Swalwell bill would stop businesses from retaliating against consumers who write negative online reviews
WASHINGTON, DC – U.S. Representative Eric Swalwell (CA-15), along with Rep. Brad Sherman (D-CA), today introduced the Consumer Review Freedom Act to make it illegal for businesses to penalize customers who write negative reviews on Yelp or other online review sites. The bill was motivated by several examples of companies attempting to dissuade people from writing honest reviews by slipping non-disparagement clauses in their consumer contracts.
“No country that values free speech would allow customers to be penalized for writing an honest review,” said Swalwell. “I introduced this legislation to put a stop to this egregious behavior so people can share honest reviews without fear of litigation. I look forward to advancing this in a bipartisan manner, and protecting the right to speak one’s mind.”
The Palmers, a couple from Utah, were fined $3,500 by KlearGear for violation of a non-disparagement clause after they posted a negative review online about their experience with the company. When they refused to pay the company in turn reported their debt to the credit bureaus, which damaged their credit rating.
Swalwell’s legislation would declare such non-disparagement clauses in consumer contracts unenforceable, in addition to providing authority to the Federal Trade Commission and state attorneys general to take action against businesses that include them. Last week, California Governor Jerry Brown signed into law a bill making non-disparagement clauses illegal in the state.
The legislation is also cosponsored by Reps. Steve Cohen (D-TN) and Tony Cárdenas (D-CA). It is supported by Public Citizen, Yelp, Consumers Union, Trip Advisor, Consumer Federation of America, Public Participation Project, and the National Consumer Law Center (on behalf of its low-income clients).
“As a country that prides itself on free speech as a tenet of our constitution, I felt this sneaky tactic of limiting it as purely wrong,” said Sherman. “After months of work, we think this represents a very effective piece of legislation that will allow consumers the freedom to continue doing what they thought they could all along – offer up opinions on products and services consumed to enable the marketplace to make more informed decisions.”
“The Consumer Review Freedom Act will ensure that consumers have the freedom to express their candid and public feedback on companies,” explained Robert Weissman, president of Public Citizen, an early supporter of the bill. “Hidden contract terms should not be used to bully consumers into silence. This measure not only will protect consumers who review businesses, but also safeguard the flow of information to other consumers who rely on reviews to figure out which businesses to patronize.”
The bill will be referred to the Committee on Energy and Commerce.
The text of the bill can be viewed here.