California "Yelp Bill" Prohibits Online Retailers From Fining Customers For Negative Reviews

Californians who want to complain on Yelp about a bad experience dealing with a business are free to do so without fear of being fined. That wasn't always the case -- businesses have gotten into the dubious habit of inserting non-disparagement clauses into contracts to prevent peeved customers from leaving a negative online review, but such practice is now outlawed thanks to what's known as the "Yelp Bill."

The official name is Assembly Bill 2365, but that's a bit boring, don't you think? Whatever -- Shakespeare taught us that a rose by any other name would smell as sweet, and in this case, the thorny bill prohibits businesses from pricking customers with sometimes hefty fines for writing negative reviews on the web. Those found in violation face up to $10,000 in fines.

Yelp Watch
Image Source: Flickr (Chris F)

"These types of non-disparagement contracts not only seek to intimidate potential reviewers away from sharing their honest experiences online, but also threaten to deprive the public of useful consumer information. A five-star rating for a business who had used one of these clauses to simply scare all negative reviewers into removing their comments wouldn’t really represent the experience a consumer could expect to have at that business in our opinion," Yelp's public policy official Laurent Crenshaw stated in a blog post.

According to National Journal, California is the first state to pass this kind of law. It was drawn up in response to a Utah couple being fined $3,500 for unknowingly breaching a retailer's Terms of Sale contract by posting a negative review, which in turn damaged their credit score.

Let's hope that other states follow California's lead here to prevent this kind of nonsense.
Tags:  California, law, Yelp, Online