Congress Cracks Down on Ecommerce Theft

By: James Flippin · June 29, 2023 · Reading Time: 3 minutes

Transparency Triumphs

The veil of anonymity often associated with online sellers is no more. The Inform Act, a bipartisan bill requiring online marketplaces to disclose and authenticate vendor identities, has officially taken effect.

This legislative move aims to thwart the sale of stolen, counterfeit, and harmful products. The act focuses on third-party sellers who made a significant number of transactions on the platform. It applies specifically to those who’ve seen over 200 individual sales or transactions, yielding a gross revenue of $5,000 or more, over any consecutive 12-month span within the past two years.

Behind the Act

The Inform Act is Congress’ response to the perceived upswing in retail theft.

Accusations against online platforms have boomed in recent years. Retailers and trade collectives have argued major ecommerce platforms are facilitating a wave of retail theft, pointing fingers at online marketplaces like eBay (EBAY) and Amazon (AMZN). They argue the high volume of transactions on those platforms provide cover and convenience to the sale of stolen goods.

The Inform Act is the culmination of these debates, seeking to restore some balance and order in the online retail space.

Impact & Implications

The Inform Act gives the Federal Trade Commission and state attorneys general stronger grounds to hold these platforms accountable. Non-compliance with the Inform Act can be a costly affair, with each violation carrying potential fines exceeding $50,000.

But it doesn’t stop there. It also endows consumers with the power to report suspicious activities themselves. Through the Inform Act’s mandated reporting mechanism, consumers may become an integral part of this safeguarding initiative.

While the new law may initially seem like an inconvenience to sellers, consumers are now shopping in a safer and more transparent marketplace. The Inform Act doesn’t just deter illicit activities; it empowers you, the buyer, to make more informed decisions.

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