December 21

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Sell Food & Drinks Online? – Better Check Your Terms of Service as Consumer Review Fairness Act Becomes Law

If you sell products online, chances are you’ve got terms of service that you’ve probably put in place and completely forgotten.  But just in time for the New Year, the ever-evolving world of e-commerce and consumer rights is asking you dust them off and ensure you’re not in violation of a new Federal Protection for consumer’s rights to post online reviews of your products.

The Consumer Review Fairness Act (full text of the bill here) allows consumers to post their negative reviews, and voids any clauses in form contracts used by businesses to restrict a consumer’s right to post those reviews or to attempt to control them through the assertion of copyright transfer.

These types of form contract provisions are gags on consumer expression that usually seek the imposition of financial penalties for saying something negative – even when it’s true.  Like imposing $250 fines for positing bad reviews or as in the case of the media-attracting-problem it was created to address.  Kleargear’s attempts to bill two customer’s $3,500 for their negative review. (*spoiler* It turned into a $306k award for that couple against Kleargear).

There are a few interesting caveats to the bill.  The first is that it doesn’t confer a private right of action for enforcement.  The Federal Trade Commission and the States’ Attorneys General are responsible for enforcement.  Another is an exception big enough to drive a truck through – it maintains the right of a party to remove or refuse to display publicly on a website content that would otherwise be covered if the content:  “contains the personal information or likeness of another person, or is libelous, harassing, abusive, obscene, vulgar, sexually explicit, or is inappropriate with respect to race, gender, sexuality, ethnicity, or other intrinsic characteristic.”  So in assessing whether to take down the review from your website, you get to play Justice Stewart in Jacobellis v. Ohio – “I know it when I see it.”

The takeaway here is that you need to update your terms of service to ensure these provisions are removed or you could find yourself facing the ire of the FTC or your Attorney General.  But the lesson is really that as the law evolves, a consumer-friendly trend towards holding online businesses to the same rights against consumers as brick-and-mortar stores is finding a foothold.  And why not, when you buy your waffles at a store, they don’t come with 26 pages of terms of service.