Direct Response Marketing

Yelp Backs FTC In Fight Against ‘Gag Clauses’

28 Oct, 2015 By: Doug McPherson

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WASHINGTON – Last month, the Federal Trade Commission (FTC) alleged in a groundbreaking lawsuit that pointed the finger at weight-loss product marketer Roca Labs’ attempts to prohibit consumers from “from speaking or publishing truthful or non-defamatory negative comments or reviews” as an unfair practice.

The FTC also asked for an injunction prohibiting the company from telling customers to avoid posting bad reviews, and last week a judge issued an order granting the injunction.

Meanwhile, Roca Labs maintains that the FTC lacks the power “to dictate the terms of private contracts between private parties.” It adds, “The FTC’s intention to ban all manner of anti-disparagement clauses is overkill and appears to be a knee-jerk reaction to a particular practice of Roca Labs … The regulation of public comment through on-line reviews is a complicated and multi-faceted problem that must balance the rights of consumers and businesses in the ever-changing landscape of Internet commerce.”

The fight has drawn the attention of review sites Yelp, Avvo, and Mediolex – all of which have sided against Roca Labs in a friend-of-the-court brief.

Yelp is a consumer review website, while AVVO is an online lawyer rating and review system, and Mediolex is an online review website.

The brief reads: “While all gag clauses are problematic, Roca’s gag clause chills speech and diminishes the ability of its customers to make informed decisions about a medical and nutritional product. This is particularly egregious, and the strong policy considerations against enforceability should be resolved in favor of consumers maintaining the utmost freedom to share their experiences with other consumers.”

The review websites’ involvement adds a new twist to the allegations against Roca, bringing First Amendment rights into a case that wasn’t originally about that. “Thus, the decision here may have far-reaching application in federal and state courts throughout the country,” the amicus brief states.

All three of the review companies are being represented by Marc Randazza, an attorney from the Randazza Legal Group in Las Vegas that represents clients on a variety of First Amendment issues, according to its website.

The FTC’s filing states that the three online reviewers “have an interest in encouraging the free exchange of consumer information, positive and negative. Defendants have warned purchasers, through package inserts included in product shipments, that they agreed not to write any negative reviews about the defendants or their products and would owe defendants hundreds of dollars should they do so.”

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