1 00:00:02,120 --> 00:00:06,040 Speaker 1: Global business News twenty four hours a day's Bloomberg dot Com, 2 00:00:06,240 --> 00:00:09,080 Speaker 1: the Radio plus Mobile Act and on your radio. This 3 00:00:09,520 --> 00:00:13,400 Speaker 1: is a Bloomberg Business flag from Bloomberg World Headquarters. I'm 4 00:00:13,480 --> 00:00:16,440 Speaker 1: Charlie Pellett's stocks are holding onto their gains. This update 5 00:00:16,480 --> 00:00:20,200 Speaker 1: brought to you by E t F Exchange sixteen b 6 00:00:20,400 --> 00:00:24,400 Speaker 1: n Y Melon's annual E t F Symposium September nine 7 00:00:24,840 --> 00:00:28,520 Speaker 1: to the twenty one in Dana Point, California. This essential 8 00:00:28,560 --> 00:00:32,519 Speaker 1: conferences complementary for R I A S, but space is limited. 9 00:00:32,800 --> 00:00:35,800 Speaker 1: Register now at b n y melon dot com slash 10 00:00:36,240 --> 00:00:40,320 Speaker 1: E t F. SMP five hundred index jumping the most 11 00:00:40,360 --> 00:00:42,920 Speaker 1: in four weeks after the latest polls show the UK 12 00:00:43,080 --> 00:00:46,680 Speaker 1: campaign to remain in the European Union is gaining ground 13 00:00:46,760 --> 00:00:51,040 Speaker 1: ahead of Thursday's referendum. SMP five hundred INDEXX up twenty 14 00:00:51,040 --> 00:00:53,040 Speaker 1: now to two thousand ninety one, a gain there of 15 00:00:53,159 --> 00:00:56,280 Speaker 1: one percent down Industrials up one ninety four, a gain 16 00:00:56,360 --> 00:00:59,600 Speaker 1: of one point one percents, Stack up sixty a gain 17 00:00:59,680 --> 00:01:02,880 Speaker 1: of one point three percent. The tenure down eighteen thirty 18 00:01:02,880 --> 00:01:06,319 Speaker 1: seconds that yield one point six six percent. Gold down 19 00:01:06,360 --> 00:01:08,640 Speaker 1: four dollars. The ounce to twelve ninety a drop of 20 00:01:08,680 --> 00:01:11,720 Speaker 1: three tenths of one percent and crude oil higher by 21 00:01:11,720 --> 00:01:14,120 Speaker 1: two point seven percent of a dollar thirty of barrel 22 00:01:15,480 --> 00:01:18,880 Speaker 1: eight Right now on West Texas Intermediate Group, I'm Charlie 23 00:01:18,920 --> 00:01:22,920 Speaker 1: Holt them. That's a bloom Bred business flash. You're listening 24 00:01:22,920 --> 00:01:25,920 Speaker 1: to Jaking Stock with Kathleen has and bim Box on 25 00:01:26,000 --> 00:01:30,399 Speaker 1: Bloomberg Radio and its twenty study by the marketing research 26 00:01:30,560 --> 00:01:35,399 Speaker 1: firm Mintel found that nearly seventy percent of Americans seek 27 00:01:35,440 --> 00:01:40,520 Speaker 1: out others opinions online before making a purchase. While some 28 00:01:40,640 --> 00:01:45,919 Speaker 1: of those online reviews can lead to some unintended consequences, 29 00:01:46,160 --> 00:01:50,360 Speaker 1: one Dallas couple who wrote a review about a pet 30 00:01:50,520 --> 00:01:54,640 Speaker 1: company was sued for over a million dollars for the review. 31 00:01:55,120 --> 00:01:57,640 Speaker 1: It was a negative review, and the suit alleges that 32 00:01:57,680 --> 00:02:02,000 Speaker 1: had violated the non disparagement cause in the contract. To 33 00:02:02,080 --> 00:02:04,360 Speaker 1: find out more, I want to bring in Patrick Gregory. 34 00:02:04,440 --> 00:02:08,000 Speaker 1: He is Legal editor for Bloomberg b n A. Bloomberg 35 00:02:08,080 --> 00:02:11,079 Speaker 1: Dyna is a wholly owned subsidiary of Bloomberg. It's a 36 00:02:11,160 --> 00:02:15,200 Speaker 1: leading source of legal, regulatory and business information for professionals, 37 00:02:15,480 --> 00:02:19,000 Speaker 1: and Bloomberg Byenna's authoritative coverage spans a range of legal 38 00:02:19,040 --> 00:02:22,920 Speaker 1: practice areas including tax and accounting, labor and employment. I 39 00:02:22,960 --> 00:02:25,640 Speaker 1: want to bring in Patrick Gregory. Patrick, thanks very much 40 00:02:25,680 --> 00:02:28,280 Speaker 1: for being with us. Explain exactly what is going on here. 41 00:02:28,320 --> 00:02:33,799 Speaker 1: When people write a review on a website such as yelp, 42 00:02:34,240 --> 00:02:38,560 Speaker 1: what kind of liability are they subject to? This is 43 00:02:38,600 --> 00:02:42,960 Speaker 1: generally about defamation lawsuits. So, for example, you write a 44 00:02:42,960 --> 00:02:46,200 Speaker 1: review on Yelp, you say the flower company that I 45 00:02:46,280 --> 00:02:49,440 Speaker 1: hired for my wedding brought flowers that we're wilted, and 46 00:02:49,480 --> 00:02:52,239 Speaker 1: then you might get a demand letter saying we think 47 00:02:52,280 --> 00:02:54,239 Speaker 1: that you are the saming us. We don't think the 48 00:02:54,280 --> 00:02:57,840 Speaker 1: flowers were wilted. You lied about us. And of course 49 00:02:57,880 --> 00:03:00,400 Speaker 1: it's not the lawsuits that are the problem, so as 50 00:03:00,400 --> 00:03:03,040 Speaker 1: the threat of the lawsuits, because how many people are 51 00:03:03,080 --> 00:03:05,440 Speaker 1: going to go to court over a Yelp review that 52 00:03:05,440 --> 00:03:07,800 Speaker 1: they might have spent ten minutes writing, even if they're 53 00:03:07,800 --> 00:03:10,720 Speaker 1: telling the truth or just giving a matter of opinion people. No, 54 00:03:10,919 --> 00:03:14,280 Speaker 1: lawsuits are expensive to defend. Of course, we know the UK, 55 00:03:14,400 --> 00:03:16,760 Speaker 1: for example, makes it much tougher. There's a much tougher 56 00:03:17,720 --> 00:03:21,120 Speaker 1: hurdle seems to me to prove defamation or something like that. 57 00:03:21,480 --> 00:03:23,400 Speaker 1: If I'm a business though I'm a small business. Are 58 00:03:23,440 --> 00:03:27,360 Speaker 1: people who have claimed that these reviews were put in 59 00:03:27,639 --> 00:03:31,119 Speaker 1: by people who were exaggerating or at a bone to pick, 60 00:03:31,240 --> 00:03:33,800 Speaker 1: they were not valid. Uh. In fact, you even mentioned 61 00:03:33,800 --> 00:03:36,440 Speaker 1: in your story give us uh the example that could 62 00:03:36,480 --> 00:03:39,000 Speaker 1: not really it wasn't held up by the Virginia courts 63 00:03:39,080 --> 00:03:42,400 Speaker 1: of a company that asked to have the negative reviews 64 00:03:42,800 --> 00:03:45,320 Speaker 1: unveiled who the people really were, because it seemed that 65 00:03:45,360 --> 00:03:47,840 Speaker 1: they couldn't. Their views came in negative, but these weren't 66 00:03:47,840 --> 00:03:49,960 Speaker 1: really people. Maybe, so there was something going on that 67 00:03:50,000 --> 00:03:52,520 Speaker 1: I can understand why a small business might want to 68 00:03:52,520 --> 00:03:57,520 Speaker 1: protect against. Absolutely nobody wants their livelihood destroyed by a 69 00:03:57,560 --> 00:04:00,920 Speaker 1: couple of reviews that may be false. What happened in 70 00:04:01,000 --> 00:04:05,720 Speaker 1: Virginia there were actually two courts that said Yelp needed 71 00:04:05,760 --> 00:04:10,480 Speaker 1: to unmask the reviewers of this carpet company. The carpet 72 00:04:10,520 --> 00:04:14,280 Speaker 1: company said that these reviews that were posted online don't 73 00:04:14,320 --> 00:04:17,320 Speaker 1: match match up with the service states that we have 74 00:04:18,120 --> 00:04:22,160 Speaker 1: in our online records, and so two of the courts said, Yelp, 75 00:04:22,200 --> 00:04:24,960 Speaker 1: you're going to have to unmask those anonymous reviewers. And 76 00:04:25,080 --> 00:04:27,360 Speaker 1: that's a big component of this whole issue, is you're 77 00:04:27,440 --> 00:04:30,240 Speaker 1: right to anonymous speech that's something that goes way back 78 00:04:30,279 --> 00:04:33,480 Speaker 1: to the founding of the country. UM. But some disagreed 79 00:04:33,520 --> 00:04:35,560 Speaker 1: with those courts, saying this was really just a bare 80 00:04:35,600 --> 00:04:37,800 Speaker 1: bones claim and it shouldn't have been enough to make 81 00:04:37,920 --> 00:04:41,599 Speaker 1: unmask the reviewers. And that decision did get vacated, but 82 00:04:41,600 --> 00:04:43,919 Speaker 1: it was on procedural grounds, so it wasn't something that 83 00:04:43,920 --> 00:04:46,800 Speaker 1: would give YELP reviewers much comfort in Virginia in the future. 84 00:04:47,400 --> 00:04:49,320 Speaker 1: Can you tell us a little bit about the Consumer 85 00:04:49,480 --> 00:04:53,600 Speaker 1: Review Freedom Act and whether that is something that will 86 00:04:53,720 --> 00:04:59,400 Speaker 1: in a sense derail these lawsuits. There's so what we're 87 00:04:59,440 --> 00:05:05,240 Speaker 1: talking about here, strategic lawsuits against participation UM, so participating 88 00:05:05,360 --> 00:05:10,640 Speaker 1: in online speech. Uh. We have federal legislation UM called 89 00:05:10,640 --> 00:05:13,280 Speaker 1: to Speak Free Act. I'm not sure about the specific 90 00:05:13,400 --> 00:05:15,600 Speaker 1: legislation you mentioned, but there is a legislation called to 91 00:05:15,600 --> 00:05:18,640 Speaker 1: Speak Free Acts that the House is holding a hearing 92 00:05:18,680 --> 00:05:22,880 Speaker 1: on on Wednesday. Was sponsored by Blake Ferenshold. He's a Republican, 93 00:05:22,880 --> 00:05:26,320 Speaker 1: but he's actually joined by twenty Democrats and twelve Republicans. 94 00:05:26,360 --> 00:05:29,839 Speaker 1: And this is an anti slap statute. The way that 95 00:05:29,960 --> 00:05:34,800 Speaker 1: anti slap statutes work, it lets you dismiss litigation early. So, 96 00:05:34,920 --> 00:05:38,720 Speaker 1: for example, under California's state anti slap law. You file 97 00:05:38,760 --> 00:05:41,320 Speaker 1: an anti slap motion and then the plaintiffs must show 98 00:05:41,400 --> 00:05:44,880 Speaker 1: a likelihood of success or the suit is dismissed. And 99 00:05:44,920 --> 00:05:47,520 Speaker 1: if it's dismissed, the defendant can even get attorneys fees, 100 00:05:47,800 --> 00:05:51,680 Speaker 1: which changes the whole economics of the litigation. It deters planeffs, 101 00:05:52,040 --> 00:05:54,520 Speaker 1: and then you may even have attorneys taking on slap 102 00:05:54,560 --> 00:05:58,560 Speaker 1: defense lawsuits at new cost to the defendant. So big 103 00:05:58,600 --> 00:06:02,720 Speaker 1: hearing coming up. Patrick directly addressing this issue. A House 104 00:06:02,800 --> 00:06:07,400 Speaker 1: subcommittee holding a hearing June twenty second, that's Wednesday, on 105 00:06:07,440 --> 00:06:13,360 Speaker 1: a bipartisan federal anti slap bill that Speak Free Act. Yeah, 106 00:06:13,480 --> 00:06:16,680 Speaker 1: and that's that's what I mentioned with you have twenty 107 00:06:16,720 --> 00:06:19,840 Speaker 1: Democrats and thirteen Republicans supporting this. So it looks like 108 00:06:20,240 --> 00:06:23,719 Speaker 1: if this is if you believe an anti slap legislation, 109 00:06:23,839 --> 00:06:27,240 Speaker 1: then for you, this is an encouraging development. Certainly, about 110 00:06:27,600 --> 00:06:34,599 Speaker 1: twenty eight states and incidentally have anti slap statutes currently California, Texas, Florida, 111 00:06:34,680 --> 00:06:37,880 Speaker 1: New York, but there's plenty that don't, such as Virginia, Connecticut, 112 00:06:37,960 --> 00:06:41,719 Speaker 1: New Jersey. Will companies such as yelp, those that host 113 00:06:41,800 --> 00:06:45,679 Speaker 1: these online reviews will they indeed have to or want 114 00:06:45,720 --> 00:06:50,080 Speaker 1: to let their potential reviewers know whether a business has 115 00:06:50,160 --> 00:06:56,960 Speaker 1: already initiated a lawsuit. Absolutely, and for example a glass 116 00:06:57,040 --> 00:07:00,240 Speaker 1: door UM at a panel discussion I want to glass 117 00:07:00,240 --> 00:07:03,240 Speaker 1: Wars vice president was talking about how she gets two 118 00:07:03,560 --> 00:07:06,680 Speaker 1: D fifty demand letters a year from employers, and they've 119 00:07:06,680 --> 00:07:08,320 Speaker 1: said that they're willing to go as far as they 120 00:07:08,360 --> 00:07:12,160 Speaker 1: can to protect their users identities and filing as many 121 00:07:12,160 --> 00:07:16,480 Speaker 1: appeals as possible. YELP is in very much in favor 122 00:07:16,520 --> 00:07:19,200 Speaker 1: of this type of legislation and their director of litigation 123 00:07:19,280 --> 00:07:20,720 Speaker 1: is going to be one of the witnesses that this 124 00:07:20,840 --> 00:07:25,720 Speaker 1: hearing on Wednesday. So how big of an issue is 125 00:07:25,800 --> 00:07:30,400 Speaker 1: this for online sites like that? Not just yell but 126 00:07:30,400 --> 00:07:32,480 Speaker 1: there's so many things, there's Angie's. This seems to me 127 00:07:32,520 --> 00:07:35,560 Speaker 1: you could extend this the scope of this kind of 128 00:07:35,600 --> 00:07:41,600 Speaker 1: complaint UH much further if the courts allow. They don't. 129 00:07:41,720 --> 00:07:44,400 Speaker 1: They don't come to something that that sets the limits, 130 00:07:44,400 --> 00:07:49,200 Speaker 1: sets the parameters. Absolutely, there are so many businesses online 131 00:07:49,360 --> 00:07:52,040 Speaker 1: that are affected. UM. The one that I mentioned glass 132 00:07:52,080 --> 00:07:56,200 Speaker 1: doors of website where employees can review their employers or 133 00:07:57,000 --> 00:08:00,360 Speaker 1: past employers. You know, you have trip Advisor have so 134 00:08:00,400 --> 00:08:04,640 Speaker 1: many um websites designs um to get information, you know, 135 00:08:04,720 --> 00:08:08,480 Speaker 1: from reviewers, even Amazon dot Com, and plenty of people 136 00:08:08,520 --> 00:08:10,760 Speaker 1: leave reviews on there and rely on those reviews to 137 00:08:10,800 --> 00:08:15,720 Speaker 1: buy products. People also rely on reviews to determine the 138 00:08:15,800 --> 00:08:20,320 Speaker 1: applications that they want to download for their smartphone or 139 00:08:20,440 --> 00:08:24,000 Speaker 1: for their computer. Would this also have any bearing on 140 00:08:24,080 --> 00:08:28,160 Speaker 1: let's say, the Android Google Play service as well as 141 00:08:28,320 --> 00:08:35,480 Speaker 1: the Apple iTunes and Apple App Store. Absolutely, because you know, 142 00:08:35,520 --> 00:08:38,680 Speaker 1: any type of defamation lawsuit, they simply just need to 143 00:08:38,720 --> 00:08:41,839 Speaker 1: allege that you said something that was false and that 144 00:08:42,160 --> 00:08:44,440 Speaker 1: it's caused a business harm. So you can certainly think 145 00:08:44,480 --> 00:08:47,560 Speaker 1: of a situation where you say something about an app 146 00:08:47,720 --> 00:08:49,760 Speaker 1: that may or may not be true and then you 147 00:08:49,800 --> 00:08:51,920 Speaker 1: get a demand letter threatening to teach you to court. 148 00:08:52,760 --> 00:08:55,199 Speaker 1: All right, Patrick Gigory, thank you so very much for 149 00:08:55,280 --> 00:08:57,760 Speaker 1: joining us. We'll be will you be covering the hearing 150 00:08:57,800 --> 00:09:01,280 Speaker 1: on I'm hoping too, yes, what we'll be looking forward 151 00:09:01,320 --> 00:09:03,360 Speaker 1: to your report. It's one of those things that's brewing 152 00:09:03,360 --> 00:09:05,160 Speaker 1: out there that we don't always think about, but that's 153 00:09:05,200 --> 00:09:07,720 Speaker 1: why we always like to turn to Bloomberg b n 154 00:09:07,760 --> 00:09:10,840 Speaker 1: A and a legal editor like Patrick Gregory to let 155 00:09:10,960 --> 00:09:13,320 Speaker 1: us know what is going on in Washington, you see 156 00:09:13,400 --> 00:09:19,800 Speaker 1: him because certainly with legislation, there's so many specifics these days. 157 00:09:19,960 --> 00:09:23,720 Speaker 1: And of course I'm looking forward speaking of online Facebook, 158 00:09:23,760 --> 00:09:26,520 Speaker 1: We're going to be looking at their annual conference in 159 00:09:26,520 --> 00:09:29,360 Speaker 1: the show today. Yeah, their annual shareholder at meeting, at 160 00:09:29,440 --> 00:09:32,320 Speaker 1: which I believe the issue whether there's a new class 161 00:09:32,360 --> 00:09:36,640 Speaker 1: of stock the Mark Zuckerberg wants to create will in 162 00:09:36,720 --> 00:09:41,920 Speaker 1: fact be voted on by the shareholders, and also keeping 163 00:09:42,240 --> 00:09:45,520 Speaker 1: Peter Teel on Facebook's board of directors. And of course 164 00:09:45,520 --> 00:09:47,840 Speaker 1: now you explain to our listeners because this new class 165 00:09:47,840 --> 00:09:50,560 Speaker 1: of stocks, which was actually something that was announced a 166 00:09:50,559 --> 00:09:55,280 Speaker 1: few weeks ago, will allow Mark Zuckerberg to retain power, 167 00:09:55,400 --> 00:09:59,080 Speaker 1: retained control of the company. Yes, the idea is that 168 00:09:59,480 --> 00:10:02,319 Speaker 1: there will be a stock split, and that would affect 169 00:10:02,640 --> 00:10:07,280 Speaker 1: investors mainly because not in terms of their their value, 170 00:10:07,440 --> 00:10:11,440 Speaker 1: but it would just affect their ability to control the actions, 171 00:10:11,440 --> 00:10:15,280 Speaker 1: the corporate actions of the firm, because Mark Zuckerberg would 172 00:10:15,280 --> 00:10:18,520 Speaker 1: still retain the majority of the voting shares. So you 173 00:10:18,559 --> 00:10:20,520 Speaker 1: think that no matter what it does to the current 174 00:10:20,640 --> 00:10:24,800 Speaker 1: value of the existing shares for investors, the fact that 175 00:10:25,040 --> 00:10:27,560 Speaker 1: Mark Zuckerberg, who most would say has an obviously terrific 176 00:10:27,679 --> 00:10:30,880 Speaker 1: job is Founders CEO, the guy who runs Facebook. They 177 00:10:30,960 --> 00:10:33,679 Speaker 1: like to see him retain control and say, well, that 178 00:10:33,760 --> 00:10:36,920 Speaker 1: certainly is what many investors would agree to. I mean, 179 00:10:36,960 --> 00:10:40,559 Speaker 1: the shares of Facebook are up about nine percent so 180 00:10:40,640 --> 00:10:43,920 Speaker 1: far this year. And taking a look at the ownership 181 00:10:44,040 --> 00:10:49,240 Speaker 1: of Facebook, well, take a look that Mr Zuckerberg, through 182 00:10:49,280 --> 00:10:54,800 Speaker 1: a variety of entities UM still owns a controlling interest. 183 00:10:55,520 --> 00:10:58,280 Speaker 1: You listen, need to taking Stockheim pim Fox. My co 184 00:10:58,400 --> 00:11:02,200 Speaker 1: host Kathleen Hayes coming up a look at Facebook, and 185 00:11:02,320 --> 00:11:06,160 Speaker 1: also we'll take a check on global economics and the 186 00:11:06,200 --> 00:11:10,600 Speaker 1: preview of Janet Yellen's testimony before Congress. This is Bloomberg Radio.