Negative online reviews may be an unpleasant reality for businesses. But, there are business law restrictions governing how businesses can deal with negative reviews. The Federal Trade Commission approved final orders resolving complaints against five companies charged with violating the Consumer Review Fairness Act.
The five firms included a flooring company and two timeshare marketers. According to the FTC’s complaints, these firms violated the CRFA by having customers agree to non-disparagement contracts that prevented customers from writing or posting online reviews or which imposed financial penalties for posting these reviews. The FTC announced the complaints in May and June. The FTC’s settlement of these complaints prevents each business from placing non-disparagement terms in form contracts for goods and services. They must also notify consumers who signed contracts containing these terms that these agreements are unenforceable.
The CFRA was passed by Congress to deal with firms that tried to prevent consumers from posting candid reviews. Companies were imposing contract terms, including online conditions, that authorized them to sue or penalize customers for negative reviews posted online. Under the CFRA, consumers may publicly discuss their consumer experiences. Businesses cannot require consumers to enter contracts that prevent them from posting their reviews. The FTC said that blocking negative reviews infringes upon consumer rights and harm consumers who make decisions based on these reviews.
Businesses do have some legal remedies, however, for consumer reviews that are clearly out-of-line. Businesses may prevent or remove reviews that contain trade secrets or proprietary or other confidential information. Companies also have some flexibility in addressing posts that are libelous, constitute harassment or are obscene, sexually explicit, vulgar or contain inappropriate language on race, gender, sexuality or ethnicity.