What is Senate Bill S. 2044?
This bill — the Consumer Review Freedom Act — was designed to keep businesses from contractually barring their customers from reviewing them online (think sites like Yelp and it's competitors). These are often called "gag clauses" or “anti-review clauses” and mostly come into play against customers who write bad reviews.
These are legal tools (often in the fine print of the terms of service) that businesses use to protect their online reputation — often unbeknownst to the customer. Although courts tend to side with consumers when these cases make it into courts, this bill would add protections for customers/reviewers by making the clauses flat-out illegal and voiding them immediately.
If passed, the bill will grant authority to enforce the law and prosecute deceptive or unfair contracts to individual states and the Federal Trade Commission (FTC). The FTC will also be responsible for business outreach and support to help companies meet the new guidelines.
People who write reviews on sites like Yelp, anyone who use and/or trusts other’s Yelp reviews, companies that already (or plan to) include anti-negative review clauses in their contracts, Yelp and other review sites, and the Federal Trade Commission.
Cost of Senate Bill S. 2044
The Congressional Budget Office (CBO) expects costs from this measure to be negligible.
In Depth: The specific types of clauses banned in this bill are any that:
Prevent a person from reviewing products or services;
Penalize or fine negative reviewers;
Transfer the intellectual property rights included in reviews. (In this roundabout strategy, a business has customers sign a contract transferring the rights to any reviews they might write in the future. Then, if the company sees a review it doesn’t like, it can file a DMCA notice to have the review taken down.)
The bill does have several exceptions. This protection would not apply to reviews that reveal:
Of Note: Interest in this bill grew because of several national stories about online reviewers getting hit with huge fines or lawsuits. One woman told the Senate Commerce Committee her credit score dropped when she was fined by an online retailer after leaving a negative review.
This legislation was modeled after California’s so-called “Yelp Bill
,” which passed last year.