Lawmakers look to end gag clauses for online reviews

By: The VNN Team  //  Consumer News

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A bipartisan group of senators is pushing legislation to bar businesses from using a common online contract clause that effectively prohibits customers from posting negative reviews about them.

Senate bill S. 2044, the Consumer Review Freedom Act of 2015, would prohibit the use of certain clauses in form contracts that restrict the ability of a consumer to communicate regarding the goods or services offered in interstate commerce that were the subject of the contract, and for other purposes.

This bill makes a provision of a form contract void from the inception if it:

(1) prohibits or restricts an individual who is a party to such a contract from engaging in written, verbal, or pictorial reviews, or other similar performance assessments or analyses of, the products, services, or conduct of a person that is also a party to the contract;

(2) imposes penalties or fees against individuals who engage in such communications; or

(3) transfers or requires the individual to transfer any intellectual property rights in any such otherwise lawful communications about such person or the goods or services provided by such person.

Exceptions are provided under which a provision shall not be considered void under this Act if the provision prohibits disclosure of certain: (1) trade secrets or commercial or financial information, (2) personnel and medical files, or (3) law enforcement records.

The bill does not apply to contracts establishing an employer-employee or independent contractor relationship.

A person is prohibited from offering or entering into form contracts containing a provision that is considered void under this Act.

Enforcement authority is provided to the Federal Trade Commission (FTC) and states.

The FTC must provide businesses with nonbinding best practices for compliance.

Sen. John Thune (R., S.D.), the Commerce Committee chairman, said he plans to push the bipartisan legislation through his committee. Similar measures also are pending in the House.

“Our committee spends a significant amount of time focusing on how we can increase broadband adoption and create policies that unlock the true potential of the Internet, but speech-stifling contract terms undermine what we’re trying to accomplish in Internet policy,” Mr. Thune said in his opening statement. “A core tenet of the Internet is the ability to freely share information with whomever you like. What good is information if it’s been sanitized to remove truthful criticism?”

The committee recently held a hearing and no one spoke in favor the clauses, known as gag clauses.

This is not the first time a bill banning gag clauses has been introduced, however, it is the first time the bill has ever had traction.

The legislation has received bipartisan support.