U.S. Sen. Steve Daines (R-MT) said on Monday that he is supporting a bill that aims to protect consumers who write online reviews of companies from financial repercussions brought on by businesses being reviewed.
The Consumer Review Freedom Act would prohibit the use of non-disparagement clauses, referred to as “gag clauses,” which are often found in little-read online user agreements. Reviewed businesses can use these clauses to penalize or fine customers for
negative reviews of their services on websites such as Yelp
or TripAdvisor.
The Senate Commerce, Science and Transportation Committee held its first hearing on the legislation this week, during which Daines spoke in favor of it.
“Feedback is a gift,” Daines said. “I think it’s insecure companies, like bullies on a playground, that are insecure, that have these anti-disparagement clauses. Welcome to the free markets of the Internet. Let’s compete and let the consumer have (a) voice.”
The Utah case of Palmer v. KlearGear.com, in which a website demanded that a customer remove a negative online review or pay $3,500 in damages because the website’s terms of service included a non-disparagement clause, is a prime example of a non-disparagement clause. The website reported the $3,500 to credit-reporting agencies as an unpaid debt after the customer refused to pay the penalty .
The Consumer Review Freedom Act would prohibit such business practices, while still allowing business owners to sue reviewers who make dishonest statements about their businesses.