Sep 18 2015
WASHINGTON – U.S. Senator Jerry Moran (R-Kan.) – chairman of the U.S. Senate Commerce Subcommittee on Consumer Protection, Product Safety, Insurance and Data Security – this week joined U.S. Senators John Thune (R-S.D.) and Brian Schatz (D-Hawaii) in introducing the Consumer Review Freedom Act (S. 2044).
“This legislation would make certain consumers in Kansas and across the country are able to make their voices heard without having to fear lawsuits or financial repercussions for honest feedback,” said Sen. Moran. “Just as word of mouth is used by family and friends to share experiences with particular brands or businesses, online reviews have significant benefits to consumers in their purchasing decisions.”
S. 2044 protects consumers from unfair non-disparagement clauses that are appearing in a number of non-negotiable form contracts. This practice can occur when one party imposes a standardized contract without a meaningful opportunity for parties to modify the contract. Businesses can use these clauses to penalize or seek fines from customers for negative but honest reviews of their services on websites such as Yelp or TripAdvisor.
Non-disparagement clauses stifle consumer speech by silencing fair criticism in public forums, particularly on websites. One example of a non-disparagement clause harming consumers was the Utah case of Palmer v. KlearGear.com where the website demanded a customer remove a negative online review or pay $3,500 in damages because the website’s terms of service included a non-disparagement clause. When the customer refused to pay the penalty, the website reported the $3,500 to credit reporting agencies as an unpaid debt.
The Consumer Review Freedom Act would prohibit business practices like the example above, while still allowing business owners to seek repercussions against reviewers who make dishonest misrepresentations about their business.
Similar bipartisan legislation, H.R. 2110, has been introduced in the U.S. House of Representatives. The bill is expected to be referred to the Senate Commerce, Science, and Transportation Committee chaired by Sen. Thune.