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New 'Yelp Law' Makes It illegal to Gag Customers for Criticizing Businesses Online

By William Vogeler, Esq. | Last updated on

Consumers who critique businesses through Yelp, TripAdviser, and other websites may breathe easier now that a new law is on the president's desk.

The Consumer Review Fairness Act, which Congress passed to stop businesses from punishing consumers who post negative reviews, received widespread support in both houses. The U.S. Senate approved the bill unanimously yesterday, sending it to the President Obama for signature.

"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," said Sen. Brian Schatz (D-Hawaii). "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."

Gag Clauses Out

The Senate Commerce Committee held a hearing last year, receiving "testimony from Ms. Jen Palmer, a plaintiff in Palmer v. KlearGear, where a company demanded the removal of a negative online review or payment of $3,500 in fines because the online merchant's terms of service included a non-disparagement clause. When the review was not taken down, the company reported the unpaid $3,500 to a credit reporting agency as an outstanding debt, which negatively impacted the Palmers' credit."

Laurent Crenshaw, Yelp's director of public policy, said something needed to be done about the increasing number of "gag clauses" being slipped into contracts. These gag clauses result in a chilling effect for both consumers and businesses. As Crenshaw notes, "People nationwide expect to have their legitimate speech protected." Criticizing a business for poor service is certainly a form of legitimate speech.

Freedom of Speech In

Congressman Darrell Issa said the internet is supposed to be a place for the free exchange of ideas. "The bill we've now sent to the President's desk will ensure that the internet remains a place where the freedom of speech can thrive and protect honest consumers from retaliatory litigation," the congressman said.

Those who enjoy leaving one-star reviews and ranting about terrible service online can finally breathe easy.

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