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Union Calendar No. 567 

114TH CONGRESS 

2D SESSION H. R. 5111 

[Report No. 114–731] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 28, 2016 

Mr. LANCE (for himself, Mr. KENNEDY, Mr. ISSA, Mr. SWALWELL of California, Mr. BURGESS, Mr. HARPER, Mr. POMPEO, Mr. MULLIN, and Mr. 

OLSON) introduced the following bill; which was referred to the Committee on Energy and Commerce 

SEPTEMBER 9, 2016 

Additional sponsor: Mr. CA ́RDENAS

SEPTEMBER 9, 2016 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on April 28, 2016] 

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A BILL 

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. 

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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Consumer Review Fair5 ness Act of 2016’’. 

6 SEC. 2. CONSUMER REVIEW PROTECTION. 

7 (a) DEFINITIONS.—In this section: 

8 (1) COMMISSION.—The term ‘‘Commission’’ 

9 means the Federal Trade Commission. 

10 (2) COVERED COMMUNICATION.—The term ‘‘cov11 ered communication’’ means a written, oral, or pic12 torial review, performance assessment of, or other 

13 similar analysis of, including by electronic means, the 

14 goods, services, or conduct of a person by an indi15 vidual who is party to a form contract with respect 

16 to which such person is also a party. 

17 (3) FORM CONTRACT.— 

18 (A) IN GENERAL.—Except as provided in 

19 subparagraph (B), the term ‘‘form contract’’ 

20 means a contract with standardized terms— 

21 (i) used by a person in the course of 

22 selling or leasing the person’s goods or serv23 ices; and 

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1 (ii) imposed on an individual without 

2 a meaningful opportunity for such indi3 vidual to negotiate the standardized terms. 

4 (B) EXCEPTION.—The term ‘‘form contract’’ 

5 does not include an employer-employee or inde6 pendent contractor contract. 

7 (4) PICTORIAL.—The term ‘‘pictorial’’ includes 

8 pictures, photographs, video, illustrations, and sym9 bols. 

10 (b) INVALIDITY OF CONTRACTS THAT IMPEDE CON11 SUMER REVIEWS.— 

12 (1) IN GENERAL.—Except as provided in para13 graphs (2) and (3), a provision of a form contract is 

14 void from the inception of such contract if such provi15 sion— 

16 (A) prohibits or restricts the ability of an 

17 individual who is a party to the form contract 

18 to engage in a covered communication; 

19 (B) imposes a penalty or fee against an in20 dividual who is a party to the form contract for 

21 engaging in a covered communication; or 

22 (C) transfers or requires an individual who 

23 is a party to the form contract to transfer to any 

24 person any intellectual property rights in review 

25 or feedback content, with the exception of a nonmstockstill on DSK3G9T082PROD with BILLS

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1 exclusive license to use the content, that the indi2 vidual may have in any otherwise lawful covered 

3 communication about such person or the goods or 

4 services provided by such person. 

5 (2) RULE OF CONSTRUCTION.—Nothing in para6 graph (1) shall be construed to affect— 

7 (A) any duty of confidentiality imposed by 

8 law (including agency guidance); 

9 (B) any civil cause of action for defama10 tion, libel, or slander, or any similar cause of ac11 tion; 

12 (C) any party’s right to remove or refuse to 

13 display publicly on an Internet website or 

14 webpage owned, operated, or otherwise controlled 

15 by such party any content of a covered commu16 nication that— 

17 (i) contains the personal information 

18 or likeness of another person, or is libelous, 

19 harassing, abusive, obscene, vulgar, sexually 

20 explicit, or is inappropriate with respect to 

21 race, gender, sexuality, ethnicity, or other 

22 intrinsic characteristic; 

23 (ii) is unrelated to the goods or services 

24 offered by or available at such party’s Inter25 net website or webpage; or 

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1 (iii) is clearly false or misleading; or 

2 (D) a party’s right to establish terms and 

3 conditions with respect to the creation of photo4 graphs or video of such party’s property when 

5 those photographs or video are created by an em6 ployee or independent contractor of a commercial 

7 entity and solely intended for commercial pur8 poses by that entity. 

9 (3) EXCEPTIONS.—Paragraph (1) shall not 

10 apply to the extent that a provision of a form con11 tract prohibits disclosure or submission of, or reserves 

12 the right of a person or business that hosts online con13 sumer reviews or comments to remove— 

14 (A) trade secrets or commercial or financial 

15 information obtained from a person and consid16 ered privileged or confidential; 

17 (B) personnel and medical files and similar 

18 information the disclosure of which would con19 stitute a clearly unwarranted invasion of per20 sonal privacy; 

21 (C) records or information compiled for law 

22 enforcement purposes, the disclosure of which 

23 would constitute a clearly unwarranted invasion 

24 of personal privacy; 

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1 (D) content that is unlawful or otherwise 

2 meets the requirements of paragraph (2)(C); or 

3 (E) content that contains any computer vi4 ruses, worms, or other potentially damaging 

5 computer code, processes, programs, applications, 

6 or files. 

7 (c) PROHIBITION.—It shall be unlawful for a person 

8 to offer a form contract containing a provision described 

9 as void in subsection (b). 

10 (d) ENFORCEMENT BY COMMISSION.— 

11 (1) UNFAIR OR DECEPTIVE ACTS OR PRAC12 TICES.—A violation of subsection (c) by a person with 

13 respect to which the Commission is empowered under 

14 section 5(a)(2) of the Federal Trade Commission Act 

15 (15 U.S.C. 45(a)(2)) shall be treated as a violation of 

16 a rule defining an unfair or deceptive act or practice 

17 prescribed under section 18(a)(1)(B) of the Federal 

18 Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). 

19 (2) POWERS OF COMMISSION.— 

20 (A) IN GENERAL.—The Commission shall 

21 enforce this section in the same manner, by the 

22 same means, and with the same jurisdiction, 

23 powers, and duties as though all applicable 

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1 mission Act (15 U.S.C. 41 et seq.) were incor2 porated into and made a part of this Act. 

3 (B) PRIVILEGES AND IMMUNITIES.—Any 

4 person who violates this section shall be subject 

5 to the penalties and entitled to the privileges and 

6 immunities provided in the Federal Trade Com7 mission Act (15 U.S.C. 41 et seq.). 

8 (e) ENFORCEMENT BY STATES.— 

9 (1) AUTHORIZATION.—Subject to paragraph (2), 

10 in any case in which the attorney general of a State 

11 has reason to believe that an interest of the residents 

12 of the State has been or is threatened or adversely af13 fected by the engagement of any person subject to sub14 section (c) in a practice that violates such subsection, 

15 the attorney general of the State may, as parens 

16 patriae, bring a civil action on behalf of the residents 

17 of the State in an appropriate district court of the 

18 United States to obtain appropriate relief. 

19 (2) RIGHTS OF FEDERAL TRADE COMMISSION.— 

20 (A) NOTICE TO FEDERAL TRADE COMMIS21 SION.— 

22 (i) IN GENERAL.—Except as provided 

23 in clause (iii), the attorney general of a 

24 State shall notify the Commission in writ25 ing that the attorney general intends to 

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1 bring a civil action under paragraph (1) 

2 before initiating the civil action against a 

3 person described in subsection (d)(1). 

4 (ii) CONTENTS.—The notification re5 quired by clause (i) with respect to a civil 

6 action shall include a copy of the complaint 

7 to be filed to initiate the civil action. 

8 (iii) EXCEPTION.—If it is not feasible 

9 for the attorney general of a State to pro10 vide the notification required by clause (i) 

11 before initiating a civil action under para12 graph (1), the attorney general shall notify 

13 the Commission immediately upon insti14 tuting the civil action. 

15 (B) INTERVENTION BY FEDERAL TRADE

16 COMMISSION.—The Commission may— 

17 (i) intervene in any civil action 

18 brought by the attorney general of a State 

19 under paragraph (1) against a person de20 scribed in subsection (d)(1); and 

21 (ii) upon intervening— 

22 (I) be heard on all matters arising 

23 in the civil action; and 

24 (II) file petitions for appeal of a 

25 decision in the civil action. 

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1 (3) INVESTIGATORY POWERS.—Nothing in this 

2 subsection may be construed to prevent the attorney 

3 general of a State from exercising the powers con4 ferred on the attorney general by the laws of the State 

5 to conduct investigations, to administer oaths or affir6 mations, or to compel the attendance of witnesses or 

7 the production of documentary or other evidence. 

8 (4) PREEMPTIVE ACTION BY FEDERAL TRADE

9 COMMISSION.—If the Federal Trade Commission in10 stitutes a civil action or an administrative action 

11 with respect to a violation of subsection (c), the attor12 ney general of a State may not, during the pendency 

13 of such action, bring a civil action under paragraph 

14 (1) against any defendant named in the complaint of 

15 the Commission for the violation with respect to 

16 which the Commission instituted such action. 

17 (5) VENUE; SERVICE OF PROCESS.— 

18 (A) VENUE.—Any action brought under 

19 paragraph (1) may be brought in— 

20 (i) the district court of the United 

21 States that meets applicable requirements 

22 relating to venue under section 1391 of title 

23 28, United States Code; or 

24 (ii) another court of competent juris25 diction. 

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1 (B) SERVICE OF PROCESS.—In an action 

2 brought under paragraph (1), process may be 

3 served in any district in which the defendant— 

4 (i) is an inhabitant; or 

5 (ii) may be found. 

6 (6) ACTIONS BY OTHER STATE OFFICIALS.— 

7 (A) IN GENERAL.—In addition to civil ac8 tions brought by attorneys general under para9 graph (1), any other consumer protection officer 

10 of a State who is authorized by the State to do 

11 so may bring a civil action under paragraph 

12 (1), subject to the same requirements and limita13 tions that apply under this subsection to civil 

14 actions brought by attorneys general. 

15 (B) SAVINGS PROVISION.—Nothing in this 

16 subsection may be construed to prohibit an au17 thorized official of a State from initiating or 

18 continuing any proceeding in a court of the 

19 State for a violation of any civil or criminal law 

20 of the State. 

21 (f) EDUCATION AND OUTREACH FOR BUSINESSES.— 

22 Not later than 60 days after the date of the enactment of 

23 this Act, the Commission shall commence conducting edu24 cation and outreach that provides businesses with non-bind25 ing best practices for compliance with this Act. 

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1 (g) RELATION TO STATE CAUSES OF ACTION.—Noth2 ing in this section shall be construed to affect any cause 

3 of action brought by a person that exists or may exist under 

4 State law. 

5 (h) SAVINGS PROVISION.—Nothing in this section shall 

6 be construed to limit, impair, or supersede the operation 

7 of the Federal Trade Commission Act or any other provi8 sion of Federal law. 

9 (i) EFFECTIVE DATES.—This section shall take effect 

10 on the date of the enactment of this Act, except that— 

11 (1) subsections (b) and (c) shall apply with re12 spect to contracts in effect on or after the date that 

13 is 90 days after the date of the enactment of this Act; 

14 and 

15 (2) subsections (d) and (e) shall apply with re16 spect to contracts in effect on or after the date that 

17 is 1 year after the date of the enactment of this Act. 

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Union Calendar No. 567 

114TH CONGRESS 

2D SESSION H. R. 5111 

[Report No. 114–731] 

A BILL 

To prohibit the use of certain clauses in form conject of the contract, and for other purposes. fered in interstate commerce that were the sub- communicate regarding the goods or services of- tracts that restrict the ability of a consumer to 

SEPTEMBER 9, 2016 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 

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