[Congressional Record Volume 162, Number 137 (Monday, September 12, 2016)]
[House]
[Pages H5295-H5298]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONSUMER REVIEW FAIRNESS ACT OF 2016
Mr. BURGESS. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5111) 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, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5111
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
[[Page H5296]]
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.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Burgess) and the gentlewoman from Illinois (Ms. Schakowsky)
each will control 20 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. BURGESS. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and to
include any extraneous material on the bill in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. BURGESS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, one of the most important aspects of an efficient market
is the free flow of information to consumers. The Internet has added
hundreds of billions of dollars to the economy, and much of this is due
to the ready access that it affords consumers and businesses access to
information.
Government officials spend a lot of time worrying about how to ensure
that the independent information sources about product and service
qualities are available. So the truly great thing about consumer
reviews is that, as long as they are reliable sources of information,
they are made available at no cost to the consumer or to the taxpayer.
{time} 1715
But this benefit is in trouble if we allow businesses to prevent
information from ever becoming public. Many of us might hesitate before
we give that negative review. Others might be eager to let everyone
know just how bad their brunch was, but it probably never crosses
anyone's mind that they could be fined if they tell the truth. After
all, Americans are used to our freedom of speech.
In one extreme example brought to us by TripAdvisor, travelers were
subjected to a $5 million fine if any ``actual opinions and/or
publications are created which, at the sole opinion of the
businessowner tends directly to injure him in respect to his trade or
business . . . `'
Now, this is clearly designed to frighten those who read it and
frighten them into silence, and those who don't see it might be
surprised to hear from a collection agency asking for $5 million after
posting a negative review.
The Consumer Review Fairness Act outlaws these gag orders. The
prohibition is narrowly tailored to only those contracts where there is
no opportunity for meaningful negotiations between the consumer and the
business. In other words, it only applies to true form contracts. And
the bill doesn't interfere with Web site operators' ability to manage
the contacts and reviews on their own Web sites. Reasonable management
of online reviews is necessary to ensure that they convey useful
information as opposed to irrelevant or offensive content.
Mr. Speaker, I urge my colleagues to support free speech and support
the passage of H.R. 5111.
I reserve the balance of my time.
Ms. SCHAKOWSKY. Mr. Speaker, I yield myself such time as I may
consume.
I want to thank Mr. Lance and Mr. Kennedy for cosponsoring this bill,
and I am pleased to join my colleague in support of H.R. 5111, the
Consumer Review Fairness Act. This bill protects consumers' ability to
provide honest reviews of products and services.
Chairman Burgess is right in saying that if you get a notice that you
now owe $5 million probably just about for anything, you would be
surprised; but if it was because you said something truthful based on
your experience about a business, that would be particularly egregious.
Lots of mothers have told their children, ``If you don't have
something nice to say, say nothing at all,'' but the current practice
now takes that way too far.
Businesses have snuck so-called nondisparagement clauses in terms of
service agreements, and consumers don't really have a choice when it
comes to those form contracts. In fact, they often don't realize they
have just given up their right to speak openly about a bad experience.
Imagine hiding language in form contracts to stop a bad Yelp review,
for example.
For instance, a hotel in New York included a line in its guest policy
that customers could be fined $500 for leaving a bad review online. It
seems ridiculous to me that a company would punish a consumer who wants
to air complaints, particularly since hotel prices in New York are high
enough already, and now you could be slapped with a fine for saying the
service wasn't up to par.
This bill would put a stop to that anticonsumer practice. It would
stop nondisparagement clauses from being placed in form contracts.
Consumers should be able to voice their criticisms, and allowing
reviews can help other consumers make informed choices. I look at
those. The Consumer Review Fairness Act protects consumer speech, and I
look forward to passing this legislation.
Mr. Speaker, I reserve the balance of my time.
[[Page H5297]]
Mr. BURGESS. Mr. Speaker, I am pleased to yield 4 minutes to the
gentleman from New Jersey (Mr. Lance), the author of the bill and vice
chairman of the subcommittee.
Mr. LANCE. Mr. Speaker, I am pleased to offer this consumer
protection measure along with my cosponsor, the gentleman from
Massachusetts (Mr. Kennedy).
The Consumer Review Fairness Act allows Americans to exercise their
First Amendment rights regarding consumer experiences without fear of
retribution. This issue comes right from the heart of the 21st century
economy. It is easier than ever for consumers to make informed choices
on which business or service to use by consulting Web sites and apps
that publish crowdsourced reviews of local businesses and restaurants.
Consumer reviews are a powerful informational tool because consumers
place a high value on the truthful reviews of other consumers. The
trouble is that a number of businesses have become frustrated by online
criticism and some have employed the questionable legal remedy known as
nondisparagement clauses to retaliate against consumers. These are
often buried in fine print, fine print that even these glasses couldn't
discern.
The Consumer Review Fairness Act would void any nondisparagement
clause in consumer contracts if that clause restricts consumers from
publicly reviewing products or businesses accurately and would give the
Federal Trade Commission the tools it needs to take action against
businesses that insert these provisions into their contracts. It also
would ensure companies are still able to remove false and defamatory
reviews. And so it is narrowly tailored, but it is fairly tailored.
A few months ago I visited Bovella's Pastry Shoppe in Westfield, New
Jersey, in the district I serve here. Bovella's has the highest Yelp
review of any bakery in that part of New Jersey. The good people at
that bakery have earned reviews from their hard work and excellent
consumer service. They get a lot of business from people who turn to
Yelp for insight on the best bakery in town. This crowdsourcing system
thrives because of its integrity. People trust it. Bad actors who bully
consumers are ruining the system that helps small businesses across
this country.
I want to thank Chairman Upton and Ranking Member Pallone and Dr.
Burgess and Ranking Member Schakowsky for their leadership in moving
this forward. I certainly thank my cosponsor, the gentleman from
Massachusetts (Mr. Kennedy). I thank the entire Committee on Energy and
Commerce staff and the subcommittee staff on both sides of the aisle
for their hard work on this legislation.
This will protect the consuming public in a way that is really what
we are trying to do in the 21st century because so much of what we do
is based upon the Internet, based upon apps, and it is important that
this Congress make sure that we are up to date in this regard. Please,
let's pass this bill to the benefit of online consumers.
Ms. SCHAKOWSKY. Mr. Speaker, it is now my pleasure to yield such time
as he may consume to the gentleman from Massachusetts (Mr. Kennedy),
the cosponsor of this consumer-friendly legislation.
Mr. KENNEDY. Mr. Speaker, I thank the gentlewoman from Illinois (Ms.
Schakowsky), my colleague, for yielding and for her leadership on the
Subcommittee on Commerce, Manufacturing, and Trade. Her efforts in
fighting for consumer protection rights and privacy, including her
support for this bill, are tireless.
Mr. Speaker, I rise today in strong support of H.R. 5111, the
Consumer Review Fairness Act of 2016. The Consumer Review Fairness Act
is a solution to a problem consumers across America are facing. In an
unjust effort to stop consumers from posting honest reviews online,
some businesses have resorted to hidden contract clauses prohibiting
any negative feedback for a product, service, or experience. These so-
called nondisparagement clauses allow companies to sue reviewers simply
for posting their candid opinions online. This is a problem I have
heard about firsthand from a major company in my district, Mr. Speaker,
TripAdvisor, whose members depend on an open, honest, and fair online
forum.
Like every American, those members have an undeniable right to voice
their concerns when an experience or product fails to meet their
expectations. Secret nondisparagement clauses limit our free speech and
subject unsuspecting individuals to crippling lawsuits from businesses
desperately trying to preserve their own reputation.
The Consumer Review Fairness Act makes these clauses illegal and
voids any contract that contains a nondisparagement clause. It would
allow the Federal Trade Commission to enforce the law and take action
against any business that inserts these provisions into their
contracts.
Importantly, Mr. Speaker, this bill preserves the rights of
businessowners to take action against untruthful or dishonest reviews.
Businesses still have a right to ensure that no confidential
information is unfairly posted and may seek recourse in cases of
defamation, libel, or slander.
I think it is fair to say that most of us in this Chamber today have
looked at a consumer review prior to purchasing a product or service.
In some way or another, we have relied at least some or in part on
those reviews, both good and bad. If consumers want to post a truthful
review online, they should not fear retribution just because their
review is negative.
Mr. Speaker, there are several more people I would like to thank,
including, of course, the gentleman from New Jersey (Mr. Lance) for his
leadership and partnership in this effort; the subcommittee chair, Mr.
Burgess, and his staff; Chairman Upton; Ranking Member Pallone; and, as
I said, the ranking member of the subcommittee, Ms. Schakowsky. I would
like to thank also my good friend, Eric Swalwell, who has led
legislative efforts on this issue for years. Lastly, and certainly not
least, Mr. Speaker, I would like to extend my gratitude to the majority
and minority staff of the Committee on Energy and Commerce for their
hard work and engaging in good faith discussion to help get this bill
to the floor today.
I urge my colleagues to support H.R. 5111.
Mr. BURGESS. Mr. Speaker, I advise the minority that we have no
additional speakers. I reserve the balance of my time.
Ms. SCHAKOWSKY. Mr. Speaker, I yield myself the balance of my time.
The Consumer Review Fairness Act is a step forward not only for
protecting consumers' speech, but for, really, the millions of
consumers who rely on the reviews, the opinions of others, and believe
that you get a fair mix of reviews, good and bad, that will enable you
to make better purchasing decisions.
This bill passed on a bipartisan basis through both the subcommittee
and full committee, and I look forward to passing it today. I want to
thank all those who were involved in making this happen.
Mr. Speaker, I yield back the balance of my time.
Mr. BURGESS. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I urge my colleagues to support free speech and support
the passage of H.R. 5111.
I yield back the balance of my time.
Mr. SWALWELL of California. Mr. Speaker, I rise in strong support of
H.R. 5111, the Consumer Review Fairness Act of 2016.
One of the most amazing aspects of the Internet is its ability to
allow for the sharing of information, and consumers often rely on the
reviews of others to make purchasing decisions. This system only works
if consumers have access to all information available from across the
nation, including both positive and negative reviews. We simply cannot
allow companies to bully or attempt to silence customers who want to
offer negative but honest assessments of products or services.
I was outraged when I first heard last Congress that companies were
doing exactly that, using buried contractual terms, known as
nondisparagement clauses, to try to block or punish customers for
writing negative reviews online. To end this practice I introduced H.R.
5499, the Consumer Review Freedom Act of 2014, a narrow bill designed
to outlaw nondisparagement clauses and empower the government to stop
companies from using them while maintaining the ability of businesses
to sue for traditional defamation. This Congress, Representative
Darrell Issa and I introduced a bipartisan version of this legislation.
Today the House is considering H.R. 5111, very similar to our
Consumer Review Freedom
[[Page H5298]]
Act but with some improvements. I want to thank Representatives Leonard
Lance and Joe Kennedy for introducing this legislation and working
diligently to move it forward. The Senate has already passed
essentially the same bill, and so I hope once the House acts today the
Senate can quickly pass H.R. 5111 and send it to the President's desk
for his signature. This will be an important step in protecting a vital
source of information for consumers across the country.
I urge my colleagues to vote in favor of H.R. 5111.
Mr. CARTER of Georgia, Mr. Speaker, I rise today in support of H.R.
5111, the Consumer Review Fairness Act, which would protect consumers'
First Amendment right to share their experiences with a product or
service online. Millions of Americans go online every day to read
candid experiences from like-minded consumers, and many also share
their reviews on everything from restaurants to clothing to hotels and
services.
American consumers should feel confident in providing honest reviews,
as the First Amendment protects their right to express their opinions.
As a former small business owner, I know that listening to customer
feedback is crucial for success, and that constructive criticism is
sometimes more helpful than praise. Unfortunately, some businesses have
found ways to bully consumers with costly penalties and lawsuits in an
effort to hide negative reviews. Instead of trying to improve their own
practices, these bad actors are taking their mistakes out on their own
customers.
The Consumer Review Fairness Act would stop this unethical practice
by prohibiting businesses from penalizing consumers for sharing a
review they don't agree with. Our modern day economy is dependent on
the free flow of information, and this bill will ensure consumers'
rights to openly review products and services are not infringed upon.
I would like to thank my colleagues for introducing this important
bill, and I urge my colleagues to support it.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Texas (Mr. Burgess) that the House suspend the rules and
pass the bill, H.R. 5111, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________