Tuesday, June 9, 1998
Philip faces uphill battle in attempt to censure
Internet chat groups
Libel warning silences TSE critic
By SIMON AVERY
The Financial Post
Philip Services Corp. has launched an attack against an Internet chat group, vowing to shut down critical commentary and uncover the identities of the anonymous scribes behind it.
"The company will take all necessary steps to protect the safety and reputation of its employees and the integrity of its business," Philip said in a statement fired off to the Yahoo Finance chat group,
where the Hamilton-based company is discussed under the symbol "PHV."
Charging that a small group of people are conducting "a campaign of hatred" against it, Philip said it had asked Yahoo to remove "the most offensive messages" and prevent the authors from posting any further thoughts.
The chat group has been mainly investor-oriented since
December, and passed on information ranging from wild
rumors to accurate reports of upcoming meetings with key
executives.
Analysts at numerous brokerage firms visit the site
regularly for any trace of useful information.
Defamation experts warned Philip is entering a terrain full
of legal obstacles in trying to control the site. Response
within the Internet chat group has been one of disbelief
and anger since the company posted its statement Friday
night.
"This bulletin board is amongst the least of what should
worry you. Your time is much better spent in finding
buyers of the metals businesses and figuring out ways to
avoid leaving money on the table," said one contributor,
alias "alligator1928."
"Sceptic666" was more scathing: "It's fair game you
idiots. Welcome to the new world where company's [sic]
that ... have something to hide are deadmeat."
A third contributor, "n913ta," challenged Philip to turn the message board into a continuing shareholders meeting through which investors could get answers to their many questions about its recent troubles.
The company has announced a series of copper-related losses of more than US$200 million going back to 1995. It has restated earnings as far back as 1995, wiping out profit for the period. Last week it announced it would try to sell its metals division, responsible for 60% of its revenue, to pay down mounting debt.
Philip shares (PHV/NYSE, TSE) have tumbled from an all-time high of US$19 15/16 in New York last September to US$4 1/4 yesterday, down 3/16. They closed down 25› in Toronto at $6.15.
A Philip spokeswoman confirmed Friday night the company had put out the statement. It claims messages posted on the Yahoo finance site have libelled the company and employees, including ethnic slurs and demeaning statements about some female staff.
Philip also said people using several aliases have also posted messages claiming to be stalking senior management, and former employees are posting confidential, insider information.
Lawyers said the same libel laws that apply to traditional media apply to comments on the Internet, but added Philip faces numerous legal hurdles if it intends to proceed with an action. These include
issues of jurisdiction, responsibility, confidentiality and freedom of expression.
Julian Porter, a partner at the Toronto law firm Gowling Strathy & Henderson, said he knew of no instance in which a company had managed to censor a public chat group.
"They've got one huge uphill battle ahead of them," he said. "One of the problems when you attack the Internet is who are you attacking -- who's posting the stuff on the billboard?"
He doubts whether Santa Clara, Calif.-based Yahoo would divulge the identities of any participants without a U.S. court order.
Furthermore, because of strong First Amendment laws, no U.S. judge would back Philip's request to prevent people from taking part in the chat group, in effect censoring them for comments they haven't yet made.
Officials from Yahoo were not available for comment.
-- with files from Dan Westell/FP
canoe2.canoe.ca
My bolding -g-
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