Companies will no longer be able to sue consumers for negative reviews

Congress has passed a law protecting the right of US consumers to post negative reviews online without frear of retaliation. 

While it might come as a surprise that this was ever the case, until now it had been legal for companies to include ‘negative review gag clauses’ in their terms of service. This had meant that if users had written negative reviews of said company’s products or services somewhere online, then that company was within its rights to take that user to court. 

Now, thanks to a bill that was initially introduced in 2014, it will now be illegal for companies to sneak these clauses into their terms of service agreements.

The bipartisan Consumer Review Fairness Act was passed by unanimous conesnt in the US senate, a Senate Commerce Committee announcement said. The bill had previously been approved by the House of Represenatives and now awaits President Obama’s signatures in one of the incumbent president’s final actions in office. 

The Commerce Committee held a hearing on gag clauses a year ago and examined the case of Palmer v. KlearGear, where a company demanded the removal of a negative online review or payment of $3,500 in fines as the etailer’s terms of service included a non-disparagement clause. When the review was not taken down, the company reported the unpaid fine to a credit reporting agence which in turn affected Palmer’s credit. 

Palmer won this case after a case that lasted a year but this is not the only situation where a customer has been taken to court. Supplement maker Ubervita threatened legal action against customers leaving negative reviews on Amazon, and a Boston-based jewelers sued a customer who left a one-star review on Yelp.

The new bill will mean that terms that restrict or penalise poor customer reviews will be voided. Any company attempting to punish customers for reviews will be subject to investigation from the Federal Trade Commission. 

Senate Republicans and Democrats praised the bill’s passage. "By ending gag clauses, this legislation supports consumer rights and the integrity of critical feedback about products and services sold online," Commerce Committee Chairman John Thune (R-S.D.) said.

"Reviews on where to shop, eat, or stay on websites like Yelp or TripAdvisor help consumers make informed choices about where to spend their money," said Sen. Brian Schatz (D-Hawaii). "Every consumer has the right to share their honest experiences and opinions of any business without the fear of legal retaliation, and the passage of our bill brings us one step closer to protecting that right."

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