Report text available as:

(PDF provides a complete and accurate display of this text.) Tip?



114th Congress   }                                     {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {       114-731

======================================================================



 
                  CONSUMER REVIEW FAIRNESS ACT OF 2016

                                _______
                                

 September 9, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5111]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 5111) 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, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     4
Background and Need for Legislation..............................     5
Hearings.........................................................     6
Committee Consideration..........................................     6
Committee Votes..................................................     6
Committee Oversight Findings.....................................     6
Statement of General Performance Goals and Objectives............     7
New Budget Authority, Entitlement Authority, and Tax Expenditures     7
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     7
Committee Cost Estimate..........................................     7
Congressional Budget Office Estimate.............................     7
Federal Mandates Statement.......................................     8
Duplication of Federal Programs..................................     8
Disclosure of Directed Rule Makings..............................     8
Advisory Committee Statement.....................................     8
Applicability to Legislative Branch..............................     9
Section-by-Section Analysis of the Legislation...................     9
Changes in Existing Law Made by the Bill, as Reported............     9

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Consumer Review Fairness Act of 
2016''.

SEC. 2. CONSUMER REVIEW PROTECTION.

  (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;
                  (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.--
          (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) Contents.--The 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 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) Education and Outreach for Businesses.--Not 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) Effective Dates.--This section shall 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
          (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.

                          PURPOSE AND SUMMARY

    The purpose of H.R. 5111, the Consumer Review Fairness Act 
of 2016, is to prohibit the use of certain non-disparagement 
clauses in form contracts that restrict the ability of a 
consumer to publicly review the goods or services offered in 
interstate commerce that were the subject of the contract. H.R. 
5111 would invalidate such clauses subject to this legislation 
in form contracts and prohibit a person from offering a 
contract containing a non-disparagement clause, where a 
consumer has no meaningful opportunity to negotiate the terms. 
A violation of the legislation would be treated as a violation 
of a rule defining an unfair or deceptive act or practice 
prescribed under the Federal Trade Commission Act (FTC Act, 15 
U.S.C. 41 et seq.). Such violations are punishable by civil 
penalties.
    The Federal Trade Commission (FTC) is the primary enforcer 
of H.R. 5111. Subject to certain restraints outlined in the 
legislation, a State's attorney general may also enforce the 
provisions of H.R. 5111 if the State attorney general has 
reason to believe that an interest of the residents of the 
State has been threatened or adversely affected by the 
engagement of any person in a practice that violates H.R. 5111. 
State attorneys general would be required to notify the FTC in 
writing when they bring civil actions under the statute and are 
precluded from State enforcement actions during the pendency of 
an FTC enforcement action involving the same violation.
    The legislation would provide a rule of construction and 
several exceptions. For example, H.R. 5111 would not limit the 
ability of a person or business that hosts online reviews to 
remove comments, including comments that contain personal 
information, comments that contain the likeness of a person, 
libelous, harassing, or abusive comments, trade secrets, 
personnel and medical files, or content that contains computer 
viruses.
    The Committee's view is that H.R. 5111 should prevent 
businesses and individuals from imposing non-disparagement 
clauses restricting truthful reviews in cases where consumers 
have no meaningful opportunity to bargain over the terms of a 
form contract.

                  BACKGROUND AND NEED FOR LEGISLATION

    The Internet has enabled consumers to publish reviews of 
products and services widely at low cost, improving information 
flows to consumers and providers of goods and services. The 
wide availability of these reviews has caused consumers to rely 
on them more heavily as credible indicators of product or 
service quality.\1\ In turn, businesses have sought to avoid 
negative reviews. Some businesses have attempted to suppress 
negative reviews, even if they are truthful, through provisions 
of form contracts with consumers restricting such reviews. 
These provisions typically impose monetary or other penalties 
for publishing negative comments regarding the provider's 
services or products.\2\ The provisions have come to be known 
as gag clauses or non-disparagement clauses.
---------------------------------------------------------------------------
    \1\See, e.g., BrightLocal, Local Consumer Review Survey 2014 
(2014), available at https://www.brightlocal.com/learn/local-consumer-
review-survey-2014/ (finding that 88% of consumers rely on online 
consumer reviews).
    \2\See, e.g., Peter Wilkinson, Guests Fined for Leaving Review of 
`Filthy, Dirty Rotten' Hotel on TripAdvisor, CNN (Nov. 19, 2014), 
available at https://perma.cc/9PXX-5H67; FTC v. Roca Labs, Inc., No. 
8:15-cv-02231-MSS-TBM (M.D. Fla. filed Sept. 28, 2015), available at 
https://www.ftc.gov/enforcement/cases-proceedings/142-3255/roca-labs-
inc.
---------------------------------------------------------------------------
    Gag clauses have been imposed by many different types of 
businesses and come in different forms. Some examples include a 
$3,500 penalty imposed by online retailer KlearGear, a gag 
clause by a weight loss supplement seller,\3\ and a wedding 
vendor's prohibition on encouraging disparaging comments.\4\ In 
at least a few cases, when a consumer has refused to pay a 
fine, the offeror of a contract containing a non-disparagement 
clause has referred the monetary penalty to debt collectors, 
creating further headaches for the consumer. When KlearGear 
referred the $3,500 penalty allegedly owed under the non-
disparagement clause to a collection agency, the consumer sued 
KlearGear seeking damages and a declaratory judgment that the 
debt was not owed.\5\ The consumer ultimately won a judgment, 
and California passed a law banning non-disparagement 
clauses.\6\ However, their wider effect on state contract laws 
is unclear and common law doctrines may even evolve to accept 
them.\7\
---------------------------------------------------------------------------
    \3\FTC v. Roca Labs, Inc., No. 8:15-cv-02231-MSS-TBM (M.D. Fla. 
filed Sept. 28, 2015), available at https://www.ftc.gov/enforcement/
cases-proceedings/142-3255/roca-labs-inc.
    \4\Chris Morran, Wedding Company Contract Tries to Ban Bride & 
Groom From ``Encouraging'' Negative Feedback, Consumerist (Apr. 20, 
2015), available at https://consumerist.com/2015/04/20/wedding-company-
contract-tries-to-ban-bride-groom-from-encouraging-negative-feedback/.
    \5\Palmer v. KlearGear.com, No. 1:13-cv-00175 (N.D. Utah, filed 
Dec. 18, 2013), available at http://www.documentcloud.org/documents/
929250-palmer-v-kleargear-complaint.html.
    \6\Cal. Civ. Code 1670.8.
    \7\See, e.g., Daniel D. Barnhizer, Nancy Kim's Wrap Contracts 
Symposium: Escaping Toxic Contracts: How we have Lost the War on Assent 
in Wrap Contracts, 44 Sw. L. Rev. 215 (2014) (``If such [non-
disparagement] terms do become widespread, both common law doctrines, 
such as unconscionability and reasonable expectations, and statutory 
consumer protection regulations that are informed by commercial norms 
will be affected in favor of the drafters of such terms'').
---------------------------------------------------------------------------
    Non-disparagement clauses interfere with the benefits 
consumers derive from ready access to ``crowd-sourced'' reviews 
of products and services. If such clauses become widely 
adopted, negative yet truthful reviews may be chilled, 
undermining the overall credibility of consumer reviews. The 
newfound utility of consumer reviews would then be reduced as 
trust in their veracity diminishes. H.R. 5111 seeks to curtail 
non-disparagement clauses in order to preserve the credibility 
and value of online consumer reviews.

                                HEARINGS

    The Subcommittee on Commerce, Manufacturing, and Trade held 
a hearing on H.R. 5111, along with several other bills, on May 
24, 2016. The Subcommittee received testimony from:
           Edith Ramirez, Chairwoman, Federal Trade 
        Commission;
           Joshua D. Wright, University Professor, 
        Antonin Scalia Law School at George Mason University;
           Geoffrey Manne, Founder and Executive 
        Director, International Center for Law and Economics;
           Daniel Castro, Vice President, Information 
        Technology and Innovation Foundation;
           Abigail Slater, General Counsel, Internet 
        Association;
           Michael Best, Senior Policy Advocate, 
        Consumer Federation of America;
           David Vladeck, Professor of Law, Georgetown 
        Law;
           Richard Hendrickson, President and CEO of 
        Lifetime Products;
           Greg O'Shanick, President and Medical 
        Director, Center for Neurorehabilitation Services;
           Stephen Shur, President, Travel Technology 
        Association;
           Robert Arrington, President, National 
        Funeral Directors Association;
           John Breyault, Vice President of Public 
        Policy, Telecommunications and Fraud, National 
        Consumers League;
           Gil Genn, Maryland Sports and Entertainment 
        Industry Coalition; and
           Jamie Pena, Vice President, Revenue Strategy 
        and Global Distribution, Omni Hotels and Resorts.

                        COMMITTEE CONSIDERATION

    On June 8, 2016, the Subcommittee on Commerce, 
Manufacturing, and Trade met in open markup session and 
forwarded H.R. 5111 to the full Committee by a voice vote. On 
July 12, 2016, the full Committee on Energy and Commerce met in 
open markup session and ordered H.R. 5111 reported to the 
House, as amended, by a voice vote on July 13, 2016.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. 
There were no record votes taken in connection with ordering 
H.R. 5111 reported.

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    The goal of H.R. 5111 is to preserve the credibility and 
value of online consumer reviews by prohibiting non-
disparagement clauses restricting negative, yet truthful, 
reviews of products and services by consumers.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
5111 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 5111 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

H.R. 5111--Consumer Review Fairness Act of 2016

    H.R. 5111 would void certain provisions in standard form 
contracts (those used in the course of selling or leasing goods 
and services) that impose restrictions or penalties for one 
party's review of the performance of another party under the 
contract. It also would void and prohibit certain contract 
provisions that would assign the intellectual property rights 
for one party's review of the performance of the contract to 
any other party. The bill would grant the Federal Trade 
Commission (FTC) the authority to enforce the new prohibitions 
and authorize the agency to levy civil penalties for 
violations. H.R. 5111 also would direct the FTC to develop an 
education and outreach program to provide businesses with best 
practices for complying with new restrictions.
    CBO estimates that the cost of implementing H.R. 5111 would 
be insignificant because the FTC enforces similar prohibitions 
and provides compliance assistance under its existing general 
authorities.
    CBO estimates that enacting H.R. 5111 would increase 
federal revenues from the new authority to collect civil 
penalties; therefore, pay-as-you-go procedures apply. However, 
CBO estimates those collections would be insignificant because 
of the small number of cases that the agency would probably 
pursue. CBO estimates that enacting the bill would not affect 
direct spending.
    CBO estimates that enacting H.R. 5111 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    H.R. 5111 contains no intergovernmental mandates as defined 
in Unfunded Mandates Reform Act (UMRA) and would not affect the 
budgets of state, local, or tribal governments.
    Although the FTC has begun to enforce prohibitions on 
contract provisions similar to those outlined in the bill under 
its existing authorities, to the extent that such provisions 
are not currently considered void in all jurisdictions, the 
bill would impose a private-sector mandate as defined in UMRA 
on entities that use such provisions in their contracts. The 
cost of the mandate would be the value of forgone income from 
out-of-court settlements and compensation for damages the 
entities could be awarded under a breach of contract claim. 
However, reliable and comprehensive information concerning the 
number of businesses that continue to use contracts containing 
such provisions, the number of those contracts that impose a 
monetary payment as a penalty, and the level of any such 
payments is not available. In addition, although the court 
cases in which consumers have challenged these provisions have 
resulted in judgments in favor of the consumer, the limited 
sample of such cases cannot be used to generalize about the 
results of such cases in other jurisdictions. Therefore, CBO 
cannot determine whether the cost of the mandate would exceed 
the annual threshold established in UMRA for private-sector 
mandates ($154 million in 2016, adjusted annually for 
inflation).
    On December 9, 2015, CBO transmitted a cost estimate for S. 
2044, the Consumer Review Freedom Act of 2015, as reported by 
the Senate Committee on Commerce, Science, and Transportation 
on November 18, 2015. The two pieces of legislation are similar 
and CBO's estimates of their budgetary effects are the same.
    The CBO staff contacts for this estimate are Stephen Rabent 
(for federal costs) and Logan Smith (for the impact on the 
private sector). The estimate was approved by Theresa Gullo, 
Assistant Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    DUPLICATION OF FEDERAL PROGRAMS

    No provision of H.R. 5111 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    The Committee estimates that enacting H.R. 5111 
specifically directs to be completed no rulemakings within the 
meaning of 5 U.S.C. 551.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    Section 1 provides that the Act may be cited as the 
``Consumer Review Fairness Act of 2016.''

Section 2. Consumer review protection

    This section voids form contract provisions that prohibit 
or restrict an individual who is a party to the form contract 
from engaging in a covered communication, impose a penalty or 
fee against such an individual for engaging in covered 
communications, or require the transfer of intellectual 
property rights--except for non-exclusive licenses--in review 
or feedback content.
    This section does not affect any duty of confidentiality 
imposed by law; any civil cause of action for defamation, 
libel, or slander, or similar cause of action; any party's 
right to remove or refuse to display on an Internet website or 
webpage controlled by such party content of a covered 
communication, including content that contains personal 
information or likeness of a person or is libelous, harassing, 
abusive, obscene, vulgar, sexually explicit, or is 
inappropriate with respect to race, gender, sexuality, 
ethnicity, or other intrinsic characteristic; is unrelated to 
the goods or services available on such Internet website or 
webpage; or is clearly false or misleading. This section does 
not affect a party's right to establish terms and conditions 
for content creation by an employee or independent contractor 
of a commercial entity in certain circumstances.
    This section shall not apply to a provision of a form 
contract that prohibits disclosure or submission of, or 
reserves the right of a person or business that hosts online 
consumer reviews or comments, to remove trade secrets or 
commercial or financial information considered privileged or 
confidential; personnel and medical files; records compiled for 
law enforcement purposes; unlawful content; and computer 
viruses, worms, or other potentially damaging code, processes, 
programs, applications, or files.
    This section outlines the enforcement responsibilities of 
the FTC, State attorneys general, and consumer protection 
officials. This section also outlines venue and service of 
process requirements.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                                  [all]