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Thune, Schatz, and Moran Introduce Bill to Protect Consumers From Fines For Negative Online Reviews

Washington, D.C. – U.S. Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-S.D.), Communications, Technology, Innovation, and the Internet Subcommittee Ranking Member Brian Schatz (D-Hawai‘i), and Consumer Protection, Product Safety, Insurance, and Data Security Subcommittee Chairman Jerry Moran (R-Kan.) introduced S. 2044, the Consumer Review Freedom Act.

“Reviews on where to shop, eat, or stay on websites like Yelp or TripAdvisor help guide where consumers do business every day,” said Senator Schatz. “Honest reviews from real people have made these sites successful and are the reason why so many of us have come to rely on them. Every consumer has the right to share their experiences and opinions of any business. Our bill would protect that right and ensure consumers are free to share their views, free from intimidation.”  

“Online customer reviews have become an integral part of not just e-commerce but consumer choice everywhere,” said Senator Thune. “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.”

“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 Senator 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.”  

The Consumer Review Freedom Act protects consumers from unfair non-disparagement clauses that are appearing in a larger 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. An example of a non-disparagement clause the Utah case of Palmer v. where a 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 sue reviewers who make dishonest misrepresentations about their business.

Similar bipartisan legislation, H.R. 2110, has been introduced in the U.S. House of Representatives by Reps. Darrell Issa (R-Calif.), Eric Swalwell (D-Calif.), Blake Farenthold (R-Texas), Anna Eshoo (D-Calif.), Brad Sherman (D-Calif.), and Steve Cohen (D-Tenn.).

Click here for a copy of the legislation. The bill is expected to be referred to the Senate Commerce, Science, and Transportation Committee chaired by Sen. Thune.