Internet Law

Customer zapped with $3.5K charge for critique of Web retailer; its terms of use ban 'disparagement'

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Updated: A Web retailer has ignited an Internet firestorm by adding an anti-disparagement provision to its terms of use—and enforcing it.

Customer Jen Palmer says she was caught between a rock and a hard place when threatened to impose a $3,500 fine if she didn’t take down the criticism she had posted about the company on She tried, but told her she would have to pay $2,000 to remove the post, so she ignored the takedown demand, Palmer tells KUTV. (The founder of, Ed Magedson, says in a comment to this article that the site would never take down a consumer complaint, for any amount of money.)

Although Kleargear apparently didn’t sue to force Palmer and her husband to pay the $3,500 fine after its takedown demand several years ago was ignored, it did report her as delinquent to credit agencies, which has made it impossible for the Utah couple to get loans for a car and to fix their furnace, according to the station. The couple has disputed the negative credit-report entry to no avail.

When KUTV contacted Kleargear, an unidentified company spokesperson defended the charge in an email as justified by the terms of use.

TechCrunch and Techdirt provide the text of the anti-disparagement provision, which states in part:

“In an effort to ensure fair and honest public feedback, and to prevent the publishing of libelous content in any form, your acceptance of this sales contract prohibits you from taking any action that negatively impacts, its reputation, products, services, management or employees.”

However, there’s some question, KUTV says, whether the provision was in force in 2008 when Palmer put up the post.

There’s also some question whether such anti-disparagement provisions—which other companies also are beginning to use—are enforceable, a Better Business Bureau official tells Klearview gets mail in Grandville, Mich., and Phil Catlett is president of the Better Business Bureau of West Michigan.

“There’s a number of businesses around the country that are starting to put this language in their agreements; where they say ‘if you post anything detrimental there’s a cost to be paid,’” he says. “Whether it’s legal or not is a different issue.”

Magedson says supports customers’ right to complain, and likewise questions whether the anti-disparagement clause is enforceable, if the reported facts of the Palmer matter are correct.

News of the $3,500 charge sparked a swift negative reaction amongst the blogging community, TechCrunch says, and Kleargear took down its Twitter account and closed its Facebook page as a result. Techdirt says the Web retailer has also taken down the anti-disparagement provision.

The BBC News, the Consumerist, Gawker and Popehat also have stories.

Hat tip: Las Vegas Review-Journal

Updated on Nov. 21. to include Magedson comment.

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