New Law Would Protect Consumers from Retaliation for Bad Reviews

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Dec 7, 2016

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Online ReviewsThe US House of Representatives recently voted to enact the Consumer Review Fairness Act. If passed by the Senate (which has its own version of the bill) and signed by the President, the bill will become law.

Table of Contents

Free Speech

As CNN noted,

You have a right to post about undercooked chicken or the cockroach you spied in a restaurant’s bathroom. And lawmakers want to protect those rights.

As reported by Fortune,

some companies’ contracts state that customers are not allowed to post negative reviews on social media or websites like Yelp, otherwise they can seek damages. Consumerist reports that some people have been fined just for threatening to complain.

For example, Consumerist reported that a Texas pet-sitter sued a customer for $1 million over a one-star Yelp review.

And an online retailer tried but failed to impose a $3,500 penalty on a customer who left a negative but truthful review.

Gag Orders

The proposed law would allow the Federal Trade Commission to take action against any business that tried to enforce such a “gag order” in a consumer contract.

California banned non-disparagement clauses in consumer contracts in 2014.

As I blogged about previously, one tactic that businesses have used to block bad reviews is claiming copyright in those reviews.

A New York dentist forced her patients to sign a contract that gave her ownership of any reviews they wrote about her. She’d threaten to sue them for copyright infringement if they posted any negative reviews online.

If the negative reviews were posted anyway, the dentist could use the Digital Millennium Copyright Act’s “take down” provisions to have the “infringing” reviews removed.

A judge found that this constituted misuse of copyright law.

However, the Electronic Frontier Foundation (EFF) is concerned that the copyright loophole still exists:

If a company claims that a review is not “otherwise lawful” (for example, because it allegedly defames the company), then the law may permit the company to claim that it owns the copyright in the review and have it removed as copyright infringement, thus creating a shortcut for having speech removed. We don’t think this is what Congress intended, and we hope it’s not too late to remove the two offending words.

As the EFF notes, the Act wouldn’t allow consumers to post defamatory (untrue and damaging) reviews.

The passage of the bill was applauded by TripAdvisor, the travel review site:

The legislation would protect consumers from disreputable businesses that try to muzzle dissatisfied consumers’ opinions and reviews through gag orders in form contracts that most consumers never recognize they agree to….

It is against TripAdvisor’s policies for a business to include gag orders in its contracts with travelers. Businesses that violate these policies may receive a red badge on the site warning travelers about these practices.

Review-driven sites like Avvo, Yelp, and Glassdoor are also supporting the legislation. Yelp has also started flagging businesses that “issue questionable legal threats” in response to bad reviews.

The full text of the Act can be seen here.

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