Fighting the penalty of free speech
by Carol Thompson
Congress is now jumping into the fight to prevent business owners from financially penalizing consumers who leave bad reviews on websites.
The Consumer Review Freedom Act was introduced earlier this month. The bill proposes to make it illegal for businesses to attempt to thwart negative online reviews by adding non-disparagement clauses into customer contracts threatening to impose a fine for posting negative comments on websites such as Yelp. The rules would be enforced by the Federal Trade Commission and state attorneys general.
“It’s un-American that any consumer would be penalized for writing an honest review,” said Rep. Eric Swalwell (D-CA) who introduced the legislation. “I’m introducing this legislation to put a stop to this egregious behavior so people can share honest reviews without fear of litigation.”
Salwell’s legislation is similar to a California bill recently signed into law by Gov. Jerry Brown known as the “Yelp bill.” California businesses in violation of the new law could face up to $10,000 in fines.
The new legislation follows an Internet explosion over a Hudson, New York, hotel, the Union Street Guest House, that attempted to fine a wedding party $500 for each negative review placed on any Internet site.
The terms stated, “Please know that despite the fact that wedding couples love Hudson and our inn, your friends and families may not. … If you have booked the inn for a wedding or other type of event … and given us a deposit of any kind … there will be a $500 fine that will be deducted from your deposit for every negative review … placed on any internet (sic) site by anyone in your party.”
That prompted an onslaught of negative reviews on Yelp, 3819 that the online business review site removed for violating its content guidelines or terms of service.
The Union Street Guest House now changed their terms to read, “Please know that despite the fact that wedding couples love Hudson and our Inn, your friends and families may not. This is due to the fact that your guests may not understand what we offer – therefore we respectfully ask you to explain that to them.”
The proposed legislation is not only in response to the Union Street Guest House, but also to a similar, but far more serious, incident that happened to a Utah couple.
The couple was fined $3,500 by a company called KlearGear after they wrote an online review about a problem they had with a product. The company accused them of violating a “non-disparagement” clause in their contract. When the couple refused to pay the fine, they said the company sent their debt to the credit reporting bureaus, which damaged the couple’s credit rating.
The proposed legislation would make non-disparagement clauses non-enforceable. The law would not prevent defamation, libel, and slander cases. Companies would continue to be allowed to bring civil action against a consumer who they believed defamed their reputation. In most states, those suing for defamation, libel, or slander have to prove a monetary loss.
Under the proposed bill, companies found in violation can be fined.
Image: Flickr Lrivas3