WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA) and Dick Durbin (D-IL) introduced an amendment to the National Defense Authorization Act (NDAA) to combat the online sale of stolen, counterfeit, and dangerous consumer products by ensuring transparency of high-volume third-party sellers in online retail marketplaces. The amendment consists of the text of H.R. 5502, which represents the most recent negotiated version of The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act. The Senators’ amendment would direct online retail marketplaces that include third-party sellers of consumer products to verify the identity of “high-volume third-party sellers,” which will help deter the online sale of counterfeit goods by anonymous sellers and prevent organized retail crime rings from stealing items from stores to resell those items in bulk online. The amendment will also ensure that consumers can see basic identification and contact information for high-volume third party sellers who have sold them goods.
“With the holidays around the corner, Americans need to have confidence in the safety of the gifts they buy online,” said Dr. Cassidy. “Today we submitted the INFORM Consumers Act as an amendment to increase transparency and stop criminal third-party sellers from tricking Americans into buying counterfeit and hazardous products online.”
“Cosmetics. Electronics. Clothes. Over-the-counter drugs. Toys. Baby formula. Third-party sellers are flooding internet marketplaces with stolen or counterfeited versions of these and many other types of consumer goods. Often, these products pose serious health and safety risks to consumers who thought they were buying legitimate goods. That is why we believe people deserve to know basic information about those who sell them consumer products online. Our amendment ensures a baseline level of transparency for online marketplaces – like Amazon – and will help promote responsible marketplace behavior, discourage shadowy sales practices, and protect consumers. This amendment also represents months of bipartisan negotiations and has wide support from consumer advocates, manufacturers, retailers, and online marketplaces,” said Senator Durbin.
The INFORM Consumers Act directs online marketplaces to verify high-volume third-party sellers’ identities in order to deter shady anonymous sellers from using online marketplaces to hawk stolen or counterfeit goods. High-volume third-party sellers are defined as vendors who have made 200 or more discrete sales in a 12-month period amounting to $5,000 or more.
The legislation instructs online marketplaces to ensure that certain high-volume third-party sellers disclose to consumers basic information including the seller’s name, business address, and contact information.
The online marketplace will also need to supply a hotline to allow customers to report to the marketplace suspicious marketplace activity such as the posting of suspected stolen, counterfeit, or dangerous products. The bill presents an exception for individual high-volume third-party sellers that permits them not to have their personal street address or personal phone number revealed to the public if they respond to consumers’ questions over email within a reasonable timeframe. The bill’s requirements would be enforced by the FTC and violations would be subject to civil penalties.
The INFORM Consumers Act has received support from a broad range of organizations including the Buy Safe America Coalition, the National Association of Manufacturers, Consumer Reports, AFL-CIO, and the Coalition to Protect America’s Small Sellers which represents online marketplaces.