262.40 +0.20 (0.08%)
After hours: 7:59PM EST
|Bid||262.26 x 3200|
|Ask||262.45 x 900|
|Day's range||258.28 - 262.46|
|52-week range||142.00 - 262.46|
|Beta (3Y monthly)||1.25|
|PE ratio (TTM)||22.05|
|Earnings date||27 Jan 2020 - 31 Jan 2020|
|Forward dividend & yield||3.08 (1.18%)|
|1y target est||256.19|
Nov.11 -- Tech entrepreneur and Apple Inc. co-founder Steve Wozniak comments on the allegations that the Apple Card has a gender-bias issue. He speaks with Bloomberg's Kurt Wagner on "Bloomberg Technology."
(Bloomberg) -- The male-dominated finance industry is missing out on more than $700 billion a year in revenue by failing to listen to or tailor products for women, according to management consultancy Oliver Wyman.“Women are arguably the single largest under-served group of customers in financial services,” Jessica Clempner, the report’s lead author, said in a statement Tuesday. “Firms are leaving money on the table by not listening to and understanding their women customers.”Many products that appear gender-neutral actually default to men’s needs, with wealth products in particular not consistently designed for women’s financial lives, the report said.For example, if insurers sold life policies to women at the same rate as to men, they could generate $500 million in new premiums, Oliver Wyman estimated. Women also tend to hold more of their assets in cash rather than stocks and bonds, costing wealth and asset managers a potential $25 billion in fees.Apple Inc. and Goldman Sachs Group Inc. were recently caught up in the growing debate about whether lenders unintentionally discriminate when they use algorithms to determine how Americans borrow money, after a viral tweet from a tech entrepreneur alleged gender discrimination in the new Apple Card.Read more: Apple Co-Founder Says Goldman’s Apple Card Algo DiscriminatesThe problems are compounded by lack of women in senior management in the finance industry. Just 20% of finance executives globally are women, up from 16% in 2016, the report said. The industry continues to grapple with many of the same challenges as it has in the past, including the mid-career gap that holds many women back, it said.To contact the reporter on this story: Emily Cadman in Sydney at firstname.lastname@example.orgTo contact the editors responsible for this story: Marcus Wright at email@example.com, Peter Vercoe, Katrina NicholasFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Walmart stock is up over 13% in the last three months. Now, with the firm set to report its Q3 financial results before the opening bell Thursday, let's break down Walmart to see if investors should consider buying WMT shares...
Associate Stock Strategist Ben Rains dives into some of Disney's recent quarterly results, before we look at Disney+ and discuss which company, from Netflix to Amazon might win the streaming TV war...
(Bloomberg) -- Apple Inc. is working on a range of augmented and virtual-reality devices underpinned by a new 3-D sensor system, according to people familiar with the plans.A new iPad Pro for release as early as the first half of 2020 will feature a new module with two camera sensors, up from one on the current model, and a small hole for the 3-D system, letting people create three-dimensional reconstructions of rooms, objects and people. The Cupertino, California-based technology giant also plans to add the sensor to new high-end iPhones later in 2020, along with 5G networking capabilities, said the people, who asked not to be identified discussing unannounced products.In 2021 or 2022, Apple aims to release a combined VR and AR headset with a focus on gaming, watching video and virtual meetings. The company intends to roll out a lightweight pair of AR glasses as early as 2023, one of the people familiar with the plans said. Apple had originally intended to have the technology for its initial headset ready in 2019 for a release in 2020, but recently decided to push that back, the person added. The Information earlier reported that Apple told employees it is aiming to launch its first headset by 2022 and the glasses a year later.Chief Executive Officer Tim Cook has talked up AR for some time, and the technology is the core of Apple’s next big hardware push beyond the iPhone, iPad and Apple Watch. The new 3-D sensor system will be the centerpiece of this. It has been in development inside Apple for several years, and is a more advanced version of the Face ID sensor on the front of Apple’s latest mobile devices, said the people.Augmented reality mixes the real world with the virtual world, letting a user interact with other people while also seeing digital information such as text messages and directions in a maps app. Virtual reality is all-encompassing, gluing humans to headsets, like the HTC Vive or Oculus Rift with high-resolution lenses used for gaming and video.Engineering teams for the iPhone and iPad have begun work on connecting important applications and software features to a new operating system, dubbed “rOS” internally, that will let current devices work with the future headset and glasses.Apple has about 1,000 engineers working on the AR and VR initiative, which is led by vice president Mike Rockwell, Bloomberg News has reported. The multi-disciplinary team is part of Apple’s hardware engineering division, but has its own leadership with executives who have worked on Apple’s gaming software system, earlier iPhone hardware, software engineering and manufacturing. The team also has ex-NASA engineers, former game developers and graphics experts. It is based in a nondescript area of Sunnyvale, California, not far from Apple’s main campus in Cupertino.When the devices launch, they will likely become part of Apple’s growing wearable devices segment, which currently includes the Watch, AirPods and Beats headphones. This is one of Apple’s fastest growing businesses, and has helped offset a slowdown in iPhone unit sales and revenue.To contact the reporter on this story: Mark Gurman in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Apple Inc. pitches its new card as a model of simplicity and transparency, upending everything consumers think about credit cards.But for the card’s overseers at Goldman Sachs Group Inc., it’s creating the same headaches that have bedeviled an industry the companies had hoped to disrupt.Social media postings in recent days by a tech entrepreneur and Apple co-founder Steve Wozniak complaining about unequal treatment of their wives ignited a firestorm that’s engulfed the two giants of Silicon Valley and Wall Street, casting a pall over what the companies had claimed was the most successful launch of a credit card ever.Goldman has said it’s done nothing wrong. There’s been no evidence that the bank, which decides who gets an Apple Card and how much they can borrow, intentionally discriminated against women. But that may be the point, according to critics. The complex models that guide its lending decisions may inadvertently produce results that disadvantage certain groups.The problem -- in Washington it’s referred to as “disparate impact” -- is one the financial industry has spent years trying to address. The increasing use of algorithms in lending decisions has sharpened the years-long debate, as consumer advocates, armed with what they claim is supporting research, are pushing regulators and companies to rethink whether models are only entrenching discrimination that algorithm-driven lending is meant to stamp out.“Because machines can treat similarly-situated people and objects differently, research is starting to reveal some troubling examples in which the reality of algorithmic decision-making falls short of our expectations, or is simply wrong,” Nicol Turner Lee, a fellow at the Center for Technology Innovation at the Brookings Institution, recently told Congress.Wozniak and David Heinemeier Hansson said on Twitter that their wives were given significantly lower limits on their Apple Cards, despite sharing finances and filing joint tax returns. Wozniak said he and his wife report the same income and have a joint bank account, which should mean that lenders view them as equals.One reason Goldman has become a poster child for the issue is that the Apple Card doesn’t let households share accounts -- the way much of the industry does. That could lead to family members getting significantly different credit limits. Goldman says it’s considering offering the option.With this month’s snafu, Goldman has found itself in the middle of one of the thorniest laws in finance: the Equal Credit Opportunity Act. The 1974 law prohibits lenders from considering sex or marital status and was later expanded to prohibit discrimination based on other factors including race, color, religion, national origin and whether a borrower receives public assistance.The issue gained national prominence in the 1970s when Jorie Lueloff Friedman, a prominent Chicago television anchor, began reporting on her own experience with losing access to some of her credit card accounts at local retailers after she married her husband, who was unemployed at the time. She ultimately testified before Congress, saying “in the eyes of a credit department, it seems, women cease to exist and become non-persons when they get married.”FTC WarningA 2016 study by credit reporting agency Experian found that women had higher credit scores, less debt, and a lower rate of late mortgage payments than men. Still, the Federal Trade Commission has warned that women may continue to face difficulties in getting credit.Freddy Kelly, chief executive officer of Credit Kudos, a London-based credit scoring startup, pointed to the gender pay gap, where women are typically paid less than men for performing the same job, as one reason lenders may be stingy with how much they let women borrow.Using complex algorithms that take into account hundreds of variables should lead to more just outcomes than relying on error-prone loan officers who may harbor biases against certain groups, proponents say.“It’s hard for humans to manually identify these characteristics that would make someone more creditworthy,” said Paul Gu, co-founder of Upstart Network Inc., a tech firm that uses artificial intelligence to help banks make loans.Upstart uses borrowers’ educational backgrounds to make lending decisions, which could run afoul of federal law. In 2017, the Consumer Financial Protection Bureau told the company it wouldn’t be penalized as part of an ongoing push to understand how lenders use non-traditional data for credit decisions.AI PushConsumer advocates reckon that outsourcing decision-making to computers could ultimately result in unfair lending practices, according to a June memorandum prepared by Democratic congressional aides working for the House Financial Services Committee. The memo cited studies that suggest algorithmic underwriting can result in discrimination, such as one that found black and Latino borrowers were charged more for home mortgages.Linda Lacewell, the superintendent of the New York Department of Financial Services, which launched an investigation into Goldman’s credit card practices, described algorithms in a Bloomberg Television interview as a “black box.” Wozniak and Hansson said they struggled to get someone on the phone to explain the decision.“Algorithms are not only nonpublic, they are actually treated as proprietary trade secrets by many companies,” Rohit Chopra, an FTC commissioner, said last month. “To make matters worse, machine learning means that algorithms can evolve in real time with no paper trail on the data, inputs, or equations used to develop a prediction.“Victims of discriminatory algorithms seldom if ever know they have been victimized,” Chopra said.To contact the reporters on this story: Shahien Nasiripour in New York at firstname.lastname@example.org;Jenny Surane in New York at email@example.com;Sridhar Natarajan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Alibaba Group Holding Ltd. logged more than 268 billion yuan ($38.3 billion) of purchases during its Singles’ Day bonanza, exceeding last year’s record haul after a 24-hour shopping marathon.An estimated half-billion shoppers from China to Russia and Argentina swarmed the e-commerce giant’s sites to scoop up everything from Apple Inc. and Xiaomi Corp. gadgets to Ugandan mangoes. The company again hosted a televised entertainment revue in Shanghai to run alongside the bargain-hunting, this time enlisting Taylor Swift and Asian pop icon G.E.M. to pump up sales.The world’s largest shopping event has become an annual ritual for Asia’s largest company, part showcase of commercialism and part publicity blitz. Also referred to as “Double 11” because it falls on Nov. 11, it’s closely watched by investors keen to gauge how willing Chinese consumers are to spend as economic growth threatens to slip below 6%.Tensions between Washington and Beijing continue to fuel uncertainty and roil global commerce. Among China’s largest corporations, Alibaba is expected to better ride out the storm, thanks to booming online consumption in the world’s No. 2 economy. On Sunday, Alvin Liu, a Tmall general manager, said Alibaba doesn’t expect any impact on its cross-border import business from an ongoing trade spat.“Alibaba will probably be the one that will be able to circumvent and come out from the trade war in better shape” versus Baidu Inc. and Tencent Holdings Ltd., Richard Wong, head of ICT for the Asia Pacific at Frost & Sullivan, told Bloomberg Television. “The current sentiment and confidence in terms of spending is still relatively high.”While Alibaba and its rivals routinely trumpet record sums in the event’s aftermath, it’s unclear how much Nov. 11 sales actually will contribute to the bottom line given the enormous discounting involved. A good result however could bolster Alibaba’s effort to raise as much as $15 billion in a landmark Hong Kong share sale this month, according to people familiar with the matter.Singles’ Day emerged as a uniquely Chinese antidote to the sentimentality surrounding Valentine’s Day. Emerging on college campuses across the country, it takes its name from the way the date is written numerically as 11/11, which resembles “bare branches,” a local expression for the unattached.It’s now become an excuse for people to splurge. Last year, sales at Alibaba climbed 27% to 213.5 billion yuan, equivalent to $30.7 billion at the time. This time, purchases grew 26% from the year earlier. More merchandise is sold online over the 24-hour period than during the five-day U.S. holiday buying spree that begins on Thanksgiving and ends on Cyber Monday.Alibaba’s U.S. traded shares were down 1.9% Monday to $183.70 at 11:25 a.m. in New York.Alibaba saw 100 million new users join the shopping festival this year, according to Jiang Fan, president of the company’s e-commerce marketplaces Taobao and Tmall.“This is the power of expanding into less developed regions,” he said. “We hope this event can help more factories and farmers.”Read more: Alibaba Said to Seek Up to $15 Billion in Hong Kong ListingIt’s Time for Alibaba to Slay Jack Ma’s Monster: Tim CulpanBut the company faced stiff competition this year from smaller platforms including JD.com Inc. and Pinduoduo Inc. -- the aggressively expanding upstart that’s encroaching on the market leaders’ turf. They vied for the wallets of Chinese shoppers particularly in relatively untapped rural areas. All employ heavy discounting and hard-sell tactics in the run-up to and during the 24 hours in a bid to best the previous year’s record.“Overall, we think this year will likely see a more competitive Double 11 period,” Ella Ji, an analyst at China Renaissance Holdings Ltd., said in a report. “We anticipate each platform will spend more on subsidies.”Daniel Zhang, who took over as Alibaba chairman from billionaire Jack Ma in September, pioneered the show in its present form in 2015. The Singles’ Day impresario passes the baton this year to Fan, a potential successor to Zhang himself.“Over the years, we’ve seen consumers become more diverse and younger. Each generation of consumers needs their own peers to serve them,” Zhang said in a post on Alibaba’s blog. “I think this young team is the future.”The 2019 edition came with slight twists to the formula. Alibaba, stung by criticism it harmed the environment by shipping an estimated 1 billion packages in a single day -- has enjoined its logistics arm Cainiao to set up recycling centers at 75,000 locations. It says it will also work with courier companies to pick up used boxes and wrapping.An expansion into Southeast Asia and less-developed areas in China plus newer services -- such as transactions on food delivery site Ele.me, grocery store chain Hema and travel service Fliggy -- bolstered the total. The company also brought in livestreamers including Kim Kardashian to appeal to younger buyers.Other aspects remained the same. Singles’ Day has always been an opportunity for Alibaba to test the limits of its cloud computing, delivery and payments systems. Leaving little to chance, Alibaba sent teams across the nation ahead of Nov. 11 to help myriad outlets prepare for the festival. Some 200,000 brands had been expected to participate in 2019‘s edition of the festival.“Singles’ Day is becoming popular outside of China, especially in the ASEAN region,” said Patrick Winter, Ernst & Young Asia Pacific managing partner. “You’re also seeing how it’s growing in smaller cities in China.”(Updates with new user number in tenth paragraph.)To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Molly Schuetz, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investors seeking to tap Singles' Day benefits in a diversified way should focus on the following four ETFs that provide substantial exposure to the Chinese e-commerce segment.
(Bloomberg Opinion) -- How do you take an innovative academic theory and apply it in the world of investing? That was the challenge confronting David Booth, the co-founder of Dimensional Fund Advisors. Booth was a student of University of Chicago economist and future Nobel laureate Gene Fama, whose ideas about efficient markets and factor-based investing revolutionized finance. Booth and Fama discuss their 50-year relationship in our Masters in Business conversation, streamed live from the University of Chicago Booth School of Business.Fama discusses how computers eventually led to the efficient-market hypothesis, meaning market incorporate all available information in setting prices; the technology allowed researchers to evaluate how well active managers who pick individual investments were actually performing. Before that, there was no quantitative evidence or data to gauge managers' performance. The new data-crunching technology also let researchers test of Fama’s theories, and for the first time, evaluate investing results after fees. This also led to the identification of factors that drove returns, and ultimately the (various) Fama-French factor models.Booth discusses how taking his first class with Fama changed his life. He eventually started Dimensional Funds out of a spare bedroom in a Brooklyn, New York, apartment. He asked Fama to be on his board of directors, followed by Myron Scholes and Merton Miller, two other University of Chicago economics professors and future Nobel laureates.The full video of the interview is here.You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.Next week, we speak with former Secretary of Defense Ash Carter, author of 11 books, including most recently, "Inside the Five-Sided Box: Lessons from a Lifetime of Leadership in the Pentagon."To contact the author of this story: Barry Ritholtz at firstname.lastname@example.orgTo contact the editor responsible for this story: James Greiff at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Hyped as the biggest credit-card innovation in 50 years, the Apple Card is starting to look more like something from the 1960s and 1970s: Women are allegedly being granted a fraction of their spouses’ borrowing limits. It’s another troubling example of the deficiencies of machine learning.Just months after its launch, New York regulators say they’re investigating Goldman Sachs Group Inc., the bank behind the card, and the algorithm that it uses to determine credit-worthiness. Goldman denies any discrimination but that hasn’t stopped Apple Inc.’s co-founder Steve Wozniak from calling for the U.S. government to get involved. “We don’t have transparency on how these companies set these things up and operate,” he told Bloomberg News.The investigation and Wozniak’s comments came in response to a Twitter broadside from the tech entrepreneur David Heinemeier Hansson, in which he said the Apple Card gave him a credit limit 20 times bigger than the one for his wife. This was despite her superior credit score and their jointly filed tax returns. Wozniak says he has been given 10 times the limit granted to his wife.The bone of contention here is what Apple’s customer services representatives called, in Hansson’s telling, “the algorithm.” When he sought an explanation of why his wife was being treated differently, he was told the algorithm was accountable.How the Algorithms Running Your Life Are Biased: QuickTakeYet blaming the algorithm — while saying an exception would be made for Hansson’s wife and her credit assessment adjusted, as Apple did — seems a tacit admission that said algorithm is flawed. At the very least, it raises questions about just how “accountable” these systems are. Customers don’t know the details of how the Apple-Goldman credit-worthiness computations work, how dependent they are on artificial intelligence (or, more precisely, machine learning), what inputs they use, or even how much of the technology is proprietary to the two companies.If the system is indeed making such blatantly egregious decisions, should it really be used at all? At least when there’s human error or bias there’s a more straightforward route to correct it. While a company can interrogate a person about how they arrived at an individual decision, that’s usually not possible with machine learning. Instead you have to examine the “big data” inputs that informed the algorithm, and see if that prompted a set of biases.Of course, bias in artificial intelligence is not unique to the Apple Card. It has reared its head in the criminal justice system, the employment market, health care, facial recognition, app recommendations and beyond. In each case, understanding what prompted the prejudices is essential to fixing it. And in each case, that’s easier said than done. John Giannandrea, Apple's head of AI, said in 2017 that data bias is the greatest danger posed by machine learning.This isn’t the first consumer finance misstep for Goldman. The Wall Street firm may be at the cutting edge of finance, but its foray into consumer lending has been mired in rookie mistakes. Its consumer lending arm, Marcus, reportedly started without a team of debt collectors, leading to early losses on delinquent borrowers.Apple’s chief executive officer Tim Cook, meanwhile, has hinted that he’s seeking a partner to bring the Apple Card to Europe. The Hansson and Wozniak episodes show that would be quite a gamble. The European Union’s General Data Protection Regulation, introduced last year, includes the “right to explanation” for consumers – exactly the thing being demanded by Hansson. A failure to provide a satisfactory reason might result in financial penalties. As we can see, with AI algorithms such explanations aren’t easily extracted.To contact the authors of this story: Alex Webb at firstname.lastname@example.orgElisa Martinuzzi at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.Elisa Martinuzzi is a Bloomberg Opinion columnist covering finance. She is a former managing editor for European finance at Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Investing.com - U.S. futures slumped on Monday, as worsening unrest in Hong Kong caused market jitters and hopes for trade detente between the U.S. and China receded.
(Bloomberg) -- Apple Inc. and Goldman Sachs Group Inc., two of the most recognizable companies in tech and finance, are caught up in a growing debate over whether lenders unintentionally discriminate when they use complex models to determine how Americans borrow money.On Saturday, Bloomberg reported that a Wall Street regulator had opened a probe into Goldman’s credit card practices after a viral tweet from a tech entrepreneur alleged that the Apple Card’s algorithms discriminated against his wife.Now another high-profile user of the Apple Card -- Apple co-founder Steve Wozniak -- is calling for the government to get involved, citing excessive corporate reliance on mysterious technology.“These sorts of unfairnesses bother me and go against the principle of truth. We don’t have transparency on how these companies set these things up and operate,” Wozniak said in an interview on Sunday. “Our government isn’t strong enough on the issues of regulation. Consumers can only be represented by the government because the big corporations only represent themselves.”Wozniak said he can borrow 10 times as much as his wife on their Apple Cards even though they share bank and other credit card accounts, and that other lenders treat them equally.“Algos obviously have flaws,” Wozniak said. “A huge number of people would say, ‘We love our technology but we are no longer in control.’ I think that’s the case.”Lenders have promoted the models because they’re supposed to level the playing field among different borrowers by removing human error and focusing only on data.Apple Card only offers individual accounts and it is possible for two family members to receive significantly different credit decisions, a Goldman spokesman said. “In all cases, we have not and will not make decisions based on factors like gender,” he said.The investigation was launched in response to a series of Twitter posts from David Heinemeier Hansson that railed against the Apple Card for giving him 20 times the credit limit that his wife got. The tweets, many of which contain profanity, immediately gained traction online -- and a response on Twitter from Wozniak.Hansson didn’t disclose any specific income-related information for the couple but said they filed joint tax returns and that his wife has a better credit score than he does. Wozniak said he and his wife also file joint returns and share credit card and bank accounts.“The department will be conducting an investigation to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex,” said a spokesman for Linda Lacewell, the superintendent of the NY DFS. “Any algorithm that intentionally or not results in discriminatory treatment of women or any other protected class of people violates New York law.”It’s the second such action in recent weeks from the regulator, which opened a probe against health-care giant UnitedHealth Group Inc. after a study found an algorithm favored white patients over black patients.“New technologies cannot leave certain consumers behind or entrench discrimination,” Lacewell said in a statement on Sunday. She also solicited complaints from aggrieved consumers on Twitter.Traditional lenders are increasing their use of machines to decide who gets how much credit as part of a strategy to reduce costs and boost loan applications. Meanwhile, technology companies are moving in on the financial services industry’s turf, with businesses such as Amazon, Apple, Facebook and Google threatening banks’ lucrative business lines by offering loans and payment options.Congressional ScrutinyThe algorithms have drawn scrutiny in Congress. In June, the House Financial Services Committee heard about examples of algorithmic decision-making where researchers have found instances of bias targeting specific groups even when there was no intent to discriminate.Some lawmakers already are demanding a federal response. Senator Elizabeth Warren, a Massachusetts Democrat and contender to challenge President Donald Trump in the 2020 election, told federal regulators in June that the government “will have to take action to ensure that anti-discrimination laws keep up with innovation.”For Goldman, its growing ambitions for Main Street are bringing increased scrutiny and a new set of challenges it hasn’t faced previously. The Apple Card is a joint venture between Apple and the New York-based bank, which is responsible for all the credit decisions on the card. It was rolled out earlier this year -- the tech giant markets it as “created by Apple, not a bank” -- and executives at both firms hailed it as the most successful launch ever.Hansson said Goldman isn’t treating inadvertent bias seriously.“As soon as this became a PR issue, they immediately bumped up her credit limit without asking for any additional documentation,” he said of his wife in an interview Saturday. “My belief isn’t there was some nefarious person wanting to discriminate. But that doesn’t matter. How do you know there isn’t an issue with the machine-learning algo when no one can explain how this decision was made?”To contact the reporters on this story: Shahien Nasiripour in New York at email@example.com;Sridhar Natarajan in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Josh Friedman, Matthew G. MillerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A probe into Goldman Sachs Group Inc's credit card practices has been initiated after tweets from a tech entrepreneur alleged gender discrimination in the new Apple Inc card algorithms that are used to determine credit limits. In a series of Twitter posts starting on Thursday, David Heinemeier Hansson railed against the Apple Card for giving him 20 times the credit limit that his wife got, Bloomberg reported on Saturday.
(Bloomberg) -- A Wall Street regulator is opening a probe into Goldman Sachs Group Inc.’s credit card practices after a viral tweet from a tech entrepreneur alleged gender discrimination in the new Apple Card’s algorithms when determining credit limits.A series of posts from David Heinemeier Hansson starting Thursday railed against the Apple Card for giving him 20 times the credit limit that his wife got. The tweets, many of which contain profanity, immediately gained traction online, even attracting comment from Apple co-founder Steve Wozniak.Hansson didn’t disclose any specific income-related information for either of them but said they filed joint tax returns and that his wife has a better credit score than he does.“The department will be conducting an investigation to determine whether New York law was violated and ensure all consumers are treated equally regardless of sex,” said a spokesman for Linda Lacewell, the superintendent of the New York Department of Financial Services. “Any algorithm, that intentionally or not results in discriminatory treatment of women or any other protected class of people violates New York law.”Apple Card only offers individual accounts and it is possible for two family members to receive significantly different credit decisions, a Goldman spokesman said. “In all cases, we have not and will not make decisions based on factors like gender,” he said.Hansson said Goldman’s response doesn’t explain what happened after he started airing his issues on social media.“As soon as this became a PR issue, they immediately bumped up her credit limit without asking for any additional documentation,” he said in an interview. “My belief isn’t there was some nefarious person wanting to discriminate. But that doesn’t matter. How do you know there isn’t an issue with the machine-learning algo when no one can explain how this decision was made?”This is the second such action from the regulator in recent weeks. NY DFS opened a probe against health care giant UnitedHealth Group Inc. after a study found an algorithm favored white patients over black patients.Goldman’s growing ambitions for main street is bringing increased scrutiny and a new set of challenges it hasn’t faced previously. The Apple Card is a joint venture between Apple Inc. and the New York-based bank, which is responsible for all the credit decisions on the card. The card was rolled out earlier this year and executives at both firms hailed it as the most successful launch ever.Traditional lenders are upping their use of machines to decide who gets how much credit as part of a strategy to reduce costs and boost loan applications. Meanwhile, technology companies are moving in on the financial services industry’s turf, with businesses such as Amazon, Apple, Facebook and Google offering loans and payment options.Black-Box AlgorithmsHansson said his posts had led to an internal review and that he was hopeful it would spark a conversation about black-box algorithms and the inherent biases in those systems.The 40-year-old Dane is known for being the creator of the popular programming tool Ruby on Rails. He’s a partner at Basecamp, a web-based software development firm, and also known to regularly take part in automobile endurance races, including the 24 hours of Le Mans in France.“Goldman and Apple are delegating credit assessment to a black box,” Hansson said. “It’s not a gender-discrimination intent but it is a gender-discrimination outcome.”The use of algorithms by lenders in credit decisions has drawn scrutiny in Congress. In June, the House Financial Services Committee heard about examples of algorithmic decision-making where researchers have found instances of bias targeting specific groups even when there was no intent to discriminate.Some lawmakers already are demanding a federal response. Sen. Elizabeth Warren, a Massachusetts Democrat and contender to challenge President Donald Trump in the 2020 presidential election, told federal regulators in June that the government “will have to take action to ensure that anti-discrimination laws keep up with innovation.(Updates with tweet from Steve Wozniak.)To contact the reporters on this story: Sridhar Natarajan in New York at firstname.lastname@example.org;Shahien Nasiripour in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Virginia Van Natta, Matthew G. MillerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.