If that was part of the terms under which you  were working (e.g. the agreement under which you were hired to do the work), then yes, it is legal--there is nothing illegal about reducing compensation based on customer feedback or opinion. If it was not part of the terms you agreed to, even if only implicitly (i.e. by taking the job after having first been told this was a term or condition), then they cannot retroactively apply it to you, but could now announce it and make it a term of your employment, as a 1099 contractor, going forward.