Consumer Review Fairness Act: Summary and Impact On Small Businesses

graphic of hand choosing rating to accompany post about consumer review fairness actPoliticians gavel’d H.R. 5111, the Consumer Review Fairness Act (CRFA), into federal law.

What does ratification mean for small businesses? Well, as a whole, not much, because the law only affects folks who use “gag clauses” to prevent defamatory reviews.

The Consumer Review Fairness Act = No More “Gag Clauses”

What the law doesn’t say is this: “It’s perfectly legal to post defamatory online reviews.”

Instead, the statute invalidates contract provisions transferring copyright ownership of online reviews.

What do intellectual property rights have to do with online review defamation?

Well, over the past several years, to mitigate the impact of inaccurate, business-crushing rants, some businesses used contracts with online review parameters.

Here’s a hypothetical example of how it typically worked:

Dentist Amy performs patient Todd’s root canal. Before the procedure, Amy makes Todd sign an agreement — which is standard practice. Amy’s contract, however, also includes an intellectual property clause. You see, Amy’s agreement confers copyright ownership, of any future online reviews about her dental practice, from Todd to Amy. So, let’s say, in a fit of expected discomfort the day after the procedure, Todd posts lies about Amy’s work, despite her having done a perfect job. On account of the agreement, Amy could, theoretically, have proven herself “owner” of the comment and gotten it removed.

But the Consumer Review Fairness Act changes all that. Amy’s (hypothetical) contract — and countless others out there just like it — are no longer valid because the CFRA renders “certain clauses of a form contract void if it prohibits, or restricts, an individual from engaging in a review of a seller’s goods, services, or conduct.”

Reactions to the Consumer Review Protection Act

In praise of the new law, Hawaiian Senator Brian Shatz said:

“Reviews on where to shop, eat, or stay on websites like Yelp or TripAdvisor help consumers make informed choices about where to spend their money. Every consumer has the right to share their honest experiences and opinions of any business without the fear of legal retaliation, and the passage of our bill brings us one step closer to protecting that right.”

Yelp also seems pleased with the Consumer Review Fairness Act. Laurent Crenshaw, the company’s Director of Public Policy, enthused:

“While these clauses aren’t everywhere, when people hear about them, it does create a chilling effect and that’s something we’ve been concerned about and were very glad that Congress has taken steps to eliminate.”

You Can Still Sue Over Defamatory Online Reviews

The Consumer Review Fairness Act doesn’t prohibit small business owners from suing over genuinely defamatory reviews. Comments featuring false statements of fact, which materially harm businesses, may still be actionable. So, if you’re the victim of a libelous review, don’t throw your hands in the air and give up. You may be able to remedy the situation, legally.

Speak with a consumer review defamation attorney to discuss your situation and explore solutions.

Article Sources

114th Congress – CRFA

U.S. Senate Cmte. Announcement of CFRA

eBay Defamation Case Study: Jeweler v. Buyer

picture of eBay signage to accompany a blog post about eBay defamationThis post is about an eBay defamation case currently making its way through the courts. Our firm, Kelly / Warner, doesn’t represent either side. We do, however, help folks in similar situations.

If you’re here to read about a customer review defamation case, keep scrolling. If you’re struggling with an online reputation issue, Kelly / Warner can help. Get in touch today; let’s start weighing your legal options.

Introductions and self-shout-outs aside, without further ado, we present The Case of the eBay Ring Refund

eBay Defamation Case Study: Unsatisfied Client v. Jeweler

Refund Confusion Results In Legal Tussle

Several months ago, a woman (whom we’ll call “Alice”) bought a ring from an eBay store; she split the purchase between two credit cards.

Unfortunately, Alice decided the ring wasn’t for her and initiated the return process. At first, the jeweler didn’t realize that Alice had used two cards and only refunded one.

That’s when things supposedly took a vengeful turn.

Business Owner Said…

Allegedly, the refund confusion compelled Alice to create a phony Yelp page. But Alice didn’t use her own information. Instead, she purportedly created a fake Yelp page under the jeweler’s name — and for the coup de grâce, littered it with negative reviews, including an accusation of “[stealing] thousands of dollars through this diamond scam.”

Customer Said…

No way, insists Alice, who swears she is not the one. In a statement, Alice shared her side of the story:

“[T]here were two other people involved in this dispute with the eBay seller and they were the ones who posted on Yelp and other online sites. I have email evidence that I did not write any of the comments. The plaintiff’s eBay account was shut down due to her misconduct based on eBay’s investigation.”

Reviews Lead To Job Insecurity For Plaintiff and Defendant

The jeweler suffered serious setbacks because of the reviews. Customers canceled orders; eBay removed listings; Intuit even canceled her payment processing account.

Alice didn’t fare any better. You see, for the past decade, she reportedly had worked for the Chamber of Commerce, but lost her job soon after this defamation debacle. Her former employer refused to comment on Alice’s departure, but when asked about the situation, she said, “I am considering filing a countersuit for defamation of character leading to loss of income.”

The Difference Between Bad Reviews and Defamatory Reviews

Judging from online discussions, many people seem to think businesses can sue over negative reviews on sites like (but not limited to) Yelp, eBay, Ripoff Report, and Amazon.

Not true.

Free Speech is an American solemnity. Since the Founding Fathers distributed The Federalists Papers, our nation has enjoyed a long and storied history of public criticism. Every person on U.S. soil can shout their opinions from the top of Denali or a digital pedestal.

But we can’t publicly lie about a person or business, to the point of material hardship. Ask yourself: What would you do if a customer or colleague spread rumors about your circumstances or business? Would you shrug it off, citing free speech, even if the fib destroyed your livelihood?

Winning an eBay Defamation Case

How can plaintiffs win online review lawsuits? Every case is different, but at the very least, claimants must convince a judge or jury that the defendants:

  • Made false statements of fact, which caused material harm to befall the plaintiffs; and
  • Acted negligently — or with actual malice — in publishing or broadcasting the declaration.

Considering An eBay Defamation Lawsuit?

Are you weathering a reputation storm? Wondering whether or not you can sue for defamation? Our team regularly assists people overcome reputation challenges.

Get in touch to talk about your situation.

Amazon’s New Review Policy: Big Changes

Picture of two business people on couch to accompany blog post about Amazon’s new review policy
Amazon’s new review policy crashed into Planet-Online-Retail, and now feedback facilitators are working round the clock to adjust business models.

Let’s take 3 minutes to outline the situation — in plain language — and examine how the change will affect Amazon sellers and reviewers.

How Amazon Reviews Used To Work

Before this e-commerce October surprise, Amazon let sellers offer discounts in exchange for product reviews, so long as the reviewer included proper disclosures. The system seemed to work and even spawned review facilitation businesses that helped vendors plan and execute discount-for-review programs.

But Amazon never seemed entirely comfortable with paid reviews, of any ilk. In fact, to combat the trend, platform engineers deployed a “learned algorithm that gives more weight to newer, more helpful reviews” and implemented stricter “verified purchase” badge requirements.

Amazon has even sued a few unlucky pay-for-review services, which you can read about here and here.

Amazon’s New Review Policy Points

So, what was the big change? In short: Sellers can no longer offer free products and discounts in exchange for a review. Here is a handful of specific points:

  • Sellers can’t use third-party services to loophole around the restriction.
  • The policy took effect immediately, but vendors shouldn’t worry about past posts. However, Amazon may remove old reviews “if they are excessive, and don’t comply with prior policy.”
  • Sellers CAN “continue to offer discounts and promotions as long as they are not offered in exchange for reviews.
  • Ignoring Amazon’s new review policy is grounds for account suspension.
  • Review facilitators can no longer require members to leave reviews.

Authors Are Exempt From Amazon’s New Review Rules

Which segment of Amazon World doesn’t have to worry about the new review guidelines? Authors. Giving away advanced copies of a book, in exchange for a review, is a publishing industry solemnity — and the online retail giant doesn’t want to disturb the ancient institution. In Amazon’s exact words, the company will “continue to allow the age-old practice of providing advance review copies of books.”

What’s VINE Got To Do With It?

Discount-for-feedback programs are strictly prohibited “unless […] facilitated through the Amazon Vine program.”

Wait, what?

Yep, Amazon is now the only acceptable channel for early offer arrangements. But even that’s a slight misnomer because Amazon doesn’t “incentivize [Vine members to give] positive star ratings, attempt to influence the content of reviews, or even require a review to be written.”

Is Amazon Sticking It To The Proverbial “Little Guy”?

Amazon’s new review policy press release states that “when done carefully,” incentivized reviews “can be helpful to customers by providing a foundation of reviews for new or less well-known products.”

To put it another way: Amazon admits that “incentivized reviews” help online retail startups, but it’s outlawing the practice regardless? Apparently so.

Now, does this mean it’ll be impossible to start a successful FBA store? Not at all. Most review facilitators have already operationally adjusted to the change.

But beyond that, in the simple terms, people like reviewing products. Stick to an effective marketing plan — which includes follow-up e-mails and superior customer service — and you shouldn’t notice a seismic change in sales.

Online Retail Legal Reminders and Considerations

Before our 3-minutes are up, we wanted to leave you with 3 legally minded thoughts:

  • “Unfair and deceptive marketing” rules do apply. Adhere to them or risk and FTC investigation and fine.
  • In light of Amazon’s new review policy, feedback services should make a Herculean effort to contact their review-writers’ networks. Don’t forget, a review that includes something to the effect of “received at a discount for an honest and unbiased review,” is now non-compliant.
  • Account suspension is reversible in some instances. Talk with an online retail consultant who can help pinpoint the exact problem, and provide the best plan of action to restore your account.

Good luck with Amazon’s new review policy. If you have questions, get in touch.

Online Review Defamation: A Client Lied About Your Business. Now What?

online review defamation
Protecting your online reputation can be as difficult as winning the Tour de France…clean. So, what can businesses do when faced with online review defamation? Let’s take a look.

  • First, ask yourself: “Is the review accurate?” This can be the hardest step. If the review is negative but true, the chances of remedying the situation with a defamation claim diminish considerably. Why? Well, under United States law, legal defamation requires falsity. Does this mean you can’t combat the negative review? No, it doesn’t. You can. (We’ll get to “the how” below.)
  • Second, ask yourself another question: “Is the review fundamentally true, but grossly exaggerated?” Hyperbole, believe it or not, rarely passes the defamation sniff test. Sometimes, but not often. In the eyes of the law, reasonable people can distinguish hyperbolic speech from a false statement of fact. For example, an online reviewer condemns: “Mr. Widget’s Widgets are the WORST widgets in the world!” Mr. Widget is peeved about the review and threatens a defamation lawsuit. But the truth is, he probably wouldn’t win an online review defamation lawsuit, because “the worst company in the world,” is an exaggerated opinion and not tantamount to libel. Does this mean you can’t combat negative reviews? Again, no. (I promise we’ll get to how below.)
  • Third, if your detractor did, indeed, make a false statement of fact in an online review, you may be able to sue for trade libel or defamation. That said, most online defamation situations rarely blossom into lawsuits. Attorney intervention usually does the trick; people often — and innocently — don’t realize they’ve crossed a legal line and just need reminding to remove it.
  • If you’re confident a detractor made a false statement of fact, as opposed to a hyperbolic opinion, contact a lawyer. He or she can analyze the situation and help you work through questions like:
    1. Depending on details, should you send a letter, or use another marketing method, to squelch the effect of bad online reviews?
    2. Is the statement egregious enough to move forward with a full-fledged lawsuit? If yes, do you have enough evidence to effectively argue the case in court?

Find a attorney who will tell you, upfront, if your potential case is a dud or a stud.

To learn more about the nuances of online review defamation, click here. To read more about the history of U.S. defamation law, click here.

Online Review Defamation: Consider This Before Suing

A difficult customer or client posts a scathing review, with a low truthiness quotient, on a popular site like Amazon, Yelp or Ripoff Report. What can you, the business owner, do?

You’ve got three options:

  • Ignore the issue, letting the problem fester and grow.
  • Work with an attorney to get the offending comments removed.
  • Work with a marketing professional to neutralize the review’s negative effects.

According to this Forbes article, 88% of consumers trust online reviews as much as personal recommendations. So ask yourself: do you want to sacrifice business by ignoring a damaging review? I’m sure we can all agree: doing nothing is unwise.

So, with option 1 out of the way, which is better: working with a lawyer or a marketer?

88% of consumers trust online reviews as much as personal recommendations. So ask yourself: do you want to sacrifice business by ignoring a damaging review?

Deciding Between Marketing Fixes & Legal Solutions

Before deciding whether to deal with a damaging online review with marketing methods, legal tactics — or both — consider a few facts about U.S. defamation law.

  • Thanks to a high-profile legal scuffle between a preacher and pornographer, satire and parody aren’t legally defamatory. Consider: did your detractor cloak disdain in satire or parody? Yes? Then you’re probably better off working with a marketer. (Chill Tip: In cases of satire and parody, consider laughing it off. Humorlessness and hyper sensitivity are not qualities consumers easily tolerate.)
  • Is the statement an opinion? If yes, then it’s not defamatory under U.S. law. Comments like, “I hate this product!” or “John Doe is the WORST dentist I’ve ever used!” are opinions.
  • Does putting “In my opinion” or “IMO” before a false statement of fact automatically make said statement an opinion? No. IMO is not a legal shield that confers defamation immunity on all who use it.
  • What happens if an anonymous user posts a scathing review? You may be able to uncover their real identity. Click here to read more about the process.
  • What does it take to win a U.S. defamation lawsuit? It’s difficult, but possible. In short, plaintiffs need to prove that contested statements are about them, in addition to falsity, harm, and a level of negligence. For a state-by-state defamation law analysis, go here.

You Have Options. Don’t Wait, Act. Solutions Are A Phone Call Away.

If your business has suffered because of an inflammatory review, and you’re ready to fight back, let’s talk.

Our team has helped hundreds of individuals — and businesses– pluck defamatory content off the Internet. And note, a lawsuit isn’t always nececcary to remedy an online review defamation issue.
Who are we? Kelly / Warner — a group of attorneys, with strong marketing connections, that excels at fixing online defamation problems. To learn more about us, head here.

Reclaim your reputation — and revenue flow. Get in touch today.

Yelp Defamation: Is The Site Required To Remove Defamatory Reviews?

Yelp Defamation

Yelp! (“Yelp”) isn’t happy.

A California judge ordered the review site to remove a defamatory posting. Yelp, for its part, felt the decision defied Section 230 of the Communications Decency Act and appealed — but lost.

Will the ruling affect future Yelp defamation claims? Will business owners be helped or hurt by this turn of events?

Let’s review the case and discuss the potential implications for SMBs.

Background Summary: Business Owner Sues For Defamation Over Yelp Review

We live in the Age of Online Reviews, so it happens all the time. A service provider clashes with a client. Eager to share his displeasure with the world, said client (under the altruistic auspices of “warning others”) takes to Yelp and posts a scathing — often hyperbolic — negative review. Within days, the target’s inquiries come to a grinding halt.

It’s every business owner’s worst nightmare, and it happened to an attorney a few years back — so she sued for online defamation.

Who won?

To shorten a long story, the client failed to appear in court, which triggered a default win, and the judge ordered Yelp to remove the defamatory review.

Yelp’s Position: Forcing Content Removal Defies Section 230 of the CDA

But Yelp didn’t want to remove the review.

In its defense, the review website argued insufficient governance, maintaining that Yelp wasn’t party to the lawsuit, and subsequently not subservient to the court in this matter. Yelp also reasoned that the removal order contravened Section 230 of the CDA, which gives immunity to websites dragged into lawsuits involving defamatory user content. Or, to put it another way, it’s the law that stops users from suing, say, Facebook (or even Yelp) over another user’s post.

Now, please don’t read us wrong: you CAN sue individuals who post libelous statements, but not the social media platform on which the contested statement sits. (Section 230 applies to most social media sites. The rules, however, vary for blogs, news sites and other informational platforms that can legally be deemed “the publisher”).

Excerpt From Yelp Defamation Removal Lawsuit

“Yelp’s claimed interest in maintaining its site as it deems appropriate does not include the right to second-guess a final court judgment establishing that statements by a third party are defamatory and thus unprotected by the First Amendment.”

Why Doesn’t Yelp Want To Remove Defamatory Reviews?

Why is Yelp against weeding the site of defamatory posts? In its estimation, removing content is a free speech quagmire, so the company spares no expense in defending removal requests.

A spokesperson for the review aggregator explained:

“The ruling undermines the free speech and due process rights of consumer reviewers and the online platforms that host their content. In a single jumbled ruling, the court managed to contravene and contort longstanding precedent concerning the First Amendment, constitutional due process and Section 230 of the Communications Decency Act.”

Section 230 of the Communications Decency Act, or CDA, says, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

Court’s Reasoning: Asking Yelp To Remove Defamatory Review Doesn’t Have Anything To Do With Section 230 In This Case

According to the court, the removal order wasn’t legally damaging, and therefore fell outside the Section 230 sphere. In other words, since Yelp wouldn’t face imminent legal injury by deleting the defamatory post, the removal order doesn’t interfere with the CDA.

And on a technical note, according to the ruling, Yelp allegedly filed its protest motion too late.

Who Can I Talk To About My Yelp Defamation Issue?

Dealing with a defamatory Yelp review? We can help. Our team has assisted countless small- and medium-sized business owners overcome setbacks related to damaging Yelp reviews. Not every case requires a lawsuit. In many instances, we’ve been able to rectify the situation without filing a claim.

Contact us now. We’ll discuss your situation, (even vent about Yelp if you want), and then start formulating a plan — that’s both effective and budget conscious — to reverse the damage done by Yelp defamation.

Yes, Amazon Sues Fake Reviewers

Fake Review Law and Lawyer
The Legal Low Down On Fraudulent Feedback
Online Marketing Legal Reminder: Avoid using and writing paid reviews for Amazon.com. Why? You could be sued or banned!

Amazon is cracking down on phony feedback. Not only is it suing fake review services, but also suspending complicit seller accounts. In fact, just the other day, Amazon announced a lawsuit against a group of third-party sellers who used “sock puppet accounts” to post phony, positive reviews on their product pages.

Recent Action: Amazon Sued Phony Appraisal Services

A few weeks ago, Amazon sued five websites servicing the fake feedback “ecosystem.” An Amazon spokesperson explained:

“We will continue to pursue legal action against the root cause of reviews abuse — the sellers and manufacturers who create the demand for fraudulent reviews, as well as the ecosystem of individuals and organizations who supply fraudulent reviews.”

Ongoing Dragnet Against Fake Review Services

Amazon is obsessed with review integrity because customer posts fuel the e-commerce engine. To that end, last year, the company litigiously targeted parties that allegedly contributed to review corruption. Since then, the online retail giant has targeted about one-thousand phony feedback operations and forced many offline.

Is Amazon’s Review Integrity Initiative Working?

Are Amazon’s attempts to stomp out phony feedback working? Depends on how you assess the situation. Sure, more people now know about the company’s anti-fake review stance, prompting some marketers to stop using them. But, due to the pop-up-shop nature of review services, attempts at extermination have ultimately proven to be whack-a-mole level frustrating.

Need Help With An Amazon Review Problem?

User reviews are essential to the e-commerce success formula. For sellers, the quality and quantity of customer feedback can mean the difference between success and failure.

And unfortunately, unscrupulous marketers use disparaging reviews as a negative SEO tactic.

If you’ve been hit, and you’re ready to right a wrong, get in touch immediately. Our team of attorneys and techs has helped tons of people and businesses overcome various review issues. We can help you, too.

Don’t wait. The longer phony reviews fester, the more damage they can do.

Get in touch immediately to get back on a profitable path, free of fake review problems.

E-Commerce Law: Is It Legal To Pay For Online Reviews?

graphic of search bar juxtaposed against a line of e-commerce entrepreneurs to accompany a blog post answering the question is it legal to pay for online reviews

Is It Legal To Pay For Online Reviews?

You can make money with e-commerce startups. Amazon, eBay, Etsy – even Walmart – maintain incredible platforms for outside sellers. Plus, holiday sales figures prove that Internet shopping anxiety has gone the way of the dinosaur.

Bottom line: there is e-commerce cash-money to be made.

But (there’s always a “but”), as more folks dive into the product marketing pond, competition is stiffer than the Queen’s Guard.

So, how are some sellers standing out from the pack? They’re buying reviews! Which raises the question: Is it legal to buy online reviews?

Online Review Truth #1: Fake Reviews Can Get You Sued

Reviews are a vital cog in the e-commerce machine. Every platform — and entrepreneur — leverages user reviews to sell, sell, sell! Think about it: when you see a product without feedback, do you buy…or hop to a similar product with reviews?

So, what’s a newbie to do? Is it legal to buy online reviews?

E-commerce platforms are serious about review integrity, and they actively work to expunge phony feedback. Not only are algorithms used to scrub “bad” posts, but some platforms, like Amazon, sue paid review services and reviewers.

Are you thinking, “No problem, I’ll just use a paid review service overseas?” Well, foreign governments are also cracking down.

The risk of permanent account expulsion increases, exponentially, if you use fake review services. The danger is real; you may get burned.

Online Review Truth #2: Disclose Material Relationships

What’s the easiest way to avoid review-related suspension hassles? Disclose, disclose, disclose!

If Aunt Bessie buys your organic sea-kale lollipops, genuinely loves them, and wants to shout it from a mountaintop, she can certainly spread the sea-kale gospel via online reviews. BUT,  don’t PAY Aunt Bessie to write a review. (Update: Offering consumers free products is exchange for an online review is now also frowned upon by Amazon. You can read about the rule change here.)

Will you be tossed in the clink if friends and family don’t divulge their relationship, to you, in an online review? Of course not. Let’s be real: how will Amazon — or another platform — know if “Liv4Cats54” is your relative? But be aware that disclosing material relationships is, technically, part of FTC guidelines.

Online Review Truth #3: Don’t Ghost Write Tons of Reviews for Your Products

Is it legal to pay for online reviews? Not really. Is it legal to write your own reviews under aliases? Again, not really.

For e-commerce platforms, reviews are both a blessing and a curse; a blessing because they engage audiences in a meaningful, profitable way; a curse because an outbreak of corrupt reviews has the power to crush a site’s credibility – and ultimately tarnish the brand.

So,  what’s the lesson? Don’t write a ton of fake reviews for your products. Websites use algorithms that sniff and snuff out faux-feedback. Best to avoid them altogether.

Online Review Truth #4: Don’t Sabotage Competitors’ Listings

One night, you’re sitting at home, stewing in a cauldron of frustration. Your e-commerce gamble is not working out as planned! Where are the customers!?

You ask yourself, “Is it legal to pay for online reviews or post fake ones?” And then, in a moment of weakness, frustration takes your wheel and you screed-type some nasty feedback on a competitor’s listing. Your (misguided) rationale? Well, if I trash competing products, more people are likely to find me!

This type of thinking is wrong thinking. Being a rogue, fake-review-dispensing troll will bring you 99 problems, and a possible FTC sanction IS one.

Fake reviews fall clearly into the “unfair and deceptive marketing” strike zone. Plus, depending on the circumstances, you could be sued for trade libel — and lose.

Befriend An E-Commerce Lawyer

You’ve vested a lot in your e-commerce business. Protect your efforts; team up with an experienced attorney with a nuanced understanding of:

Our focus areas (FTC compliance, review defamation, online intellectual property, et cetera) line up perfectly with what Internet businesses need to grow and earn.

Hope we’ve answered the question “Is it legal to pay for online reviews?” for you. Interested in learning more about Internet business law? Yes? Head here.

Using Gag Clauses To Prevent Negative Online Reviews?

gag clauses to prevent negative online reviews

2017 Update: Federal politicians passed the Consumer Review Fairness Act, which outlaws online defamation gag clauses.

Are contractual “defamation clauses” – a.k.a. “gag clauses”—acceptable? Legally enforceable? Can you sneak them into customer agreements in an attempt to mitigate bad online reviews?

Let’s review.

Using Gag Clauses To Prevent Negative Online Reviews Can Backfire – Badly.

If you asked ten U.S. citizens, “What’s the cornerstone of American law,” nine of them might say, “Free speech!” And it’s a solid answer — which is why contractual consumer gag clauses are short sided. Not only is it an affront to the Constitution, but doing so will probably land you a boatload of viral, negative press.

Not All Gag Clauses Are An Assault On Free Speech…

To be clear: not all gag clauses are a spit in the face of freedom. Many contractual articles, which demand confidentiality, are perfectly fine – if not commonplace.

You may be thinking, “WTF!? How is that possible!? What happened to free speech?”

Fair question. But here’s the crux: confidentiality is the focal point of many agreements. To wit, celebrities regularly make employees sign privacy contracts – a type of “gag clause.” Commonly, startups and businesses require employees to sign non-disclosure agreements to protect corporate secrets.

…But Some Are

So, we’ve established that not all gag clauses are the work of a freedom-hating baddie. But, some contracts do cross a Constitutional line.

When online reviews became de rigueur‎, businesses and professionals started stuffing gag clauses into service contracts. But the practice quickly backfired. Netizens took to the Internet and shout-typed outrage over agreements that prohibited negative online reviews. In short order, lawyers who previously advocated for restrained gag clauses began advising against their use.

When Free Speech Crosses The Legal Line

It’s never OK to ban legitimate free speech, but there are legal limits – like defamation. In laymen’s terms, defamation (libel if written; slander if spoken) is purposefully negligent, harmful, and public lie telling.

Some people use gag clauses to prevent negative online reviews, but it typically backfires – especially if the language is hyper-aggressive.

Moreover, time and again, courts have established that the Constitution (and case law) rarely allows for “prior restraint.” In other words, it’s fine to punish a person, post-facto, for committing an act of slander or libel; however, trying to hush someone – before anything untoward actually happens – is contrary to established legal standards (except in certain circumstances, which usually involve commerce and employment).

In other words, don’t use gag clauses to prevent negative online reviews.

Some people try to use clauses to prevent negative online reviews, but it typically backfires – especially if the language is hyper-aggressive.

What Can Business Owners Do About Difficult Clients Who Litter The Web With Negative Reviews?

So, what’s an honest business owner to do when faced with a testy, ranting client? A client that embellishes the truth, but doesn’t, exactly, tell a bold-faced lie?

Talk to a lawyer. (“Yeah, right – you’re just saying that because your law firm handles this type of issue,” you protest. Yes, we’re a law firm that helps clients with reputation issues. But think of it this way: would you want a dentist to operate on your spleen?)

Gag Clause Case Study

FTC Sues Weight Loss Product Company Over Gag Clause

Recently, the Federal Trade Commission targeted a weight loss supplement company (we’ll call the company “WLC”) for “unfair and deceptive” marketing. As the nation’s consumer watchdog, the FTC punishes parties that use underhanded methods to market and promote. In fancy FTC language:

“[The FTC goes after businesses that] cause substantial injury to consumers that is not reasonably avoidable by consumers and that is not outweighed by countervailing benefits to consumers or competition.” 

Specifically, the case against “WLC” involves accusations of:

  • False and unsubstantiated claims;
  • Unconstitutional prior restraint;
  • Failure to disclose review compensations; and
  • Possibly violating HIPPA restrictions by inadvertently disclosing health information to banks and payment processors.

The “Gag Clause” That Had People Seeing Red

The terms of purchase agreement for WLC’s weight loss powder included the following phrase:

“Regardless of your personal experience with [WLC], you will not disparage [WLC] and or any of its employees, products or services.”

In other words: Even if you don’t like the product, you’re barred from saying anything bad about “WLC” – anywhere.

Defamation Clause Deemed Unacceptable by the FTC

Typically, businesses fall under the FTC’s scope for:

  • Making false claims about a product’s effectiveness.
  • Fabricating “studies” that unfairly sway public perception.
  • Engaging in negative option marketing.
  • Not disclosing “discount for feedback” initiatives (i.e., giving away free samples, money or discounts for writing reviews).
  • Deceptive billing.

FTC Rejects Gag Clause Explanation

Ostensibly, “WLC” included a defamation gag clause in its user contract. But the FTC said, “Nah-ah,” which isn’t surprising since the agency has traditionally kept a close eye on supplement manufacturers and marketers. Moreover, the clause included a damning phrase: “regardless of your personal experience with [WLC],” which probably tipped the legal scale; it’s one thing to warn against defamation, but another to threaten against free speech.

Free Contracts, Which Can Be Found Online, May Invite An FTC Investigation

In the resultant case, the nation’s consumer watchdog deemed the company’s defamation clause “unfair and deceptive.”

So, how can businesses guard against “unfair and deceptive” clients? By working with a lawyer who creates practical and protective arrangements that won’t attract the FTC’s watchful eye.

If you use a free online contract, the consequences could be dreadful. Why? Because freebie agreements usually aren’t as comprehensive as they can — and should — be. Sometimes, they include sneaky clauses that work against businesses.

Contacts & Further Reading

To avoid a run in with the Federal Trade Commission, work with an advertising and marketing lawyer. Partner Daniel Warner is an astonishingly effective litigator, and Aaron Kelly – the other named partner, enjoys a 10-out-of-10 rating on lawyer review website AVVO.com. Kelly also maintains a preeminent rating with venerated attorney assessment group Martindale-Hubbell.

To learn more about Kelly Warner, click here. To read more about other FTC cases and legal issues affecting today’s marketplace, head here. If you are currently dealing with an FTC investigation or inquiry, get an attorney. Going it alone could result in an avoidable — and unfavorable — business-crushing fine. Besides, hiring a lawyer to help with marketing initiatives may be a lot less costly than you think – and could ultimately save you a small fortune. Don’t wait. Get in touch today.

The Takeaway: In the United States, home to the world’s most free-speech-friendly constitution, using gag clauses to prevent negative online reviews is tantamount to a criminal act in the minds of many people. Adding egregious clauses to consumer contracts isn’t a wise move.

Article Sources

Trujillo, M. (2015, September 28). FTC sues weight-loss company for online ‘gag clause’ Retrieved January 12, 2016, from http://thehill.com/policy/technology/255130-ftc-sues-weight-loss-company-over-online-gag-clause

The Speak Free Act: Explanation and Analysis

speak free act of 2015
Will the latest online defamation bill in DC be a raw deal for small business owners?

The Speak Free Act is a new bill swirling its way through Capitol Hill’s intern-saturated halls. A bi-partisan proposal endorsed by both the technology lobby and free speech advocates, the proposed law is meant to curtail illegitimate legal threats over online reviews. But will it hurt small businesses?

Is everyone happy about the bill? Of course not. However, there is substantial support for the proposal. And why not: it’s an election year. What better – and let’s face it, safer – topic to champion than free speech? You’d be hard pressed to find a voter opposed to First Amendment rights.

Is the bill a redundant piece of anti-censorship legislation? Or, is it a wolf in bi-partisan, kumbaya clothing?

Will this bill be terrible for small businesses lacking huge budgets to:

  • Maintain a high-profile search engine optimization campaign;
  • Enlist the help of lawyers every time a competitor pelts them with a fake online review?

First Things First: Explanation of a SLAPP Lawsuit

Before delving into the nuts and bolts of the Speak Free Act of 2015, we must discuss Strategic Lawsuits against Public Participation – a.k.a., SLAPP Lawsuits.

What is a SLAPP Lawsuit?

Parties with “deep pockets” usually file SLAPP suits against ostensibly penury parties. What differentiates SLAPP lawsuits from “regular” defamation lawsuits is the typically tenuous nature of the claim. The true purpose of the filing is not legitimate redress, but instead an intimidation tactic targeting the defendant’s bank account and stress triggers.

The theory goes that defendants in such situations, paralyzed by fears of legal costs and protracted litigation, will fold in the face of “power,” and stand-down from a defamation battle they may have won.

Not All States Have Anti-SLAPP Laws, Which Is Why Some People Are Clamoring For A Federal One

Advocates want a Federal anti-SLAPP law because not all states have one. As a result, sometimes people go “jurisdiction shopping” to file questionable claims in states that either a) don’t have an anti-SLAPP statute or b) a very weak one.

An Increase in SLAPPs since “The Internet”

The Internet allows for greater participation in matters of public concern. Concordantly, the number of SLAPP lawsuits has skyrocketed over the past ten years. As a result, free speech advocates have been pushing politicians to pass a federal law that aims to eradicate weak defamation lawsuits.

Explanation of the 2015 Speak Free Act

Full Title

H.R. 2304: Securing Participation, Engagement, and Knowledge Freedom by Reducing Egregious Efforts Act of 2015. https://www.govtrack.us/congress/bills/114/hr2304

Bill Sponsorship

A bi-partisan effort, Republican Blake Farenthold from Texas and Democrat Anna Eshoo from California are the primary co-sponsors of the 2015 Speak Free Act.

How It Would Work

Anybody who feels they’ve been unjustly hit with a defamation lawsuit could file a special motion protesting the claim. If, in said motion, the aggrieved party can sufficiently argue the likelihood of their success at trial, a judge could dismiss the case “with prejudice” – and the defendant would, under provisions of the bill, be able to recoup legal fees from the plaintiff.

A Victory for The Yelp! Lobby?

In 2014, Yelp rooted a lobbying presence on K Street. And it appears that the money was well spent.

Some folks on Capitol Hill credit the “Yelp lobby” for pushing through H.R. 2304. Previously, the issue was exceptionally partisan. Democrats and Republicans could not agree. But once “neutral” Yelp stepped up, opinions shifted; things happened. A D.C.-based policy director, Evan Mascagni, explained:

“Yelp’s involvement has been huge. It has been really tremendous for the cause.”

Defamation Lawyer Contact Information

Did you land on this page because you need a defamation law question answered? If yes, get in touch with Kelly Warner. We have a dedicated slander and libel practice and our team excels at Internet defamation cases.

Contact us today to begin the conversation.

Article Sources

Eggerton, J. (2015, May 13). SPEAK FREE Act Introduced To Protect Online Criticism. Retrieved September 30, 2015, from http://www.broadcastingcable.com/news/washington/speak-free-act-introduced-protect-online-criticism/140841

SPEAK FREE Act of 2015. (n.d.). Retrieved September 30, 2015, from http://www.anti-slapp.org/speakfreeact/

Yelp Reputation Law: The Case of the Auto-Dealer & Unsatisfied Customer

Yelp reputation lawyer
Yelp Defamation Case Study: Business v. Unsatisfied Customer

In This Post:

  • Summary of Yelp defamation case;
  • Discussion about how to win a Yelp reputation case;
  • Contact information for an online defamation attorney;

Another Yelp! (“Yelp”) defamation case made headlines. In the latest installment of “Law and Order: Online Reputation Unit,” a California auto dealer is suing a client over a disparaging Yelp review.

Yelp Defamation Case Study: Business v. Reviewer

The Basics

Plaintiff: Zeibak Auto Trading

Defendant: Zaki Ibrahim

Lawsuit Catalyst: Ibrahim bought a used car for his wife at Zeibak Auto Trading. According to an ABC News report, the car gave him problems after he drove it off the lot. So, according to Ibrahim, he returned to Zebiak’s with hopes of calmly discussing the matter. Allegedly, while there,  staff ignored Ibrahim. Upset about the poor service, Ibrahim posted a negative review on Zebiak’s Yelp page, outlining the purported incident. In the words of Mr. Ibrahim:

“I described the experience as being a nightmare to say the least, and especially since I tried from my end to resolve the matter amicably.”

Who Will Most Likely Win This Yelp Reputation Case?

Few case details have made their way to the press, so it’s impossible to do a full – and fair – analysis. But what we can do is take a look at the basic requirements for winning an online defamation lawsuit in the United States, in relation to the facts of this Yelp reputation case.

What Constitutes Legal Defamation?

To win a slander (spoken defamation) or libel (written defamation) lawsuit in the United States, plaintiffs must, at the very least, satisfy four legal elements.

  • Identity: The first thing defamation plaintiffs must prove is that the contested statements are about them. Slander and libel lawsuits are lost because the claimants couldn’t prove that the defendants were talking about them.
  • Falsity: Due to the First Amendment and established case law, pure opinion and truth generally aren’t defamatory in a U.S. court of law. Plaintiffs almost always have to prove that their respective defendants made false and unprivileged statements of fact.
  • Harm: Except for defamation per se cases, nearly all defamation plaintiffs must prove that the contested statement(s) caused them either material or reputational harm.
  • Negligence: Plaintiffs must also demonstrate that the defendant acted negligently by publishing, speaking, or otherwise broadcasting the contested statement.

Mr. Ibrahim told ABC7 Los Angeles that he is ready to fight this Yelp defamation lawsuit, admonishing the auto dealer for “essentially trying to sue their customers into silence.”

In U.S. Defamation Cases, Plaintiffs Must Prove The Defendants Lied

Unless the auto dealer can somehow prove that Mr. Ibrahim is prevaricating, this lawsuit probably won’t go far. Why? Because under United States defamation law, it’s the responsibility of the plaintiff to prove that the defendant made an unprivileged, negligent, false statement of fact. In the context of this Yelp defamation case, Zeibak would need to demonstrate that Ibrahim’s visit didn’t unfold as he described, which – who knows – may be the case. We’ll just have to wait to see how this all turns out.

Got Questions? Speak With A Yelp Defamation Attorney

In the meantime, if you’re in search of a Yelp defamation lawyer to review a situation, get in touch with Kelly Warner. Our attorneys have helped countless individuals and businesses with various online reputation matters. A top-rated firm, our track record speaks for itself.

To learn more about Kelly Warner Law, please click here. If you’re ready to set up a consultation, please head here to schedule an appointment – we look forward to speaking with you soon.

Ripoff Report Updates Its Longstanding Removal Policy

For five or so years, the business community has hotly debated Ripoff Report’s (ripoffreport.com) removal policy. The consumer review website has earned a reputation among some entrepreneurs for not removing any postings – even defamatory ones.

In the past, people who wanted to challenge claims were welcome to publish rebuttals. But the site has always maintained a strict hands-off policy with regards to redacting posts.

And here’s the important thing to understand: Ripoff Report’s removal position was (and still is) supported by federal and state laws.

Did Ripoff Report Change Its Removal Policy?

Recently, Ripoff Report has made significant changes to its redaction policies. Not: the arbitration program and corporate advocacy programs still exist.

According to a Ripoff Report executive, the consumer review website is still developing a new procedure in which it would voluntarily honor certain court orders, under very specific, limited, circumstances. The executive said the policy change was prompted by “respect for the courts and the judicial process.”

This is a significant change for Ripoff Report. We hope it proves helpful to small business owners.

Ripoff Report Will Not Honor All “Removal” Court Orders

Must Mention Defamation

At the very least, for Ripoff Report to even consider honoring a court order, it must mention which claims or statements are defamatory or libelous. Even then, it’s unlikely that site administrators will remove the whole report.

According to Ripoff Report, the site will give court orders “special prominence” on the relevant pages, and will “redact the information specifically identified as false” under extreme enough circumstances.

We can confirm that Ripoff Report will, indeed, in very limited circumstances, redact content. In fact, we recently obtained a favorable result for a client who was dealing with a defamatory post. But since every case is different, you shouldn’t assume the same results.

We recently obtained a favorable result for a client who was dealing with a defamatory post.

Mandatory Court

Ripoff Report’s new removal policy only applies in cases where both sides have presented arguments in court – and the court ruled against the author of the posting. Default judgments probably won’t not be accepted. Still, the change is a step forward for people and businesses that have been defamed on ripoffreport.com.

Speak To A Ripoff Report Removal Lawyer

Is a false posting on Ripoff Report causing your business hardship? The attorneys at Kelly Warner have worked with hundreds of businesses to mitigate the crushing effects of defamatory online consumer reviews. If you’ve been “hit,” contact our ripoffreport.com removal attorneys; they’ll be able to review the specifics of your situation and, depending on the circumstances, may be able to guide you towards an effective outcome.

***

Arrange a consultation with a Ripoff Report Removal Lawyer.

10 Things Marketers Must Know About Fake Reviews

fake reviews lawyer and legalitiesThe bottom line on fake reviews: They’re more trouble than they’re worth.

To help you stay on the right side of regulations, pay heed to these ten tips – from an Internet lawyer – about online review legalities.

#1: Are Fake Reviews Allowed?

Fake reviews violate a slew of advertising and marketing laws. In the words of the FTC: “[Endorsements] must reflect the honest opinions, findings, beliefs or experiences of the reviewer.” In essence, a fake review would not reflect the “honest opinion, findings, beliefs or experiences of the reviewer” since the premise of a fake review is that the reviewer never used the product or service.

If fake reviews are used in a commercial capacity, the FTC could charge you with violating Section 5 of the FTC Act. Also, competitors may come after you for unfair competitive activities and/or violations of the Lanham Act. Both Section 5 of the FTC Act and the Lanham Act have provisions for punishing people who engage in false and misleading advertising.

In the words of the FTC: “If an endorser is acting on behalf of an advertiser, what she or he is saying is usually going to be commercial speech – and commercial speech violates the FTC Act if it’s deceptive. The FTC conducts investigations and brings cases involving endorsements under Section 5 of the FTC Act, which generally prohibits deceptive advertising.”

#2: Try to Get an Injunction

Fake and phony reviews can ruin a company’s reputation. The longer they remain online, the more damage they can do. If you’re the target of a malicious fake review attack, hire an attorney who can determine the best course of action.

#3: You Are Your Affiliates’ Keeper

The Federal Trade Commission has made it clear: marketers and businesses are responsible for the actions of affiliates who promote their products. If affiliates flout marketing regulations, businesses can be held liable.

#4: Tell the Truth

Advertising claims must be truthful. Yes, you’re allowed to engage in a bit of “puffery”, but straight up lying deceives consumers; hence, it’s a violation of marketing and advertising rules. If you get caught passing lies via marketing materials, the FTC may fine your company.

#5: Don’t Mislead People

Not only can’t you lie in promotional material, but you can’t intentionally mislead people. The FTC’s prime directive is to protect consumers against fraud and deceptive marketing. Blatant misdirection falls under that umbrella.

#6: Disclose Generously

It’s not OK to bury a disclosure behind a single footer link, which takes you to a 20,000-word legalese wall of 8px text. Disclosures must be conspicuous. Plus, they should be written in a way that the average person can understand.

Our online review compliance attorneys can help you craft disclosure language. Businesses are no longer protected by purposefully confusing – but legal – user agreements and disclosures. In the FTC’s words: “…but each new endorsement made without a disclosure could be deceptive because readers might not see the original blog post where you said you got the product free from the manufacturer.” And “a disclosure on a profile page isn’t sufficient because many people in your audience probably won’t see it. Also, depending upon what it says, the badge may not adequately inform consumers of your connection to the trade association. If it’s simply a logo or hashtag for the event, it won’t tell consumers of your relationship to the association.”

#7: Drop in Search Engine Rankings could be a Legitimate Harm

To win a defamation lawsuit against a fake-review-posting competitor, plaintiffs must demonstrate harm. In some cases, a drop in search engine rank qualifies as sufficient harm for the purposes of a lawsuit, because it correlates to client loss. This area of the law is still untested.

#8: Leave Celebrities and Newscasters Alone

It’s not OK to deceptively use celebrities’ or news anchors’ pictures without permission. In most cases, it’s OK to use royalty free pics of famous people for editorial purposes, but you cannot use them to make it look like they endorse a product, business, or brand.

#9: Family and Employees Must Out Themselves

The Federal Trade Commission insists that all material connections are disclosed in promotional and marketing materials – and the agency considers familial and professional relationships to be material. In the words of the FTC: “Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers.”

#10: Beware the Giant Fines

If you do tempt fate and use fake reviews, prepare to pay a large, large fine if the FTC comes knocking. Be warned: the FTC does not mess around. They’ve even been known to re-possess houses, mink coats, watches, cars, and other assets from family members!