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Consumer Review Protection Now Part of Federal Law

Seal of the Federal Trade Commission, which enforces the Consumer Review Fairness Act of 2016Consumer review protection now is part of federal law. Specifically, in December 2016, Congress passed, and then-President Obama signed, the Consumer Review Fairness Act of 2016, 15 USC Section 45b.

Interestingly, this law has some similarities to – but is more detailed than – a law that California put into effect about two years earlier. See Consumer Non-disparagement Clauses Nixed in California. However, the federal law applies only to consumer reviews that involve interstate commerce.

“Covered Communication” Means Consumer Review

Subsection (a)(2) provides one of the critical definitions, that of “covered communication”.

The term “covered communication” means a written, oral, or pictorial review, performance assessment of, or other similar analysis of, including by electronic means, the goods, services, or conduct of a person by an individual who is party to a form contract with respect to which such person is also a party.

The other critical definition is that of “form contract”. Subsection (a)(3)(A) defines that term, subject to certain exceptions, as follows.

[T]he term “form contract” means a contract with standardized terms—
(i) used by a person in the course of selling or leasing the person’s goods or services; and
(ii) imposed on an individual without a meaningful opportunity for such individual to negotiate the standardized terms.

Civil and Criminal Protections

The law provides both civil and criminal protections for consumer reviews.

Subject to certain exceptions, Subsection (b) renders void form contracts that:

  • Prohibit or restrict consumer reviews; or
  • Impose a penalty or fee for posting a consumer review; or
  • Transfers, or requires the transfer of, intellectual property rights to consumer reviews.

Subsection (c) makes it a criminal offense to offer a form contract that violates Subsection (b).

Subsection (d) provides for enforcement by the Federal Trade Commission. And Subsection (e) provides for enforcement by states’ attorneys general.

Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
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