WEBVTT - Bloomberg's Gregory on Defamation Protection for Yelpers(Audio)

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<v Speaker 1>Global business News twenty four hours a day's Bloomberg dot Com,

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<v Speaker 1>eight Right now on West Texas Intermediate Group, I'm Charlie

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<v Speaker 1>Holt them. That's a bloom Bred business flash. You're listening

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<v Speaker 1>to Jaking Stock with Kathleen has and bim Box on

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<v Speaker 1>Bloomberg Radio and its twenty study by the marketing research

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<v Speaker 1>firm Mintel found that nearly seventy percent of Americans seek

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<v Speaker 1>out others opinions online before making a purchase. While some

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<v Speaker 1>of those online reviews can lead to some unintended consequences,

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<v Speaker 1>one Dallas couple who wrote a review about a pet

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<v Speaker 1>company was sued for over a million dollars for the review.

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<v Speaker 1>It was a negative review, and the suit alleges that

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<v Speaker 1>had violated the non disparagement cause in the contract. To

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<v Speaker 1>find out more, I want to bring in Patrick Gregory.

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<v Speaker 1>He is Legal editor for Bloomberg b n A. Bloomberg

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<v Speaker 1>Dyna is a wholly owned subsidiary of Bloomberg. It's a

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<v Speaker 1>leading source of legal, regulatory and business information for professionals,

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<v Speaker 1>and Bloomberg Byenna's authoritative coverage spans a range of legal

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<v Speaker 1>practice areas including tax and accounting, labor and employment. I

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<v Speaker 1>want to bring in Patrick Gregory. Patrick, thanks very much

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<v Speaker 1>for being with us. Explain exactly what is going on here.

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<v Speaker 1>When people write a review on a website such as yelp,

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<v Speaker 1>what kind of liability are they subject to? This is

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<v Speaker 1>generally about defamation lawsuits. So, for example, you write a

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<v Speaker 1>review on Yelp, you say the flower company that I

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<v Speaker 1>hired for my wedding brought flowers that we're wilted, and

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<v Speaker 1>then you might get a demand letter saying we think

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<v Speaker 1>that you are the saming us. We don't think the

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<v Speaker 1>flowers were wilted. You lied about us. And of course

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<v Speaker 1>it's not the lawsuits that are the problem, so as

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<v Speaker 1>the threat of the lawsuits, because how many people are

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<v Speaker 1>going to go to court over a Yelp review that

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<v Speaker 1>they might have spent ten minutes writing, even if they're

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<v Speaker 1>telling the truth or just giving a matter of opinion people. No,

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<v Speaker 1>lawsuits are expensive to defend. Of course, we know the UK,

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<v Speaker 1>for example, makes it much tougher. There's a much tougher

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<v Speaker 1>hurdle seems to me to prove defamation or something like that.

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<v Speaker 1>If I'm a business though I'm a small business. Are

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<v Speaker 1>people who have claimed that these reviews were put in

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<v Speaker 1>by people who were exaggerating or at a bone to pick,

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<v Speaker 1>they were not valid. Uh. In fact, you even mentioned

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<v Speaker 1>in your story give us uh the example that could

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<v Speaker 1>not really it wasn't held up by the Virginia courts

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<v Speaker 1>of a company that asked to have the negative reviews

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<v Speaker 1>unveiled who the people really were, because it seemed that

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<v Speaker 1>they couldn't. Their views came in negative, but these weren't

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<v Speaker 1>really people. Maybe, so there was something going on that

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<v Speaker 1>I can understand why a small business might want to

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<v Speaker 1>protect against. Absolutely nobody wants their livelihood destroyed by a

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<v Speaker 1>couple of reviews that may be false. What happened in

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<v Speaker 1>Virginia there were actually two courts that said Yelp needed

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<v Speaker 1>to unmask the reviewers of this carpet company. The carpet

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<v Speaker 1>company said that these reviews that were posted online don't

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<v Speaker 1>match match up with the service states that we have

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<v Speaker 1>in our online records, and so two of the courts said, Yelp,

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<v Speaker 1>you're going to have to unmask those anonymous reviewers. And

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<v Speaker 1>that's a big component of this whole issue, is you're

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<v Speaker 1>right to anonymous speech that's something that goes way back

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<v Speaker 1>to the founding of the country. UM. But some disagreed

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<v Speaker 1>with those courts, saying this was really just a bare

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<v Speaker 1>bones claim and it shouldn't have been enough to make

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<v Speaker 1>unmask the reviewers. And that decision did get vacated, but

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<v Speaker 1>it was on procedural grounds, so it wasn't something that

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<v Speaker 1>would give YELP reviewers much comfort in Virginia in the future.

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<v Speaker 1>Can you tell us a little bit about the Consumer

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<v Speaker 1>Review Freedom Act and whether that is something that will

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<v Speaker 1>in a sense derail these lawsuits. There's so what we're

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<v Speaker 1>talking about here, strategic lawsuits against participation UM, so participating

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<v Speaker 1>in online speech. Uh. We have federal legislation UM called

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<v Speaker 1>to Speak Free Act. I'm not sure about the specific

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<v Speaker 1>legislation you mentioned, but there is a legislation called to

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<v Speaker 1>Speak Free Acts that the House is holding a hearing

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<v Speaker 1>on on Wednesday. Was sponsored by Blake Ferenshold. He's a Republican,

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<v Speaker 1>but he's actually joined by twenty Democrats and twelve Republicans.

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<v Speaker 1>And this is an anti slap statute. The way that

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<v Speaker 1>anti slap statutes work, it lets you dismiss litigation early. So,

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<v Speaker 1>for example, under California's state anti slap law. You file

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<v Speaker 1>an anti slap motion and then the plaintiffs must show

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<v Speaker 1>a likelihood of success or the suit is dismissed. And

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<v Speaker 1>if it's dismissed, the defendant can even get attorneys fees,

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<v Speaker 1>which changes the whole economics of the litigation. It deters planeffs,

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<v Speaker 1>and then you may even have attorneys taking on slap

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<v Speaker 1>defense lawsuits at new cost to the defendant. So big

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<v Speaker 1>hearing coming up. Patrick directly addressing this issue. A House

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<v Speaker 1>subcommittee holding a hearing June twenty second, that's Wednesday, on

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<v Speaker 1>a bipartisan federal anti slap bill that Speak Free Act. Yeah,

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<v Speaker 1>and that's that's what I mentioned with you have twenty

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<v Speaker 1>Democrats and thirteen Republicans supporting this. So it looks like

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<v Speaker 1>if this is if you believe an anti slap legislation,

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<v Speaker 1>then for you, this is an encouraging development. Certainly, about

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<v Speaker 1>twenty eight states and incidentally have anti slap statutes currently California, Texas, Florida,

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<v Speaker 1>New York, but there's plenty that don't, such as Virginia, Connecticut,

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<v Speaker 1>New Jersey. Will companies such as yelp, those that host

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<v Speaker 1>these online reviews will they indeed have to or want

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<v Speaker 1>to let their potential reviewers know whether a business has

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<v Speaker 1>already initiated a lawsuit. Absolutely, and for example a glass

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<v Speaker 1>door UM at a panel discussion I want to glass

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<v Speaker 1>Wars vice president was talking about how she gets two

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<v Speaker 1>D fifty demand letters a year from employers, and they've

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<v Speaker 1>said that they're willing to go as far as they

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<v Speaker 1>can to protect their users identities and filing as many

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<v Speaker 1>appeals as possible. YELP is in very much in favor

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<v Speaker 1>of this type of legislation and their director of litigation

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<v Speaker 1>is going to be one of the witnesses that this

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<v Speaker 1>hearing on Wednesday. So how big of an issue is

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<v Speaker 1>this for online sites like that? Not just yell but

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<v Speaker 1>there's so many things, there's Angie's. This seems to me

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<v Speaker 1>you could extend this the scope of this kind of

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<v Speaker 1>complaint UH much further if the courts allow. They don't.

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<v Speaker 1>They don't come to something that that sets the limits,

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<v Speaker 1>sets the parameters. Absolutely, there are so many businesses online

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<v Speaker 1>that are affected. UM. The one that I mentioned glass

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<v Speaker 1>doors of website where employees can review their employers or

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<v Speaker 1>past employers. You know, you have trip Advisor have so

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<v Speaker 1>many um websites designs um to get information, you know,

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<v Speaker 1>from reviewers, even Amazon dot Com, and plenty of people

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<v Speaker 1>leave reviews on there and rely on those reviews to

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<v Speaker 1>buy products. People also rely on reviews to determine the

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<v Speaker 1>applications that they want to download for their smartphone or

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<v Speaker 1>for their computer. Would this also have any bearing on

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<v Speaker 1>let's say, the Android Google Play service as well as

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<v Speaker 1>the Apple iTunes and Apple App Store. Absolutely, because you know,

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<v Speaker 1>any type of defamation lawsuit, they simply just need to

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<v Speaker 1>allege that you said something that was false and that

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<v Speaker 1>it's caused a business harm. So you can certainly think

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<v Speaker 1>of a situation where you say something about an app

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<v Speaker 1>that may or may not be true and then you

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<v Speaker 1>get a demand letter threatening to teach you to court.

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<v Speaker 1>All right, Patrick Gigory, thank you so very much for

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<v Speaker 1>joining us. We'll be will you be covering the hearing

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<v Speaker 1>on I'm hoping too, yes, what we'll be looking forward

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<v Speaker 1>to your report. It's one of those things that's brewing

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<v Speaker 1>out there that we don't always think about, but that's

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<v Speaker 1>why we always like to turn to Bloomberg b n

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<v Speaker 1>A and a legal editor like Patrick Gregory to let

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<v Speaker 1>us know what is going on in Washington, you see

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<v Speaker 1>him because certainly with legislation, there's so many specifics these days.

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<v Speaker 1>And of course I'm looking forward speaking of online Facebook,

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<v Speaker 1>We're going to be looking at their annual conference in

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<v Speaker 1>the show today. Yeah, their annual shareholder at meeting, at

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<v Speaker 1>which I believe the issue whether there's a new class

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<v Speaker 1>of stock the Mark Zuckerberg wants to create will in

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<v Speaker 1>fact be voted on by the shareholders, and also keeping

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<v Speaker 1>Peter Teel on Facebook's board of directors. And of course

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<v Speaker 1>now you explain to our listeners because this new class

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<v Speaker 1>of stocks, which was actually something that was announced a

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<v Speaker 1>few weeks ago, will allow Mark Zuckerberg to retain power,

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<v Speaker 1>retained control of the company. Yes, the idea is that

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<v Speaker 1>there will be a stock split, and that would affect

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<v Speaker 1>investors mainly because not in terms of their their value,

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<v Speaker 1>but it would just affect their ability to control the actions,

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<v Speaker 1>the corporate actions of the firm, because Mark Zuckerberg would

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<v Speaker 1>still retain the majority of the voting shares. So you

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<v Speaker 1>think that no matter what it does to the current

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<v Speaker 1>value of the existing shares for investors, the fact that

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<v Speaker 1>Mark Zuckerberg, who most would say has an obviously terrific

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<v Speaker 1>job is Founders CEO, the guy who runs Facebook. They

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<v Speaker 1>like to see him retain control and say, well, that

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<v Speaker 1>certainly is what many investors would agree to. I mean,

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<v Speaker 1>the shares of Facebook are up about nine percent so

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<v Speaker 1>far this year. And taking a look at the ownership

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<v Speaker 1>of Facebook, well, take a look that Mr Zuckerberg, through

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<v Speaker 1>a variety of entities UM still owns a controlling interest.

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<v Speaker 1>You listen, need to taking Stockheim pim Fox. My co

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<v Speaker 1>host Kathleen Hayes coming up a look at Facebook, and

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<v Speaker 1>also we'll take a check on global economics and the

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<v Speaker 1>preview of Janet Yellen's testimony before Congress. This is Bloomberg Radio.