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tv   Key Capitol Hill Hearings  CSPAN  November 5, 2015 8:00am-10:01am EST

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the public is less informed. and a given business, even the business doing the silence, it is harmed. these types of clauses serve no positive role in the american market place. and they stand in the way of consumer transparency. in conclusion, after the looks forward to working with you and the committee to ensure that american consumers are not prevented from sharing opinions and expenses with potential customers, whether it is done in person or the internet. i welcome your questions on this important topic. >> thank you. mr. atkinson? >> i appreciate the opportunity to come before you today to talk about the impact of non-disparagement clauses on consumers in the economy. the information technology foundation has long focused on policies to enable the internet economy to thrive.
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in this particular area you are addressing with the act is a critical one, if that is good to be our goal. it raises three issues today. the first one is economic theory. and the economics behind us, there has long been of human economics that functioning -- effective functioning of markets depend on information. received theomists nobel prize in 2001 for their research related to what they called asymmetric information. this is exactly what is going on here. when you go to a hotel, you do not know anything about what you see. the hotel knows everything. this is a market with asymmetric information. they won the nobel prize because they shows the markets with that information underperformed what would otherwise be economic welfare for everyone, consumers in the overall economy. in particular, this and other
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researchers found that markets do not perform effectively, number one, if buyers cannot accurately assess the value before they buy. you go to a whole tell you not know what is going on -- if you go to pay hotel and you do not know what is going on, there is a high quality one. clearly, the examples have shown this. certainly for some sellers. third, for the sellers of good products and services have a hard time proving quality. it is hardrds, where for a consumer to find some independent assessment of quality. online rating tools are so important. they are the tool to solve this long, h-old problem that has bedeviled economic markets. an online rating system solves the problem because they provide a public quality assurance and
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they let people know when there is poor quality. is the issueint about preemption. argue thet some federal government should not be involved in these questions. we should let the states deal with this. they are better positioned. and in many cases, states are best positioned. in general when it comes to the internet economy, we cannot rely on states to set policy for two big reasons. one is that you end up with different policies between states. in the second reason is that in many of the cases, trip advisor and hotel reviews in florida, many are not florida residents. a state may say want to protect our businesses not allowing this. but they're hurting consumers all around the country because consumers everywhere use these. i think it really is a very
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clear justification for federal action. the third would be, what about the possible harms to businesses where there is a bad review? i think it has been pointed out already that this bill would not prohibit companies from already using existing legal tools for defamation. a more portly, there has been a lot of evidence now that we site and our testimony, that even when a company receives a bad, review the company manager affirmatively responsive that oriew, and says we are sorry thanks for the review we will problem, itthat gets better results with consumers. they believe that the manager or the company is taking consumer complaints seriously. they're more likely to trust this. this was a study about hotels that found regardless of reviews
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, they began to receive higher ratings and guess after hotel managers started to respond to feedback. i have heard that from hotel managers. they actively go out now and tell the managers that they should respond online, because it brings back trust. i don't think we should worry too much about the impact on companies. if copies are smart, what they would do is they will monitor these rating platforms and then respond appropriately. where there are clear cases of defamation and outright lies, again, they can have other legal means. in summary, that is why i have supported his legislation. it is very important to the online market place. thank you. tkinson. you, mr. akin' jennifer: thank you for inviting me to testify today. my name is jen palmer.
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and a coming try to find us for a negative review -- and the company trying to find us for a negative review indicates why i'm here today. husband made a purchase for less than $20. when the items failed to arrive, we attempted to contact them by e-mail. we never get a human being on the phone. but the e-mail response claimed the order was never paid for and was canceled. frustrated at the customer service, we moved on with our lives. in may of 2012, john got an e-mail the mating of my revie be removed. the clause which barred customers from quote "taking any action which negatively impacts the reputation, services, management, or employees" did
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not exist when john or the items.the the cause to not appear until three years after my reviews have been posted. we were shocked and scared. i spent hours researching how to remove the review, only to find out they have a policy of not removing reviews. john tried to explain it cannot be removed, that the nondisturbance clause not exist at the time, and that he did not write the review. i did. they responded by threatening to report the $3500 fine. we purchased a credit monitoring service for john. reportonths later, the appeared on his credit. we disputed the credit bureaus to no success. they repeatedly confirmed the debt is valid. we cannot afford to hire an
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attorney. it would be more than 18 months before john's credit would be clear again. we have been very careful to live within our means, using financing only for large purchases like our cars and 2008 and 2011, our house in 2009, and medical bills not covered by insurance. we had no problems getting financing for those. thefor a year and a half, black mark on john's credit caused fear and anxiety when people would ask us why do we own them $3500? we were denied a credit card, th delayed on a car loan, and denied a new home. the worst game and were denied emergency financing to replace a broken furnace. ,e were desperate, ref wrapping our son and a blanket in near freezing temperatures.
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we feared social services would take our son away from us because we had no heat. between our paycheck, we were able to buy a basic furnace with cash. we were tired of living in constant anxiety and fear. a reporter insulting city did a segment on our plight and got us in contact with a nonprofit organization which represented us ensuing the company. they helped us clear of the company. after bullying us for so long, they never even showed up to defend themselves in court. throughout our entire ordeal, they only wanted two things. that all cases be cleared from credit and do whatever he could to mixture no one had to endure the nightmare that we did. we applaud the committee for proposing to adjust the column by giving the state authority to go after companies that use them. we are not the only victims of
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this type of conduct, as public citizen has reported several times on the website and blog. families should have the power to restrict speech. any. . stop.ds to we think states should be free to enforce this law anyway they can. i was not here that restrictions from the attorney general office is being removed. i'm great over the opportunity to share my experience with you. on behalf of my husband, son, and all consumers being bullied out there, i urge you to pass the bill never have as these causes and provide for robust enforcement of the law. thank you. chairman: thank you, miss palmer. professor goldman? mr. chairmandman: appreciate the
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opportunity. how congress can help protect consumer reviews. i commend the committee and sponsors for their leadership. reviews are vitally important. when consumers guide other consumers away from poor ones. despite the social benefits and rated by consumer reviews, some businesses try to distort public reputation by suppressing reviews from customers. these efforts are categorically illegitimate. the consumer review freedom act will ensure that everyone has a chance to add their voice to the discourse. because contractual restrictions is a terrible idea, it seems like existing laws and ship the practice. although there is some president to support that --
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precedent, i have two reasons why we still need it. causes term anti-review what people are calling gag clauses are non-disparagement clauses. we do have a nomenclature problem. i'm sorry for compounding that. force public policy or other reasons. but judges do not like to override contractual provisions. so anti-review clauses do not fail in court. i would call your attention to particular case. involved a vacation rental contract required tenets to agree they would not use blogs websites to complain anonymously or not. we do not have an idea how many consumers were deterred by this clause from sharing their degrees. but we do know there were two tenets who did post reviews
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online, and defiance of the band. the landlord then sued these two in court. they were not defamatory, but the tenets may have breached the rental contract. in other words, this really means that anti-review causes expose the tenant to potential liability for sharing what was a non-defamatory review. the consumer review freedom act will eliminate any ambiguity over the enforceability of anti-review clauses. it will mean that all customers will enjoy legal certainty about their rights to speak up. the second reason why we need the consumer review freedom act is that companies seek to shape their reputation, offering the illusion of control. anti-review clauses will keep proliferating unless they are banned. this illustrates how it might happen. in late 2000, a copy called medical justice sold for in
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contracts to health care professionals that contained anti-review clauses. medical justices pitched to the doctors was elegant and tempting. and implied that by using this form contract doctors and professionals could seemingly obtain a magic want to scrub unwanted reviews from the internet. over the years, i estimate that over 1000 doctors and other professionals deployed such anti-review clauses. and that over one million americans signed suc provision. incalculable, although medical justice change position in 2011 and told consumers to stop using the form. even today, it can be hard to find robust numbers of patient reviews for many health care providers. although health-care industry adoption may seem to be an extreme case, we are likely to
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see similar effects and other industries dominated by small businesses and professional service providers. why these categories? in many cases, they pride themselves and closely linked themselves to reputation. negative feedback about the xusiness feels like a refle on them as individual. the landlord might take it as a criticism of aesthetic tates. the patient says she doesn't like the bedside manner, the doctor if you like her personality is being resized. small business owners will be attracted to interview clauses. therefore, without the consumer review freedom act, other industries will embrace anti-review clauses. and we as consumers will all be poorer for it. i'm from busy congress aching on that fight -- i am thrilled to see congress taking on that fight.
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>> thank you very much. . >> thank you very much, professor goldman. mr. rheingold. >> thank you, mr. chairman. ranking member nelson and members of the committee. this morning i'd like to make three points. one, the one who's been paying attention over the past decade as consumer rights at the slowest of the way to often unseen contracts should be surprised by the present and growth of non-disparagement or gag clauses. the idea behind the legislation crafted to solve this problem is a good one and this into a long history of legislation, legislative action to sign to not only protect consumers but our market economy. three, as of now we are unable to support this bill because it seeks to limit the enforcement rights of state and federal officials. what i see non-disparagement clauses i am for to see the logical conclusion of a decades long corporate effort to strip consumers of yet another fundamental right. buried in fine print consumers
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are typically required to waive all sorts of rights including the right to seek relief in our public justice system and now with these gag clauses the right to even speak. what's happening is obvious. through the use of in disciple language and nonnegotiable form contracts corporations have first six of the strip consumers of the sabbath and in the right to a jury trial. why should we be surprised when corporations want to do the same to consumers first amendment right of free speech? in my early years as an attorney i would avoid these clauses that way fundamental constitutional rights would've been deemed unconscionable and on enforceable. surely there was no consent. surely it was unconscionable for powerful business is to deny consumers the right to tell their story in our public courts. surely of a previous clauses prevent consumers from getting legal help, or improperly -- redress that they would not be enforceable. surely i would be wrong. we cannt from stopping the fun of it right from consumer.
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we should not repeat that mistake. passfore, congress should the arbitration fairness act. these gag clauses attacked the fair and functioning american marketplace by prohibiting consumers never citing the theirm of emphasizing thoughts and freedoms with other consumers. legislaturesstate have recognized this fact on catalyst occasions and passed a wide variety of laws on the grounds of this breed laws were created with the understanding that our market economy would not function properly if unscrewed list businesses were allowed to profit from unfair and deceptive trade practices and inevitably gain competitive advantage over honest businesses. the truth in lending act exists in large part because our understanding that a fair and functioning marketplace is
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dependent on consumers making knowledgeable decisions. the fair credit reporting act, a law this committee is intimately familiar with, was passed with the full recognition that decisions based on all the information, without it, it undermines the consumer economy. clauses.o ban these our market economy only functions properly when unfair practices are exposed and consumers do not make decisions based on faulty information. but instead on all information. whether disclosed by law or shared by others, made by consumers to use or ignore, in the process. while the protections are essential for our marketplace to the passage is not enough to make sure it is complied with. strong enforcement of the statutes by public regulators or
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by private consumers is essential for laws to have their full effect. attorney generals across the work.y have done yeoman's these important public services want to protect the state economy. their efforts including working across state lines in a bipartisan manner have been essential in obtaining justice for consumers far beyond what might be possible if the work were limited to what was achievable by their own limited staff and advocacy ty. similarly, particularly in instances when they are attempting to enforce the law against corporations, that has led to a measure of justice that would be otherwise unattainable. if we want attorneys general to enforce a law, congress should not limit officials how to best protect officials in their state. we fully support the idea.
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there is no place in the american economy for denying consumers, like jennifer palmer, the right to speak freely about the marketplace. for a consumer marketplace to be fully effective, it must be fully enforceable. it limits the ability for the public to enforce, we cannot enforce it. if this provision is moved from the bill, we would be pleased in offering our full support for this important legislative effort. >> thank you. we appate your c >> thank you, mr. rheingold. we appreciate it very much her comments on the legislation and, obviously, we'll take into consideration your thoughts as we continue to shape while it moves through the process. i wanted to start with five minute rounds of questions and i will start and i just want, ms. palmer, ask you, you've been through a harrowing ordeal before finally winning in court that most people would have given up but you persisted and
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kept fighting. even now to come across the country to share your story with us today, the experience that you had speaks volumes about your commitment to this issue. so just come why you continue to stay engaged as you have on this issue? >> as i said, the only two things we ever wanted to have happen what is for my husband credit to be cleaned so that we could move on with our lives as we had originally planned. and we really did want to make sure that this never happened to anybody else ever again. when i first contacted the media i hoped that if our story got out there, the people would be inspired to come forward and say hey, these people are doing this to me, what can i do to stop it? we never dreamed it would come this far. we really didn't. i'm so pleased that you looking at pushing through legislation on the federal level. i'm happy to do anything i can to assist that.
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>> we appreciate you. your story has gotten out there. you testified today in one of the purposes of these gag clauses is to bully and to intimidate consumers and removing negative reviews. he described how kleargear's demand for $3500 shocked and scared you. i guess i'm wondering if your experience with kleargear has given you pause about posting reviews for other products? >> absolutely not. absolutely not that i continue to post reviews for both companies that have given wonderful service and great products to let other consumers know, yes, you should definitely buy from this company, they are wonderful. and also for companies that may be fell short of the mark and didn't provide such a great product. that information is just as important as a good review. >> i guess after what you've experienced at kleargear, couldn't get any worse, right?
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>> i would hope not. >> mr. medros, tripadvisor taken steps to inform its users when a company employs gag clauses. on the other side education i might add, amazon resources a number of companies that allegedly facilitate fake reviews online. did you see other large internet companies taking measures to clean up online reviews to make sure that consumers are getting accurate and authentic information? >> absolutely. before i answer that let me first again, thank you for inviting us and for pushing this legislation forward. we think it's incredibly important legislation. without a doubt we see businesses in the hospitality industry attempt to silence the critics of their services, and this plays out across a number of other industries. he mentioned the amazon case. we've seen it with yelp in trying to push both yelp
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reviewers or other reviewers to remove their comments, to reduce the severity of their comments, or to outright bury those comments with other content, more positive content. >> professor goldman, i thought you made a great point in your testimony when discussing how consumer views make markets stronger and more efficient because they help guide consumers to the best products or services. to what degree do you think that gag clauses may be distorting the market quacks and do you think most consumers are aware of that, that's going on? >> i think the contract clauses are only a small part of a much larger problem. there so many disincentives for consumers is for consumers to share their opinions and perspectives about the businesses that they deal with. and each of those become a friction point or a wedge in their willingness to share.
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ms. palmer, has said probably should not been bullied off the internet but most consumers don't have the fortitude and confidence that she has. gag clauses arches one way that businesses can threaten consumers to get them to not only stifle themselves but to move their legitimate reduce what they been posted. there are other tools companies use as well. for example, threatening defamation and simply saying we're going to see you and take you to court if you don't remove it. that's what i would also call your attention to things like the federal anti-slap law that's been considered. that would be another tool to protect consumers from having their legitimate reduce prison off the internet. >> my time has expired so i will turn to senator nelson. >> ms. palmer, i'm so sorry that you had to go through this experience. when you into the tv station and a started getting some publicity, is that when you
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didn't know decided to go into court because you're listed as the plaintiff and palmer versus kleargear? >> we have been seeking legal help before we went to the media. i had contacted several lawyers, done a lot of legal research online to find out what my options were. for all the lawyers i spoke to instead do we have a case, they said yes, we do, yes, you do. i said great, can you represent us? they said, no, we are not touching that with a 10-foot pole. it was so shady and so big, most did want to touch it. it was until after we spoke to the media, i was hoping to find a lawyer that was willing to step forward, and that's when public citizen kane for and said we can help you, we want to help you. we have the means and resources to do so. >> that's a good news story.
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mr. medros, i want to look at the other side tell us about evidence of bad actors trying to take advantage of businesses by threatening to post a false negative complaint. >> there are certainly some instances where consumers threaten a business with a negative review, threatened a share their experience online. and that business rightfully so has concern that that's going to impede their future marketing efforts, impeded their future business. but the reality is first of all we encourage businesses to proactively communicate with those threats to us and within monitor those properties for the instance of negative reviews. and the vast majority those negative reviews never appear. they are empty threats. second, one of the tenets of
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tripadvisor is to allow that businesses to respond to any consumer review. we believe transparency will solve this problem. consumers write the reviews, as his escape to respond. future consumers to to read of those responses, the back and forth between those two parties, and make their own decision, wave their own beliefs about whether this is the right business for them to visit. over all this is not a large problem. >> so you encourage those businesses, if there's a false review, to contact you. with this legislation prevent a business owner who is threatened with a false or malicious review from bringing a case in court against a consumer for defamation? >> i'm not probably the best person to answer from a legal standpoint. what i can tell you is that i don't believe it will prevent businesses from interacting with
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tripadvisor and asking reviews to be reviewed. we do employ an entire step and look at every review where an owner or another member of our community flags it as inappropriate against our guidelines or perhaps irrelevant. .. courts -- to the courts for whoever is the aggrieved party, the consumer or the business. ,n the case of ms. palmer apparently it was her access to the court that finally brought about the redress of her terrible situation. -- rheingold, let me ask you on the arbitration clauses, when this friends used and family program to basically trade away the right to go to court in exchange for a $200
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should we be doing something to protect consumers from more than just the nondisparagement clauses? >> oh, absolutely. i think you've made a very good point, senator. the fact is the way consumers can seek redress is through our public court system. a lot of these stories and a lot of the bad damages that are done to consumers if they don't have access to the courts, and ms. powers was lucky. her story's a very compelling story, and the press picked it up right away. sometimes you need to go to court and publicize those stories in ways. what fiat did in that instance is happening in every consumer place you can imagine. employers, consumers. and it has gotten sanctioned. what's interesting about the fiat case, there was actually an award to sign it away. it's been in clauses, it's in shrink-wrap click-on things. arbitration clauses are
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everywhere in our economy today, and there really is a dual justice system happening right now where consumers don't have access to our courts whenever they reach an agreement or enter into any sort of agreement with any type of business. >> this committee has seen a proliferation of these things just recently. fiat is just one example. the gm its in addition switches and -- ignition switches and so forth. and now the can takata airbags. that's still in the news, as a matter of fact, today. and is so thank you for your comments, because these things that are subject to mandatory arbitration or adhesion, you would really lose a lot of your ability if we cut off the access for either the aggrieved or the
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aggrieve or -- aggrievor. >> those cases can proceed, we don't do anything to impinge on that right. senator mccaskill and senator blunt, senator moran are still basking in the glory of the -- >> yeah. we had hardly anybody show up for the party yesterday. >> i noticed everybody in kansas and missouri was there, which begs the question what you guys are doing here. >> there aren't that many people income kansas, so it was basically missouri. [laughter] >> i tried to have a bet are from the senator with new york, and the offer was i would offer kansas city barbecue if he'd agree not to talk for 45 minutes. [laughter] he accepted your bet, not mine. >> yeah. >> and, secondly -- >> that was a bad move on your part considering who it was. >> many missourians have a loyalty elsewhere in their state. finally, senator blunt and i are
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wearing blue, and you're wearing red. >> oh, look at that. oh, my goodness, i won't even go into the history of the team in kansas city, missouri -- [laughter] but i'll be glad to acknowledge that we're welcoming all of the fans -- >> she is a loyal cardinal be fan too, i might add. >> i am both. >> you are up, senator mccaskill. >> thank you very much. i'm pleased that senator thune has, in an effort to get a bill that we can all agree on, has agreed to take out the provision that limits the tools available to attorney generals as it relates to contingency fees. let me ask you, ms. palmer, i'm assuming there was a contingency agreement with the lawyers that ultimately represented you in this case? >> fortunately, public citizen as a nonprofit was kind enough to work with us pro bono since we really could not be afford legal representation on the scale which we needed. that was the other -- aside from people just saying we're not touching this, those that said
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when i said, well, what if you just wrote a cease and desist letter or just helped us with a little bit, they were offering thousands of dollars -- >> of course. that's why, i mean, it's very hard for an individual to get to court unless there is a contingency fee agreement. >> right. and even with the contingencies, they said, no, we want a retainer. we said if we don't have $3500 to play clear gear, we don't have it to pay you. >> mr. rangel? >> sure. one important point, i'm a chicago cubs fan, so i'm a little disappointed today, but that's okay. congratulations to kansas city. one important thing about consumer statute is the that consumer statutes congress passed has fee-shifting provisions. so attorneys who take a case like a fair credit reporting case, like the damage that was done to ms. palmer, would not have to charge ms. fallpalmer. -- ms. palmer.
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they only get paid if they win that case, and the court will award them damages after they successfully win the case. it's a little different from contingency. in the past particularly when it comes to private enforcement, to have those fee-shifting statutes, and that provides access to consumers when they've been damaged like ms. palmer. >> so did public citizen recover the costs even of their litigationsome. >> we are still working on tracking clear gear down to recover any costs. >> oh, so you haven't collected yet. >> no, ma'am. >> they still in business? >> as far as i know. >> oh. that just drives me crazy. >> it should be noted that in the judgment award the judge did award us our settlement and tacked on the lawyers' fees for public citizen as well. so those -- so if and when anything is ever collected, public -- >> which is the fee shifting that mr. rhinegold was referring
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to. >> right. >> that they have the right to recover their costs. >> right. however -- >> but if you'd lost, they wouldn't have gotten anything. >> true x. that was always an issue. >> right. >> a fear. however, if were any of the other lawyers to be contacted, they wanted a retainer up front. >> and that is one of the challenges -- >> absolutely. >> -- is trying to figure out how we fund lawsuits where there's a legitimate complaint where the damages don't appear to be enough to warrant the risk that a lawyer takes on when they get into the costly litigation. and that's one of the advantages that these big companies have, is they know that it's small enough, and there's two things a lawyer has to have to bring a lawsuit. one is liability, and the second is damages. and how large the damages are is relevant to whether or not that lawyer wants to take on the costly risk of going forward with a lawsuit which does kind of even the playing field be, i
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think, in some ways too much in favor of the big guys. let me talk to mr. medros about use of service. now, i know who drafts this stuff. and they are lawyers. but this is just the terms of service, okay? web site terms, conditions and notices. then this, another five pages of fine print, is privacy. how many people do you believe are reading that that go on trip adviser? >> i would imagine very few people read through the entire terms of use and privacy statement. >> so what is the point? if we know nobody's reading it, why, why aren't we working at making this -- has any, have you thought about making a stab of making the terms of service as
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forth coming and as clear as the rest of your web site? >> i think we would welcome the opportunity to make privacy and terms of service clear. we take privacy extremely seriously. we take terms of use extremely seriously in giving us the ability to moderate our content according to our guidelines. i believe that in the case of a bill like this what you often see is a precedent and a set of standards set for how terms of use and privacy are conveyed to consumers. >> yeah. i just, you know, there's -- one of the reasons adhesion contracts are so successful is because they are buried in a way that the average person is never going to understand what is being done to them. >> correct. >> i think many of them would run in horror. i think ms. palmer would have
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run in horror if she would have realized before they ordered those items what that company was purporting to do. it seems to me that this is something we've really got to work on, because this is a lot of waste. because nobody is reading this stuff. so why are we doing it if it's not providing the service that it needs to provide to the consumers that it's ostensibly designed for? so we've got to work on that. thank you, mr. chairman. >> thank you, senator mccaskill. and i would -- in your case, ms. palmer, too, they added this long after the transaction concurred, correct? >> yes, they did. i had read through the terms of service three times to make sure there was nothing in there that would limited me -- especially since i didn't purchase the items, my husband did, i wanted to make sure there wasn't anything against me from posting the review versus my husband. so i did read through it several
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times. and when they came back and said you violated this nondisparagement clause, i looked at my husband and said, that didn't exist. >> [inaudible] >> [laughter] >> yeah. you actually read those agreements, that is most impressive to start with. [laughter] so, yeah. my neighbor to the south, senator fischer. >> thank you, mr. chairman. professor goldman, you've mentioned that small businesses in particular may make use of these nondisparagement clauses. as many of them view it as personal when they get negative feedback. i'm on the small business committee here in the senate, and i fully understand how important small businesses are to the state of nebraska and also to the economy here in our country. so while i agree that the use of these nondisparagement clauses is a practice that should be discouraged, i'd like your views on whether this bill contains
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sufficient, really protections for small businesses that are out there. do you think it does? >> in the end, the goal is to create a level playing field for small businesses, and so any of their competitors who are distorting their public persona using these anti-review gag nondisparagement clauses is actually hurting the overall marketplace and the opportunity for small businesses to go and win over customers to their side of the equation. so, in fact, if anything, i think this bill is essential for making -- preserving the vitality of the small business community and for making sure that the markets are open for them to come and enter. >> and do you think those protections are in this bill? >> i support this bill as it's currently drafted. i did write some thoughts about ways it could be tweaked, but each of those, i think, deserves some further discussion. even if we don't do that, i think this bill would be super helpful in advancing the interests of small businesses.
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>> thank you. and, mr. atkinson, do you have any comments about if small businesses -- do you believe they're protected under this bill the way it's drafted? why we're still making sure that we allow consumers to be able to express their views without being punished. >> you know, i would echo mr. goldman's comment that a lot of the damage from these clauses actually are harming their small business competitors who are doing a really good job. consumers don't have a way to weight who's better. so it might hurt a particular small business, but it helps others. secondly, there are still provisions, there are still legal remedies that a company can use if they feel like someone has outright lied. the bill doesn't prohibit a company from taking action in that way. and there really is a lot of evidence that if small businesses aren't active, a small business owner posts something and says we're concerned about that, we don't agree with the review, that it really can minimize damage if a company is sincere in what
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they're actually trying to do. >> do you think small businesses have the resources where they'd be able to respond to those negative comments where they really can take action? it's hard for consumers to take action. we've heard that. it's difficult. lawsuits are expensive. but what about small businesses on this as well? how do we reach a balance here? >> well, i think a way a lot of the online rating platforms work is you can monitor your, you can monitor what people, your customers are saying about you. and, frankly, in the internet age that is something that every business needs to do. you're not going to search the web every day for everything, but there are platforms that you can and should monitor as a small business owner and, you know, doing that is not, i don't think, overly burdensome. and a quick reply, just, you know, one minute kind of reply every once in a while, you know? you don't get negative reviews every day, so i don't think it is a burden for companies to do
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that. i think it's good practice now in the internet age. >> okay, thank you. also, mr. atkinson, in the senate version of in this bill we're looking at enforcement of the prohibition on nondisparagement clauses by the federal trade commission. and in the house version we have the enforcement by the department of justice. do you have an opinion one way or the other on who would be the best positioned to assume that role? >> i don't have an opinion on that, but the person who leads this work for us is daniel castro who was not able to be here for flight reasons, and and i will talk with him and happy to get back with you on that. >> that would be great. thank you all very much for being here. >> thank you, senator phisher. be -- senator fischer. senator moran. >> mr. chairman, thank you very much. thank you for hosting this hearing and pursuing the concepts contained in this legislation. on the topic of small business, i would assume that small business actually uses reviews as well. they are a consumer.
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small businesses need information about what business, larger or smaller, that they might want to deal with, and online reviews may be helpful to a small business in making a business decision. so while several of you outlined some ideas of how this isn't harmful or perhaps beneficial to small business, one of the other ways is a small business cannot make a mistake. it's more difficult if they enter into an agreement for purchase with another corporation that turns out to be a bad deal. the consequences are greater, harder to recover from. so i assume that small businesses also utilize the review as they make purchases of goods and and services? i don't know if there's -- everybody's shaking their head. anyone want to disagree with that? okay. then let me ask about state laws. perhaps this is to the professor. california, i think, in particular has state laws dealing with -- a state law or state laws dealing with this issue. >> yeah. california is the only state --
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>> other states are considering looking at that, is that true? >> i haven't heard. >> i hate asking this question, anything we can learn from california in the way that this law has been written or interpreted or enforced? [laughter] >> i don't believe there's been enforcement actions under the law, so we don't have data points about how it's actually applying in the field. it is relatively new, so it is early in the process. the only thing i'll call attention to is there is a statutory damages provision in the california statute that awards consumers who are subjected to these clauses to obtain statutory damages. and i think that's a topic that's worth discussion at this committee, whether that would be a helpful addition to the law. >> okay. in addition to that suggestion, let me ask a broader question. while we're focused on nondisparagement clauses, in this world of online reviews, are there other or similar issues that the commerce be committee, that congress ought to be paying attention to? a couple that i think have been mentioned previously, i know have been mentioned previously,
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fake reviews, false reviews? are there issues that surround this new development? certainly in my life particularly as a rural, small town resident, these reviews occurred. they occurred after church, they occurred at the grocery store, they occurred at the café. and people within our community would talk about what service they got or didn't get, how quality the product was or wasn't. today i suppose the consequences are just magnified because of the volume of information that's now available. is there something we're missing as we only look in this legislation as to this issue of nondisparagement clauses? professor. >> if i may, i will reiterate my interest in the federal anti-slap solution. the idea would be that it would enable lawsuits that are brought alleging defamation or other types of harms like that that are on, content that would be of
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social interest to be tossed early and to fee shift if they're illegitimate. and so the real way that reviews get scrubbed off the internet isn't through these clauses, though these clauses are problematic. but they're -- because people post them, they're threatened to take them offline like in ms. palmer's case. in all other case, when consumers get those threats, the content comes down ininstantly. a federal anti-slap law would help some consumers decide i'm not going to be bullied off the internet, and i won't be betting my house on legal fees that i can defend my interest in court. >> okay. mr. atkinson? >> i would just second mr. goldman's point on that. itif released a report last year on the wholish sue of anti-slap and the impact that it has on the internet economy and commerce. we would agree with that.
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that's another component. obviously, both pieces of legislation, in our view, are very important. >> thank you very much. mr. chairman, i apologize to you for intruding in your commentary on the royals. [laughter] nearly impossible not to have the continued kansas/missouri battles in the presence of the senator from missouri. [laughter] >> i wouldn't have it any other way. senator schatz. >> thank you, mr. chairman. ms. palmer, thank you for your courage and your clarity. i know you've been through a lot, and i imagine it's been a difficult several years. we really appreciate everything that you're doing. and your case perfectly illustrates why we need a law, because individual consumers are in no position to fight this injustice. and your case also shows why we need a federal law that a patchwork of individual statutes are not going to work in the age of the bear net. my worst question -- internet. my first question is for
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mr. atkinson. we've been talking a little bit about, well, two things, right? one is consumers don't know what rights they might be waiving as they click "i agree" or sign a contract at the hotel desk. and there's this other question related to swim case and -- intimidation and admonishing or warning customers against a negative online review. those are sort of different tactical approaches. so which is it that these companies are really employing? -- employing? are they tricking customers into signing away their rights, or are they warning customers against a negative online review? they can't be doing both at the same time, it seems to me. >> i think, first of all, we don't know -- there really hasn't been enough surveys of this. there's a lot of anecdotes which i think are quite compelling. we've just heard one here. but then other folks have talked about that. so i think there's a lot there, and we don't know exactly which strategy companies are using
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more of. but i think one of the reasons why this bill is so important is it's not just the fact that even if there were no law, if people think that they may be gone after. and i think we're at a point where if we don't solve the problem soon, there could be something in moat consumers minds -- most consumers' minds where it gives them doubt and fear, i heard about somebody getting sued, i'm just not going to take the risk. you think about somebody contributing a review, they're actually being a public citizen. they're contributing to the public good. they're taking their valuable time -- it's not going to help them. they're trying to help everybody else. so if we have a sort of collective climate of fear, we're just going to -- people are going to be not be able to do it. >> fair enough. but it does point out we're operating at sort of the beginning of this this problem, it seems to me and, therefore, we're lacking, you know, sort of good decision support on exactly the size and scope of the problem. speaking of that, does anybody on the panel know primarily whether these clauses are being
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employed by small or large enterprises? because it seems to me that that's a pretty important question too. i would imagine that the reputational risk of a big national or international brand would probably cause bigger companies not to utilize these, but i'd like to know whether some of the bigger companies are using them. does anybody know? >> i don't think, i don't think trip adviser sees any evidence one way or other. small businesses up to potentially large businesses want to, in effect, distort consumer opinions online by getting negative reviews withheld in favor of positive reviews. >> mr. medros, let me move on to the way trip adviser works in terms of you have, essentially, a pop-up screen that warns consumers if there's a particular hotel or travel
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company that has a nondisparagement clause, is that correct? >> that's correct. we put a badge, a red badge on the property warning consumers so that they can make an informed decision about whether to stay there knowing there's a nondisparagement clause. >> how do you figure out whether the company has a nondisparagement clause? is that based on consumer complaints, or do you have a process internal hi for -- internally, because i would imagine it's a resource question for you to have a team of lawyers scrubbing all of their individual contracts. so is it just based on if something pops up, then you notify the public? >> it's based on consumers reporting it to us and us investigating. and i think that speaks to why more so than any other reason we need this legislation is to -- we only see a small percentage of these contracts that may exist. some consumers may not notice the clause, may be too fearful to report i. and so widespread banishment of these types of clauses is critical for all consumers. >> well, i think that's the most
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important point here with respect to whether or not there's a private sector and sort of internet-based solution, and it seems to me that there is not without a statute. because you just can't make yelp or trip adviser or anybody else responsible for reviewing legal language in any company that may or may not be mentioned on your platform. >> i would wholeheartedly agree. it's a -- it would be a game of what can a mole. -- whack-a-mole. >> thank you. >> thank you, senator schatz. senator deans. >> thank you, mr. chairman. this is really intriguing subject today. i spent a number of years with a cloud computing customer experience solution, we were a b to c business selling to organizations that touched hundreds of thousands, if not be millions, of consumers. and it's an overused cliche to suggest that the customer is in charge. we all know that, now people are starting to wake up.
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second, i think feedback is a gift. and i think it's insecure companies like bullies on a playground are insecure that have these anti-disparagement clauses. and, you know, welcome to the free markets and the internet. let's compete and let the consumer have its voice. and i think, frankly, it tends to be a bit condescending to consumers to suggest that the consumer -- i think consumers can weed through. they kind of see that folks are a bit unhinged, perhaps things that are true and not false, let the consumers sort that out is, i guess, my view on it. recognizing there still is a problem with some companies posting false claims to prop it up and competitors posting claims to disparage. having said that, i can tell you from montana's economy viewpoint tourism is one of our largest businesses there, it's $4 billion. 11 million people visit our state. and they're going online, they're booking trips, their relying on online reviews.
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i spoke to a small business owner just a couple weeks ago in kind of an obscure place in montana. i said, how was your summer? he said, best somewhere summer ever. i said, why? he said, online reviews. people went and found us. by the way, yellowstone national park has a 4.5 out of 5 rating on yelp. [laughter] just a little hometown advertisement there. [laughter] anyway, i guess though i'm curious about how we ought to approach fake online reviews. if there's a thought on best practices, whether it's businesses that are paying for positive reviews or competitors who are writing false negative reviews. curious what -- if you could share with me some best practices, policies, procedures that you would recommend that should be used to combat fake online reviews. please.
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>> so i think a couple things. your first point about consumers becoming more sophisticated, and this in some ways infantyizes them. i think as people get more comfortable with the internet economy, they'll be able to sift through that. in terms of what companies are doing, there are certainly companies like yelp and, i'm sure, others who have very, very sophisticated algorithms to really be able to use technology to flag these reviews that are at a high risk of being false. and then taking them off automatically. so there are companies, and there's technology now that companies are employing that just simply those reviews never will be -- don't get posted. >> yeah, please. mr. goldman. >> i'd like to, first, point out that no matter how big the problem with fake reviews, anti-review clauses are never the solution. so this particular bill, i think, is a legitimate concern,
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but i want to stress how important this bill is. i think with fake reviews we should recognize that consumer views are still a are relatively new phenomenon. we can take them back maybe as far as 20 years ago, but really the modern consumer review economy is maybe a dozen years old. and if you think about it in those terms, we're seeing the evolution of review sites in developing better and more aggressive techniques for managing consumer reviews. in the end, they are the solution. we need to have trustworthy platforms for reviews, and i think that we're seeing improvement on that front every day. >> you know, i worked were procter & gamble for 12 years. you think about, i mean, this is incredible, valuable data. this is what you used to pay a lot of money to focus groups for, and now we get it virtually realtime, unedited. and that's why, yeah, i think we're in agreement, we need to deal with these
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anti-disparagement clauses based on a lot of stories, ms. palmer's here as well. but this is part of the new economy. this is a gift, i think. if you want to become a world class company, embrace it. mr. medros. >> senator daines, we see over and over again stories like you told. businesses in remote places, in places that consumers wouldn't have thought of traveling to or wouldn't have had the courage to travel to pre-internet. and, in fact, the best businesses leverage a platform like trip adviser to embrace consumer reviews, to use it as a free marketing tool, to encourage people to share their opinions and set their expectations of what that trip is going to be like so that you feel safe to venture to some of these more remote places that are amazing experiences all around the world. we hear this story over and over again from business owners. what makes that possible is the scale of our platforms, the free ability for consumers to share those opinions without the threat of being sued or bullied
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by owners who may not like every piece of feedback. and the best businesses take that feedback on an ongoing basis and make their business better. they improve their service. they change things about their property. they remodel, they use that as a feedback tool that otherwise companies would have paid millions of dollars for in the past. >> thank you. >> thank you, senator daines. in our line of work, we get plenty of feedback. [laughter] >> we do. >> i'm going to really -- [laughter] i'm really going to -- >> [inaudible] >> yeah. i'm going to embrace, embrace the idea that it's a gift. >> i'll stay -- [laughter] i'll stay off your facebook, you stay off of mine, mr. chairman. [laughter] >> thank you. all right. senator from minnesota and noted author, senator klobuchar. >> thank you very much, mr. chairman. i was thinking the exact same thing when he said it was a gift. so i was thinking of some of the hilarious tweets and facebook posts that i get. i won't go into them right now, but i collect them because
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they're so amusing. so this is a very important bill, and i want to thank -- and subject, and i want to thank the chairman and senator schatz for the work that they've done on this. and i guess i'd start with you, ms. palmer. your experience sounds like quite an ordeal. i read about it. the scale of the harm caused by what was initially a $20 purchase is astounding. and your persistence in finding a solution is extraordinary. in response to clear gear's initial demand to take down the review before they made the negative be reports to the credit rating agencies, how much time would you estimate that you and your husband spent researching and responding to clear gear's demands? >> it was several hours between -- i had chosen seemingly at random. and to find out that they don't allow reviews to come down -- it took me several hours to find out what options i had.
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i believe to the point of actually e-mailing them and saying here's my problem. i'm now being bullied. what options do i have. and they had to respond to me and kind of spell out and say, well, this isn't our policy, and the legal language is a little convoluted. but, basically, we don't allow you to take them down, but here's why. we want to make sure that people are free to post a review without feeling bullied and without feeling like they have, they can take it down and without allowing businesses to remove it. >> okay. >> so it was several hours. >> mr. rangel, this is a softball question, but do you think most consumers are likely to be as persistent in response to threats from companies seeking to enforce nondisparagement clauses, and what will likely happen if they are not as persistent? >> ms. palmer's story is remarkable. i wish all consumers acted like she did. it's quite amazing.
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most people give up. consumers are not going to pursue, heir going to move on with their lives, they, one, try to seek legal help, they would just walk away from the problem. and probably i unlike ms. palmer, stop posting reviews. i think that really would have a chilling effect on most consumers from ever doing it again. i think, again, ms. palmer's unique, and we should clone her in terms of her behavior here. >> uh-huh, very good. well, thank you. i remember i once had a similar thing with a bill, and i found some people that had pursued things like ms. aller did to talk about it -- palmer did to talk about it. it was, like, a lutheran minister and a math teacher had gone to the depths to see these tiny little charges that added up over time. so you're in good company, i guess. i understand the concerns of small business owners who worry that unfair or false reviews can
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hurt hair livelihoods -- their livelihoods. was it you, mr. atkinson, who cited a study showing -- was it you who had the study -- showing that a one-star rating can lead to a 5-9% increase in revenue? to put a less rosy spin on it, a one-star decrease, can limit it. >> well, first of all, in the lion's shareover -- share of those ratings, they're accurate reviews. the most important thing a restaurant could do in that particular case would be to improve their service or the quality of food or wherever else, why they're getting a bad review. that is information for a company to continually be able to improve their service. trip adviser has mechanisms in place where you can challenge
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reviews that are bad. not in the sense of taking someone to court, but just say this is a bad -- thirdly, companies and do post and say we don't agree with this review, and here's why we don't agree with it. or we do agree with this review, and here's why we're sorry, and here's why we're going to fix it. >> i was looking at some last night, actually, not in preparation for this hearing. [laughter] i'd like to say it was, and i've seen those. mr. medros, what knave incentives do you think companies like trip adviser have to limit unfair and false reviews? >> we give consumers this ability to share all their experience, experiences, and the incentive be ultimately when we hear about limits to free speech is to warn and then penalize businesses that try to chill that speech. >> uh-huh. and, professor goldman, does your research bear out what mr. medros just talked about? >> i'm sorry, which aspect? >> well, he talked about the
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fact that there's incentives for companies to limit unfair and false reviews. >> i'm sorry, you're talking about review sites. >> uh-huh. >> yeah. in fact, review sites andive -- live and fall on their own reputation. they themselves compete in the marketplace to be concerned to be reputable and persuasive. in fact, we see fierce competition among review sites to convince their consumers that they're trustworthy. and that competition, actually s a great incentive to fight against fake reviews. >> all right, thank you very much to all of you. thank you. >> thank you, senator klobuchar. senator blumenthal. >> thanks, mr. chairman. i want to thank the chairman for not only having this hearing, but lending his support to the idea of protecting consumers against this new, ingenious wrinkle in the sort of age-old practice of burying tricks and traps in the fine print of
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contracts. it kind of gives new meaning to hidden tricks and p traps that discourage consumers from informing and warning other potential consumers about the downsides of particular experiences or products. these sorts of sneaky sentences or paragraphs essentially gag a consumer from giving services or goods a negative review when they've paid for it, they're disappointed is in it, and they want to warn other consumers. usually they're buried, as you know, in the fine print of a sales contract or an invoice, and they are a one-way racket. they prohibit negative reviews but not positive ones. so from an economic standpoint, they distort the free market, and they chill speech.
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i am a supporter of the bipartisan bill that's been announced, and i want to thank him for engaging with me on this bill. my initial objection arose from the original language of the bill which included a provision related to state attorney general enforcement. that was concerning to me as a former attorney general. i believe that the language will be removed when we move to a mark-up x so i'm proud to add my support as a cosponsor of this bill. attorney general has a vital and vigorous role in protecting consumers and adding to the resources and intellectual weight of the federal government. so i very much appreciate the chairman's understanding in that regard. some probably are going to raise the question why do we need a federal law. and the answer is, quite simply,
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that these standardized anti-defamation provisions may be considered void under state common law, but there are a number of them throughout the country, and they confuse consumers because consumers have to go to different state laws to know whether or not they are valid in one state or another state. and i would like to simply say that making these provisions a per se violation of the ftc act is exactly the right thing to do. prohibiting their use and the chilling effect they create in the first place promotes the free market nationally, and these products, services are sold and marketed nationally. and the information should be available nationally without the impediment of a patchwork of
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different state laws. so i'd like to ask mr. goldman and mr. medros, can you talk about the virtue of a federal solution here? let's say a connecticut consumer gets a hotel through a web site located in north dakota for a hotel in utah. should a consumer have to research the state laws in three different jurisdictions before she can exercise her free speech rights? >> certainly, we would think ms. palmer's case a great example of how difficult it is for a consumer to, one, understand the limits of these clauses and, two, to get relief from them. they don't add any value to anybody in the ecosystem. they certainly hurt consumers. they probably and certainly hurt other businesses that play by the rules, and they depress the overall market. >> thank you. mr. goldman? >> yeah. i would similarly add that to
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the extent that we believe the laws -- i'm sorry, the clauses might already be illegal, that might depend on things like states' interpretations of unconscionability or public policy. and there are significant state and regional variations on those legal doctrines, and as a result, providing a federal standard would clean up any ambiguities. >> thank you. my time has expired. this subject is one that is extremely important, and i thank you all for being here today. thanks, mr. chairman. >> thank you, senator blumenthal. senator markey. >> thank you, mr. chairman, very much. and thank you for convening today's hearing. online review sites provide customers with an important and open forum to provide feedback, to share experiences and hold businesses accountable. some of these web sites even allow customers to compare products and prices amongst many service providers, helping consumers select the best product at the most affordable price. last week i visited trip adviser's headquarters in
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needham, massachusetts, and saw firsthand trip adviser's wonderful staff working on key innovations and per faces -- interfaces needed to insure consumers have unfettered access to online reviews and travel prices. and i am proud that one of the largest travel sites in the world is based in massachusetts, and i'm happy to see trip adviser testifying here today. it's come to my attention that some airlines may be restricting access to their schedules and prices, making it difficult for online travel sites like trip adviser to post different flight options online. if a consumer cannot view all of the flight options and prices on one web site, the consumer may be unable to identify the best travel prices. as a result, the consumer may pay too much for her flight. mr. medros, how are consumers harmed when airlines do not provide fare and schedule information to travel sites?
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>> consumers are harmed anytime you reduce transparency. in this case, it would be pricing and availability. and given the consolidation in the airline industry, particularly in the united states, that limit of information, that limited visibility around real pricing, real availability, real fees doesn't help consumers plan trips, doesn't help the economy grow through travel and tourism. >> are airlines currently preventing sites like trip adviser from accessing ticket feeses and flight schedules? >> yes. increasingly, airlines are attempting to withhold that information and not make it freely available for consumers to price compare and shop. >> should, mr. medros, airlines provide travel sites with ancillary fee information as well? the fee on baggage or advanced
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seat selection fees and all those things? should that also be made available so that the consumer can see what the total charge is going to be to fly? >> absolutely. i can't think of any consumer that wouldn't want to know outright what to expect in terms of pricing. >> so we have gag clauses, provisions buried in contracts that discourage customers from posting negative reviews online. which, ultimately, may wind up hurting consumers and businesses alike. and i'm concerned about these efforts to stifle americans' views. as we have learned, some people are getting penalized for posting honest but critical reviews, and the mere threat of penalizing customers from posting negative reviews may discourage some customers from posting at all. without customers posting their honest assessments of products and services, other customers may not have the information
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needed to make informed purchasing decisions. how can gag clauses also hurt businesses? >> gag clauses hurt businesses by reducing the amount of feedback that they get and birdies -- by distorting the marketplace for other businesses in that market. >> mr. rhinegold, what other attacks on consumer rights are some businesses include anything contracts in terms of service? >> [inaudible] sorry about that. this is kind of, this is the end of the line. we've seen it going on for years and years. clauses that restrict people's ability to get into court. arbitration clauses have been existing for a long time, are now widespread across every single industry you can imagine where people who have complaints simply cannot get into our public system of justice. it's a real concern. and the right to speak is sort of just naturally following the
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right to go to court. so i'm not surprised at all by what we're seeing today. >> thank you. ms. palmer has highlighted one of the more egregious examples of gag clauses. can you, mr. medros, provide other examples of consumers getting harassed for posting a negative review? >> absolutely. we've seen in the past cases with fines upwards of $5 million and daily fines of $50,000 to consumers until the reviews are removed. we've heard of cases from consumers of who have contacted us to remove a review because of the threat of a lawsuit or the threat of other action against that individual. in all of these cases, the consumer stands by their content but is choosing to remove their content and squelch their own speech so as not to end up in the case of ms. palmer with a lien against them. >> thank you. thank you, mr. chairman. be. >> thank you, senator markey. just had a couple of quick questions here, and we'll close this out.
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this would be directed to mr. atkinson or professor goldman. are there particular industries where consumer gag clauses are especially pervasive? >> i mentioned in my initial testimony about the medical and health care industry whether the entire industry was encouraged to adopt these restrictions and many participants -- i don't know exactly what percentage, but many participants did so. i think that industry has moved on. i'd like to think they have recognized the error of their ways. but i think it's an illustration of how the clauses are sweep an entire industry once a few people try it, other businesses might say that sounds like a pretty good idea. that gives me the control over my reputation i want. and if i don't do it, other -- my competitors are going to be having the glossy reviewed while
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i'll have the good and bad aired out in public. in my opening remarks, i did mention i think we'll see many other industries where the clauses will sweep that are driven by small businesses and professional service providers. so lawyers, doctors, accountants, etc., as well as small business owners, places like hotels or bed and breakfasts are good, fertile grounds for the breeding of these kinds of clauses. >> anything to add to that, mr. atkinson? >> no, i would agree with that. health care, retail, hospitality, personal services, areas where you would, companies where you're dealing individually with the actual service provider. >> okay. i would direct this to everybody on the panel, but some of you are familiar with the bill that we've introduced, the consumer review freedom act, and the question is do you believe it strikes an appropriate balance in terms of consumer rights versus the ability of businesses
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to protect their reputations? >> businesses have already a wide range of tool toss protect their reputation -- tools to protect their reputation. i can't come up with a single circumstance where it's legitimate to tell consumers they can't share their honest, truthful feedback. in my mind, on the particular question that the bill addresses, there is no balance that i can see that would be appropriate to be worried about. it's really, in my mind, an abuse of the business consumer relationship to tell consumers we want your money, but we don't want you talking about it. >> anybody else? >> i agree. i think the bill is a very strong bill and a very important bill, and i think it protects consumers. and i think as mr. goldman said, there are rights that businesses can pursue. and now that that one provision's being stripped, we're very happy to support it. >> okay. thanks mr. rhinegold. ms. palmer. >> i'd also like to point out that as consumers, as it's been
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stated, we don't have a lot of power when et comes to -- when it comes to trying to defend ourselves against a business that would seek to have us remove a review or come after us. they have a lot more money, they have a lot more lawyers on staff than we could ever choose to get. knowing that les a law in place -- there's a law in place that says you guys can't come after us just because we told the truth is extremely empowering to consumers. i believe it'll go a long way. >> thanks. >> i don't think -- i agree with mr. goldman, i don't think there's anything really here to balance. what your legislation is trying to prevent are things that are simply unfair and harmful to consumers. as we've all said, consumers have -- businesses have many other options that this bill would not take away. >> i'd just add that not only are consumers harmed, but other businesses that lay by the rules and want a level playing field are also harmed by the existence
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of gag clauses that distort the market. >> okay. well, thank you all very much and thank you for your testimony today, for your responses to our questions and, ms. palmer, thank you for your inspirational story and example that one person really can make a difference. i think you were sort of the reason why this issue has taken on a life of its own and certainly why we're here today. so -- and thank you to all the panelists. you know, we spend a lot of time on this committee, in the commerce committee, studying these issues related to the internet, how do we keep the internet ecosystem protected, how do we look at the potential that it offers. you look at the digital economy and how powerful that is and how many people are using that to do business, to purchase products and services, and obviously what is happening out there in terms
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of these various practices seems to completely contradict what we're trying to accomplishbe in terms of -- accomplish in terms of creating more freedom and protecting consumers' rights out there, but certainly empowering people as they use this powerful tool in a way that can enhance not only their lives, but those around them as well. so we appreciate your insights and thank you again for making the time to be here today. we're going to try our best as we move forward, we have a mark-up scheduled here in a couple of weeks, and we'll hopefully try and move this bill to the senate floor and try to get some action on it there. we have a companion bill in the house, and it'd be nice to see something that we could actually put on the president's desk that would address an issue that i think is becoming increasingly important in our digital economy. the hearing record will remain open for two weeks. during this time senators will be asked to submit any additional questions for the record. upon receipt, we would ask the witnesses to submit their written answers to the committee as soon as possible.
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thank you all again for being here today. this hearing's adjourned. [inaudible conversations] [inaudible conversations]
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[inaudible conversations] >> the 2016 open enrollment season for the affordable care act started november 1st. today senator ben sass of nebraska testifies about the closure of several health care insurance co-ops. we'll be live with the house energy and commerce subcommittee on oversight and investigations at 10 a.m. eastern on c-span3. >> this weekend on c-span cities tour, along with our comcast cable partners, we'll explore the history and literary life of california's capital city, sacramento. on booktv, one author shares the story of her japanese-american family's survival of the depression, being swept off to internment
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caps and bigotry. in her book, "dandelion through the crack." then open resistance to prohibition and how it earned the reputation as the wettest city in the nation. and we'll meet with another author to discuss her book, "none wounded, none missing, all dead," a biography of elizabeth bacon custer whose life was full be of adventure, tragedy and determination to recreate the image of her husband, general george armstrong custer. >> elizabeth was the first to come to george's defense and say, no, that is not what happened. i know my george. i know the character of my george. he wouldn't have done that. and she stood up for him and championed his actions. so it was elizabeth's voice that rose to the top of all of this not only because she was a woman and people were paying attention to what she had to say because she was george's wife, but because she outlived all of them.
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elizabeth doesn't die until 1933. i mean, she is there for the 50th anniversary of the battle of little bighorn. she is there for all of history. so she can help shape what is being said about her husband. so it doesn't go so far to the other end. >> on american history tv, we'll tour the mansion once owned by california governor and railroad tycoon leland stanford. as a pro-union civil war governor and railroad executive, stanford negotiated deals at the mansion that helped complete the transcontinental railroad. >> so mr. stanford was our last two-year-term governor. so he was elected and served all of 1862 and all of 1863. and he was part of a group of men who were merchants. and they were politically active and had similar ideas, and stanford was their first
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candidate that was successfully elected as governor. so he was our eighth governor, and he was the first republican governor of california. >> then we'll visit the japanese-american archivalling collection at sacramento state university which includes letters, photographs, diaries and artwork from japanese-american communities following the attack on pearl hard -- harbor. and historian marsha ayman shares insight and artifacts related to the 1849 gold rush which brought 300,000 people to california. >> today we're in the center for sacramento history, and we hold the original records for the city and county of sacramento, and we go from the beginnings of the city in 1850 all the way up to present time. when you talk about the whole experience of coming to california to search for gold, you're going to need your supplies, you probably would have gone and had your portrait taken in order to document yourself before your journey. but one of the important things you would have acquired once you got here was a map to figure out where you needed to go.
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and this is a great map of the gold fields. this map would have folded all up so they could have fitted into their pocket. everything was lightweight, compact, easy to travel with. but this would have been an essential tool, and this dates from 1849 to show miners where to go. you can see how quickly the business of mining the miners and producing all of these things, and people were quickly making money off of the people who were looking for gold. >> this weekend watch c-span's cities tour in sacramento beginning saturday at noon eastern on c-span2's booktv and sunday afternoon at two on american history tv on c-span3. the c-span cities tour, working with our cable affiliates and visiting cities across the country. >> the u.s. senate about to gavel in to start the day. lawmakers will continue working on 2016 defense appropriations or the spending bill. a vote to advance that measure is scheduled for 11 a.m.
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eastern. it will require 60 aye votes. defense also on the floor of the house, they're taking up the authorization bill. our capitol hill producer, craig kaplan, tweeting: house will vote on revised authorization bill today. $5 billion less than the one vetoed by president obama, override vote was called off. follow the house on c-span, we'll take you live to the senate floor here on c-span2. the president pro tempore: the senate will come to order. the chaplain, dr. barry black, will lead the senate in prayer. the chaplain: let us pray. spirit of god, who brought light from darkness, and order from chaos; we praise your holy name. lead our lawmakers, using their
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daily experiences of joy and sorrow, pleasure and pain, victory and defeat, for your glory. bless their labor, providing for their needs and preparing tables of peace and confidence for them. as they rejoice because of your faithfulness, protect them with the shield of your love. lord, fill all of our hearts with your joy and give us your peace. thank you for continuing to be our ever-present help in turbulent times.
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we pray in your sovereign name. amen. the president pro tempore: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the majority leader. the clerk will call the roll. quorum call:
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mr. mcconnell: mr. president? the presiding officer: the majority leader. mr. mcconnell: i ask unanimous consent that further proceedings under the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: i remember a recent time when president obama tried to spin americans on obamacare. the best he could muster then was a condescending sort of cringe-inducing message that likely turned off more people than it converted. he even said americans who already had health insurance -- quote -- "may not know that they've got a better deal now under obamacare than they did, but they do." like i said, it was condescending and cringe-inducing, it was just so out of touch with the priorities of america's middle class. well, it looks like the president is going to try again today with a series of regional tv interviews. he'll be doing so with headlines like these as the backdrop: cbs,
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affordable health care not so affordable. a.p.: more than half of the health care's insurance co-ops are closing. here's a headline about the president's home state: some obamacare marketplace prices see double-digit jump in illinois. and here's one about mine: health co-op closes. 51,000 need new insurance. this is on top of the massive premium increases so many kentuckians have faced. but this isn't just a kentucky story or an illinois story. it's in every corner of the country. we see story after story about sharply rising premiums. the largest insurers in tennessee have rates going up
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36%. a large insurer in oklahoma is raising premiums by 35%. in hawaii, families are looking at increases of 26% and 34%. it's easy to glaze over the numbers, but this is real money coming out of the pockets of real families. this is money that could help send a child to college or put thanksgiving dinner on the table. but it will go instead to insurance bills made unnecessarily expensive in part because of obamacare's costly rules and regulations. perhaps the president will settle today for just trying to convince americans that obamacare's web site, at least, is working better than in years past. but that just means it will be a little easier for middle-class families to pay more for unaffordable health insurance and higher out-of-pocket costs. that's hardly the makings of
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better headlines or better outcomes for the american people. mr. reid: mr. president? the presiding officer: the democratic leader. mr. reid: obamacare is working, as "the new york times" has indicated in a strong, strong column this week how dramatically rates of insurance have dropped since this bill was passed. the initial posting for most premiums don't tell the story, at least the whole story. the law requires the department of health and human services to propose only the health increases that go over 10%. many have gone through review process at the state level. furthermore, remember, we're only talking about the states that increase more than 10%.
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most all the states had increases that were far less than that. health reform law caps 85% exchange of enrollees premiums as a share of income. their income. because of the health law insurance companies must spend at least 80 cents of every dollar on health services. prior to this law passing these health insurance companies spent huge amounts of their money on salary and other things that didn't relate to the health of their enrollees. now 80 cents of every dollar must be spent on the enrollees. this has resulted in rebates totaling $9 billion paid to consumers since 2011. 80 cents out of every dollar on health services rather than administrative costs and profits. addressing insurance premiums was the key reason we enacted the bill in the first place. before the health reform law
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patients were subject to increases, cancellations, denials because of preexisting conditions. so thanks to this law proposed premiums are subject to scrutiny. this wasn't the way it was before. under the health insurance law insurance companies can't deep n.i.h. corchl or -- deny coverage or charge more because of preexisting conditions. health insurance can't arbitrarily cut off benefits whef you really need them. mr. president, the true test of leadership is whether one leads behind the conviction that others will carry on. yesterday wade henderson, one of the fathers of the civil rights movement, announced that he will retire from the position as president of the leadership conference on civil rights. and the leadership conference educational fund to make room for a future generation of leaders. wade henderson has inspired a new generation to hold our
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country to its most sacred values: liberty and justice for all. wade has been a true leader. for the past 20 years he's been a tireless advocate for justice and equality. his conviction, skill and expertise can be found in every major civil rights victory over the past two decades. wade has led the leadership conference and helped us pass the america vote act of 2002, the voting rights reauthorization act of 2006, the a.d.a. amendments of 2008, math shoe shepherd and -- matthew shepard hate craims prevention prevention -- hate crimes prevention act of 2009, lilly ledbetter, wade henderson carried the weight and responsibility of the modern civil rights movement on his
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shoulders. as he transforms and transitions into the next stage of his life, i have no doubt that he'll continue to be a champion for people of color, women, children, organized labor, persons with disabilities, seniors, lgbt community and faith communities. i congratulate wade henderson for his years of service to our nation and the world. i wish him continued success in all his future endeavors. i would ask consent that my statement regarding wade henderson be separate and apart from my comments on the obamacare. the presiding officer: without objection. mr. reid: would the chair announce the business for today? the presiding officer: under the previous order, the leadership time is reserved. under the previous order, the senate will resume consideration of the motion to proceed to h.r. 2685 which the clerk will report. the clerk: motion to proceed to calendar number 118, h.r. 2685, an act making appropriations for the department of defense for the
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fiscal year ending september 30, 2016, and for other purposes. the presiding officer: under the previous order, the time until 11:00 a.m. will be equally divided in the usual form. the senator from maine. ms. collins: thank you, mr. president. mr. president, i come before the senate to express my strong support for proceeding to the fiscal year 2016 defense appropriations bill. this bill provides vital funding for the men and women of our armed services at a time of serious and growing threats to our own national security and at a time of troubling instability and violent conflicts in many countries around the world.
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proceeding would allow the senate an opportunity to debate defense funding in an open and transparent manner and to meet our constitutional obligations. mr. president, i am truly perplexed to hear some of my dear friends and colleagues on the other side of the aisle suggest that there is a republican plan to enact only the defense appropriations bill and then proceed to a continuing resolution for all of the other vital appropriations bills. it would be an understatement to say that continuing resolutions are certainly not the preferred option of the appropriations committee, and i say that as a
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proud member of that committee. continuing resolutions create uncertainty. they lock in last year's priorities and they continue to fund programs that should be eliminated. they are not effective ways to govern. i want to be clear, mr. president, supporting an individual appropriations bill in no way suggests that the senate is somehow giving up on passing the other 11 subcommittee appropriations bills, whether they are brought to the floor individually or as an omnibus package. members of the appropriations committee now have working numbers as a result of the budget agreement. we are working together in a
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bipartisan, bicameral manner, diligently, to craft a bipartisan omnibus that can be supported by both chambers. democrats and republicans came together to pass a budget agreement just a few short days ago, and our ongoing negotiations prove our sincerity and determination to move ahead with individual bills and in crafting an omnibus. we've already made great progress this year. as our chairman, thad cochran, has noted previously, this is the first time in six years that the appropriations committee has approved all 12 of its bills, and many of those bills, due to
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the leadership on the democratic side, my dear friend barbara mikulski and others have been bipartisan when they were reported by our committee, and i would note that we completed our work despite terribly strict budget constraints months ago. now we are in a new stage. we have a bipartisan two-year budget agreement that has provided some much-needed relief to some of the budget caps, while keeping us on a fiscally responsible path. mr. president, this is the third time that the senate has attempted to take up this vital appropriations bill. last time, my democratic friends
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objected because there was no bipartisan, bicameral budget agreement. in the absence of such an agreement, they said they could not proceed with a bill. now, i didn't agree with that rationale, but i understood it. i do not understand the situation that we find ourselves in today. we have a budget agreement, a bipartisan, bicameral budget agreement. i do not understand why we cannot move forward with the defense appropriations bill, and i hope other bills individually and then ultimately an omnibus bill for those that we simply run out of time to consider this year. next year, due to this budget agreement, i hope we can bring
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each and every one of the individual appropriations bills before the senate for debate and amendment the way we used to do so, and that is our goal. december 11 is quickly approaching, and that is the date when the current continuing resolution expires. we must act before then to ensure that the federal government remains open. we must act to ensure that vital federal programs are funded and not operating under yet another continuing resolution, which is such poor policy. that's what we're trying to prevent. let's get the defense
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appropriations bill approved. then i hope that we can bring up at least one or two, perhaps three other appropriations bills, and in the meantime, we are already working on the omnibus bill. as chairman of the transportation and housing and urban development subcommittee, i have already met with my ranking member, senator jack reed of rhode island, and with our counterparts on the house side to begin the negotiations on our bill. we are operating under a very tight time frame that will require members to work around the clock and a good-faith effort from all sides. and that is what i'm asking for today. for members on the other side of
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the aisle to take the majority leader, the republican leader at his word, to pass this bill, this vitally needed bill, to go on to a second individual appropriations bill, all the while we are working in a bipartisan way to craft an omnibus bill. mr. president, i appreciate the opportunity to speak on the importance of advancing the fiscal year 2016 appropriations bills, and let me reiterate it is simply wrong for any of my democratic colleagues to assume that proceeding to the defense appropriations bill somehow suggests that there is no interest by our leader in passing an omnibus that will
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include the other vital bills funding essential education, biomedical research, transportation, housing, agricultural, energy and environmental and other important programs. i urge my colleagues to support proceeding to this vital bill. to fail to do so once again for the third time, despite the existence of the budget framework that we have agreed to. to fail to do so just days before we honor our nation's veterans would be a grave disservice to those who serve in our military today. thank you, mr. president.
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mr. president, seeing no one seeking the floor, i would suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
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a senator: mr. president? the presiding officer: the senator from montana. mr. daines: mr. president, for months we have called on senate democrats to stand with the american people -- the presiding officer: the senate is in a quorum call. the floor is in a quorum call. mr. daines: i ask unanimous consent that the quorum call be removed. the presiding officer: without objection. mr. daines: for months, we've called for senate democrats to stand and support our troops and pass the defense appropriation
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legislation. in fact, this is the first time, the first time since 2009 that all 12 appropriation bills were reported out of committee, and most with strong bipartisan support. i serve on the appropriations committee. in fact, i serve on the defense appropriations subcommittee. but today we are once again considering opening debate on the department of defense appropriation act of 2016, a bill that passed out of the appropriations committee on june june 11 with a very strong bipartisan vote of 27-3. and as we approach veterans day next week, today could mark the third time the democrats have blocked this critical legislation to fund our troops, and this comes at a time when our troops are actively engaged
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in multiple theaters abroad, and they need the critical support of our nation's growing mission overseas. but rather than passing this vital funding bill, my democratic colleagues would rather play politics and perpetuate the obstruction that plagues their party. the minority leader's constituents in nevada deserve more. they deserve better. montanans deserve more. the american people deserve more. so here we are debating for the third time simply to proceed on defense appropriations legislation and open it up for debate. let's be clear. the way the process works is we have to have first a vote to bring the bill to the floor to begin deliberation. this, the greatest deliberative body in the world, we can't even deliberate on the defense appropriations bill because our
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friends across the aisle are blocking it. it is time to open it up for debate, open it up for amendments. this is the process of the united states senate. the american people, the troops deserve more. but it appears that the democrat leader and his democratic colleagues would rather huddle in back rooms somewhere and concoct yet another deal behind closed doors versus in full daylight, in transparency on the senate floor because they'd rather negotiate in private than engage in an open and honest debate in front of the american people. unfortunately, today the senate democrats will put partisan politics ahe of funding the troops. the senior senator from new york, the likely next


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