Consumer Review Fairness Act Protects Free Exchange of Consumer Feedback Online
In an era when online ratings and reviews can make or break a business, maintaining a sterling online image can be crucial. So crucial, in fact, that over the past few years many businesses have introduced “non-disparagement” clauses into the form contracts that make up their sales agreements. These clauses prohibit buyers from expressing negative or critical reviews of a product or service, and customers that sign them effectively agree to incur fines should they violate the clause. A hotel in Hudson, New York, for example, claimed it would withhold $500 from the security deposit for every negative review received from wedding party attendees. In another famous case, a customer who failed to receive merchandise purchased online posted about their experience on a consumer affairs website and was subsequently charged $3500 by the company. After declining to pay, the customer’s family suffered significant damage to their credit score. This case and others eventually led to the signing of the Consumer Review Fairness Act in 2015, which now bars the inclusion of non-disparagement clauses within sales contracts.
The CRFA works by designating contracts “void from inception” should they include language that seeks to “prohibit” or “restrict” what a customer can say, or imposes penalties on certain types of consumer communication. The communication protected by the act includes “ “performance assessment of” goods or services. The act also voids contracts that involve a transfer of intellectual property rights from the customer to the company if the customer creates “review or feedback content.” This means that a seller cannot use contractual terms to prospectively claim ownership (and, in turn, removal) over any type of review a customer may wish contribute. Transmission of trade secrets, however, is not a form of communication covered by the act.
Although the scope of the CRFA is encouraging, there are a few ways that businesses may try to get around its stipulations. In his assessment of the act, consumer affairs specialist Eric Goldman mso-bidi-font-family: ‘Times New Roman’; color: #333333; background: white;”> a few methods companies might try. The most likely option would involve a company claiming that a negative review constitutes defamatory content. Since the transfer of intellectual property applies only to “lawful communications,” and defamation is unlawful, businesses could potentially intimidate websites and/or customers with the threat of a lawsuit. Even though they would be unlikely to win these suits in court, the threat could be enough to sway the removal of a review. Goldman also indicates that companies selling internet-connected devices may begin remotely disabling their products (also called “bricking”) in response to negative reviews. It is potentially unclear whether this practice would constitute imposing a penalty, and if the threat to brick were present in a sales agreement, customers might be wary of posting anything critical of the product online.
While it is likely that businesses will continue to seek ways to prevent or deter consumers from expressing their true feelings about the products they purchase in online forums, the passing of the CRFA is salutary. Paired with a web of existing Anti-SLAPP (Strategic Lawsuit Against Public Participation) legislation on the state level (laws protecting vocal critics from the burden of defending themselves against lawsuits intended to silence them), the CRFA is a welcome and signficant safeguard against incursions on consumer speech.