Marketplace: News Archives

Monday, October 2, 2000
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It's Monday, the 2nd of October. I'm David Brancaccio.

The United States Supreme Court began its new term today by turning down Exxon Mobil Corporation's appeal of the five billion-dollar damages awarded to Alaskan fishermen and others who sued following the 1989 Valdez oil spill. Marketplace's John Dimsdale reports on this and other cases coming up in the new Supreme Court session on this First Monday in October.

Dimsdale: "Today's decision doesn't mean Exxon has to pay up immediately. In fact, the company has at least four other major appeals of the five billion-dollar punitive damage award still pending, 11 years after the spill in Prince William Sound. This year, the Supreme Court will hear a relatively large number of business cases. Perhaps the biggest will be a challenge to the federal government's authority to set clean air standards. A group of business associations want the court to require regulators to consider the costs of their regulations. The director of the U.S. Chamber of Commerce's Litigation Center, Stephen Bokat, calls this the most important administrative law case in 20 years, affecting many hundreds of administrative regulations handed down by government."

Bokat: "Here it's EPA, which is, of course, important enough in its own right, but this could be OSHA, it could be Food and Drug. It could be any, if they decide to have a fairly broad ruling. Something that could impact many government agencies."

Dimsdale: "Also on the Supreme Court docket are three challenges to mandatory labor-management arbitration to resolve employee discrimination cases. The court may also rule on a telephone industry challenge to the Federal Communications Commissions' system of setting phone rates that subsidize basic phone service in hard-to-reach rural areas. There are several cases regarding states rights issues, including the question of whether states have to adhere to the requirements of the federal Americans With Disabilities Act and whether the federal government can apply interstate standards for wetlands that cross state borders. No Supreme Court Justice has retired in more than six years. Court watchers anticipate the next president will nominate at least three replacements, who could easily sway hotly contested rulings on issues like affirmative action, abortion and states rights. In Washington, I'm John Dimsdale for Marketplace."

A new federal law went into effect over the weekend that makes a kind digital signature sent over the Internet every bit as legal as a document you sign by hand. It means that one-day in the future, you might be able to make a car loan or activate an insurance policy online. Bob Moon reports businesses see a need for the technology, but it might take a while for consumers to get on board.

Moon: "This is not simply a consumer protection issue. The idea of an electronic signature spans both ends of an online transaction, and the need for some way to confirm the e-deal is apparent. According to First Data Corp., the largest credit-card processor in the country, about 1.25 percent of all Internet transactions are charged back to businesses when credit card consumers dispute the charges. That compares to only 0.33 percent of catalog transactions by phone and mail and only a tiny fraction of storefront retail transactions. It can be hard for merchants to prove their case without a signature, but how do they get one online? Well, the digital authentication law that took effect yesterday gives electronic signatures the same legal status as scribbling your name on a paper document. But experts say it may be a couple of years before consumers embrace the new technology. For now, Congress has left it to the marketplace to decide any particular standard. And Ari Schwartz of the Washington-based advocacy Center for Democracy and Technology says consumers need to avoid any one digital signature that acts like a single key that can open all the doors to your life."

Schwartz: "Someone might just need to know that you can afford to pay for something, and might not need to know who you are, like cash. In other cases, they might just need to know what company you work for, not your name or not your social security number. In other cases, they might need more information."

Moon: "Schwartz says that means consumers should have the option of a digital key ring with various keys which fit the transaction they're conducting. Otherwise, he says, if the wrong person steals your master key, it's way too easy to collect a great deal of personal information. And as he puts it, 'your only option would be changing all the locks.' I'm Bob Moon for Marketplace."

As a prelude to tomorrow's presidential debate, there some protests in Boston today, among them a demonstration over the escalating cost of medicine for seniors. Both Al Gore and George W. Bush have made high prescription drug prices a campaign issue. Pharmaceutical company officials got off the starting block early with a briefing at Pfizer's brand new facility as protestors chanted outside. From the Marketplace health desk, Helen Palmer reports.

Palmer: "Bus loads of seniors, with placards asking 'Drugs or heat?', 'Drugs or food?' milled about outside Pfizer's spanking new $50 million research facility. The message they wanted to get across? That seniors vote, and drug prices are too high. John Rother is director of legislation and public policy for the AARP."

Rother: "Many seniors look at the money spent on advertising and they look at the profit margin, which is almost 20 cents out of every dollar, and think that that's much higher than any other industry in America. And they look at the salaries of the CEOs and, you know, they draw a conclusion."

Palmer: "Executives inside the building, though, had a different conclusion: that drugs are incredible value for money. They control diseases, keep people out of the emergency room and the hospital. But, the enterprise is risky and costly, so the companies need a good return for their private investors. Judy Bello of the Pharmaceutical industry group, PHARMA."

Bello: "It takes generally 12 to 15 years to bring a medicine from the lab to the medicine cabinet. On average it costs about $500 million and there's a high failure rate."

Palmer: "Eighty percent fail in trials, and only three in ten recoup their investment. That's why, says Pfizer's senior medical adviser Mike McGee, they need to make profits to keep the shareholders sweet."

McGee: "It's extraordinarily important that shareholders support us because they're trying to allow us to allow us to accomplish what the patients want as well, and that's new discoveries. So in general, what's good for Pfizer is good for doctors and patients."

Palmer: "But the seniors lined up outside didn't seem to agree. One placard read 'Pfizer profiteers on the sick'. From the Health Desk at WGBH Boston, I'm Helen Palmer for Marketplace."

And that's the top of our news for Monday. The Nasdaq Composite today closed at 3,568. It got there by dropping 103 points or 2.8 percent. The Dow's at 10,700 on a rise of 49 points or 0.5 percent.