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Bloomberg's Gregory on Defamation Protection for Yelpers(Audio) · Bloomberg Intelligence

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  Speaker 1: to Jaking Stock with Kathleen has and bim Box on
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  Speaker 1: Bloomberg Radio and its twenty study by the marketing research
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  Speaker 1: firm Mintel found that nearly seventy percent of Americans seek
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  Speaker 1: out others opinions online before making a purchase. While some
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  Speaker 1: of those online reviews can lead to some unintended consequences,
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  Speaker 1: one Dallas couple who wrote a review about a pet
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  Speaker 1: company was sued for over a million dollars for the review.
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  Speaker 1: It was a negative review, and the suit alleges that
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  Speaker 1: had violated the non disparagement cause in the contract. To
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  Speaker 1: find out more, I want to bring in Patrick Gregory.
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  Speaker 1: He is Legal editor for Bloomberg b n A. Bloomberg
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  Speaker 1: practice areas including tax and accounting, labor and employment. I
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  Speaker 1: want to bring in Patrick Gregory. Patrick, thanks very much
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  Speaker 1: for being with us. Explain exactly what is going on here.
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  Speaker 1: When people write a review on a website such as yelp,
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  Speaker 1: what kind of liability are they subject to? This is
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  Speaker 1: generally about defamation lawsuits. So, for example, you write a
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  Speaker 1: review on Yelp, you say the flower company that I
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  Speaker 1: hired for my wedding brought flowers that we're wilted, and
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  Speaker 1: then you might get a demand letter saying we think
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  Speaker 1: that you are the saming us. We don't think the
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  Speaker 1: flowers were wilted. You lied about us. And of course
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  Speaker 1: it's not the lawsuits that are the problem, so as
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  Speaker 1: the threat of the lawsuits, because how many people are
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  Speaker 1: going to go to court over a Yelp review that
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  Speaker 1: they might have spent ten minutes writing, even if they're
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  Speaker 1: telling the truth or just giving a matter of opinion people. No,
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  Speaker 1: lawsuits are expensive to defend. Of course, we know the UK,
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  Speaker 1: for example, makes it much tougher. There's a much tougher
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  Speaker 1: hurdle seems to me to prove defamation or something like that.
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  Speaker 1: If I'm a business though I'm a small business. Are
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  Speaker 1: people who have claimed that these reviews were put in
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  Speaker 1: by people who were exaggerating or at a bone to pick,
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  Speaker 1: they were not valid. Uh. In fact, you even mentioned
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  Speaker 1: in your story give us uh the example that could
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  Speaker 1: not really it wasn't held up by the Virginia courts
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  Speaker 1: of a company that asked to have the negative reviews
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  Speaker 1: unveiled who the people really were, because it seemed that
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  Speaker 1: they couldn't. Their views came in negative, but these weren't
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  Speaker 1: really people. Maybe, so there was something going on that
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  Speaker 1: I can understand why a small business might want to
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  Speaker 1: protect against. Absolutely nobody wants their livelihood destroyed by a
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  Speaker 1: couple of reviews that may be false. What happened in
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  Speaker 1: Virginia there were actually two courts that said Yelp needed
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  Speaker 1: to unmask the reviewers of this carpet company. The carpet
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  Speaker 1: company said that these reviews that were posted online don't
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  Speaker 1: match match up with the service states that we have
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  Speaker 1: in our online records, and so two of the courts said, Yelp,
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  Speaker 1: you're going to have to unmask those anonymous reviewers. And
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  Speaker 1: that's a big component of this whole issue, is you're
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  Speaker 1: right to anonymous speech that's something that goes way back
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  Speaker 1: to the founding of the country. UM. But some disagreed
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  Speaker 1: with those courts, saying this was really just a bare
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  Speaker 1: bones claim and it shouldn't have been enough to make
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  Speaker 1: unmask the reviewers. And that decision did get vacated, but
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  Speaker 1: it was on procedural grounds, so it wasn't something that
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  Speaker 1: would give YELP reviewers much comfort in Virginia in the future.
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  Speaker 1: Can you tell us a little bit about the Consumer
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  Speaker 1: Review Freedom Act and whether that is something that will
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  Speaker 1: in a sense derail these lawsuits. There's so what we're
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  Speaker 1: talking about here, strategic lawsuits against participation UM, so participating
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  Speaker 1: in online speech. Uh. We have federal legislation UM called
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  Speaker 1: to Speak Free Act. I'm not sure about the specific
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  Speaker 1: legislation you mentioned, but there is a legislation called to
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  Speaker 1: Speak Free Acts that the House is holding a hearing
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  Speaker 1: on on Wednesday. Was sponsored by Blake Ferenshold. He's a Republican,
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  Speaker 1: but he's actually joined by twenty Democrats and twelve Republicans.
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  Speaker 1: And this is an anti slap statute. The way that
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  Speaker 1: anti slap statutes work, it lets you dismiss litigation early. So,
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  Speaker 1: for example, under California's state anti slap law. You file
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  Speaker 1: an anti slap motion and then the plaintiffs must show
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  Speaker 1: a likelihood of success or the suit is dismissed. And
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  Speaker 1: if it's dismissed, the defendant can even get attorneys fees,
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  Speaker 1: which changes the whole economics of the litigation. It deters planeffs,
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  Speaker 1: and then you may even have attorneys taking on slap
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  Speaker 1: defense lawsuits at new cost to the defendant. So big
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  Speaker 1: hearing coming up. Patrick directly addressing this issue. A House
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  Speaker 1: subcommittee holding a hearing June twenty second, that's Wednesday, on
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  Speaker 1: a bipartisan federal anti slap bill that Speak Free Act. Yeah,
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  Speaker 1: and that's that's what I mentioned with you have twenty
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  Speaker 1: Democrats and thirteen Republicans supporting this. So it looks like
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  Speaker 1: if this is if you believe an anti slap legislation,
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  Speaker 1: then for you, this is an encouraging development. Certainly, about
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  Speaker 1: twenty eight states and incidentally have anti slap statutes currently California, Texas, Florida,
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  Speaker 1: New York, but there's plenty that don't, such as Virginia, Connecticut,
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  Speaker 1: New Jersey. Will companies such as yelp, those that host
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  Speaker 1: these online reviews will they indeed have to or want
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  Speaker 1: to let their potential reviewers know whether a business has
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  Speaker 1: already initiated a lawsuit. Absolutely, and for example a glass
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  Speaker 1: door UM at a panel discussion I want to glass
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  Speaker 1: Wars vice president was talking about how she gets two
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  Speaker 1: D fifty demand letters a year from employers, and they've
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  Speaker 1: said that they're willing to go as far as they
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  Speaker 1: can to protect their users identities and filing as many
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  Speaker 1: appeals as possible. YELP is in very much in favor
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  Speaker 1: of this type of legislation and their director of litigation
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  Speaker 1: is going to be one of the witnesses that this
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  Speaker 1: hearing on Wednesday. So how big of an issue is
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  Speaker 1: this for online sites like that? Not just yell but
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  Speaker 1: there's so many things, there's Angie's. This seems to me
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  Speaker 1: you could extend this the scope of this kind of
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  Speaker 1: complaint UH much further if the courts allow. They don't.
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  Speaker 1: They don't come to something that that sets the limits,
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  Speaker 1: sets the parameters. Absolutely, there are so many businesses online
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  Speaker 1: that are affected. UM. The one that I mentioned glass
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  Speaker 1: doors of website where employees can review their employers or
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  Speaker 1: past employers. You know, you have trip Advisor have so
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  Speaker 1: many um websites designs um to get information, you know,
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  Speaker 1: from reviewers, even Amazon dot Com, and plenty of people
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  Speaker 1: leave reviews on there and rely on those reviews to
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  Speaker 1: buy products. People also rely on reviews to determine the
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  Speaker 1: applications that they want to download for their smartphone or
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  Speaker 1: for their computer. Would this also have any bearing on
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  Speaker 1: let's say, the Android Google Play service as well as
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  Speaker 1: the Apple iTunes and Apple App Store. Absolutely, because you know,
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  Speaker 1: any type of defamation lawsuit, they simply just need to
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  Speaker 1: allege that you said something that was false and that
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  Speaker 1: it's caused a business harm. So you can certainly think
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  Speaker 1: of a situation where you say something about an app
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  Speaker 1: that may or may not be true and then you
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  Speaker 1: get a demand letter threatening to teach you to court.
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  Speaker 1: All right, Patrick Gigory, thank you so very much for
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  Speaker 1: joining us. We'll be will you be covering the hearing
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  Speaker 1: on I'm hoping too, yes, what we'll be looking forward
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  Speaker 1: to your report. It's one of those things that's brewing
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  Speaker 1: out there that we don't always think about, but that's
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  Speaker 1: why we always like to turn to Bloomberg b n
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  Speaker 1: A and a legal editor like Patrick Gregory to let
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  Speaker 1: us know what is going on in Washington, you see
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  Speaker 1: him because certainly with legislation, there's so many specifics these days.
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  Speaker 1: And of course I'm looking forward speaking of online Facebook,
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  Speaker 1: We're going to be looking at their annual conference in
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  Speaker 1: the show today. Yeah, their annual shareholder at meeting, at
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  Speaker 1: which I believe the issue whether there's a new class
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  Speaker 1: of stock the Mark Zuckerberg wants to create will in
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  Speaker 1: fact be voted on by the shareholders, and also keeping
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  Speaker 1: Peter Teel on Facebook's board of directors. And of course
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  Speaker 1: now you explain to our listeners because this new class
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  Speaker 1: of stocks, which was actually something that was announced a
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  Speaker 1: few weeks ago, will allow Mark Zuckerberg to retain power,
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  Speaker 1: retained control of the company. Yes, the idea is that
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  Speaker 1: there will be a stock split, and that would affect
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  Speaker 1: investors mainly because not in terms of their their value,
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  Speaker 1: but it would just affect their ability to control the actions,
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  Speaker 1: the corporate actions of the firm, because Mark Zuckerberg would
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  Speaker 1: still retain the majority of the voting shares. So you
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  Speaker 1: think that no matter what it does to the current
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  Speaker 1: value of the existing shares for investors, the fact that
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  Speaker 1: Mark Zuckerberg, who most would say has an obviously terrific
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  Speaker 1: job is Founders CEO, the guy who runs Facebook. They
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  Speaker 1: like to see him retain control and say, well, that
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  Speaker 1: certainly is what many investors would agree to. I mean,
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  Speaker 1: the shares of Facebook are up about nine percent so
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  Speaker 1: far this year. And taking a look at the ownership
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  Speaker 1: of Facebook, well, take a look that Mr Zuckerberg, through
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  Speaker 1: a variety of entities UM still owns a controlling interest.
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  Speaker 1: You listen, need to taking Stockheim pim Fox. My co
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  Speaker 1: host Kathleen Hayes coming up a look at Facebook, and
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  Speaker 1: also we'll take a check on global economics and the
• 11:06
  Speaker 1: preview of Janet Yellen's testimony before Congress. This is Bloomberg Radio.