Businesses can no longer have provisions barring bad write-ups
On Dec. 20, President Obama signed the Consumer Review Fairness Act of 2016, which voids contract clauses if they prohibit bad online reviews.
The bill, which passed Congress with bipartisan support, prohibits nondisparagement or “gag” clauses that target negative reviews on forums like Yelp and TripAdvisor. These provisions are often buried in rarely read terms of service, and consumers are often unaware of them until the businesses threaten legal action. In one notorious instance, a hotel in upstate New York threatened to deduct $500 from a guest’s deposit if they left a negative review. In another, a Dallas pet-sitting service sued a couple that left a bad review for $1 million, claiming they violated a nondisparagement clause in the contract.
Law firm Davis Wright Tremaine notes that the law does not apply to nondisparagement provisions between employers and employees, nor does it prevent businesses from suing over reviews they consider untrue and defamatory.
“In a climate of hyperpartisanship, getting a law passed that will empower and protect consumer speech online is something all Americans should be excited about,” said review service Yelp in a statement.