INFORM Consumers Act Reintroduced, Raising Concerns About Impact on Small Businesses
The 'Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act' (INFORM Consumers Act; S. 936) has been reintroduced in the Senate. The bill, first introduced in 2021, aims to increase transparency among online sellers but raises concerns about potential impacts on small businesses.
The INFORM Consumers Act requires online marketplaces to collect and disclose personal and financial information about their 'high volume' third-party sellers. These sellers are defined as those with over 200 transactions totaling more than $5,000 annually, which could include many small businesses. The bill mandates the disclosure of sellers' names, addresses, phone numbers, and emails, along with how they acquire their goods.
Proponents acknowledge targeting e-commerce competitors, giving large retailers a competitive edge. Critics worry that the bill's strict requirements, including a 24-hour compliance deadline, could burden small businesses. The bill continues a trend of disrupted incumbents using policymaking to hinder rivals in the name of consumer protection.
The INFORM Consumers Act, reintroduced on March 23, 2021, seeks to enhance transparency in online marketplaces. However, its potential impact on small businesses remains a concern. While the bill aims to protect consumers, it should not exempt prominent retailers from consumer protection obligations if retail crime indeed requires a federal response.
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