For most of human history, if a person wanted to find out if the new downtown restaurant was worth visiting for date night, whether a remodeling contractor was legitimate, or whether a vacation destination hotel was clean or full of bedbugs, they would have to ask around. Friends, family, or casual contacts may have been harangued for their opinions about various businesses. Online reviews have improved that system, and made our lives easier. Online reviews tend to be across a wide number of people and represent a great variety of situations, rather than just one opinion which may have been based on one incidence of bad service.
The last few years have shown a steady increase in the number of people turning to online reviews as an enhancement or replacement to personal recommendations, and for good reason. Such sites exist for virtually anything – hotels, restaurants, a broad array of services, and even traffic lights. However, some see online reviews as a threat and would rather stifle free speech than risk a bad review. Those being reviewed would have never dreamed of taking legal action to shut down the talk of neighbors but now try to do so online. The chosen tool for curtailing opinions? Non-disparagement clauses, or so called “gag clauses.”
Gag clauses are typically a few sentences added to a form contract requiring that customers not write negative reviews of the service or product provided. Some contracts even define the penalty, often in the hundreds of dollars for each violation, but in practice often the customer is forced to remove the negative review. The clause is an attempt to restrict a person’s speech, at least of negative reviews as apparently positive reviews have not been the subject of any legal hijinks.
But robust free speech is the cornerstone of liberty and critical in facilitating commerce. At the same time, the freedom to contract is also critical. When two desired liberties are in conflict, a solution must be found. In this case one already exists, albeit one that is costly for the consumer.
Contract law includes a notion of “unconscionable contract,” a contract that is extremely one-sided or unjust. Provisions that would limit damages against a seller, require the customer to disclaim a warranty, or instances where bargaining power is lop-sided are all examples of an unconscionable contract. These contracts are routinely struck down by a court typically based on state law, which means the clauses related to online reviews are typically unenforceable. So why do vendors keep using them?
The clauses do succeed at one thing – making those who post reviews despite the contract clause very nervous about being sued. Even though the vast likelihood is that they will win in court, the cost of that win can be high and, to many, not worth the effort. The clauses often operate as little more than a means of intimidation.
This abuse led to the introduction of the Consumer Review Freedom Act in both the U.S. Senate (S. 2044) and House of Representatives (H.R. 2110). The act, if passed by the House and signed by the president, makes void any provision of contract that prohibits or penalizes consumers for reviewing a vendor’s services or products. The benefit for consumers is obvious: the fear of prosecution and the expense of pursuing the case in court are removed.
S.2044 is consistent with the American Legislative Exchange Council Model Public Participation Protection Act that calls for limiting lawsuits against those expressing an opinion online. The intent is to encourage and safeguard public participation in civic society.
Lawsuits designed to discourage, intimidate, retaliate against and, ultimately, silence critics by forcing them to spend time and money to defend themselves in litigation only lead to cynicism about contracts and the courts. Perhaps worse, such actions designed to limit speech and thought are repugnant to the very meaning of being American. This is a bipartisan issue perfectly suited, having already been approved in the Senate, for consideration in the House even given the very tight legislative schedule. Congress could do worse in an election year than overtly protecting thoughts expressed online.
Cleland is the vice president of the American Legislative Exchange Council (ALEC) Center for Innovation and Technology. He is a research fellow with the Institute for Policy Innovation and also serves on the Internet Education Foundation Board of Directors.