Senate Bill Would Outlaw Online Review Limitations

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By Joseph Wright

Sept. 17 — Online reviewers would be protected against non-negotiable non-disparagement clauses that penalize them for expressing their views about companies, under bipartisan legislation introduced in the Senate Sept. 17.

Sen. John Thune (R-S.D.), who chairs the Senate Commerce, Science and Transportation Committee, and Consumer Protection, Product Safety, Insurance and Data Security panel Chairman Jerry Moran (R-Kan.) introduced the Consumer Review Freedom Act (S. 2044) along with Sen. Brian Schatz (D-Hawaii).

Rep. Darrell Issa (R-Cal.) introduced a similar bill (H.R. 2110) in the House May 1.

“Online customer reviews have become an integral part of not just e-commerce but consumer choice everywhere,” Thune said. “This free market system, which empowers customers, cannot thrive if reviewers face intimidation against airing truthful criticisms. The Consumer Review Freedom Act protects the rights of reviewers, review readers, and those business owners who embrace the reality that they are accountable to customers.”

The bill would declare void any form contract provision restricting consumer from reviewing products, penalizing them or requiring a fee for doing so, or requiring the transfer of intellectual property rights for any reviews of products.

The bill wouldn't make any substantive change to defamation law or overturn duties of confidentiality. Prohibiting disclosure of personnel, medical or law enforcement records as well as trade secrets would be exempt from coverage.

In addition to being void, covered non-disparagement clauses would be unfair or deceptive trade practices under the Federal Trade Commission Act, 15 U.S.C. 45(a)(2), and subject to enforcement by the FTC and state attorneys general.

In 2011 the Center for Democracy & Technology petitioned the FTC to investigate Medical Justice Corp. over physician-patient agreements containing nondisparagement clauses. Medical Justice subsequently dropped the practice.

In September 2014 California Gov. Jerry Brown (D) signed a similar law invalidating clauses that require consumers to waive their rights to make statements regarding goods or services,, or for threatening or penalizing them for doing so.

To contact the reporter on this story: Joseph Wright in Washington at jwright@bna.com

To contact the editor responsible for this story: Thomas O'Toole at totoole@bna.com

The Consumer Review Freedom Act can be found at: http://www.commerce.senate.gov/public/index.cfm?a=Files.Serve&File_id=182837C8-CDC6-4EBA-8C1F-FCE3DF22A26F