Congress recently passed the Consumer Review Fairness Act of 2016 (the CRFA) to protect the ability of consumers to review a company’s products, services and conduct. The CRFA makes it illegal for companies to contractually bar consumers from reviewing the company or to penalize consumers for posting negative reviews. To close a loophole in the Digital Millennium Copyright Act, the CRFA also makes it illegal to use a form contract to require a consumer to transfer intellectual property rights in a review to the company being reviewed.
The provisions of the CRFA that make it illegal to include terms in form contracts to bar consumers from posting reviews and penalize consumers for negative reviews recently went into effect. Beginning on December 14, 2017, the FTC and state attorneys general have authority to enforce the CRFA.
Companies should review their form contracts, including online terms and conditions, to ensure they are in compliance with the CRFA. They should remove any provisions that prevent or discourage consumers from sharing truthful reviews or that transfer intellectual property rights in reviews. Even if a company does not enforce such provisions, the inclusion of such provisions in form contracts could cause the company to be in violation of the CRFA.
Allison Fitzpatrick is a partner in the Advertising, Marketing & Promotions Practice Group at Davis & Gilbert LLP. She may be reached at 212.468.4866 or firstname.lastname@example.org. Rohini C. Gokhale is an associate in the Advertising, Marketing & Promotions Practice Group at Davis & Gilbert LLP. She may be reached at 212.468.4978 or email@example.com.