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This Controversial Business Practice May Soon Be Outlawed

September 13, 2016, 4:25 PM UTC
Yelp IPO Puts Consumer-Review Site up for Review
The Yelp Inc. logo is displayed in the window of a restaurant in New York, U.S., on Thursday, March 1, 2012. Yelp Inc., the site that lets users review everything from diners to dentists, is set to price it's IPO tonight and could potentially raise as much as $100 million, which would value the company at about $838 million. Photographer: Scott Eells/Bloomberg via Getty Images
Photograph by Scott Eells — Bloomberg via Getty Images

Plenty of businesses have been sneaking “gag orders” into contracts to protect their Yelp pages.

A gag order is a contract provision that prohibits a consumer from sharing their honest opinions about a company or service. Currently, some companies’ contracts state that customers are not allowed to post negative reviews on social media or websites like Yelp, otherwise they can seek damages. Consumerist reports that some people have been fined just for threatening to complain.

The legislation, dubbed the Consumer Review Fairness Act, has bipartisan support. It passed on Monday by a voice vote in the House of Representatives. If signed into law, it will cancel out any existing gag orders, and the Federal Trade Commission will be able to take action against businesses that do attempt to use them.

The Senate passed its own version, called the Consumer Review Freedom Act, last year. Now the House’s version has to go to the Senate so that the two bills can be reconciled, which should be fairly easy considering they are very similar. The final product will then make its way to the President to get signed into law.

Rep. Leonard Lance (R-NJ), one of the congressmen responsible for bringing this bill to a vote, argued, “Online reviews and ratings are critical in the 21st Century and consumers should be able to post, comment, and tweet their honest and accurate feedback without fear of retribution.”

Paul Alan Levy, an attorney for consumer rights advocacy group Public Citizen, told Consumerist that it doesn’t just help the consumer, but it also protects other businesses that operate without non-disparagement agreements. Gag orders allow certain businesses that may not provide satisfactory services to compete well against businesses that do by “[painting] a false picture of themselves by suppressing truthful criticisms.”