More reason to check your website’s use policy and not squash bad online reviews: the FTC is enforcing the Consumer Review Fairness Act

Back in 2016 we wrote about the Consumer Review Fairness Act passed by congress to protect people’s ability to share “their honest opinions about a business’s products, services, or conduct, in any forum, including social media.”

The Act makes it illegal for a company, like a craft brewery, to use a contract provision (this includes doing it in the terms of service on your website) that:

  • bars or restricts the ability of a person who is a party to that contract to review a company’s products, services, or conduct;
  • imposes a penalty or fee against someone who gives a review; or
  • requires people to give up their intellectual property rights in the content of their reviews.

Recently the FTC has upped its enforcement of the Act and distillers, brewers and vintners, along with other manufacturers, are well advised to review their terms of service (which may very well not have been reviewed or updated since you put your website in place) to ensure you do not have provisions that violate the Act.

As a recent example the FTC recently settled with three different businesses for practices they engaged in violating the Consumer Review Fairness Act.

The companies resolved the disputes and have been ordered/agreed to stop utilizing the contracts containing these clauses and have also agreed to reach out to every customer who purchased under such terms to let them know the clauses were improper and that the customers are free to read online reviews.

While none of these suits ended in a direct monetary fine, the FTC’s director, Andrew Smith, has not ruled out such penalties in the future. Director Smith said of these resolutions: “Many online shoppers use customer reviews and ratings to get information, but these companies used gag clauses in their form contracts to stop customers from posting honest but negative feedback,” … “These gag clauses are illegal, and companies that know it but use them anyway will be subject to civil penalties.”

The Takeaway: The infringing contracts can take many forms such as regular purchase agreements or be as innocuous as terms and conditions or use policies on websites, many of which have not been updated since the Act took effect. Companies should review their agreements, customer terms and conditions, websites and other public facing materials that contain conditions for use or purchase to ensure none of the terms violated th Act.

Ashley Brandt

Hi there! I’m happy you’re here. My name is Ashley Brandt and I’m an attorney in Chicago representing clients in the Food and Beverage, Advertising, Media, and Real Estate industries. A while back I kept getting calls and questions from industry professionals and attorneys looking for advice and information on a fun and unique area of law that I’m lucky enough to practice in. These calls represented a serious lack of, and need for, some answers, news, and information on the legal aspects of marketing and media. I've got this deep seeded belief that information should be readily available and that the greatest benefit from the information age is open access to knowledge... so ... this blog seemed like the best way to accomplish that. I enjoy being an attorney and it’s given me some amazing opportunities, wonderful experiences, and an appreciation and love for this work. I live in Chicago and work at an exceptional law firm, Goldstein & McClintock, with some truly brilliant people. Feel free to contact me at any time with any issues, comments, concerns… frankly, after reading this far, I hope you take the time to at least let me know what you think about the blog and how I can make it a better resource.

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