The House of Representatives passed two bills last week relevant to the advertising industry: the Consumer Review Fairness Act and the Better On-line Ticket Sales Act (“BOTS Act”).
The Consumer Review Fairness Act is aimed at protecting consumers who write online reviews on certain websites, by invalidating “form contracts” which would impede those reviews from being made. The bill also prohibits contracts which transfer or require “an individual who is a party to the form contract to transfer to any person any intellectual property rights in review or feedback content, with the exception of a non-exclusive license to use the content, that the individual may have in any otherwise lawful covered communication about such person or the goods or services provided by such person.” Examples of this conduct cited in the media include wedding planners who require their clients to sign non-disclosure/non-disparagement agreements, hotels which require guests to sign certain form non-disparagement agreements upon check-in, and apartment complexes who have included language in leases which claim to own all intellectual property in reviews made by their tenants. The bill empowers the Federal Trade Commission to consider a violation of this bill (to the extent it becomes law) as an unfair or deceptive act pursuant to Section 5 of the FTC Act.
The BOTS Act prohibits the sale or use of certain software to circumvent control measures used by Internet ticket sellers in order to ensure equitable access to tickets for various events. Specifically, the bill prohibits both: (a) the use or sale of the software to circumvent security measures or control systems established on a ticket seller’s website that is used to ensure equitable consumer access to tickets for events; and (b) selling tickets which are knowingly obtained by someone who used or sold such software. A violation of this bill (to the extent it becomes law) is deemed an unfair or deceptive act or practice pursuant to the FTC Act. Additionally, an injured person may seek damages plus statutory damages of $1,000 for each distinct use or sale of the software in violation of the bill. Finally, the BOTS Act amends the fraud section of the federal criminal code, making such conduct a criminal offense.
TAKEAWAY: Since both bills have implications for several clients, we encourage you to keep updated on these bills, as the passage of these bills may require changes to business practices and revisions to contracts.