Most enterprise house owners know they can’t purchase faux evaluations. Far fewer know {that a} single line buried of their normal service settlement also can break federal legislation. The Shopper Evaluation Equity Act makes sure contract phrases unlawful even when a enterprise has by no means as soon as tried to implement them, and the repair takes a day.
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Key Takeaways
- The Shopper Evaluation Equity Act of 2016 voids contract phrases that block, penalize, or declare possession of buyer evaluations.
- The legislation applies to type contracts, together with on-line phrases and circumstances, not negotiated agreements.
- Employment contracts and unbiased contractor agreements sit exterior the legislation completely.
- Merely having a prohibited clause can set off FTC or state enforcement, even when by no means used.
- Companies should take away evaluations which might be defamatory, personal, unrelated, or clearly false.
- A separate 2024 FTC rule governs how you might reply to evaluations you dislike.
What Is the Shopper Evaluation Equity Act?
The Shopper Evaluation Equity Act of 2016 is a federal legislation that protects a buyer’s potential to publish an trustworthy evaluation of a enterprise, and it does so by making sure contract phrases unenforceable. Congress handed it as H.R. 5111 within the 114th Congress, and it was signed into legislation in December 2016. The Federal Commerce Fee printed its enterprise steerage in February 2017.
The stakes behind the legislation are seen in how a lot weight consumers now place on evaluations. BrightLocal’s Native Shopper Evaluation Survey 2026, primarily based on a consultant panel of 1,002 US grownup shoppers, discovered that 97% of shoppers depend on evaluations to information their buy choices, and that 41% now all the time learn evaluations when shopping for a enterprise, up from 29% in 2025. A contract time period that suppresses trustworthy suggestions interferes with the first means prospects consider companies.
“97% of shoppers depend on evaluations to information their buy choices” (BrightLocal, Native Shopper Evaluation Survey, 2026)
The legislation was established in response to a selected observe. Some corporations had begun writing provisions into their normal contracts and on-line phrases that permit them sue or advantageous prospects who posted unfavorable evaluations. Reporting on a handful of aggressive instances, together with companies that pursued prospects for tons of or hundreds of {dollars} over a foul evaluation, made the issue seen sufficient for Congress to behave.
The safety is broader than product evaluations. In keeping with the FTC’s steerage, the legislation covers trustworthy shopper assessments in any discussion board, together with on-line evaluations, social media posts, uploaded pictures and movies, and evaluations of an organization’s customer support slightly than solely its merchandise.
What Does the Shopper Evaluation Equity Act Prohibit?
The legislation makes three particular sorts of contract provisions unlawful. A provision violates the Act if it does any of the next:
- Bars or restricts the power of somebody who’s get together to the contract to evaluation the corporate’s merchandise, providers, or conduct.
- Imposes a penalty or a charge in opposition to somebody who offers a evaluation.
- Requires individuals to surrender their mental property rights within the content material of their evaluations.
That third one catches companies off guard most frequently. A clause assigning the corporate copyright over something a buyer writes about it could appear like routine boilerplate, however it offers the enterprise a path to file takedown notices in opposition to evaluations it doesn’t like. The Act closes that route.
The prohibited phrases are void whether or not or not the enterprise has ever acted on them. The FTC has been direct on this level: An organization ought to take away any offending provision even when they’ve by no means tried to implement it or don’t have any intention of implementing it.
Which Contracts Does the Regulation Cowl, and Which Are Exempt?
The Act applies to type contracts, which means standardized phrases imposed on a buyer and not using a significant alternative to barter. This covers the paperwork most companies use day-after-day: on-line phrases and circumstances, checkout agreements, service contracts, rental and reserving agreements, consumption paperwork, and point-of-sale types.
Two classes fall exterior the legislation. The FTC’s steerage states plainly that it doesn’t apply to employment contracts or agreements with unbiased contractors. A non-disparagement clause in a severance settlement or a contractor engagement is ruled by employment legislation and different statutes, not by this Act. Companies researching non-disparagement language for employees agreements are taking a look at a distinct authorized query than the one this legislation solutions.
Genuinely negotiated contracts, the place each side had actual potential to form the phrases, additionally sit exterior the definition of a type contract.
What Can Your Enterprise Nonetheless Do A couple of Adverse Evaluation?
The legislation doesn’t require you to host every bit of content material a buyer submits. The FTC’s steerage confirms {that a} enterprise might prohibit or take away a evaluation that:
- incorporates confidential or personal info, comparable to monetary particulars, medical info, personnel file contents, or commerce secrets and techniques.
- is libelous, harassing, abusive, obscene, vulgar, sexually specific, or inappropriate with respect to race, gender, sexuality, ethnicity, or one other intrinsic attribute.
- is unrelated to the corporate’s services or products.
- is clearly false or deceptive.
The fourth class is narrower than it sounds, and the FTC anticipated companies stretching it. Its steerage provides the qualifier instantly: It’s unlikely {that a} shopper’s evaluation or opinion with which you disagree meets the clearly false or deceptive normal. Disagreeing with a evaluation is just not the identical because the evaluation being false.
That distinction issues for anybody weighing choices in opposition to a evaluation that’s unfair however not fabricated. The place content material genuinely violates a platform’s printed insurance policies, flagging it for removing by way of the platform’s personal course of is a official path. The place it doesn’t, the practical choices are a robust public response and bettering what surrounds it in search outcomes, not removing.
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What Are the Penalties for Violating the Shopper Evaluation Equity Act?
Underneath the Act, the Federal Commerce Fee and state attorneys normal have enforcement authority. A CRFA violation is handled the identical as violating an FTC rule that defines an unfair or misleading act or observe, which suggests a enterprise can face monetary penalties in addition to a federal courtroom order.
The publicity doesn’t depend upon a buyer being harmed. In its personal abstract of its first enforcement actions, the FTC famous that the existence of an unlawful contract provision alone can topic an organization to federal or state enforcement, and that the FTC and states can act whether or not or not the corporate adopted by way of on its threats. Civil penalty quantities for violations of Fee orders are adjusted yearly, so any determine needs to be checked in opposition to the present FTC schedule slightly than an older press launch.
There’s additionally a reputational value that arrives earlier than any shopper evaluation equity act penalties do. An enforcement motion in opposition to a enterprise for making an attempt to silence its prospects is strictly the form of protection that then wants repute restore of its personal.
What Did the FTC’s First Enforcement Circumstances Contain?
The FTC introduced its first actions targeted solely on the CRFA in 2019, in opposition to three corporations in unrelated industries: A Pennsylvania HVAC and electrical supplier, a Massachusetts flooring agency, and a Nevada horseback path driving operation. Every agreed to cease utilizing the clauses and to inform affected prospects that the language was not enforceable.
The contract language in a type of complaints is value studying intently, as a result of it exhibits how a clause can violate the Act with out ever mentioning the phrase “evaluation.” In keeping with the FTC, the HVAC firm’s type contract informed prospects the phrases have been confidential and shall not be made public, or given to anybody else to make public, together with the Higher Enterprise Bureau, with liquidated damages owed if the shopper breached that confidentiality.
A confidentiality clause that features as a evaluation ban remains to be a evaluation ban. Companies involved about grievance exercise have official routes accessible, together with responding to and disputing BBB complaints by way of the BBB’s personal course of.
The Fee introduced additional actions later the identical yr in opposition to a Florida trip property rental firm and a Maryland rental dwelling supervisor, once more requiring each to inform affected shoppers that the non-disparagement clauses have been void.
How Does the CRFA Differ From the FTC’s 2024 Evaluation Rule?
They aim various things. The CRFA governs what you might write right into a contract. The FTC’s Rule on the Use of Shopper Evaluations and Testimonials, which took impact on October 21, 2024, governs conduct round evaluations themselves, together with faux evaluations, purchased evaluations, and stress utilized to reviewers.
Most companies have to fulfill each. A contract might be clear below the CRFA whereas the corporate’s evaluation practices nonetheless run afoul of the 2024 rule, and the reverse is equally doable. Our overview of the FTC’s ban on faux evaluations covers the faux and incentivized evaluation facet in additional element.
What Does the 2024 Rule Say About Pressuring Reviewers?
The rule’s evaluation suppression provisions draw a transparent line between official objection and coercion. Studying the FTC’s workers solutions on the rule, a number of issues are prohibited and a number of other issues stay totally accessible.
Prohibited
Utilizing an unfounded or groundless authorized risk to forestall a evaluation or to get one eliminated, the place the risk rests on authorized contentions unwarranted by present legislation or factual contentions with no evidentiary help, is prohibited.
Additionally prohibited are bodily threats and intimidation, which the FTC says extends past bodily threats to abusive communications, stalking, character assassination, and harassment used to induce worry.
Making a false accusation a few reviewer, realizing it’s false or with reckless disregard for whether or not it’s, is likewise off limits.
Permitted
You might be nonetheless permitted to threaten authorized motion when you could have a official foundation for it, reply publicly to a evaluation, contact a buyer to resolve the issue they described, and ask glad prospects to replace their evaluations.
Organizing evaluations by yourself website is just not suppression below the rule, although the FTC notes that arranging them so unfavorable evaluations are exhausting to search out may nonetheless be an unfair or misleading observe below Part 5 of the FTC Act.
Prolonged Legal responsibility
One element deserves consideration from any enterprise that hires exterior assist. The FTC states that promoting companies, public relations companies, evaluation brokers, and repute administration corporations should not immune from legal responsibility below the rule and might be responsible for evaluation suppression themselves.
A vendor promising to make unfavorable evaluations disappear no matter whether or not they violate platform coverage is describing a service that carries threat for each of you. Any credible evaluation administration service works inside platform coverage and federal guidelines slightly than round them.
A Compliance Guidelines for Your Contracts and Evaluation Practices
Work by way of the next, and hold a dated document that you simply did.
- Pull each type doc a buyer indicators or accepts. That features web site phrases and circumstances, checkout flows, service agreements, consumption types, reserving confirmations, and any paperwork a gross sales rep carries.
- Search every one for language proscribing what a buyer might publish, imposing a charge or penalty for a evaluation, or assigning the corporate rights over customer-created content material. Confidentiality and non-disparagement wording deserves an in depth studying even when evaluations are by no means talked about.
- Take away the offending language slightly than softening it, and do it whether or not or not you could have ever enforced it.
- Separate your worker and contractor agreements from this evaluation, for the reason that Act doesn’t attain them and totally different guidelines apply.
- Verify your evaluation solicitation practices in opposition to the 2024 rule. Incentives conditioned on constructive sentiment are prohibited, and asking solely prospects you anticipate to be blissful is evaluation gating, which might increase issues below the FTC Act.
- Give your group a written coverage for responding to unfavorable evaluations that guidelines out authorized threats and not using a official foundation, and private accusations in opposition to reviewers.
- Doc your course of for flagging content material that genuinely violates platform coverage, so removing requests are grounded in a acknowledged coverage violation.
What Can You Do About Evaluations You Can’t Take away?
Most unfavorable evaluations should not detachable, and that could be a state of affairs value planning for. A evaluation from an actual buyer describing an actual expertise is protected, even when it’s unflattering and even if you imagine it’s unfair.
Three approaches stay open. Responding publicly and nicely demonstrates to each future reader how the enterprise handles criticism, which regularly issues extra to them than the grievance itself, and readers now anticipate it shortly. BrightLocal’s 2026 survey discovered that 19% of shoppers anticipate a response to their evaluation on the identical day they put up it, up from 6% the yr earlier than, with an extra 32% anticipating one by the next day.
Requesting removing by way of the platform’s course of is acceptable the place content material really breaches printed coverage, whether or not that could be a Google evaluation or a Trustpilot evaluation. And the place a harmful end result can’t be eliminated in any respect, constructing and selling stronger property can change what a seek for your online business surfaces first.
For purchasers on the opposite facet of this query, our information as to whether leaving a foul evaluation can get you sued covers the reviewer’s place.
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Incessantly Requested Questions
What’s the Shopper Evaluation Equity Act in easy phrases?
It’s a federal legislation that makes it unlawful for a enterprise to make use of standardized contract phrases that cease prospects from posting trustworthy evaluations, penalize prospects for doing so, or declare possession of shoppers’ evaluation content material. The FTC and state attorneys normal implement it.
Does the Shopper Evaluation Equity Act apply to worker evaluations on websites like Glassdoor?
No. The FTC’s steerage states the legislation doesn’t apply to employment contracts or agreements with unbiased contractors. Worker evaluations increase separate authorized questions, and a non-disparagement clause in an employment settlement is ruled by different legislation.
What are the penalties for violating the Shopper Evaluation Equity Act?
A violation is handled the identical as violating an FTC rule defining an unfair or misleading act or observe, which exposes a enterprise to monetary penalties and a federal courtroom order. Enforcement can comply with from the presence of the clause alone, with none try and implement it.
Can a enterprise ask a buyer to take down a unfavorable evaluation?
Asking is just not itself prohibited, and contacting a buyer to resolve their grievance is expressly permitted. What the 2024 FTC rule prohibits is utilizing unfounded authorized threats, intimidation, or knowingly false accusations to get a evaluation eliminated or modified.
Can a enterprise nonetheless take away a evaluation that’s defamatory or incorporates personal info?
Sure. The Act permits prohibiting or eradicating content material that’s libelous, harassing, obscene, or abusive, incorporates confidential or personal info, is unrelated to your services or products, or is clearly false or deceptive. Disagreeing with an opinion doesn’t meet that final normal.
Does the Shopper Evaluation Equity Act imply prospects can say something they need?
No. The legislation protects trustworthy assessments. It doesn’t protect defamatory statements, and it doesn’t require a enterprise to publish content material that violates the classes listed above.
This text is normal details about federal legislation and isn’t authorized recommendation. Seek the advice of a professional legal professional about how these guidelines apply to your particular contracts and circumstances.
