Federal Legislation Introduced To Strengthen Consumer Free Speech Rights Online

from the about-time dept

Thu, Sep 18th 2014 3:46am — Evan Mascagni

Last week, Tim Cushing wrote about California's new law that outlaws consumer-silencing non-disparagement clauses. Apparently momentum is on consumers' side, as Rep. Eric Swalwell, along with Rep. Brad Sherman, introduced similar federal legislation this week to protect all consumers from this shady tactic.

The bill, cited as the "Consumer Review Freedom Act of 2014," voids any provision of a contract that:

prohibits or restricts the ability of a person who is a party to the form contract to engage in a covered communication;
imposes a penalty or fee against a person who is a party to the form contract for engaging in a covered communication; or
assigns or provides an exclusive license, or requires a person who is a party to the form contract to assign or provide an exclusive license, to any business, other person, or entity any intellectual property rights that such party to the adhesion contract has or may have in a covered communication.

The bill later defines "covered communication" as "a person's written, verbal, or pictorial review, performance assessment of, or other similar analysis of, the products, services, or conduct of a business which is a party to the form contract."

While the bill does not specify fines for violations like California's new law, it is still a step in the right direction (and better than nothing).

In his press release following the introduction, Swalwell said, "No country that values free speech would allow customers to be penalized for writing an honest review. I introduced this legislation to put a stop to this egregious behavior so people can share honest reviews without fear of litigation. I look forward to advancing this in a bipartisan manner, and protecting the right to speak one's mind."

Swalwell also cited Palmer v. Kleargear.com in his press release (the case involving a couple from Utah who was fined $3,500 by KlearGear for violation of a non-disparagement clause after they posted a negative review online about their experience with the company).

Palmer is just one example of recent headlines that shed light on the problem of non-disparagement clauses. From a hotel in New York that threatened to charge guests $500 for posting negative reviews online, to a contractor who voided his client's warranty because of a negative online review, numerous examples over the past few years have shed light on this shameful practice by businesses.

Though this is not an entirely new phenomenon. Consumers have been getting hit with Strategic Lawsuits Against Public Participation (SLAPPs) for years, where a plaintiff files a meritless lawsuit against a consumer for posting a negative review online. Yet, now businesses are attempting to avoid having to file a SLAPP by burying non-disparagement clauses in the fine print of consumer contracts.

Both tactics by businesses are aimed at chilling the First Amendment rights of consumers. Here's hoping Rep. Swalwell's bill becomes law and that federal anti-SLAPP legislation follows suit.

Evan Mascagni is the Policy Director of the Public Participation Project (www.anti-slapp.org), a nonprofit organization dedicated to enactment of strong federal and state legislative protections against SLAPPs.

SWALWE 046 xml1 (PDF)SWALWE 046 xml1 (Text)

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Filed Under: brad sherman, consumer review freedom act, eric swalwell, free speech, non-disparagement clauses, reviews

12 Comments

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Dale (profile), 18 Sep 2014 @ 4:52am

Let's hope...
...or at least pretend :-) that this will also apply to Harris Corp's 'Stinger' contract provisions!
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Anonymous Coward, 18 Sep 2014 @ 5:01am

"While the bill does not specify fines for violations like California's new law, it is still a step in the right direction (and better than nothing)."

No, it's not, because the assholes who write (and attempt to enforce) these kinds of clauses will simply shrug it off. Just like telemarketers. Just like spammers. Just like snake-oil salesmen. Just like [fill in the blank].

For legislation like this to be effective, it needs to include mandatory large fines, it must stipulate that they will be extracted from the guilty party's personal accounts, and it must include escalation clauses that carry mandatory prison terms. Otherwise it will be laughed off, and the paltry fines it specifies will either be ignored or negotiated down or shrugged off as a cost of doing business.
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Anonymous Coward, 18 Sep 2014 @ 5:20am

This shouldn't need to happen , our Constitution broadly covers all speech as free and without restraints, The only thing that was needed was clear definitions of what happens when a person exorcises that right.
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Dale (profile), 18 Sep 2014 @ 6:13am

"Just like [fill in the blank]"
Politicians? The NSA? The entertainment industry? C'mon, don't leave us hanging like this...
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Anonymous Coward, 18 Sep 2014 @ 6:25am

Does the party of NO even justify their down votes anymore?
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R.H. (profile), 18 Sep 2014 @ 6:47am

Re:
The Constitution only protects a person from having the federal government (and after the fourteenth amendment, states governments as well) limit their speech. Contracts between individuals or between a person and a company/corporation have always been able to limit speech. After all, that's what non-disclosure agreements do. This is necessary just as there are laws prohibiting contracts from being enforceable if they require a party to break the law.
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Anonymous Coward, 18 Sep 2014 @ 7:02am

Re: Re:
"Contracts between individuals or between a person and a company/corporation have always been able to limit speech."

This may be deemed unconscionable by a court of law.
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ppnl (profile), 18 Sep 2014 @ 9:13am

Anonymous Coward,

Non-disclosure agreements are not and maybe cannot be made illegal. They can only be regulated in specific circumstances.

This whole thing isn't really a constitutional free speech issue at all. If it were no law would be needed. Free speech only protects you from government action. Private parties very often do have the right to limit your speech.
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John Fenderson (profile), 18 Sep 2014 @ 9:38am

Re:
I believe you're responding to this AC's comment: "This may be deemed unconscionable by a court of law." If not, then I apologize for my mistake.

"Non-disclosure agreements are not and maybe cannot be made illegal. They can only be regulated in specific circumstances."

And one of those specific circumstances is what the AC said, if the term is "unconscionable". Yes, NDAs are generally legal, but it's not too hard to draft one that is unconscionable. For example, and NDA that says "you have to keep this secret forever no matter what" is likely to be considered unconscionable.
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nasch (profile), 18 Sep 2014 @ 1:27pm

Re:
The problem with a bill that has no penalties is it will be a long time before the issue is revisited and penalties are added. So we'll be stuck with a basically useless law but Congress can say "look, we did something". I hope someone amends this to add penalties.
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Androgynous Cowherd, 18 Sep 2014 @ 2:45pm

This is going to bite Microsoft in the ass
This isn't just going to affect Kleargear and its ilk. How about Microsoft?

https://www.eff.org/wp/dangerous-terms-users-guide-eulas

According to terms in several Microsoft EULAs, including those for MS XML and the SQL Server, you "may not without Microsoft's prior written approval disclose to any third party the results of any benchmark test.

McAfee and other mainstream software vendors are equally guilty. All of those terms will be rendered unenforceable, as benchmarks clearly constitute "a person's written, verbal, or pictorial ... performance assessment of ... the products ... of a business which is a party to the form contract" thus activating clause 1 above.
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Coyne Tibbets (profile), 18 Sep 2014 @ 5:54pm

As usual
As usual, if the legislation is in support of a "consumer right," it's toothless. Oh, yes, in theory it protects you...

But it'll be up to you to bring a lawsuit and get the clause struck from the unconscionable contract, and get an order to get your money back, and then for the additional orders you'll need after the company ignores the first orders.

And good luck getting your attorney fees paid for all your trouble. Your chances of that are nil.

In the meantime, the company will continue to use the same egregious terms against other customers, because the court ruling won't even apply across the board; each consumer will have to fight their own battle.

Toothless.
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