On September 12, 2016, the House of Representatives passed the Consumer Review Fairness Act (the “Fairness Act”), aimed at preventing companies from penalizing consumers who post negative reviews online. The law is a response to non-disparagement clauses such as the one challenged by the FTC in litigation filed last year against Roca Labs, Inc.
The Fairness Act invalidates contracts that impede consumer reviews; it also prohibits companies from penalizing consumers who post negative reviews. The bill vests both the FTC and state attorneys general with enforcement, and requires the FTC to engage in a campaign to educate businesses on compliance best practices.
A similar bill, the Consumer Review Freedom Act (“Freedom Act”), was passed by the Senate last year. The only substantive difference between the two bills is that the Fairness Act contains a savings provision to ensure that the legislation will not supersede either the FTC Act or other federal law. It is likely that the Senate will ratify the House version, possibly in time for President Obama to sign into law before the end of his term.