By on

Sometime last month, we talked about how a new California bill would protect consumers’ rights to leave negative reviews of a business on the Internet.

This new law looks like it’s going to take effect pretty soon. The Assembly Bill 2365 – pushed initially by Assembly Speaker John Perez – has passed the state assembly last week with little opposition. This means that business owners who rely on contractual clauses to prevent their customers from posting negative reviews might soon be fined under state law.

Fines can be as much as $2,500 for the first offense and $5,000 for each subsequent offense.

“It shall be unlawful to threaten or seek to… penalize a consumer for making any statement regarding the consumer’s experience with a seller or lessor, or its employees or agent,” reads the bill, “unless the consumer has knowingly, voluntarily, and intelligently waived his or her right to do so.”

(Check out: “9 Awesome Online Reputation Management Tips for Your Business”)

The bill was said to have been inspired after KlearGear, an online retailer, had sued customers in Utah for posting negative feedback online. According to KlearGear, the customers had violated a “terms of sale” non-disparagement clause, which is exactly the kind of thing the new bill hopes to prevent.

In an analysis, Joe Silver of Ars Technica wrote, “The proposed law appears to take aim at online licensing agreements that consumers often enter into with companies when they click through the many boilerplate terms and conditions of various online services. Buried deep in the small print of a number of these contacts are provisions stating that consumers agree not to write negative reviews about the service provider.”

Added New York City attorney Domenic Romano: “This protects the integrity of consumer reviews online. California has led the way in a lot of consumer protection initiatives, and with the amount of attention it’s getting, it may only be a matter of time before Congress puts something in place on a federal level.”

What do you, as a business owner, think of this proposed bill? Does it make you worry more about what customers will say, or do you think it helps balance the contractual needs of business and the right of consumers to free speech? Let us know your thoughts by leaving a comment below.

Meanwhile, we here at ReviewTrackers stand by our recommendation that your business should apply best industry practices in tracking business reviews and managing online reputation. Sign up for a free trial of ReviewTrackers and discover how the software platform can help you listen closely and respond promptly to what customers are saying online.

Migs Bassig

Migs is the Content Manager for ReviewTrackers. He's a creative writer who has helped numerous companies communicate more effectively online, and he loves sharing his local marketing knowledge to help brands and business succeed.

Comment