Consumer Corner: Is There A Right To Yelp?

By Alan Marx, AARP Tennessee Consumer Watchdog

Before the internet arose, people had fewer sources for information about the performance, reliability, and cost of goods and services. Print reviews, such as Consumer Reports, existed, but the information they provided was limited by their publishing cycle and physical and financial impediments.

nicolasjoseschirado - Fotolia

Thanks to the expansion of technology, the world has changed. Today, just by logging on to your computer or using your smartphone, you can find many current reviews and opinions from users about almost anything, including restaurants, plumbers, automobiles, resorts, appliances, and doctors. You can add your own experiences to the list with a few keystrokes. Web sites, such as Yelp and Trip Advisor, have joined the mix. Many people routinely check these sources before making financial or shopping decisions. Of great importance, the reviews and comments are arrayed by date, so you can see changes that have occurred from time to time.

Some reviewers may have had a bad night or may just be hypercritical. Frequent users of web sites often start by checking the array of comments from bad to good or from latest to earliest. If one hundred reviewers liked a place and four did not, the odds are in your favor, especially if the four were not recent. Also, the management of some establishments conscientiously respond to negative comments, explaining what occurred or assuring the reviewer that their comments were taken seriously and that shortcomings have been or will be addressed.

Unfortunately, not every proprietor is conscientious or willing to accept criticism. News media have reported about attempts to gag criticism.   See, for example, the story by Jenni Bergal of Stateline at

http://www.govtech.com/policy/The-Right-to-Gripe-States-Seek-to-Protect-Negative-Online-Reviews.html

Stateline is a nonpartisan, nonprofit news service of the Pew Charitable Trust.

In her article Ms. Bergal reports that some businesses have inserted “gag clauses” in the fine print of their service contracts barring customers from publishing negative or critical reviews. If customers do not comply, businesses have attempted to force compliance by threatened legal action or imposing financial penalties.

Many customers do not realize that the contracts they are asked to sign contain “gag clauses.” While in theory (and a different universe) everyone reads and fully understands the contracts they sign, in reality a substantial number of consumers do not work their way through the details of routine contracts or present every contract they are asked to sign to an attorney for advice before signing. When was the last time you read every word of a contract to rent a car or asked for an explanation of its terms?

As a response to the use of non-disparagement clauses in consumer contracts, two states, California and Maryland, passed laws, known as “Right to Yelp,” that address these clauses. California now requires that unless consumers knowingly and voluntarily waive their right to complain, the non-disparagement clause is unenforceable and civil penalties are available. In Maryland, these clauses are now treated as an unfair and deceptive trade practice, with both civil and criminal penalties available.

In 2015 Senator John Thune (R-SD) introduced S. 2044, the Consumer Review Freedom Act of 2015. On December 14, 2015, the U. S. Senate passed S. 2044 by unanimous consent. Among other things, the bill makes a form contract void from its inception if it prohibits a party from engaging in performance assessments or analyses of the goods, services, or conduct of another person who is also a party to the contract, and imposes penalties or fees against parties who use gag clauses to try to prevent or discourage those assessments or analyses

Thus far, support in the states that have passed Right to Yelp laws and in the Congress has been bipartisan.

FTC v. Roca Labs Inc.

This blog previously discussed a lawsuit filed by the FTC in federal court in Florida against Roca Labs Inc, Roca Labs Nutraceutical USA Inc., and their principals, all engaged in the marketing of dietary and weight-loss supplements. See CONSUMER CORNER, “Shush - Sign Here and Don’t Tell Anyone – Or Else!” posted by AARP Tennessee on November 30, 2015 at https://states.aarp.org/consumer-corner-sign-here-dont-tell-anyone/

The FTC alleged that the companies made claims that their products are safe, even for children, and are effective alternatives to gastric bypass surgery. The FTC charged that the defendants lacked scientific support for those claims. According to the FTC, the companies included a hyperlink that customers had to click that said “I have read and agree to the terms, privacy, and money back reward/return policy.” One of the terms said:

You agree that regardless of your personal experience with RL, you will not disparage RL and/or any of its employees, products, or services. This means that you will not speak, publish, or cause to be published, print, review, blog, or otherwise write negatively about RL, or its products or employees in any way. This encompasses all forms of media, including and especially the internet.

In addition, Roca Labs included an insert in the package that said:

You were given a discount off the unsubsidized price of $1,580 in exchange for your agreement to promote our product, and when possible share your weight loss success with us. As part of this endorsement you also agree not to write any negative reviews about RLN or our products. In the event that you do not honor this agreement, you may owe immediately the full price of $1,580.

The FTC took the position that “using a gag clause that prohibited consumers from saying anything negative, making any truthful comments about a company, is an unfair practice that violate[s] the Federal Trade Commission Act.”

In October 2015, a federal judge in Florida entered a preliminary injunction barring the defendants from making false advertisements and from binding, ”including through any notice, warning, threat to enforce or attempt to enforce” gag clauses against customers seeking to write negative reviews, unless the reviews are untrue or defamatory.

In April 2016, the FTC and the defendants asked the court to stay the case until August to give the parties time to finalize a settlement.

Conclusions
Consumers need access to truthful information about products and services in order to make informed purchases. Gag clauses are an attempt to prevent the public from getting that information. While businesses have a right to challenge malicious reviews that are based on defamatory or false information, that right is not at risk in the state Right to Yelp laws or in the proposed federal law. While a few years ago the use of gag clauses seemed to be on an upward trajectory, the pendulum now is swinging back and consumers should have the right to Yelp going forward.