Introduction

Welcome to the Simplifying Legal podcast, brought to you by Businessese. I’m your host, Danielle Liss.

Many years ago, someone told me I was the least lawyer-y lawyer she’d ever met because I helped make legal easier to understand. To this day, it’s one of the best compliments I’ve received in my professional life.

If you’ve ever felt legal was too scary, too overwhelming, too complicated, or just plain incomprehensible, you’re not alone. The Simplifying Legal podcast was created to help. 

In each episode, we’ll do a deep dive into a legal topic and give you concrete next steps so you can apply it to your business. 

My goal is for you to walk away from each episode thinking, oh, that was easier than I thought it would be.

Let’s get started. 

Episode Content

Hey there, I’m Danielle. Welcome to Episode 50 of Simplifying Legal for Small Business Owners. Today, I’m talking about how to legally deal with negative reviews. 

Disclaimer: As always, before we get into today’s topic, a quick disclaimer. This podcast is meant to provide you with legal information only. It’s not legal advice and doesn’t create any type of attorney-client relationship between us. Please don’t take any action without consulting your lawyer first. 

In recent episodes, I’ve talked a lot about marketing, and I’ve focused a lot on areas that are impacted by the Federal Trade Commission, which is also known as the FTC. In Episode 45, I talked about using testimonials in marketing. 

Are You Using Client Reviews for Marketing in Your Business?

Using customer testimonials is a regular practice for businesses. If you’re a service business owner, it may be a regular part of your offboarding process to solicit testimonials from clients you’ve worked with. And, of course, the goal is to capture those great experiences for your marketing. 

Many businesses may also ask their customers to leave them reviews on public platforms, like Yelp, Google, or Facebook. Yes, the goal for soliciting these reviews is also to have happy customers share their experience in hopes that it will help bring in new business. 

When it comes to public reviews, this also means that you are potentially opening your business up to criticism from unhappy customers. Business owners react to negative reviews in a lot of different ways. You may view a negative review as an incredible learning opportunity so that you can make improvements on the things pointed out in the review. But others don’t handle the criticism very well. 

And, as a business owner, if dealing with negative reviews seems like the ultimate headache, what can you do to simply ensure that your business doesn’t deal with negative reviews? Is it even possible? 

I’m going to look at this from a couple of different angles, based on questions I’ve received in the past. 

First, can you legally prevent someone from leaving you a negative review? Next, can you threaten to sue someone to have the review taken down? 

Preventing Negative Reviews

Let’s dive into the first question: Can you legally prevent someone from leaving you a negative review? The answer to this is probably not, but you may be able to ask for removal if it meets certain criteria.

Like so many of my recent episodes, this episode also involves the FTC. To review, the Federal Trade Commission is a federal agency that has two goals: to promote competition and protect consumers. As part of these goals, the FTC helps to protect consumers from unfair or deceptive advertising. 

Protecting Consumers

The Consumer Review Fairness Act, or CRFA, was enacted in 2016. It protects honest consumer assessments, including online reviews, social media posts, etc. Fun fact, the CRFA was originally nicknamed the “right to Yelp” bill. 

Because this was really prevalent, I want to give you a couple of examples of what used to happen. First, one that I saw many people deal with. There was a popular online course that many online business owners had participated in. The terms had a very particular non-disparagement clause that prohibited leaving negative reviews. Past participants had a bit of a whisper network about the course, discussing the issues, but there were very few negative reviews. Everyone cited that non-disparagement provision as the reason why no one talked about it. 

Another far more famous example involved a wedding venue that essentially fined couples for leaving negative reviews. Under their policy, they reserved the right to deduct a $500 fine from any room deposit for any negative reviews left by guests. I can’t imagine agreeing to those terms, but at the time they did it, in 2014, there was nothing specific preventing it. 

But now, we have the CRFA to prevent this type of behavior. So what does it cover? The CRFA applies to assessments of a company’s: 

• products, 
• Services,
• customer service, 
• and business conduct. 

It specifically prohibits any standardized provisions that threaten or penalize someone for posting an honest review. In other words, you can’t include a non-disparagement clause in your terms or contract as a way to prevent consumers from leaving negative reviews. And, you can’t threaten to charge someone an additional fee for leaving a negative review. Additionally, a business can’t try to claim copyright ownership, or an exclusive license in, consumer reviews. 

Managing Your Reviews

Now, while it does prevent a business from doing those things to prevent reviews, the law still gives business owners the ability to manage certain types of content in reviews. A business owner can remove a review if: 

• It contains confidential information, like trade secrets or personal medical information
• It’s libelous, harassing, abusive, obscene, vulgar, sexually explicit, or inappropriate regarding race, gender, sexuality, ethnicity, or other intrinsic characteristics. 
• If the review is unrelated to the business’s products or services, or
• It’s clearly false or misleading

But remember, simply disagreeing with a review doesn’t necessarily make it false or misleading. Sometimes, instead of fighting to take down an honest review, it may make more sense to find a way to give a gracious response to the concerns within the review. 

One important thing to note. The CRFA doesn’t give a private right of action, which means that a consumer can’t sue you. Instead, it is enforced by the FTC or state attorneys general and can come with monetary fines and court orders. 

So, even though you may want to proactively try to protect your business against negative reviews, you shouldn’t: 

• Include any terms in a contract or terms and conditions that prohibit someone from reviewing the products or services; 
• Impose any penalties for consumers who give reviews; or
• Require that customers give up their intellectual property rights in the content of their reviews. 

Remember, if the content of the review falls into the criteria I mentioned before, like if it’s false or misleading, that is different and you can still pursue removal of the review. The CRFA is really there to protect consumers and give them the right to share their honest opinions. The review isn’t meant to give someone permission to say absolutely whatever they want, regardless of the content. 

Concealing Negative Reviews

The CRFA covers whether or not you can take certain actions to prohibit negative reviews. But, what if you solicit reviews for your own platform. In other words, rather than someone posting on Yelp, they would post it on your own platform or website. Can you elect to conceal negative reviews that you receive by not posting them? 

While it’s not part of the CRFA, the FTC has made its position on this clear in 2022. This has been a hot topic for those who follow FTC activity. (And, yes, I swear, there are a lot of us!)

The FTC and the company Fashion Nova recently entered a settlement agreement. Fashion Nova had collected reviews and they made it seem like the ratings they displayed were based on all reviews; however, any review under four out of five stars wasn’t included. In other words, they were concealing any reviews under 4 stars without disclosing that only positive reviews were displayed. The FTC found this to be a deceptive practice and there was a multi-million dollar fine. 

From the consent order with Fashion Nova, we now have additional guidance regarding the FTC’s stance. They stated that Fashion Nova would include all reviews unless it: 

• Was unrelated to the company’s products or customer service, or 
• Contained obscene, sexually explicit, racist, or unlawful content, so long as the criteria was applied uniformly to all reviews.

By looking at the CRFA and the FTC’s recent actions, we can get a better sense of what you can do when you receive a negative review. 

Threatening to Sue to Remove Negative Reviews

Before I wrap up this discussion, I also want to address another common question: Can a business can threaten a lawsuit to remove negative reviews?

One important thing to know. If the negative review was left on a third-party platform, you can’t sue the platform to remove the review. Under the US Communications Decency Act, you can’t try to sue the platform for publishing the content from a third party.

If you are considering suing the reviewer, assuming you know their identity, there are a number of things to keep in mind. First, you need to consider Anti-SLAPP laws. 

SLAPP suits are strategic lawsuits against public participation. Historically, these types of suits were viewed as a sort of legal bullying and have been used as a method of silencing someone. They have been used to censor critics, so it’s probably evident how a company could use a SLAPP suit to try to motivate the removal of negative reviews. 

Many states have passed Anti-SLAPP laws to prevent this type of suit, so you need to closely consider whether or not the lawsuit you’re considering would be prohibited under Anti-SLAPP laws. 

Additionally, you need to carefully consider the content of the review because this is a really important factor as you consider a lawsuit. Usually, even under an anti-SLAPP law, you can sue if a review is defamatory. 

If the review is factually inaccurate or contains unfair accusations, it may rise to the level of defamation. Usually, a negative review that contains someone’s opinions or it has factual information will not be considered defamation. Laws about defamation can vary from state to state, so if you are considering whether it applies, then I strongly recommend talking to a lawyer in your state who can advise you. 

Filing a lawsuit is a really big decision, so please don’t take it lightly. If it’s on your radar, this really is when you need to talk to your attorney about how to proceed. 

Action Steps

This wraps up my tips on how to legally deal with negative reviews. Now let’s talk about today’s action steps.

1. First, check your contracts and terms to ensure that you are complying with the Consumer Review Fairness Act. Consider whether you need to adjust any terms. 
2. When you receive a negative client review, look closely at the content. Consider whether or not it is false or misleading, contains confidential information, or any of the other content I reviewed earlier. If so, then you may pursue removing the review in a way that is compliant with CRFA. 
3. I strongly recommend creating internal policies for the handling of online reviews. Make sure your team is acting under the same guidelines and that they understand any when you can and can’t pursue having a negative review removed. Most importantly, consider the honest negative reviews as learning experiences for your business.
4. Last, as always, if you have questions about handling negative reviews, please contact your lawyer. If you don’t have a lawyer and you’d like to see if we’re a good fit to work together, you can learn more about my firm at LissLegal.com.  

Thanks for joining me for today’s episode of the Simplifying Legal Podcast. Please subscribe if you haven’t already. 

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Thanks for listening and we’ll continue Simplifying Legal on next week’s episode.