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Can a Business Tell You to Not Write a Review?

Imagine a dentist telling his or her patients that they can’t write online reviews. Or a hotel deducting money from a newly married couple’s security deposit if any member of the wedding party blasts the hotel on Yelp. These stories might sound outrageous, but they are true–and stories like these are becoming increasingly common as businesses panic about the growing importance of consumer reviews.

Rep. Eric Swalwell (D-CA) and  Rep. Brad Sherman (D-CA) recently introduced H.R. 5499, the Consumer Review Freedom Act of 2014. The law targets businesses’ efforts to suppress consumer reviews or “performance assessments.” It proposes outlawing bans or fines for reviews or requiring consumers to provide businesses with exclusive rights to such reviews. Any such provision in a form contract automatically would be void and also would constitute an “unlawful” practice. The Federal Trade Commission and state attorneys’ general would have enforcement authority.

This bill proposal addresses the same concerns as the newly enacted California law, AB 2365, which also stops businesses from banning consumer reviews. There are some differences, but they are relatively inconsequential. For example, the federal law doesn’t clearly provide for any consumer recourse or any financial penalties for businesses that violate the restrictions.

The federal bill has some ambiguities that I hope will be addressed as it moves forward, including:

  • Preemption: The federal bill doesn’t have an express preemption clause, but does say that the act doesn’t “affect any cause of action brought by a person that exists or may exist under state law.” Presumably, this means California’s existing anti-review ban law would survive.

  • What’s a “form contract”? The law defines it as a “standardized” contract “without a meaningful opportunity” to negotiate the terms. I imagine most online “terms of use” and similar documents would meet this standard, but terms of use are implemented in a wide variety of ways that might stretch the statutory definition.

  • Can consumers sue businesses for impermissible contract clauses? The bill contemplates that the FTC and state AGs will have primary enforcement authority. However, by declaring certain practices “unlawful,” it sets up the possibility that consumers could sue offending businesses directly.

Let’s put my quibbles aside. A bill like this is such an obviously good idea, it’s tempting to believe the bill will pass easily. Certainly I would be surprised if any coordinated opposition emerges. 

But let’s not forget: we’re talking about Congress, where policy innovations go to die. If you think this law is a good idea, let Reps. Swalwell and Sherman know and thank them for their leadership. Or, better yet, contact Congress and encourage your representative to co-sponsor the bill. Ideally this initiative will garner critical mass so we put a definitive end to ridiculous efforts to suppress consumer views.

Business, Technology, Ethics
legal,Illuminate

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