Yelp Backs FTC In Fight Against 'Gag Clauses'

Last month, the Federal Trade Commission alleged in a groundbreaking lawsuit that Roca Labs wrongly included non-disparagement clauses in its terms of service.

The FTC said in its complaint against the company that attempts to prohibit consumers from "from speaking or publishing truthful or non-defamatory negative comments or reviews" is an unfair practice.

Roca Labs disagrees. The company, which sells weight-loss products, argues in court papers filed earlier this month that the FTC lacks the power "to dictate the terms of private contracts between private parties."

The company 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."

Roca filed its papers in response to the FTC's request for an injunction prohibiting the company from telling customers to avoid posting bad reviews.

U.S. District Court Judge Mary Scriven in Florida issued a one-page order today granting the FTC's request for a preliminary injunction. That order doesn't provide any additional information, or the reasons for the decision.

The order itself is only preliminary, which means that it could be lifted after there's a trial in the matter.

The dispute has drawn the attention of review sites Yelp, Avvo and Mediolex, which sided against Roca Labs in a friend-of-the-court brief. "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," the companies write. "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."

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