California Introduces Social Media Anti-Disparagement Consumer Protection Bill

California recently introduced AB 2365 which would prohibit businesses and service professionals from contractually silencing customers who may want to complain online about their experiences.  While I am generally not in favor of increased digital regulations, this bill may be a step in the right direction because more businesses are exploring contractually silencing their critics. is the poster child for how not to treat consumers in the Social Media Age.  It inserted a non-disparagement clause into its online agreements several years ago in order to pursue disgruntled customers who complained about their service.  For example, threatened a former consumer who wasn’t even subject to its non-disparagement clause since she made her purchase before the clause was effective.  The company demanded $3,500 from this customer because it did not agree with her online review.  When this former consumer refused to pay she was reported to multiple credit reporting agencies which caused real world damages.    

During the initial media firestorm when’s reprehensible behavior was publicized last year, it removed the non-disparagement clause.  However, it appears that it was recently reinstated.’s non-disparagement clause states:

“In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts, its reputation, products, services, management or employees. 

Should you violate this clause, as determined by in its sole discretion, you will be provided a seventy-two (72) hour opportunity to retract the content in question. If the content remains, in whole or in part, you will immediately be billed $3,500.00 USD for legal fees and court costs until such complete costs are determined in litigation. Should these charges remain unpaid for 30 calendar days from the billing date, your unpaid invoice will be forwarded to our third party collection firm and will be reported to consumer credit reporting agencies until paid.”’s behavior demonstrates that without robust digital consumer protections some companies will abuse their power and insert very troubling language into their Terms of Use/Sale agreements.  Caveat emptor when making online purchases.  

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