A Senate panel approved legislation Wednesday that would limit the ability of businesses to retaliate against customers who leave negative reviews online.
The bill cracks down on so-called gag clauses that businesses can place in their terms of service that allow them to take legal action against customers who post negative Internet reviews. The legislation is backed by major online review sites such as Yelp and TripAdvisor.
{mosads}The Senate Commerce, Science, and Transportation Committee signed off on the Consumer Review Freedom Act by a voice vote.
Online reviews containing certain types of information are exempt from the legislation, including law enforcement information and trade secrets.
Committee Chairman John Thune (R-S.D.), a sponsor of the bill, cheered the legislation as a boon for consumers.
“Earlier this month, the committee held a hearing on consumer gag clauses and received compelling testimony about how this practice decreases consumer power and negatively impacts the Internet ecosystem,” Thune said in his opening statement.
Under the legislation, state regulators and the Federal Trade Commission can police companies for using the gag clauses. Under the bill’s House counterpart sponsored by Rep. Darrell Issa (R-Calif.), that job falls to the Justice Department. Both bills have support from a bipartisan group of lawmakers.
Before the markup, the Senate panel eliminated a part of the original bill that would have stopped states from paying lawyers working on gag clause cases based, either entirely or in part, on the outcome of those cases.