[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5111 Enrolled Bill (ENR)]

        H.R.5111

                     One Hundred Fourteenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Monday,
           the fourth day of January, two thousand and sixteen


                                 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.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.