Understanding the Consumer Review Fairness Act of 2016

By Eric Goldman

Posted on March 8, 2017


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I’ve posted a new essay, Understanding the Consumer Review Fairness Act of 2016, to SSRN. It will be published later this year in the Michigan Telecommunications and Technology Law Review (MTTLR).

 

I trust most of you already know about the Consumer Review Fairness Act, which bans contractual restrictions on consumer reviews. The first part of it takes effect next week, so expect to hear more about it shortly. The essay provides an overview/primer about the new law; I designed it to answer the questions about the law I’m frequently getting from reporters. Though the law’s objective is easy to state, it has a number of moving parts that cut across multiple legal disciplines, so explaining the whole story to reporters has proven a little tricky. This essay tries to lay everything out as simply as I could. For those who are thinking about consumer reviews, the essay should be a fairly quick and light read, so I hope you’ll check it out.

 

The essay is still in draft form, so as always I’d gratefully welcome your comments and suggestions. In particular, I might want to expand the discussion about the law’s borders/edge cases. The narrative mostly focuses on the law’s main use case of protecting consumer reviews, but I did have a slightly deeper dive on how the law might affect contracts to restrict photos on business premises. There may be other edge cases that I should address in the essay, and I’d appreciate your thoughts about issues that have been puzzling you.

 

The essay abstract/introduction:

 

Consumer reviews are vitally important to our modern economy. Markets become stronger and more efficient when consumers share their marketplace experiences and guide other consumers toward the best vendors and away from poor ones.

 

Businesses recognize the importance of consumer reviews, and many businesses take numerous steps to manage how consumer reviews affect their public image. Unfortunately, in a misguided effort to control consumer reviews, some businesses have deployed contract provisions that ban or inhibit their consumers from reviewing them. I call those provisions “anti-review clauses.”

 

Anti-review clauses distort the marketplace benefits society gets from consumer reviews by suppressing peer feedback from prospective consumers, which in turn helps poor vendors stay in business and diminishes the returns that good vendors get from investments in quality (thus degrading their willingness to make those investments).

 

Recognizing the threats posed by anti-review clauses, Congress banned them in the Consumer Review Fairness Act of 2016 (the CRFA). As the House Report explains, the law seeks “to preserve the credibility and value of online consumer reviews by prohibiting non-disparagement clauses restricting negative, yet truthful, reviews of products and services by consumers.” By doing so, the CRFA helps advance the effective functioning of marketplaces.

 

This essay helps readers understand the CRFA. Part I provides some background about anti-review clauses. Part II describes the new law and how it relates to existing law. Part III considers if the law goes far enough to protect consumer reviews. The article then has a short conclusion.

 

A note about MTTLR: They extended a publication offer about 14 hours after I circulated it for publication. This sets a new all-time speed record for me, and I must say that their enthusiasm for the essay helped seal the deal.

 

A note about other forthcoming works: I am nearing the end on two more lengthier articles that I hope to circulate this Spring (I know, I’m already late) on the topics of “Emojis and the Law” and how courts have handled nonconsensual pornography cases (we analyze over 80 such cases).

 

 

The preceding is republished on TAP with permission by its author, Professor Eric Goldman, Professor of Law and Co-Director of the Santa Clara High Tech Law Institute at Santa Clara University. “Understanding the Consumer Review Fairness Act of 2016” was originally published March 6, 2017 in the Technology & Marketing Law Blog.

 


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