[Congressional Record (Bound Edition), Volume 162 (2016), Part 9]
[House]
[Pages 12336-12339]
[From the U.S. 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:

[[Page 12337]]

       (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.

  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.

[[Page 12338]]

  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.
  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

[[Page 12339]]

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 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.

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