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How the new Consumer Review Protection Law will Affect Your Business

One of the final bills signed into law by President Barack Obama before leaving the Oval Office was House Resolution 5111, which is now known as the Consumer Review Fairness Act of 2016. Some analysts who followed the progress of the bill called it the “Yelp law” due to its association with reviews made by consumers about their experiences at various business establishments.

In essence, the new law is a consumer protection measure that fights against retaliation by business owners who feel slighted by negative reviews. The sheer growth of internet platforms such as Yelp and Google Reviews over the last few years have caused a few situations involving hidden contractual clauses that called for monetary penalties against those who reviewed businesses negatively.

The Need for the Law

One particular case cited in Congress as the bill was debated recalled a contract between a venue rental establishment in New York that attempted to charge clients $500 for each negative review posted after a wedding party.

Prior to the passing of the law, business owners could use a contractual strategy to avoid being disparaged on Yelp, on a newspaper or on talk radio. A contract could be drawn to include clauses of non-disparagement to the disadvantage of customers who faced stiff monetary penalties. In a way, this practice was similar to non-disclosure agreements between business partners.

The problem with the aforementioned gag clauses that they are too draconian in the consumer economy that the United States is known for. The new law voids contracts that would prohibit consumers from making reviews.

How Your Small Business Could be Affected

If you are an American small business owner, not much will change with the enactment of this law. In order to create a healthy climate of competition that is conducive to prosperity, consumers need platforms such as Yelp and Google Reviews, and they need to feel free to voice their opinions about business practices.

The last thing you need to do as a business-owners is to file a lawsuit against your customers only because they posted a negative review. To be sure, the new law does not give anyone the right to post a slanderous review in the spirit of defamation, and there is little you can do to stop this from happening. It is important to note, however, that platforms such as Yelp are developing safeguards against such reviews.

As the situation stands in Yelp, a pizza shop in Omaha that gets 15 positive reviews and one scathing diatribe will not be affected by the sole negative review. If you see a slanderous Yelp review that is obviously a fake, the first thing you want to do is address the situation; the last thing you want to do would be to engage the reviewer in a flame war, which is likely the intention of the negative poster.

In the Omaha pizza shop example, the 15 positive reviews will far outweigh the negative one. You should always strive to make your customers happy so that you do not have to worry about the new Consumer Review Fairness Act.

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