You Probably Missed New Legislation To Protect People Making Online Complaints

Last year, Congress and the President made a small blow for freedom in the never ending struggle to protect open communications on the Internet from corporate censorship. I hadn't heard about it at the time, but it is a potentially valuable tool on cases involving online customer reviews and for people drafting business-customer contracts.

Consumer reviews are vitally important to our modern economy. Markets become stronger and more efficient when consumers share their marketplace experiences and guide other consumers toward the best vendors and away from poor ones.

Businesses recognize the importance of consumer reviews, and many businesses take numerous steps to manage how consumer reviews affect their public image. Unfortunately, in a misguided effort to control consumer reviews, some businesses have deployed contract provisions that ban or inhibit their consumers from reviewing them. I call those provisions “anti-review clauses.”

Anti-review clauses distort the marketplace benefits society gets from consumer reviews by suppressing peer feedback from prospective consumers, which in turn helps poor vendors stay in business and diminishes the returns that good vendors get from investments in quality (thus degrading their willingness to make those investments).

Recognizing the threats posed by anti-review clauses, Congress banned them in the Consumer Review Fairness Act of 2016 (the CRFA). As the House Report explains, the law seeks “to preserve the credibility and value of online consumer reviews by prohibiting non-disparagement clauses restricting negative, yet truthful, reviews of products and services by consumers.” By doing so, the CRFA helps advance the effective functioning of marketplaces. 

This essay helps readers understand the CRFA. Part I provides some background about anti-review clauses. Part II describes the new law and how it relates to existing law. Part III considers if the law goes far enough to protect consumer reviews. The article then has a short conclusion.

Eric Goldman, "Understanding the Consumer Review Fairness Act of 2016" Michigan Telecommunications and Technology Law Review, Forthcoming; Santa Clara Univ. Legal Studies Research Paper No. 2-17 (February 2017).

The bill is Consumer Review Fairness Act of 2016, H.R. 5111, 114th Congress (2015-2016), which has just two sections. Section 1 is the short title, and the balance of the act is in Section 2. It has apparently not yet been assigned a codified United States Code section number.

It was enacted on December 14, 2016 as Public Law 114-258.