WASHINGTON - U.S. Senate Committee on Commerce, Science, and Transportation will hold a full committee hearing entitled “Zero Stars: How Gagging Honest Reviews Harms Consumers and the Economy” on Wednesday, November 4 at 10:00 a.m. The hearing follows the introduction of S. 2044, the Consumer Review Freedom Act, by Senators John Thune (R-S.D.), Jerry Moran (R-Kan.) and Brian Schatz (D-Hawaii) on September 16, 2015. The bipartisan bill would prohibit the use of non-disparagement clauses referred to as “gag clauses” in form contracts between consumers and businesses. S. 2044 was referred to the Senate Commerce Committee where it is currently pending.
“Honest reviews are an integral part of consumer choice in today’s digital economy,” said Thune, chairman of the Commerce Committee. “This free market system cannot thrive if reviewers face intimidation from providing truthful criticism. I look forward to hearing the testimony from our witnesses and, in Ms. Palmer’s case, hearing about her real-life experience with this issue.”
Gag clauses are appearing in a large number of non-negotiable form contracts. This practice can occur when one party imposes a standardized contract without a meaningful opportunity for the other party to modify the contract. Some businesses have sought to use these clauses unfairly to penalize or pursue fines from customers for negative but honest reviews of their services on websites such as Yelp or TripAdvisor.
One of the witnesses, Ms. Jen Palmer, is a plaintiff in Palmer v. KlearGear.com, where a website demanded that she remove a negative online review or pay $3,500 in damages because the website’s terms of service included a non-disparagement clause. When she refused to pay the penalty, the website reported the $3,500 to credit reporting agencies as an unpaid debt.
- Mr. Adam Medros, Senior Vice President for Global Product, TripAdvisor LLC
- Ms. Jen Palmer, Plaintiff, Palmer v. KlearGear
- Mr. Daniel Castro, Vice President, Information Technology and Innovation Foundation
- Mr. Eric Goldman, Professor, Santa Clara University School of Law
- Mr. Ira Rheingold, Executive Director of National Association of Consumer Advocates
Wednesday, November 4, 2015
Full Committee hearing
This hearing will take place in Senate Russell Office Building, Room 253. Witness testimony, opening statements, and a live video of the hearing will be available at www.commerce.senate.gov.