Gag On This: The U.S. Senate Wants To Ban The Misuse of ‘Non-disparagement clauses’

dome of the US Capitol is seen in Washington on January 4, 2011, one day before before the Republican-led 112th Congress covenes for the first time. AFP PHOTO/Nicholas KAMM (Photo credit should read
Nicholas Kamm/AFP/Getty Images

The U.S. Senate doesn’t want to gag you – in fact, it wants you to Yelp.

Senators have just approved a bill that would prevent companies using “non-disparagement” laws, more commonly known as “gag clauses,” to prevent consumers from airing opinions about products and services on the internet. These clauses currently allow companies to pursue consumers for eye-watering fines.

In an age of rampant surveillance and bizarre initiatives against cyberviolence, news that the government is acting on behalf of ordinary internet users may come as a surprise. It was Ronald Reagan who once warned, “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.'”

Yet the Consumer Review Freedom Act does, on the face of it, look like it will help consumers. The bill, passed unanimously by the Senate, would empower the Federal Trade Commission (FTC) and state attorneys to take action against businesses that use the clauses to intimidate consumers. It must now be approved by the House, where it is unlikely to meet much opposition.

Consumer advocacy websites have been tracking the improper use of gag clauses for some time. Examples include an attempt by the gadget retailer to claim $3000 from a couple who posted a negative review about one of their products, a landlord who claimed copyright on all his tenants’ photos and reviews of his properties, and a company that slapped consumers with a $250 fine for merely threatening to leave a negative review.

The rise of online reviews has significantly altered the power dynamic between retailers and consumers, who previously had to expend considerable effort to ensure their complaints about businesses gained an audience. According to Forbeswe now live in the age of the “Empowered Consumer,” where ordinary people can pressure businesses using only their smartphones.

Businesses’ fear of online reviews was also satirised in a recent episode of South Park, entitled “You’re Not Yelping,” in which restaurants and retailers fall over themselves to please Yelp reviewers — ultimately causing the entire town to become Yelp reviewers.

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