Today I want to talk about one aspect of operating a modern business and that is making sure that you are not out of compliance with federal law with respect to online reviews.
There is a federal statute called the Consumer Review Fairness Act, which came into law in 2017. It essentially prohibits three things for businesses.
First, you cannot put a provision, which is sometimes called a non-disparagement provision, in your contracts for the sale or leasing of goods or services. If that provision prohibits your customers from leaving you negative online reviews you can’t prohibit that or restrict that.
Second, you can’t place a fine or a penalty against your customers for leaving you a bad review.
Third, you cannot attempt to acquire the copyright to your customer’s online review.
So essentially you can’t restrict bad reviews online. You can’t penalize a negative online review by imposing a monetary penalty against a customer for leaving a bad review online. And you can’t acquire the customer’s property rights (i.e., the customer’s copyright) in that review.
So if you do that, the FTC, the Federal Trade Commission, can bring an enforcement action against you, and there are potential monetary penalties.
So if look at your contracts and make sure you don’t have a provision in there that prohibits your customers from reviewing your company or from leaving your negative online reviews. If you do that, you’re in violation of the Consumer Review Fairness Act.
That’s just one thing to keep in mind when you’re setting up your business, making sure that you’re compliant with all the rules and regulations that apply to your business, including those that apply to online reviews by your customers.
