The bill does enjoy some bipartisan support, however, and some industry experts believe that it could advance in coming months. As such, it is unlikely to become law in the short term. The SHOP Safe act has not yet received a vote in either the House or the Senate. The law outlines steps (discussed below) that the marketplace can take to avoid liability. The law would make online marketplaces liable for copyright and trademark infringement in cases where a third party uses their platform to sell counterfeit goods with the potential to harm the health or safety of the customer, such as cosmetics, supplements, and pharmaceuticals.
THE INFORM FULL
The full name of the bill is the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act. The SHOP Safe Act is a piece of proposed legislation designed to address the problem of counterfeit goods being sold online.
THE INFORM VERIFICATION
Accepted forms of verification include government ID verification, tax document verification, and email/phone verification. This is defined as vendors who complete more than 200 transactions a year, or who bring in at least $5,000 in gross revenues during the year. Requiring the online marketplace to collect and verify the contact information, bank account details, and tax identification number of all high-volume third-party sellers.
It does this by requiring online marketplaces to implement certain policies that make it easier for regulators and enforcement officials to target bad actors if and when fraud is detected. The INFORM Consumers Act is designed to limit and deter sales of counterfeit and stolen products that have been known to happen on popular online marketplaces. The law requires online marketplaces to collect certain information about sellers earning a certain level of revenue to make it easier for regulators and investigators to investigate suspected fraud. It was signed into law in late 2022 and goes into effect June 2023. Its full name is the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act. The INFORM Consumers Act is a law that includes provisions designed to target online marketplace fraud - specifically, the sale of stolen and counterfeit goods. With this in mind, it’s important for any business that runs an online marketplace to understand the new and potential requirements of the laws and begin crafting a plan to get up to compliance in the event that both bills become law.īelow, we take a closer look at both the INFORM Consumers Act and the SHOP Safe Act, outline their requirements, and discuss some steps you can take to address the issue of fraud on your platform.
While these steps used to be voluntary, they'll soon be legally required thanks to a new law and a proposed piece of legislation - the INFORM Consumers Act and the SHOP Safe Act. This includes verifying the identity of sellers on your platform and performing ongoing analysis to identify potential fraud rings (both of which we discuss below). The good news is, there are steps you can take to manage marketplace fraud in order to protect your customers. At best, these issues might make individuals think twice before making a purchase through your business at worst, they might send them to the arms of your competitors. If you run an online marketplace, then you already know just how serious a problem marketplace fraud can be - for both your customers and your business.įake profiles, fake listings, false advertising, and the sale of counterfeit or stolen goods can all cause serious damage to your reputation and make your customers lose trust in your platform.
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