The New “Consumer Review Fairness Act of 2016”


Click here to accept these terms.  That sentence, or a variation of it, is something that we routinely encounter. It shows up in app updates, on website registration pages, and during the installation of software and computer games. Most people don’t read the terms that they’re accepting, which can be a problem if they have a dispute with the company that provided the product because these unknown terms are now part of a binding contract. In the law, such a contract is often referred to as a contract of adhesion. Contracts are usually about a “meeting of the minds” – in other words, the people signing the contract know what’s in the contract and mutually agree to it.  But form contracts, like clickwrap agreements, don’t give customers the opportunity to negotiate for more favorable terms.

Some of these form contracts might include terms that limit the customer’s rights.  In 2003, a court in New York ruled that the popular anti-virus company McAfee could no longer use language in its form contracts that prohibited customers from publishing reviews or benchmark tests of its product without McAfee’s permission. That ruling, however, only applied to one company in one jurisdiction. Since then, similar gag clauses have continued to show up. For example, the owner of a vacation home rental might sneak in a line saying that he may keep the deposit in the event of an unflattering review.

This past week, Congress passed a bill called the Consumer Review Fairness Act of 2016. This bill renders void any provisions of a form contract that prohibits customers from posting reviews or that requires customers to transfer their intellectual property rights in a review to the company. By doing these things, the bill makes it harder for companies to silence unfavorable reviews.  It is likely that President Obama will sign the bill.

There are exceptions, of course. The prohibition doesn’t affect a company’s ability to take action if there has been defamation, or if the review is unrelated to the goods or services provided by the company, or if the review is clearly false or misleading.  Reviews can also be removed for abusive or inappropriate content, or if they include confidential or other sensitive information, like trade secrets or medical information.

The bill gives the Federal Trade Commission the authority to enforce the Consumer Review Fairness Act. State attorneys general and state consumer protection officers can also investigate and sue companies that include these prohibited terms in their form contracts.

Ultimately, the Consumer Review Fairness Act should protect customers from one method that has been used to silence honest criticism.  However, SLAPPs are still a concern. SLAPP stands for–Strategic Lawsuit Against Public Participation. 28 states, plus DC, have anti-SLAPP laws. The Consumer Review Fairness Act fixes the problem of companies bullying critics into silence using gag clauses in form contracts, but it doesn’t fix the whole problem. Still, some argue that anti-SLAPP laws make it harder for sincere plaintiffs to ask courts to fix real wrongs.  We know that it is always a challenge to control for abuses of the legal system on either side.

People have been urging Congress for years to enact a federal anti-SLAPP law.  The Consumer Review Fairness Act is a good step, but there are a lot of ways to use lawsuits to harass and intimidate critics into silence. Passing this law might be a way for Congress to test the waters and see how much demand there is for a federal anti-SLAPP law.  The passage of this Act also shows that there is support for such legislation, so a new federal anti-SLAPP law may be on the cards in the future.

Author – Jay Kesan