Summary: A group of senators are working to free customers to post bad reviews online without fear of retaliation.
While honest feedback, good or bad, comes with the territory in the business world, some companies try to use non-disparagement clauses or “gag clauses” to protect their reputation and silence critics, even the ones who are truthful.
After a hearing on Wednesday, the Senate Commerce Committee will probe gag clauses from businesses that critics argue intimidate and stop people from writing honest and critical reviews. The committee consists of senators from the Republican and Democratic parties.
Trip Advisor, the large travel review site, was one of the witnesses to testify. Other witnesses included advocates from various industries, and they stated these gag clauses cause hardship for consumers. There were no witnesses who were in favor of the gag clauses.
The Washington Post described the testimony of Jennifer Palmer, one of the witnesses in the hearing. Palmer wrote a negative review against an online merchant in 2012. The merchant attempted to enact its gag clause and went after her family for $3,500. She said the company reported the matter to credit-rating agencies and destroyed her family’s credit rating.
In late 2013, Palmer’s furnace failed, and the family discovered they could not get a loan for a new one because of their damaged credit rating. They contacted a local TV station in Utah to explain the situation, and they ultimately won a court victory against the online merchant. The Palmers were helped by a consumer advocacy group.
The Senate Commerce Committee is fighting for a bill that would give states and the Federal Trade Commission the power to prevent terms of agreement clauses.
“These gag provisions are egregious from a consumer protection standpoint, but they’re also doing harm to our Internet ecosystem,” Chairman John Thune (R-South Dakota) said.
Darrell Issa (R-California) has introduced accompanying legislation that would give judges the ability to shut down the lawsuits against online reviewers. A federal law has been supported by groups such as Yelp and Trip Advisor, and 28 states currently have similar laws already in play, according to The Hill.
- See New California Law Allows Consumers to Write Negative Reviews without Fear for more information.
Although judges already sometimes refuse to enforce gag clauses, the clauses’ existence often causes consumers to self-censor themselves to avoid confrontation.
“A core tenet of the Internet is the ability to freely share information with whomever you like. What good is information if it’s been sanitized to remove truthful criticism?” Thune said.
It is noted that a similar law was introduced in 2014 but did not go through. Additionally, a 2015 House bill has been stuck in committee since the spring.
Sources:
http://blogs.wsj.com/law/2015/11/04/senators-look-to-end-gag-clauses-for-online-reviews/?mod=WSJBlog