New Senate Bill Aims to Boost Online Marketplace Transparency, but Could Impact Small Sellers
A new bill, the 'Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act' (INFORM Consumers Act; S. 936), has been reintroduced in the Senate. This bill aims to increase transparency and protect consumers by targeting high-volume online sellers on platforms like the Facebook marketplace. Introduced on March 23, 2021, S. 936 defines 'high volume' sellers as those with more than 200 transactions annually, totaling over $5,000 on the marketplace. These sellers must disclose extensive personal and financial information, including government-issued photo identification, tax ID number, bank account details, contact information, and the means of acquiring their goods on the marketplace. The bill also requires online marketplaces like Facebook marketplace to publicly reveal sellers' names, addresses, phone numbers, emails, and other relevant details. This could pose challenges for small businesses that have turned to online sales on the marketplace, particularly during the COVID-19 pandemic. Large retailers, however, see this as a way to gain a competitive edge by raising compliance costs for their online rivals on the marketplace. The retail industry's own research notes that stolen cargo is often returned to retailers offline in exchange for gift cards, suggesting that the problem may not be exclusive to the Facebook marketplace.
The INFORM Consumers Act, if passed, will significantly impact online sellers and marketplaces like the Facebook marketplace. While it aims to increase transparency and protect consumers, it may also create hurdles for small businesses and give traditional retailers an advantage on the marketplace. The bill's fate in the Senate remains to be seen.
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