Last week, the U.S. Senate gave consumers an early Christmas present by unanimously passing the Consumer Review Freedom Act. Although the bill still needs to pass the House, its passage in the Senate bodes well for the rights of American consumers.
If you shopped online this holiday season, you probably used customer reviews to help choose the perfect gifts. You may even have written an online review yourself. This interaction is one of the great advantages and conveniences of online shopping. It is an unprecedented way for consumers to communicate with each other.
But some companies require consumers to sign contracts that prohibit them from writing negative reviews. Customers who violate the agreement receive a warning from the company to either remove the review or pay a fine, which can run thousands of dollars.
These non-disparagement clauses, or “gag rules,” are written in arcane legalese and tucked in the middle of long contracts, so they can be easy to miss. And they’re non-negotiable: the consumer must either accept the clause or not purchase the product.
These clauses shield companies by intimidating consumers into forfeiting much of the freedom and power offered by Internet commerce. Companies using gag rules obviously like the Internet’s ability to attract customers — but they seek to stifle the knowledge-sharing that this technological advancement enables.
The Consumer Review Freedom Act would make such clauses illegal. According to Republican Sen. John Thune of South Dakota, one of the bill’s sponsors, “A core tenet of the Internet is the ability to freely share information with whomever you like. What good is information if it’s been sanitized to remove truthful criticism?”
During testimony before the Senate Committee on Commerce, Science, and Transportation last month, Jennifer Palmer testified about her own experience with gag rules. Her story illustrates just how pernicious these clauses can be, and how aggressive companies can be in enforcing them. When items her husband had ordered from an online company never arrived, Ms. Palmer posted a review. Three years later, she received a letter from the company demanding that she remove the review or be fined $3,500 for violating the terms of agreement.
There was a catch: This term of agreement did not exist when Ms. Palmer’s husband bought the item; it was added years later. When Ms. Palmer was unable to delete the review, the company reported a $3,500 debt to credit agencies. This unfair debt lowered the couple’s credit rating, preventing them from getting loans. They were able to remove the debt only after 18 months of vigilant research, media attention, and the help of a nonprofit firm’s free legal services.
Few people would have had the tenacity and ingenuity that Ms. Palmer showed in standing up to the company, a fact that companies using gag rules know very well. The Consumer Review Freedom Act would ensure that businesses could not intimidate customers into silence.
It is true that some people post fake online reviews, which is why the act would not deprive companies of the right to challenge false reviews in court. What the law would ensure is that consumers are not forced to relinquish their free speech as a condition of doing business online.
The Internet empowers consumers by helping them communicate with one another, sharing warnings or recommendations with unprecedented speed and reach. Companies that seek to stifle this instant and global interaction are inhibiting the promise of the Internet. They are also clamping down on the right of private citizens to share their experiences in a public forum.
Consumers are not the only winners in this bill; good businesses would reap benefits, as well. Because inferior competitors could not suppress accurate customer feedback, the cream would rise to the top and the dregs stay at the bottom until they improved their quality.
The Consumer Review Freedom Act should get good reviews from the American public. And passing a bill that protects the speech of consumers would help Congress improve its own ratings.
Joseph Colangelo is Executive Director of Consumers' Research, the nation's oldest consumer-focused organization. Joseph grew up in Northern New Jersey and attended U.C. Berkeley on a Naval ROTC scholarship where he graduated with a Bachelor’s of Arts with a concentration in Political Science.