A new federal law, the Consumer Review Fairness Act of 2016 (the
CRFA), protects the ability of consumers to review a company's
products, services, and conduct – including on social
Congress passed the CRFA in response to reports that some
businesses tried to prevent consumers from writing negative reviews
by binding them to form contracts, such as online terms and
conditions. These form contracts often included contractual
provisions that allowed businesses to sue or otherwise penalize
consumers for posting negative reviews about their products or
Specifically, the CRFA makes it illegal for a company to
contractually bar a consumer from reviewing – including by
electronic means – a company's goods, services, or
conduct. The CRFA also bars any provision in a form contract that
imposes a penalty or fee against a consumer for posting such a
In addition, the CRFA makes it illegal to include and voids any
provision in a form contract that requires a consumer to transfer
his or her intellectual property rights in such a communication,
with the exception of a non-exclusive license permitting the
business to use that content. This provision was intended to close
a loophole in the Digital Millennium Copyright Act (DMCA) that
allowed businesses to take down reviews for which they claimed
The CRFA contains a number of important limitations to its
broadly-stated prohibitions. For instance, a company still may act
to protect any duty of confidentiality imposed by law or in cases
of defamation, libel, or slander. The CRFA also does not affect a
company's right to remove or refuse to display publicly on the
company's website or webpage content that:
Contains the personal information or likeness of another
person, or is libelous, harassing, abusive, obscene, vulgar,
sexually explicit, or is inappropriate with respect to race,
gender, sexuality, ethnicity, or another intrinsic
Is unrelated to the goods or services offered by or available
at the company's website or webpage; or
Is clearly false or misleading.
Moreover, companies are permitted to establish terms and
conditions with respect to photographs or videos of their property
created for commercial purposes by employees or independent
The CFRA also exempts from its broad bar any contractual
provision that prohibits the disclosure of, or that permits the
Trade secrets or commercial or financial information considered
privileged and confidential;
Personnel and medical files and similar information the
disclosure of which would constitute an unwarranted invasion of
Records or information compiled for law enforcement purposes,
the disclosure of which would constitute an unwarranted invasion of
Content that is unlawful or contains computer viruses, worms,
or other potentially damaging computer code, processes, programs,
applications, or files.
The CRFA grants the FTC and state attorneys general the
authority to enforce the Act. Violations will be treated the same
as unfair or deceptive practices and may result in injunctive
orders, penalties and/or monetary fines.
The provisions of the CRFA that make it illegal to include terms
in form contracts barring a consumer from posting a review and
penalizing consumers for negative reviews go into effect on March
The FTC and state attorneys general have authority to begin
enforcing the CRFA beginning on December 14, 2017. The FTC already
has issued tips to help companies comply with the law, available here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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