[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5111 Engrossed in House (EH)]

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114th CONGRESS
  2d Session
                                H. R. 5111

_______________________________________________________________________

                                 AN ACT


 
To prohibit the use of certain clauses in form contracts that restrict 
    the ability of a consumer to communicate regarding the goods or 
 services offered in interstate commerce that were the subject of the 
                   contract, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Review Fairness Act of 
2016''.

SEC. 2. CONSUMER REVIEW PROTECTION.

    (a) Definitions.--In this section:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Covered communication.--The term ``covered 
        communication'' means a written, oral, or pictorial review, 
        performance assessment of, or other similar analysis of, 
        including by electronic means, the goods, services, or conduct 
        of a person by an individual who is party to a form contract 
        with respect to which such person is also a party.
            (3) Form contract.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``form contract'' means a contract with 
                standardized terms--
                            (i) used by a person in the course of 
                        selling or leasing the person's goods or 
                        services; and
                            (ii) imposed on an individual without a 
                        meaningful opportunity for such individual to 
                        negotiate the standardized terms.
                    (B) Exception.--The term ``form contract'' does not 
                include an employer-employee or independent contractor 
                contract.
            (4) Pictorial.--The term ``pictorial'' includes pictures, 
        photographs, video, illustrations, and symbols.
    (b) Invalidity of Contracts That Impede Consumer Reviews.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), a provision of a form contract is void from the inception 
        of such contract if such provision--
                    (A) prohibits or restricts the ability of an 
                individual who is a party to the form contract to 
                engage in a covered communication;
                    (B) imposes a penalty or fee against an individual 
                who is a party to the form contract for engaging in a 
                covered communication; or
                    (C) transfers or requires an individual who is a 
                party to the form contract to transfer to any person 
                any intellectual property rights in review or feedback 
                content, with the exception of a non-exclusive license 
                to use the content, that the individual may have in any 
                otherwise lawful covered communication about such 
                person or the goods or services provided by such 
                person.
            (2) Rule of construction.--Nothing in paragraph (1) shall 
        be construed to affect--
                    (A) any duty of confidentiality imposed by law 
                (including agency guidance);
                    (B) any civil cause of action for defamation, 
                libel, or slander, or any similar cause of action;
                    (C) any party's right to remove or refuse to 
                display publicly on an Internet website or webpage 
                owned, operated, or otherwise controlled by such party 
                any content of a covered communication that--
                            (i) contains the personal information or 
                        likeness of another person, or is libelous, 
                        harassing, abusive, obscene, vulgar, sexually 
                        explicit, or is inappropriate with respect to 
                        race, gender, sexuality, ethnicity, or other 
                        intrinsic characteristic;
                            (ii) is unrelated to the goods or services 
                        offered by or available at such party's 
                        Internet website or webpage; or
                            (iii) is clearly false or misleading; or
                    (D) a party's right to establish terms and 
                conditions with respect to the creation of photographs 
                or video of such party's property when those 
                photographs or video are created by an employee or 
                independent contractor of a commercial entity and 
                solely intended for commercial purposes by that entity.
            (3) Exceptions.--Paragraph (1) shall not apply to the 
        extent that a provision of a form contract prohibits disclosure 
        or submission of, or reserves the right of a person or business 
        that hosts online consumer reviews or comments to remove--
                    (A) trade secrets or commercial or financial 
                information obtained from a person and considered 
                privileged or confidential;
                    (B) personnel and medical files and similar 
                information the disclosure of which would constitute a 
                clearly unwarranted invasion of personal privacy;
                    (C) records or information compiled for law 
                enforcement purposes, the disclosure of which would 
                constitute a clearly unwarranted invasion of personal 
                privacy;
                    (D) content that is unlawful or otherwise meets the 
                requirements of paragraph (2)(C); or
                    (E) content that contains any computer viruses, 
                worms, or other potentially damaging computer code, 
                processes, programs, applications, or files.
    (c) Prohibition.--It shall be unlawful for a person to offer a form 
contract containing a provision described as void in subsection (b).
    (d) Enforcement by Commission.--
            (1) Unfair or deceptive acts or practices.--A violation of 
        subsection (c) by a person with respect to which the Commission 
        is empowered under section 5(a)(2) of the Federal Trade 
        Commission Act (15 U.S.C. 45(a)(2)) shall be treated as a 
        violation of a rule defining an unfair or deceptive act or 
        practice prescribed under section 18(a)(1)(B) of the Federal 
        Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
            (2) Powers of commission.--
                    (A) In general.--The Commission shall enforce this 
                section in the same manner, by the same means, and with 
                the same jurisdiction, powers, and duties as though all 
                applicable terms and provisions of the Federal Trade 
                Commission Act (15 U.S.C. 41 et seq.) were incorporated 
                into and made a part of this Act.
                    (B) Privileges and immunities.--Any person who 
                violates this section shall be subject to the penalties 
                and entitled to the privileges and immunities provided 
                in the Federal Trade Commission Act (15 U.S.C. 41 et 
                seq.).
    (e) Enforcement by States.--
            (1) Authorization.--Subject to paragraph (2), in any case 
        in which the attorney general of a State has reason to believe 
        that an interest of the residents of the State has been or is 
        threatened or adversely affected by the engagement of any 
        person subject to subsection (c) in a practice that violates 
        such subsection, the attorney general of the State may, as 
        parens patriae, bring a civil action on behalf of the residents 
        of the State in an appropriate district court of the United 
        States to obtain appropriate relief.
            (2) Rights of federal trade commission.--
                    (A) Notice to federal trade commission.--
                            (i) In general.--Except as provided in 
                        clause (iii), the attorney general of a State 
                        shall notify the Commission in writing that the 
                        attorney general intends to bring a civil 
                        action under paragraph (1) before initiating 
                        the civil action against a person described in 
                        subsection (d)(1).
                            (ii) Contents.--The notification required 
                        by clause (i) with respect to a civil action 
                        shall include a copy of the complaint to be 
                        filed to initiate the civil action.
                            (iii) Exception.--If it is not feasible for 
                        the attorney general of a State to provide the 
                        notification required by clause (i) before 
                        initiating a civil action under paragraph (1), 
                        the attorney general shall notify the 
                        Commission immediately upon instituting the 
                        civil action.
                    (B) Intervention by federal trade commission.--The 
                Commission may--
                            (i) intervene in any civil action brought 
                        by the attorney general of a State under 
                        paragraph (1) against a person described in 
                        subsection (d)(1); and
                            (ii) upon intervening--
                                    (I) be heard on all matters arising 
                                in the civil action; and
                                    (II) file petitions for appeal of a 
                                decision in the civil action.
            (3) Investigatory powers.--Nothing in this subsection may 
        be construed to prevent the attorney general of a State from 
        exercising the powers conferred on the attorney general by the 
        laws of the State to conduct investigations, to administer 
        oaths or affirmations, or to compel the attendance of witnesses 
        or the production of documentary or other evidence.
            (4) Preemptive action by federal trade commission.--If the 
        Federal Trade Commission institutes a civil action or an 
        administrative action with respect to a violation of subsection 
        (c), the attorney general of a State may not, during the 
        pendency of such action, bring a civil action under paragraph 
        (1) against any defendant named in the complaint of the 
        Commission for the violation with respect to which the 
        Commission instituted such action.
            (5) Venue; service of process.--
                    (A) Venue.--Any action brought under paragraph (1) 
                may be brought in--
                            (i) the district court of the United States 
                        that meets applicable requirements relating to 
                        venue under section 1391 of title 28, United 
                        States Code; or
                            (ii) another court of competent 
                        jurisdiction.
                    (B) Service of process.--In an action brought under 
                paragraph (1), process may be served in any district in 
                which the defendant--
                            (i) is an inhabitant; or
                            (ii) may be found.
            (6) Actions by other state officials.--
                    (A) In general.--In addition to civil actions 
                brought by attorneys general under paragraph (1), any 
                other consumer protection officer of a State who is 
                authorized by the State to do so may bring a civil 
                action under paragraph (1), subject to the same 
                requirements and limitations that apply under this 
                subsection to civil actions brought by attorneys 
                general.
                    (B) Savings provision.--Nothing in this subsection 
                may be construed to prohibit an authorized official of 
                a State from initiating or continuing any proceeding in 
                a court of the State for a violation of any civil or 
                criminal law of the State.
    (f) Education and Outreach for Businesses.--Not later than 60 days 
after the date of the enactment of this Act, the Commission shall 
commence conducting education and outreach that provides businesses 
with non-binding best practices for compliance with this Act.
    (g) Relation to State Causes of Action.--Nothing in this section 
shall be construed to affect any cause of action brought by a person 
that exists or may exist under State law.
    (h) Savings Provision.--Nothing in this section shall be construed 
to limit, impair, or supersede the operation of the Federal Trade 
Commission Act or any other provision of Federal law.
    (i) Effective Dates.--This section shall take effect on the date of 
the enactment of this Act, except that--
            (1) subsections (b) and (c) shall apply with respect to 
        contracts in effect on or after the date that is 90 days after 
        the date of the enactment of this Act; and
            (2) subsections (d) and (e) shall apply with respect to 
        contracts in effect on or after the date that is 1 year after 
        the date of the enactment of this Act.

            Passed the House of Representatives September 12, 2016.

            Attest:

                                                                 Clerk.
114th CONGRESS

  2d Session

                               H. R. 5111

_______________________________________________________________________

                                 AN ACT

To prohibit the use of certain clauses in form contracts that restrict 
    the ability of a consumer to communicate regarding the goods or 
 services offered in interstate commerce that were the subject of the 
                   contract, and for other purposes.