and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby
in New York. Up later in our program, we look ahead to an important policy decision from the Preserve Bank of Australia. But first JUCHS policymakers convening this week to make their last interest rate decision of twenty twenty five. That's against a backdrop dominated by political uncertainty amid governmental challenges in France and looming US tariffs. Could the rate
path ahead be more slippery than first anticipated? Well, for more, let's go to London and bring in Bloomberg daybreak, europe Banker Caroline hepger.
Tom the European Central Bank is likely to cut interest rates again at its December meeting. Policymakers made debates a bigger than usual move, but comments from individuals suggests that they will proceed with caution for now. Speaking during a recent television interview, the Bank of Latvia, Governor Martin's Kazakhs said that uncertainty is still very high, with a number
of complex geopolitical risks facing Europe. Governing Council member Joachim Nagel has suggested interest rates should converge only slowly towards neutral territory, so support for a fifty basis point move does seem limited. Layer onto that, the political crisis in France, one of the bloc's biggest members after Michelle Barnier, became the shortest serving prime minister in French history, his government collapse following a vote of no confidence, crucially before a
budget could be agreed in parliament. The fiscal unpredictability of Europe is something ECB policymakers will have to consider their upcoming meeting Bloomberg. Stephen Cowl and I discussed this with Maria Demerzis, who is program leader at the Conference Board and professor of Economic policy at the European University Institute.
Well, I mean, the first thing is that we need to understand who will govern France, and the issue is that President mccran will not be able is not allowed constitution to call elections again, given that he's called elections
back in June. So that means that for one year from since last June, that means that till next June, we will have to have a technocratic government, another prime minister or a technocratic government that actually does the government business right, and that means that we will have to operate with the current budget and political decisions will not be a Difficultulican decisions will not be made. So I think that is what I foresee till next Shuar, when Persson.
Macron will have the chance again to call elections.
Italy may be used to having a technocratic government, France certainly is not. And the budget deficit is the main challenge. It is expected to run at six point one percent this year. How significant an issue is this going to be for Europe to have this continued uncertainty and instability in France.
Indeed, it's not good, and in fact, the reason why we are in this position here is indeed because Prime Minister Mariner was trying to put a budget forward that it was going to take us back in the right direction and in compliance with the European rules that have come into operations since September. All of this is postponed. Now will have to wait for the next government of French government to actually do the job, but it will have to be done, and the European Commission will be
what very closely. I remind you that France is under the excessive deficit procedure, which is the corrective arm of the monitoring process of the European Union, and that means that the European Commission will be watching very carefully.
What happens with the EU Commission's reaction to this if we do end up in this situation where they're rerunning the current budget, which means the effort is going to be far above what had been submitted and approved by the Commission in the pre budget rules. I mean, what are the next steps of the Commission can take If they're on this temporary holding pattern for the next potentially six months.
Progressively, it can put off enormous pressure on whatever French government is in place to actually do the job. In principal, he could also impose fines on the country. In practice, this has never happened, and I don't think it will happen, given also what we call the French exceptionalism. But I think the pressure for France to deliver is going to recommend any is going to come also from other countries
because there is in fact there's good reasons. What we have is rules in the European Union, and if a country like France, which is big, actually violates the rules, this isn't good either for the history of the rules or indeed for the European economy.
The Conference Board keeps close tabs on the views of CEOs within Europe, looking at the stock market as a measure there obviously European stocks, particularly French equities, have been suffering, but we've seen a bit of a bounce in recent days and Germany's let to DAX has done actually recently well year to date this year, which seems quite strange given the pessimism that CEOs do have on European economic growth.
Indeed, the CEOs actually tell us that they're in a recent service that we've done, they tell us that they actually prefer to operate outside Europe because I think conditions European economic conditions in Europe are not are very favorable. It's consistent also with the Charun account numbers that we see business conditions in Europe, you know they could be improved,
and this is exactly what drag you. Of course, the mission of Draguar was very much to find the policies that we need to put in place for this to change.
Is there actually any political currency though, to implement any of those recommendations. I mean, we saw the commission point to the Dragy Report and the other reports that have been done on competitiveness in the European Union as well. But realistically, if the national capitals aren't kind of up there and pushing it, and particularly France and Germany, nothing's really going to get done.
It is true that we need France and Germany to act as as Germany as in a coalition of change. We need them, and you know, with both actually countries now in political instability, things won't move very fast. However, what I will say is that that the CEOs are telling us that if there's one change that they won't
happen is simplification of the regulation. This is actually the top number one priority that they tell us is this, And what we saw actually the European Commission has actually put the point of the agenda very high in the priorities. So I would be very curious to see how they aim to implement this.
Yeah, I mean I suppose speed is also the other question involved in this, as well as how fast they be able to do something.
I wonder does something.
Like the twin three e g. In this idea of creating a separate corporate structure that could operate across member states. I mean that's the sort of idea that does that get CEO as excited. Is that a policy they could get on board with?
Yes, But like I say, I mean the CEO's understand how slowly europe movies. The twenty eighth regime is an idea that has been around for a very long time, particularly with regards to the creation of the Capital Markets Union. We've made very little progress in this respect. I think CEOs want tangible change, and this type of change, the certification of regulation, is something that can, in principle happen.
It doesn't require money, it doesn't require much agreement. Of course, it does require parliamentary approval, but everybody agrees on this, So I think this is one of the low hanging fruits. So if we get ourselves to implement it, we can actually make change.
Yeah.
My thanks to Maria Demerzis, who is program leader at the Conference Board and professor of Economic policy at the European University Institute, someone who spends time in both Brussels and Florence. So, after the failure of Barnier's administration, which injects uncertainty and perhaps more austerity into France, how will the ECB choose to rebuild is something I asked Bloomberg's senior reporter covering the Central bank yall around out.
I think France in itself is another source of uncertainty, of course, and there are already plenty other sources out there, and I'm sure we will get a chance to talk about that when it comes to the decision itself in the coming days. That of course will will not be affected by what we're seeing in France, but of course the the economic outlook very much will both the French economy, which of course is the is the Eurozone's second largest,
and the Eurozone economy itself. They're not doing very well at the moment. Pmis are deep in contractionary territory, and uncertainty of this caliber weighs on consumption, it weighs on investment, It stands in the way of of reforms. The absence of a government in France, of course, means fiscal policy is very much a wildcard, and also an important voice is missing at the European level, So a lot more
uncertainty to you know, in the future. To be aware of that will change the way the EACP looks at the economy and the economic outlook and the risks associated to that outlook, But not much of an impact on the decision itself.
I would say, yeah, okay, but the possibility of an economic drag perhaps further down the road. So, in terms of this upcoming meeting, do we expect twenty five basis points or could we see a fifty basis point rate reduction?
Yeah? I think twenty five is what I would bet my money on. Fifty. It's been talked about, if you asked me, it was never a real option. It was part of the speculation that the ECB might go down this route after pmis were significantly weaker than expected, after inflation didn't pick up as strongly as people might have expected. But even the market has come around too prising No, but not significantly more than a quarter point cut for
Thursday's meeting. So I would say twenty five is the way, you know, the way to position.
Yeah.
In terms of the risks though in Europe there are a number, aren't there? Not just the geopolitical uncertainty in Ukraine, there's also Georgia and looming possibly tariffs from an incoming Trump administration. How will these factor into the interest rate decision process? So many risks, so.
Many risks indeed, and all of that makes it very difficult to know what's ahead. We'll get new forecasts, which is going to be very exciting. We'll get a chance to look all the way into twenty twenty seven. But of course, you know that's that's a set of forecasts, builds, build on assumptions. We don't know yet what's going to
come on the terraff front. We don't know how the warn Ukraine is going to pan out, which will have an impact on, you know, how how Europe deals with its own defense, It might impact energy overall uncertainty, of course, so the risks and and the uncertainty around those forecasts are just enormous, which makes it very very difficult for policy makers to you know, say, with with with certainty, what's needed, where to go. And and that's you know, a big part behind why policy makers say we are
data dependent. We take a very gradual approach. Here, we're going step by step, and then we look around and see how our actions, our policy affect what's actually happening in the economy.
In terms of the data. As you say, the pressures on the economy, the possibility of stagnation really across Europe is quite significant. The pressures on inflation, though, have also been coming down. Just took us through the inflation picture now for Europe, we.
Have seen a small pickup in headline inflation that was very much in line with expectations, so that was not a big surprise there. The surprise really was underneath the headline number, so we had core inflation holding steady at two point seven percent. It's obviously still still above that two percent target, but it was weaker than expected. We are seeing a slowdown in services prices finally from a
very high level. Of course, we're still closer to four percent than two percent on that indicator, but we're seeing movement as well. And what is going to be very interesting on the inflation side is a look at the quarterly profile of the new projections I mentioned, and that will tell us you know something about how confident they will be in cutting interest rates further.
My thanks to Bloomberg's Janna Randau, and we will have full coverage of that final ECB meeting of the year with a Bloomberg survey showing that ECB watches now expect the Central Bank to cut a quarter point at every policy meeting through to June, taking the deposit rate at the ECB to two percent. I'm Caroline Hepge here in London and you can catch us every weekday morning for Bloomberg Daybreak you're at beginning at six am in London. That's one am on Wall Street.
Tom, Thank you, Caroline. And coming up on Bloomberg day Break Weekend, we'll discuss Australia's social media band for teenagers. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead at the top store, worries for investors in the coming week. I'm Tom Busby in New York. Australia's household spending rose eight tens of percent in October, exceeding estimates. This as the Reserve Bank of Australia is set to issue a policy decision this week.
Bloomberg's Paul Allen is in for Doug Chrisner on the Daybreak Asia podcast, and he has more from Sydney.
Tom. That pickup in Australia's October retail sales reflects a boost to household spending capacity. The data probably gives the RBA more room to hold rates for the time being while it waits for inflation to call. That's according to James McIntyre, who covers Australia and New Zealand for Bloomberg Economics, and he joins me now in our Sydney radio studio. So, James has been more than a year now. The next move from the RBA is likely to be down.
But when so twelve months, that's one of the longer holds that they've had. We have been thinking that they should be cutting already, but we've been wrong on that. And why we've been wrong as we've been surprised by how strong population growth is adding that extra demand of the economy. It looks like that's phasing off. So the question is is there going to be enough evidence in the first quarter of the year for the RBA to
begin cutting in in February or March. My view is that will at least be seeing that first move by May. So it's a question this year of whether there is kind of seventy five or maybe at a stretch one hundred bases points of cuts from the RBA next year. At the moment, the data is pretty strong, it's looking like we might be on that May start.
You're not the only one who thinks that the RBA probably should have gone by now. We had some commentary from Goldman Sachs saying that the RBA has no longer got an argument to keep rates high and continuing to keep them high is going to inflict unnecessary economic damage. Now, the RBA was slow to titan and it got criticized for that. Now it's slow to ease. Are we seeing the formation the genesis of another policy mistake here?
Well, I guess we need to kind of look at what are they trying to achieve and why would they cut And I think it's really the labor market that's that's been the surprise. If we hadn't had that population surge, we would have had a lot less demand in the economy, taking a lot more wind out of the pricing pressure, especially with demand and the retail sector and the.
Like with that.
But what's that demand? Being there in the economy has meant that labor market's been there and it's been quite strong as well. And we'd been expecting the unemployment rate to be marching well towards five percent by now by this time, giving the RBA a clear cut reason to lower rates. But at four point one percent, that's what the RBA is clinging to. But the very narrow path and this has been the retric from the RBA wanting to maintain those labor market gains, staying on the narrow path,
keeping that unemployment rate down. It's very very dicey about how long you hold because you can overcorrect, and you know, we're seeing that in New Zealand and the repercussions of that in Australia. Interestingly is that with that New Zealand labor market being so terrible, key wes have started flood across the border here to Australia and adding to the RBA's delay and problems.
And of course there's no restrictions on the number of New Zealanders that can come over either thanks to their closer Economic Relations agreement. But immigrations a really important part of the story here and it impacts the property story as well, and I want to get to that in a minute. But the other part of the dual mandate is, of course inflation. Now it's coming down. Is there a risk of undershooting here?
Well, look, in my view, yes, that's where the balance of risks lies. So the RBA is still the underlying inflation has been coming down. It's a little bit slower than the headline inflation. Some of the reasons that there is this embedded stickiness. Every country's got little different quirks with their inflation, and some of the Australian story at the moment is a bunch of these administered prices and some of them are basically goods that go up by
inflation the year before. So we've got a bit of an echo in some of the inflation right now, and that low inflation that we're getting as a result of the government's steps to provide cost of living subsidies and really putting downward pressure on the headline inflation. Those are things that will be anchored pretty low next year, but we could see that undershoot all of that would be a recipe for things going a little bit more south, a little bit quicker than the RBA is expecting, and
pulling inflation down with it. That's where that balance of risk lies.
In my view.
Growth's really been struggling, hasn't it. I think Jim Chalmers, the Treasurer, said of it in the second quarter it was only government spending that kept the country out of recession. How great is recession risk?
Yeah?
Well, I mean if you look in per capita terms, we've been in recession for more than eighteen months and that's likely to continue. In the GDP figures that we'll see for the third quarter, and it's unlikely I think that we do see that per capita GDP growth actually beginning to pull up until that's unlikely until we get rate cuts helping to kind of relieve some of the
tension on consumers there. So yeah, it's a very icy outcome, very low growth, very weak growth, which means that the labor market outcomes that we're getting some of those are reflecting previous growth, and the labor market ahead the outlook isn't as strong. And I think that's that very very delicate balance, that narrow path that the RBA is trying to three.
To hear, James will just finish up on the property story because it has the great Australian barbecue stopper, if you like, and so rate sensitive as well. And we've seen property prices cooling in Australia and that's a relative term. I mean, we're still a nosebleed territory here. But once the easing cycle does begin from the RBA, are we going to just see prices reigniting.
Well.
There has been really a tale of two stories within the property market. The Melbourne property market's been very weak for quite some time now. Sydney's starting to show those signs of weakness, especially at the top end, and that's where the borrowing capacity hit from high rates is really
leaving its mark. Those markets are likely to be ones could see quite a bit of upside if we do get a strong rates download rate cycle, But fifty seventy five or one hundred basis points over the year it's not going to give you that bigger punch on boring capacity and property price boost as other rate cut cycles
might have. So I think we might be relying on sentiment and those two bigger cities, which are the most important ones for the Australian economy, a bit of a sentiment improvement as rate cuts maybe helping propel things a bit next year.
All right, thanks James, as the RBA keeps us waiting. That is James McIntyre, who covers Australia for Bloomberg Economics. We move next to Australia's sweeping social media ban. Last week, Canberra past a law banning teams under sixteen from platforms like Facebook and tech Talk. It marks one of the toughest crackdowns on these social media companies, and the move is sending shock waves through the industry worldwide. Bloomberg's Angus
Swickley joins me now for a deeper dive. So, Angus key among this new law, as parents are going to be responsible for enforcing this band it's going to be up to social media companies to do it at risk of a thirty two million dollar US fine for non compliance. How is this even going to work? I mean, you can't could just find a way to get around this.
I think this is one of the big unanswered questions sort of hanging over this legislation. You're right in the law really does put the responsibility on the social platform operators rather than the kids and even their parents. So it's the operators like Facebook and Snapchat that must find a way somehow to check the identity or the age rather of the users without some kind of formal government
identification because that has also been ruled out. So one of the weaknesses, if you like, when this law was passed is that this technology doesn't really seem to exist in any practical form yet at least. Yes, it's true that the law does not come in to sort of effect for another twelve months or so, but even then, it's not quite clear whether the technology will be in place even then, So, yeah, how are the kids going
to be checked? There are privacy concerns there, facial recognition perhaps that doesn't seem to be up to speed yet, So yes, that is one of the questions.
Yeah, I've seen other commentary around this, suggesting that you know, even things like browsing history, online shopping behavior, whether or not people have a MYGV account. These are all ways that social media companies can detect whether or not a user is likely to be of age. But it doesn't really draw that definitive line in the sand, does it? What a social media company saying about this.
As you'd expect, there has been a strong wave of opposition to this legislation. I mean, this is a key demographic, isn't it for social media platforms, teenagers, youths. They may not be spenders at that age, but that they mature into valuable customers, don't they, so that they want to get their teeth into these users as it were. Having said that, they do make some criticisms which which do appear to hold some water, that they argue that the law is sort of ignore as the practical side of
age verification technology, which you could argue is true. It's it's been rushed, they say, which is also true. I mean it was plowed through the parliament in a matter of days, very little time for consultation, the platform operators argue, and very little time for some inquiry as well. India didn't even have time, it seems, to publish all the submissions it had on this legislation. A lot of that is driven by the terrible told social media inarguably takes.
Yeah, this has come about because of some of the very sad stories out there.
That's right, and these are profoundly sad stories users teenagers taking their own lives after spaces of bullying online, and that is a key driver of this change. The question is how do you address these problems without destroying the benefits and that that's the problem.
Here, and some other confusing things about this. I mean some platforms the suppliers do Facebook x TikTok, but others not, such as What's Happened messaging platforms. And you know, it's obvious that these sorts of problems like cyberbodying still take place on places like What's Happened messaging platforms, But this is being really closely watched by other countries as well. Could we see similar laws coming into force around the world in the coming months.
Yeah, this is interesting. I mean, if you look at Australia's history, it's got form, hasn't it with big tech. It's it's picked fights with big tech before, whether it's X for you know, posting distressing material, whether it's Google or Facebook for for not paying local publishers for news. So it's shown a kind of punch, if you like, for for taking on these these big companies from the other side of the world that fights that the the
rest of the world has looked at before. And the question is to what extent will this, you know, precedent setting legislation be followed in other countries. Other countries have tried to do similar things with mixed results. To my knowledge, I don't think anyone's ever tried a blanket ban with without parental permission for on the sixteens. You know, there is legislation in other US states, for instance, that allow used to use it if they're permission from parents, So
that this is a blunt tool. It's it's wide ranging and all catching, and the question is will other government look at the results and say, yeah, this is something we want to do because it's proven to work, or will they say this has proven to be ineffective. They're just too many youths getting around this legislation, which inevitably there will be some.
All right, Agus, thanks very much. That is Bloomberg's Angus Whitley, who has been covering that sweeping social media ban for teenagers under the age of sixteen in Australia. I'm Paul Allen in for Doug Crisner this week. You can catch him weekdays on the Daybreak Asia podcast, looking at the top stories moving markets in the Asia Pacific. It's available on Apple, Spotify or wherever you get your podcasts. Tom.
Thanks Paul, and that does it for this edition of Bloomberg day Break Weekend. Join us again Monday morning at five am Wall Street Time for the latest on markets overseas and the news you need to start your day. I'm Tom Busby. Stay with us. Top stories and global business headlines are coming up right now.