New York Real Estate Lawyer Blog
In a rare bi-partisan effort, the U.S. Senate passed a bipartisan bill called the Consumer Review Fairness Act, which should give on-line reviewers some respite from overreaching “terms of service” clauses, buried deep within the fine print of the internet, which purport to limit or preclude on-line reviews through “gag” orders.
Gone are the days were people rely solely on Consumer Reports to understand whether the service or good he is buying lives up to the claims. Since the rise of the internet, sites like Yelp, Trip Advisor, eBay, and others have allowed consumers to review all forms and types of sellers, restaurants, products and service providers. That said, in an effort to combat negative reviews, various service providers have used their “terms of service,” to threaten and retaliate against consumers who post “negative” reviews. The legislation arose from a series of cases like Palmer v. KlearGear, where the consumer posted a negative review and the company demanded thousands of dollars in fines because of the terms of service contained in the fine print of the terms of service. When she did not remove the review, the company notified debt collectors of an “outstanding debt” and torpedoed Palmer’s credit rating. In the end, the consumer won $306,750 in damages, but the case earned the ire of our elected officials.
Other examples of internet companies seeking “retribution” for on-line reviews and alleged “non-disparagement clauses” used to avoid negative online reviews led to the need for national legislation regulating the use of such “gag clauses.” The new bill makes it illegal to have terms of service that “disparage, restrict, or penalize poor customer reviews.” If companies do not abide by these terms, the Federal Trade Commission (FTC) can penalize the company and stop lawsuits based on negative reviews, according to this article. Notably, the law does not protect against libel or slander lawsuits by these vendors, but it is a landmark bill in protecting consumer rights, since the internet is considered the Wild West of the law with lack of government oversight in many cases. Sen. John Thune (R-ND), who chairs the Senate Commerce Committee, said in this article that “by ending gag clauses, this legislation supports consumer articles and the integrity of critical feedback about products and services sold online [the bill also protects offline reviews].”
Essentially, online sites have allowed consumers to make informed choices about where to spend their money to receive goods and services; it is a form of accountability for companies and a strong protection for consumers who used to have to rely on word-of-mouth to make informed choices. According to this article, surveys indicate 84% of people trust online reviews as if they were received from a friend or family member so people heavily rely on online feedback. There has been pushback from many businesses who want to preserve their pristine reputations, but review giants like Google and Yelp support the new law. The law encourages good behavior and is a form of competition for businesses, promoting beneficial ones and discouraging consumers from choosing poor goods and services.
The Bottom line– you no longer have to scour the fine print of the internet provider or service company before leaving your “opinion.” That said, you should always take care to base you on-line opinion on verifiable facts and take care to avoid defamation.