EARLIER THIS year, a new federal law went into effect designed to prevent businesses from keeping their customers from writing negative reviews or turning over, to the business, the copyright ownership of their reviews. The Consumer Review Fairness Act (CRFA), 15 U.S.C. § 45b, provides that if a contract prohibits or restricts the ability of someone to make a consumer review — whether verbal or pictorial — or requires someone to transfer their copyright ownership of such a review, that provision is void and unenforceable. It also makes it unlawful for a business to offer such a void contractual provision.
In other words, if a contract imposes a penalty or fee against someone who gives a review or requires consumers to give up their intellectual property rights in the content of their reviews, that contact would be made illegal under the act. The law does not apply, however, to contracts between employers and employees or with independent contractors.
The Act was introduced in response to some reports of businesses trying to prevent people from giving honest reviews. Companies were reported of making contractual provisions, including within their online terms and conditions, that gave them recourse against consumers who posted negative reviews.
The law is not specific to any particular type of “review.” It includes online reviews, social media posts, photos, videos, and more.
What recourse do businesses have against negative reviews or comments?
The enacting of the Consumer Fairness Review Act does not mean that companies are completely prevented from protecting themselves. Companies still can include provisions to allow them to take action against reviews or statement that reveal confidential or private information, such as trade secrets; are libelous, abusive, vulgar, or sexually explicit; are inappropriate with respect to race, gender, sexuality, ethnicity, or other intrinsic characteristic; are unrelated to the company’s products or services; or are clearly false or misleading.
What’s the worst that can happen to a company who violates the CRFA?
The Federal Trade Commission and the state Attorneys General have enforcing authority over the Act, similar to acts prohibiting unfair or deceptive acts or practices. These agencies can apply to the court for financial penalties against those who violate the Act.
What should businesses do to ensure compliance with the CRFA?
To make they are in compliance with the Consumer Review Fairness Act, businesses should review their form contracts and online terms and conditions, and remove any provisions that restrict people from sharing honest reviews, penalize those who do, or claims copyright over peoples’ reviews.
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