U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

59–010 

" ! SENATE 

114TH CONGRESS

1st Session 

REPORT

2015

114–175 

Calendar No. 316 

CONSUMER REVIEW FREEDOM ACT OF 2015 

R E P O R T 

OF THE

COMMITTEE ON COMMERCE, SCIENCE, AND 

TRANSPORTATION 

ON

S. 2044 

DECEMBER 8, 2015.—Ordered to be printed 


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(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED FOURTEENTH CONGRESS

FIRST SESSION

JOHN THUNE, South Dakota, Chairman 

ROGER F. WICKER, Mississippi BILL NELSON, Florida 

ROY BLUNT, Missouri MARIA CANTWELL, Washington 

MARCO RUBIO, Florida CLAIRE MCCASKILL, Missouri 

KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota 

TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut 

DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii 

JERRY MORAN, Kansas ED MARKEY, Massachusetts 

DAN SULLIVAN, Alaska CORY BOOKER, New Jersey 

RON JOHNSON, Wisconsin TOM UDALL, New Mexico 

DEAN HELLER, Nevada JOE MANCHIN, West Virginia 

CORY GARDNER, Colorado GARY PETERS, Michigan 

STEVE DAINES, Montana 

DAVID SCHWIETERT, Staff Director 

NICK ROSSI, Deputy Staff Director 

REBECCA SEIDEL, General Counsel 

KIM LIPSKY, Democratic Staff Director 

CHRISTOPHER DAY, Democratic Deputy Staff Director 

CLINT ODOM, Democratic General Counsel 


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Calendar No. 316 

114TH CONGRESS REPORT " ! SENATE 1st Session 114–175 

CONSUMER REVIEW FREEDOM ACT OF 2015 

DECEMBER 8, 2015.—Ordered to be printed 

Mr. THUNE, from the Committee on Commerce, Science, and 

Transportation, submitted the following 

R E P O R T 

[To accompany S. 2044] 

The Committee on Commerce, Science, and Transportation, to 

which was referred the bill (S. 2044) to prohibit the use of certain 

clauses in form contracts that restrict the ability of a consumer to 

communicate regarding the goods or services offered in interstate 

commerce that were the subject of the contract, and for other purposes, having considered the same, reports favorably thereon with 

an amendment (in the nature of a substitute) and recommends that 

the bill (as amended) do pass. 

PURPOSE OF THE BILL

The purpose of S. 2044, the Consumer Review Freedom Act of 

2015, is to prohibit the use of certain clauses in form contracts that 

restrict the ability of a consumer to communicate regarding the 

goods or services offered in interstate commerce that were the subject of the contract, and for other purposes. 

BACKGROUND AND NEEDS

Consumers increasingly rely on websites and other platforms 

that allow consumers to share information about goods and services and, as a result, to benefit from the experiences of others. In 

particular, consumer reviews have become a powerful informational 

tool because consumers place a high value on the truthful reviews 

of other consumers. As a result, businesses are at times frustrated 

by what they perceive as unfair criticism and some have turned to 

questionable legal remedies in an effort to protect their reputations, including non-negotiable terms in form contracts that prohibit consumers from publicly ‘‘disparaging’’ a business. Such 


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clauses go beyond protecting businesses from defamation because 

they also restrict or bar truthful statements, often by imposing financial penalties if the provision is violated. For example, one online retailer assessed a penalty of $3,500 against a consumer for a 

truthful, yet negative, review. When the consumer refused to pay 

the penalty, the online retailer reported the penalty as a ‘‘debt’’ to 

credit agencies. Another online retailer prohibited consumers from 

even proposing to make negative public statements about the retailer. When one consumer did not receive her order from the online retailer, she informed the retailer she would contact her credit 

card company. In response, the retailer demanded the consumer 

pay $250 for violation of the company’s terms of sale. 

The consequences of these non-disparagement clauses are far 

ranging. Penalties and lawsuits that emanate from non-disparagement clauses stifle the speech of consumers, and thus interstate 

commerce, by not permitting fair criticism of a business even when 

that feedback is an honest reflection of consumers’ experiences. 

Non-disparagement clauses also distort public reviews of a business 

because that business may receive more positive feedback than 

warranted, thus harming consumers who rely on such reviews. 

SUMMARY OF PROVISIONS

S. 2044 would invalidate non-disparagement clauses in form contracts and make it unlawful for a person to offer or enter into a 

contract containing a non-negotiable non-disparagement clause as 

defined in the legislation. Violation of the legislation would be 

treated as an unfair or deceptive act or practice under the Federal 

Trade Commission Act (FTC Act, 15 U.S.C. 41 et seq.). The legislation would provide a rule of construction and three exceptions that 

limit the reach of the statute. For example, S. 2044 would not limit 

the ability of a person or business to file a civil action for defamation, libel, slander, or any similar cause of action under State law. 

Under the legislation, the Federal Trade Commission (FTC) and 

State attorneys general would have enforcement authority. State 

attorneys general are precluded from State enforcement actions 

under the legislation during the pendency of FTC enforcement. 

State attorneys general would also be required to notify the FTC 

in writing when they bring civil actions under the statute. 

It is the intention of the Committee that enforcement of the statute be focused on businesses or individuals imposing the non-disparagement clause on consumers. 

LEGISLATIVE HISTORY

On September 16, 2015, Chairman Thune, along with Senators 

Schatz and Moran, introduced the Consumer Review Freedom Act 

of 2015 (S. 2044). The legislation is co-sponsored by Ranking Member Nelson and Senators Blumenthal, McCaskill, Daines, and 

Booker. Similar legislation was introduced in the House of Representatives by Congressman Issa on April 29, 2015 (H.R. 2110). 

On November 4, 2015, the Committee held a hearing entitled 

‘‘Zero Stars: How Gagging Honest Reviews Harms Consumers and 

the Economy.’’ The Committee received compelling testimony about 

the impact of non-disparagement clauses in form contracts and the 

need for S. 2044. Witnesses testified that non-disparagement 


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clauses have been used in many industries, including health care, 

retail, and hospitality. One witness estimated that over 1 million 

Americans signed non-disparagement clauses due to a form contract that was used in the health industry. The Committee received 

testimony that one State, California, has enacted a law to bar such 

clauses in non-negotiable form contracts. The Committee also 

learned that the FTC has brought an enforcement action against 

one company, alleging, inter alia, that the firm’s threats to enforce 

a gag provision against consumers to stop them from posting negative reviews and testimonials online constitute an unfair trade 

practice in violation of section 5 of the FTC Act. In some cases, 

judges have refused to enforce non-disparagement clauses in form 

contracts usually on the grounds of unconscionability. Despite the 

persuasive rationale of such decisions, however, the legality of such 

clauses remains murky. Therefore, S. 2044 is necessary to eliminate any ambiguity over the enforceability of non-disparagement 

clauses. 

On November 18, 2015, the Committee held an Executive Session, during which S. 2044 was considered. Chairman Thune offered a substitute amendment to S. 2044. During the Executive 

Session, the Committee ordered by voice vote that S. 2044, as 

amended, be favorably reported with an amendment in the nature 

of a substitute. 

ESTIMATED COSTS

In compliance with subsection (a)(3) of paragraph 11 of rule 

XXVI of the Standing Rules of the Senate, the Committee states 

that, in its opinion, it is necessary to dispense with the requirements of paragraphs (1) and (2) of that subsection in order to expedite the business of the Senate. 

REGULATORY IMPACT

In accordance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee provides the following evaluation of the regulatory impact of the legislation, as reported: 

NUMBER OF PERSONS COVERED

The bill would affect parties to a form contract used in the course 

of selling or leasing a person’s goods or services. Because the bill 

would invalidate non-disparagement clauses in form contracts and 

would make it unlawful for a person to enter into a contract containing a non-disparagement clause, as defined in the legislation, 

millions of consumers could be protected under the bill. S. 2044 

would not authorize any new regulations and therefore would not 

subject any individuals or businesses to new regulations. 

ECONOMIC IMPACT

This legislation would not have an adverse economic impact on 

the Nation. The bill would promote consumer protection by making 

certain non-disparagement clauses unlawful, thus allowing consumers to make better informed decisions when procuring goods 

and services, and rewarding companies that offer quality goods and 

services. 


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PRIVACY

The bill would not have any adverse impact on the personal privacy of individuals. 

PAPERWORK

The Committee does not anticipate a major increase in paperwork burdens resulting from the passage of this legilsation. 

CONGRESSIONALLY DIRECTED SPENDING

In compliance with paragraph 4(b) of rule XLIV of the Standing 

Rules of the Senate, the Committee provides that no provisions 

contained in the bill, as reported, meet the definition of congressionally directed spending items under the rule. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title. 

Section 1 would designate the short title of this Act as the ‘‘Consumer Review Freedom Act of 2015.’’ 

Section 2. Consumer review protection. 

Section 2(a) of this bill would provide definitions for this section. 

Section 2(b) would invalidate non-disparagement clauses in 

standardized form contracts where the terms are imposed on an individual without a meaningful opportunity for the individual to negotiate such terms, including provisions that seek to impose a penalty or fee on a consumer for engaging in a covered communication 

section 2(b)(1)(B)) or that seek to transfer intellectual property 

rights an individual may have in a covered communication section 

2(b)(1)(C). The latter prohibition prevents consumers from being accused of copyright infringement or similar violations simply for 

sharing their own communications. 

The substitute amendment, as modified, that was favorably reported by the Committee provided a narrow exception to section 

2(b)(1)(C) that would permit a party to a form contract to use the 

content of a review pursuant to a non-exclusive license. For example, under this exception a website owner may lawfully include in 

its terms and conditions a non-exclusive license to a comment left 

on the owner’s website and use the content for marketing purposes. 

Section 2(b)(2) would clarify that the bill should not be construed 

to affect: (1) any duty of confidentiality imposed by law; or (2) actions for defamation, libel, slander, or similar causes for action. The 

aforementioned substitute amendment would further clarify that 

the bill should not be construed to affect: (1) removal by a website 

owner of a review that is libelous, abusive, obscene, vulgar, or sexually explicit, among other factors; or (2) the ability of a property 

owner to restrict photography and videography on its premises 

used by commercial entities for solely commercial purposes. 

Section 2(b)(3) would provide that the ban on non-disparagement 

clauses does not apply to the extent a provision in a form contract 

prohibits disclosure of: (1) trade secrets or financial information; (2) 

personnel and medical files that would constitute a clearly unwarranted invasion of personal privacy; and (3) law enforcement 

records that would constitute a clearly unwarranted invasion of 


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personal privacy. It is the intention of the Committee that a 

website owner or operator may remove content from its website 

that is unlawful, whether by statute, regulation, requirement, 

standard, or other provision having the force or effect of law. For 

example, the Committee understands that website operators may 

be required to remove unlawful content from a website under laws 

governing export control, consumer protection, computer fraud and 

abuse, intellectual property rights, unfair competition, anti-discrimination, or false advertising, among other matters. 

Section 2(c) would make it unlawful for a person to offer or enter 

into such a form contract containing a non-disparagement clause. 

Sections 2(d) and (e) of section 2 would authorize the FTC and 

State attorneys general, respectively, to enforce the provisions of 

the bill. Under these subsections, State attorneys general would be 

stayed from action while a Federal action is pending and the FTC 

may intervene in any pending State action. Section 2(e)(6)(A) would 

permit State consumer protection authorities, when authorized, to 

bring a cause of action under this legislation. The Committee intends for enforcement to apply on those entities that impose contracts with non-disparagement clauses on consumers. 

Section 2(f) would require the FTC to conduct outreach and education that provides businesses with non-binding best practices for 

compliance with the Act. 

Section 2(h) would provide that the ban on non-disparagement 

clauses in form contracts become effective 90 days after the date 

of passage of the Act, whereas the enforcement mechanisms in the 

bill apply to form contracts would become effective 1 year after the 

date of enactment of the Act. 

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, the Committee states that the bill as reported 

would make no change to existing law. 

Æ 


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