Impact of Consumer Review Fairness Act on Small Businesses

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The Consumer Review Fairness Act (CRFA) may not appreciably affect small businesses. The CRFA only affects companies who contractually prohibit defamatory reviews of their products.

The consumer review fairness act prohibits “Gag Clauses”

The CRFA invalidates contract provisions that attempt to transfer copyright ownership of online reviews. It does not, however, license consumers to post defamatory online reviews.

The law was enacted in response to the recent trend among companies to abuse the mechanics of intellectual property rights to suppress unfavorable reviews of their products or services. Some businesses even employed contracts with online review parameters. As owners of the copyright in

Here’s a hypothetical example of how it typically worked:

Amy performs a root canal for Todd. According to standard practice, Amy makes Todd sign an agreement before the procedure. However, in the agreement Todd agreed to confer to Amy the ownership of the copyrights in any of his future online reviews about her dental practice. The next day, in a fit of discomfort, Todd posts a review about Amy’s work lying about her competency as a dentist. According to the agreement, Amy owns the review and can easily remove it.

The Consumer Review Fairness Act would invalidate contract elements that prohibit or restrict an individual from engaging in a review of a seller’s goods, services, or conduct.

Reactions to the Consumer Review Protection Act

Hawaiian Senator Brian Shatz praised the CRFA, saying:

“Reviews on where to shop, eat, or stay on websites like Yelp or TripAdvisor help consumers make informed choices about where to spend their money. Every consumer has the right to share their honest experiences and opinions of any business without the fear of legal retaliation, and the passage of our bill brings us one step closer to protecting that right.”

Laurent Crenshaw, the Director of Public Policy at Yelp, enthused:

“While these clauses aren’t everywhere, when people hear about them, it does create a chilling effect and that’s something we’ve been concerned about and were very glad that Congress has taken steps to eliminate.”

Defamatory Online Reviews are not Protected

The CRFA still allows small business owners from suing over reviews that are genuinely defamatory. Comments that include false statements of fact which materially harm a businesses may still be actionable. If you or your company is the victim of a defamatory review, get in touch with a consumer review defamation attorney to discuss your situation and explore solutions.

Article Sources

114th Congress – CRFA

U.S. Senate Cmte. Announcement of CFRA

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