A handful of companies have gone after customers that left negative online reviews, prompting a new federal law that protects the right to complain on such forums as Yelp.com. With the law’s impacts soon to be felt, in-house counsel would be wise to review their company’s terms of use and make sure they aren’t trying to silence peeved customers, internet lawyers say.
The Consumer Review Fairness Act of 2016, signed into law by President Barack Obama on Dec. 14, voids provisions in form contracts that aim to prohibit or restrict a consumer’s ability to leave a negative review. While a number of exceptions are included to allow businesses to take action for such things as defamatory or vulgar reviews, the CRFA makes it unlawful to include so-called gag clauses in contracts with consumers and authorizes the Federal Trade Commission, and in some cases, state attorneys general, to bring enforcement actions. The law makes it unlawful to offer contracts with these clauses 90 days after enactment, in mid-March, and the enforcement provisions are effective one year after enactment, in December.
