The INFORM Consumers Act -Online sale of stolen, counterfeit .. & consumer products”

New #ecommerce Marketplace Regulations: Online Marketplaces Must Comply with "The INFORM Consumers Act" by June 27, 2023

In an effort to “combat the online sale of stolen, counterfeit, and dangerous consumer products,” Congress passed the?Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act?(the “INFORM Consumers Act”), which was signed into law at the end of 2022. The INFORM Consumers Act mandates transparency with respect to high-volume sellers in online marketplaces, with the primary goal of discouraging marketplaces or other similarly situated platforms from facilitating the sale of counterfeit goods.

Key Takeaways

1- The INFORM Consumers Act broadly defines what platforms constitute “online marketplaces” and requires that such marketplaces promptly collect and verify information from “high-volume sellers.” To comply, marketplaces must thoughtfully craft and implement systems both for identifying these sellers and requiring them to comply with the Act’s requirements, which may involve significant operational shifts to how marketplaces presently conduct business.

2-To supplement these systems, marketplaces should consider revising their agreements and terms of use governing their relationship with their sellers to incorporate the Act’s requirements.

3- With the letters circulated by the FTC on June 20, 2023, the FTC has indicated that it expects full compliance by marketplaces with the Act.

4- Online marketplaces may face increased risk of criminal and civil penalties, as the information collection and verification required by the Act make marketplaces more aware of potential illicit conduct by third-party sellers on their platforms. Marketplaces should develop procedures designed to comply with this Act to appropriately consider such situations.

5- Implementing any of the above changes in business operations, contractual relationships or product distribution mechanisms could present ancillary impacts on the marketplaces’ compliance and legal outlooks, including the way in which they leverage third-party payment processors and collect and distribute payments for products

https://www.fenwick.com/insights/publications/new-e-commerce-marketplace-regulations-online-marketplaces-must-comply-with-the-inform-consumers-act-by-june-27-2023

Fenwick & West

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INFORM Consumers Act to impact Etsy, eBay, Amazon sellers June 27 (usatoday.com)