An Act
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. <<NOTE: Dec. 14, 2016 – [H.R. 5111]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Consumer Review Fairness Act of 2016.>>
SECTION 1. <<NOTE: 15 USC 58 note.>>
This Act may be cited as the “Consumer Review Fairness Act of
2016”.
SEC. 2. <<NOTE: 15 USC 45b.>>
(a) Definitions.–In this section:
(1) Commission.–The term “Commission” means the Federal
Trade Commission.
(2) Covered communication.–The term “covered
communication” means a written, oral, or pictorial review,
performance assessment of, or other similar analysis of,
including by electronic means, the goods, services, or conduct
of a person by an individual who is party to a form contract
with respect to which such person is also a party.
(3) Form contract.–
(A) In general.–Except as provided in subparagraph
(B), the term “form contract” means a contract with
standardized terms–
(i) used by a person in the course of selling
or leasing the person’s goods or services; and
(ii) imposed on an individual without a
meaningful opportunity for such individual to
negotiate the standardized terms.
(B) Exception.–The term “form contract” does not
include an employer-employee or independent contractor
contract.
(4) Pictorial.–The term “pictorial” includes pictures,
photographs, video, illustrations, and symbols.
(b) Invalidity of Contracts That Impede Consumer Reviews.–
(1) In general.–Except as provided in paragraphs (2) and
(3), a provision of a form contract is void from the inception
of such contract if such provision–
(A) prohibits or restricts the ability of an
individual who is a party to the form contract to engage
in a covered communication;
[[Page 130 STAT. 1356]]
(B) imposes a penalty or fee against an individual
who is a party to the form contract for engaging in a
covered communication; or
(C) transfers or requires an individual who is a
party to the form contract to transfer to any person any
intellectual property rights in review or feedback
content, with the exception of a non-exclusive license
to use the content, that the individual may have in any
otherwise lawful covered communication about such person
or the goods or services provided by such person.
(2) Rule of construction.–Nothing in paragraph (1) shall be
construed to affect–
(A) any duty of confidentiality imposed by law
(including agency guidance);
(B) any civil cause of action for defamation, libel,
or slander, or any similar cause of action;
(C) any party’s right to remove or refuse to display
publicly on an Internet website or webpage owned,
operated, or otherwise controlled by such party any
content of a covered communication that–
(i) contains the personal information or
likeness of another person, or is libelous,
harassing, abusive, obscene, vulgar, sexually
explicit, or is inappropriate with respect to
race, gender, sexuality, ethnicity, or other
intrinsic characteristic;
(ii) is unrelated to the goods or services
offered by or available at such party’s Internet
website or webpage; or
(iii) is clearly false or misleading; or
(D) a party’s right to establish terms and
conditions with respect to the creation of photographs
or video of such party’s property when those photographs
or video are created by an employee or independent
contractor of a commercial entity and solely intended
for commercial purposes by that entity.
(3) Exceptions.–Paragraph (1) shall not apply to the extent
that a provision of a form contract prohibits disclosure or
submission of, or reserves the right of a person or business
that hosts online consumer reviews or comments to remove–
(A) trade secrets or commercial or financial
information obtained from a person and considered
privileged or confidential;
(B) personnel and medical files and similar
information the disclosure of which would constitute a
clearly unwarranted invasion of personal privacy;
(C) records or information compiled for law
enforcement purposes, the disclosure of which would
constitute a clearly unwarranted invasion of personal
privacy;
(D) content that is unlawful or otherwise meets the
requirements of paragraph (2)(C); or
(E) content that contains any computer viruses,
worms, or other potentially damaging computer code,
processes, programs, applications, or files.
(c) Prohibition.–It shall be unlawful for a person to offer a form
contract containing a provision described as void in subsection (b).
(d) Enforcement by Commission.–
[[Page 130 STAT. 1357]]
(1) Unfair or deceptive acts or practices.–A violation of
subsection (c) by a person with respect to which the Commission
is empowered under section 5(a)(2) of the Federal Trade
Commission Act (15 U.S.C. 45(a)(2)) shall be treated as a
violation of a rule defining an unfair or deceptive act or
practice prescribed under section 18(a)(1)(B) of the Federal
Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
(2) Powers of commission.–
(A) In general.–The Commission shall enforce this
section in the same manner, by the same means, and with
the same jurisdiction, powers, and duties as though all
applicable terms and provisions of the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) were incorporated
into and made a part of this Act.
(B) Privileges and immunities.–Any person who
violates this section shall be subject to the penalties
and entitled to the privileges and immunities provided
in the Federal Trade Commission Act (15 U.S.C. 41 et
seq.).
(e) Enforcement by States.–
(1) Authorization.–Subject to paragraph (2), in any case in
which the attorney general of a State has reason to believe that
an interest of the residents of the State has been or is
threatened or adversely affected by the engagement of any person
subject to subsection (c) in a practice that violates such
subsection, the attorney general of the State may, as parens
patriae, bring a civil action on behalf of the residents of the
State in an appropriate district court of the United States to
obtain appropriate relief.
(2) Rights of federal trade commission.–
(A) Notice to federal trade commission.–
(i) In general.–Except as provided in clause
(iii), the attorney general of a State shall
notify the Commission in writing that the attorney
general intends to bring a civil action under
paragraph (1) before initiating the civil action
against a person described in subsection (d)(1).
(ii) <
notification required by clause (i) with respect
to a civil action shall include a copy of the
complaint to be filed to initiate the civil
action.
(iii) Exception.–If it is not feasible for
the attorney general of a State to provide the
notification required by clause (i) before
initiating a civil action under paragraph (1), the
attorney general shall notify the Commission
immediately upon instituting the civil action.
(B) Intervention by federal trade commission.–The
Commission may–
(i) intervene in any civil action brought by
the attorney general of a State under paragraph
(1) against a person described in subsection
(d)(1); and
(ii) upon intervening–
(I) be heard on all matters arising
in the civil action; and
(II) file petitions for appeal of a
decision in the civil action.
(3) Investigatory powers.–Nothing in this subsection may be
construed to prevent the attorney general of a State
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from exercising the powers conferred on the attorney general by
the laws of the State to conduct investigations, to administer
oaths or affirmations, or to compel the attendance of witnesses
or the production of documentary or other evidence.
(4) Preemptive action by federal trade commission.–If the
Federal Trade Commission institutes a civil action or an
administrative action with respect to a violation of subsection
(c), the attorney general of a State may not, during the
pendency of such action, bring a civil action under paragraph
(1) against any defendant named in the complaint of the
Commission for the violation with respect to which the
Commission instituted such action.
(5) Venue; service of process.–
(A) Venue.–Any action brought under paragraph (1)
may be brought in–
(i) the district court of the United States
that meets applicable requirements relating to
venue under section 1391 of title 28, United
States Code; or
(ii) another court of competent jurisdiction.
(B) Service of process.–In an action brought under
paragraph (1), process may be served in any district in
which the defendant–
(i) is an inhabitant; or
(ii) may be found.
(6) Actions by other state officials.–
(A) In general.–In addition to civil actions
brought by attorneys general under paragraph (1), any
other consumer protection officer of a State who is
authorized by the State to do so may bring a civil
action under paragraph (1), subject to the same
requirements and limitations that apply under this
subsection to civil actions brought by attorneys
general.
(B) Savings provision.–Nothing in this subsection
may be construed to prohibit an authorized official of a
State from initiating or continuing any proceeding in a
court of the State for a violation of any civil or
criminal law of the State.
(f) <
later than 60 days after the date of the enactment of this Act, the
Commission shall commence conducting education and outreach that
provides businesses with non-binding best practices for compliance with
this Act.
(g) Relation to State Causes of Action.–Nothing in this section
shall be construed to affect any cause of action brought by a person
that exists or may exist under State law.
(h) Savings Provision.–Nothing in this section shall be construed
to limit, impair, or supersede the operation of the Federal Trade
Commission Act or any other provision of Federal law.
(i) <
take effect on the date of the enactment of this Act, except that–
(1) subsections (b) and (c) shall apply with respect to
contracts in effect on or after the date that is 90 days after
the date of the enactment of this Act; and
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(2) subsections (d) and (e) shall apply with respect to
contracts in effect on or after the date that is 1 year after
the date of the enactment of this Act.
Approved December 14, 2016.