consumer review

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On Thursday, December 15, 2016, President Obama signed into law H.R. 5111, now officially titled the “Consumer Review Fairness Act of 2016.” The substantive provisions of the bill, which we discussed in a previous post, are virtually unchanged, but the law’s text provides further details regarding enforcement by the Federal Trade Commission and the states.

One noteworthy enforcement feature of the law is a cross-reference to the Federal Trade Commission Act. A violation of the Consumer Review Fairness Act of 2016 by offering a form contract containing a provision described as void in the law is also a violation of 15 U.S.C. 45(a)(2), which essentially prohibits unfair or deceptive acts or practices.

We have all seen the reviews of products or services that disgruntled consumers post on review sites such as Yelp. Lately, however, some consumers have faced lawsuits for violating “gag orders,” or non-disparagement clauses, found in agreements between businesses and consumers. These clauses restrict consumers’ ability to publish any negative criticism about their experiences and are often placed in the fine print of form contracts.  These agreements provide that, when the consumer posts a negative review, or even speaks negatively about the business’s products, services, or conduct, the business would have a cause of action against the consumer for breach of contract.