Lawmakers Propose Consumer Review Freedom Legislation

Earlier this month, a class action lawsuit against Yelp was thrown out when the plaintiffs failed to prove that Yelp’s manipulation of reviews amounted to extortion. That issue remains at large, but lawmakers are working to make sure users are able to leave negative reviews without fear of retaliation from businesses.

The bill, titled the Consumer Review Freedom Act [PDF], would invalidate any contract that “prohibits or restricts the ability of a person who is a party to the form contract to engage in a covered communication,” or imposes any fee that acts as retribution against that covered communication.

Essentially, users have the right to free speech when it comes to leaving negative reviews online. Under the proposed legislation, no contract, user agreement or Terms of Service can provide companies with a method of silencing or penalizing critical users. Remember the hotel that charged guests $500 for negative Yelp reviews? Illegal — if the bill passes.

Calif. Congressman Eric Swalwell introduced the bill along with Congressman Brad Sherman. Swalwell said in a release: “I introduced this legislation to put a stop to this egregious behavior so people can share honest reviews without fear of litigation”

Sherman added that the bill “will allow consumers the freedom to continue doing what they thought they could all along — offer up opinions on products and services consumed to enable the marketplace to make more informed decisions.”

Last week, Calif. Governor Jerry Brown signed a similar bill into law, which received the support of Yelp. The state is working to update its legal system to weed out anti-consumer contracts.

The Consumer Review Freedom Act also contains language that would allow the FTC and state attorneys to pursue cases against businesses and fine them for issuing contracts like these.

Yelp may be taking a lot of flack over the dismissed class action suit, but it appears that the company does support consumer rights. It’s not within their interests to discourage users from leaving reviews — that’s core to their business model. What Yelp does with those reviews once businesses pay (or don’t pay) for advertising is another matter.

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