President Obama has signed into effect a new law that bars businesses from punishing customers for giving bad reviews.
The Consumer Review Fairness Act (HR 5111) voids any contract that involves prohibitions or penalties related to negative online reviews.
The aim of the bill, written by Reps. Leonard Lance (R-NJ) and Joseph Kennedy (D-MA) is to stop companies from imposing penalties on consumers who would leave negative comments on sites such as Yelp.
"Consumers in the 21st century economy should be able to post, comment and tweet their honest and accurate feedback without fear of retribution," Lance said of the bill.
"Too many companies are burying non-disparagement clauses in fine print and going after consumers when they post negative feedback online."
Those review sites have long been at odds with local businesses who have accused Yelp and others or leveraging poor reviews (often claimed to be fake) as a way to shake them down for payments.
With the new law in effect, any contract that attempts to tie in a clause calling for a fine or penalty for a review would be rendered void and legally unenforceable. The law would also prevent a business from asserting intellectual property claims on the content of a review, provided no trade secrets or personally identifiable information are involved.
The bill does make exceptions in the case of reviews deemed to be libelous or slanderous, and also removes any protections for reviews and posts that are found to be false or misleading- so fake reviews will not be protected.
The Consumer Review Fairness Act was one of 21 bills and declarations signed into effect by President Obama on Wednesday. Other measures signed included the BOTS Act, a ban on the use of bots to purchase event tickets online. ®