A New Law Protects Your Right to Post Negative Yelp Reviews

A New Law Protects Your Right to Post Negative Yelp Reviews

Jed Oelbaum

Image by  SEO via Flickr

Now more than ever, people need the ability to stand up to greedy, thin-skinned, litigious businessmen in public forums. The Consumer Review Fairness Act, passed recently by Congress and now awaiting President Obama’s signature, intends to help consumers do just that.

The new law, which received bipartisan support, prevents companies from using “gag clauses” to retaliate against unhappy customers who leave negative reviews on sites like Yelp or TripAdvisor.

“It ensures that consumers have the freedom to tell the truth,” Eric Goldman, a law professor who testified in support of the Consumer Review Fairness Act, told the Washington Post.

Knowing what bad reviews online could mean for their bottom lines, businesses began inserting non-disparagement clauses into their contracts and terms of sale. These threatened legal action or automatic fines if customers left unsatisfied feedback on the internet.

A Techdirt article from late 2014 lists companies, from a textbook store, to a dentist, to a tour operator, that were all attempting to protect their reputation or collect a quick buck in this way. 

And businesses were actually following up on these threats. Imagine this: you order something online and it never comes. You cancel your order and leave a negative review of your experience. The company you tried to buy it from then bills you for $3,500, citing a non-disparagement clause buried somewhere on their website. Crazy, right?

But this is exactly what happened to the Palmers, a Utah couple who had the bad fortune to buy something from online retailer KlearGear. The company’s attempts to collect the fee hurt the couple’s credit score and they sued; a court eventually awarded the Palmers $306,750 in damages.

There were a number of cases like this popping up, but the KlearGear case brought the issue to the public. And backlash against experiences like the Palmers’ began a legislative march that would later lead to the Consumer Review Fairness Act.

The new law completely bans companies from using these kinds of clauses and small-print tricks to silence customers. Consumerist, which has been reporting on these gag clauses for seven years, has a good piece up outlining the public’s slow, winding path to victory over this stifling tactic.

“At the end of the day, fair and honest commentary—whether it's positive or negative—serves to inform both consumers and, if taken properly by the business owner, can actually help them to improve their business practices,” Laurent Crenshaw, director of public policy at Yelp, told NBC News last week.

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