One of the most insidious tactics has been to insert non-disparagement clauses in customer agreements. These clauses are simple: they essentially forbid customers from publishing anything negative about a business, and come with stiff financial penalties if broken.
Despite their harsh nature, and the fact that in many cases they are unenforceable, more and more companies have included these clauses in their customer agreements and some have even created headlines when they try to use them.
For instance, one company, KlearGear.com, found itself under CNN’s spotlight when it fined a couple $3,500 for a claimed violation of its non-disparagement clause.
When the couple refused to pay, KlearGear.com turned the former customers over to a collections company, resulting in damage to the couple’s credit score. The couple sued KlearGear.com and won a $306,750 default judgment against the company.
Cases like this one may be extreme, but some lawmakers in the United States Congress are concerned enough that they have introduced a bill called the Consumer Review Freedom Act, which would make non-disparagement clauses like the one used by KlearGear.com unenforceable.
The proposed law would also authorize the Department of Justice and state attorneys general to pursue violators of the law.
Representative Darrell Issa stated in announcing the bill:
The Internet is a critical economic engine, increasingly used for all types of commerce and communication, including for consumer reviews. Some organizations have sought to stifle customers’ abilities to express their opinions online by threatening punitive action if a customer leaves a negative review.
The mere threat of monetary penalties or fines for writing honest reviews would chill the free exchange of opinions we expect to find on the Internet. The Consumer Review Freedom Act would put a stop to these outrageous attempts to silence free speech online.
Is a law really necessary?
Supporters of the Consumer Review Freedom Act include prominent online services such as Yelp, TripAdvisor and Angie’s List. They, obviously, have a vested interest in seeing that consumers have the ability to post honest reviews on their services, even if they’re negative.
But is a law protecting online reviews really necessary? In many states, the kind of non-disparagement clauses that seek to limit the freedom of a customer to voice an opinion about a business are already unenforceable, and the KlearGear.com case shows that businesses using strong-armed tactics against customers can wind up facing stiff penalties for their actions.
Supporters argue, however, that making the rules uniform at the federal level is necessary to truly prevent bad behavior on the part of businesses.
And some supporters, like the Information Technology and Innovation Foundation (ITIF), believe that Congress needs to address more than anti-disparagement clauses. There are other ways businesses can pursue customers and try to prevent them from speaking out and Congress should address these too the organization says.
Just don’t suck
Of course, the reality for businesses is that trying to silence negative reviews is usually a losing battle. While there are certainly cases where negative reviews are not legitimate, arguably the best way for business owners to protect their interests is to ensure that they have enough good reviews to drown out any bad ones.
At the end of the day, it comes down to one thing: don’t suck. If you don’t suck, chances are your business’ online reviews will reflect that. And if you do suck, the best way to improve your business’ online reviews is to improve your product or service.