California is falling into line with Congress’ attempt to put an end to the gag clause associated with a number of consumer contracts. Whether you are a consumer or a producer, you know the importance of reviews. Many people turn to quality review sites to better understand what they should expect for certain products or services. As a result, many businesses are including gag clauses in their consumer contracts to avoid potentially negative reviews. In September, California became the first state to outlaw such clauses. The reasoning was that this type of approach is unfair and keeps consumers unaware of the true quality of certain products.
A Need for Change
The reality is that many companies will do whatever it takes to avoid negative reviews about them. In their consumer contract they have been able to include language that not only forbids consumers from speaking out negatively, but also fines them for doing so. This creates a kind of hostage situation where the company controls the situation and will revoke the fine if the individual removes the negative comment. Creating an atmosphere where consumers cannot be truthful about their experience hinders the ability for the marketplace to adequately serve everybody involved. Likewise, the marketplace can no longer operate at a truly competitive rate if nobody is truthful about their experience. Essentially, consumers will hear only good news and all companies are considered to be on the same plane.