H.R. 5111, Consumer Review Fairness Act of 2016

H.R. 5111

Consumer Review Fairness Act of 2016

Date
September 12, 2016 (114th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On­­­­ Monday, September 12, 2016, the House will consider H.R. 5111, the Consumer Review Fairness Act of 2016, under suspension of the rules. H.R. 5111 was introduced on April 28, 2016, by Rep. Leonard Lance (R-NJ) and was referred to the Committee on Energy and Commerce, which ordered the bill reported, as amended, by voice vote on July 13, 2016.

Bill Summary

H.R. 5111 allows Americans to exercise their First Amendment rights regarding consumer experiences without fear of retribution. Specifically, the bill voids form contract[1] provisions if: the provision prohibits or restricts an individual who is a party to the contract from engaging in written, oral, or pictorial reviews, assessments, or analyses of goods, services, or conduct of an individual that is also a party to the contract; the contract imposes penalties or fees against individuals who engage in such communications; or requires the transfer of intellectual property rights in review or feedback content.

The legislation does not apply to employer-employee or independent contractor contracts, and will not affect legal duties of confidentiality; civil actions for defamation, libel, or slander; a party’s right to establish terms and conditions for content created by an employee or independent contractor; or a party’s right to remove or refuse to display content that contains personal information or obscene or inappropriate material.

In addition, provisions of H.R. 5111 would not apply to the removal or refusal to display certain trade secrets or commercial or financial information; personnel and medical files; law enforcement records; unlawful content; or computer viruses or other potentially damaging computer code or applications.

Finally, the legislation grants the Federal Trade Commission the authority to enforce the new prohibitions and authorizes the agency to levy civil penalties for violations. H.R. 5111 also would direct the FTC to develop an education and outreach program to provide businesses with best practices for complying with new restrictions.

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[1] Form contracts are those used in the course of selling or leasing goods and services.

Background

Consumer reviews can be a powerful informational tool because consumers place a high value on the truthful reviews of other consumers. As businesses have become frustrated by online criticism, some have employed a questionable legal remedy known as a non-disparagement clause to retaliate against consumers by restricting consumers from publicly reviewing products or businesses accurately, or punishing them when they do.[1] These clauses will prohibit customers from taking any action that negatively impacts the company, its reputation, products, services, management, or employees. In some cases, the customer received penalties that if went unpaid were considered unpaid debt and sent to credit reporting agencies.

According to the bill’s sponsor, “Consumers in the 21st century economy should be able to post, comment, and tweet their honest and accurate feedback without fear of retribution. Too many companies are burying non-disparagement clauses in fine print and going after consumers when they post negative feedback online. In 2016 online platforms are where consumers turn to praise or criticize their shopping, eating or traveling experiences. They should be able to do so without harassment from companies eager to protect an image.”[2]

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[1] See. Rep. Lance’s press release, “Lance, Kennedy: Protect Consumer Rights” April 28, 2016.
[2] Id.

Cost

The Congressional Budget Office (CBO) estimates that the cost of enacting H.R. 5111 would be insignificant because the FTC enforces similar prohibitions and provides compliance assistance under its existing general authorities. CBO further estimates that implementing H.R. 5111 would increase federal revenues from the new authority to collect civil penalties, therefore pay-as-you-go procedures apply. Enacting H.R. 5111 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027.

Additional Information

For questions or further information please contact Jake Vreeburg with the House Republican Policy Committee by email or at 5-0190.