INFORM Consumers Act

I 116TH CONGRESS 2D SESSION H. R. 7756 To require online marketplaces to verify and disclose certain information regarding high-volume third-party sellers of consumer products to inform consumers. IN THE HOUSE OF REPRESENTATIVES JULY 23, 2020 Ms. SCHAKOWSKY (for herself and Ms. CASTOR of Florida) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To require online marketplaces to verify and disclose certain information regarding high-volume third-party sellers of consumer products to inform consumers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Integrity, Notification, 4 and Fairness in Online Retail Marketplaces for Con- 5 sumers Act’’ or the ‘‘INFORM Consumers Act’’. 6 SEC. 2. DISCLOSURE OF INFORMATION BY ONLINE MAR- 7 KETPLACES TO INFORM CONSUMERS. 8 (a) VERIFICATION REQUIRED.— 9 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 7756 IH (1) IN GENERAL.—Any online marketplace shall 1 require that any high-volume third-party seller on 2 the online marketplace provide the online market- 3 place with the following information within 24 hours 4 of becoming a high-volume third-party seller: 5 (A) Bank account information, the accu- 6 racy of which has been confirmed directly by 7 the online marketplace or by a payment proc- 8 essor or other third-party contracted by the on- 9 line marketplace, or, if the high-volume third- 10 party seller does not have a bank account, the 11 name of the payee for payments issued by the 12 online marketplace to the high-volume third- 13 party seller. Such bank account or payee infor- 14 mation may be provided by the seller either— 15 (i) to the online marketplace; or 16 (ii) to a payment processor or other 17 third-party contracted by the online mar- 18 ketplace to maintain such information, 19 provided that the online marketplace may 20 obtain such information on demand from 21 such payment processor or other third- 22 party. 23 (B) Contact information, including— 24 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 7756 IH (i) if the high-volume third-party sell- 1 er is an individual, a copy of a govern- 2 ment-issued photo identification for the in- 3 dividual that includes the individual’s 4 name and physical address; or 5 (ii) if the high-volume third-party sell- 6 er is not an individual, either— 7 (I) a copy of a government-issued 8 photo identification for an individual 9 acting on behalf of the high-volume 10 third-party seller that includes the in- 11 dividual’s name and physical address; 12 or 13 (II) a copy of a government- 14 issued record or tax document that in- 15 cludes the business name and physical 16 address of the high-volume third-party 17 seller; and 18 (iii) a working email address and 19 working phone number for the high-volume 20 third-party seller. 21 (C) A business tax identification number 22 or, if the high-volume third-party seller does not 23 have a business tax identification number, a 24 taxpayer identification number. 25 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 7756 IH (D) Whether the high-volume third-party 1 seller is exclusively advertising or offering the 2 consumer product or products on the online 3 marketplace, or if the high-volume third-party 4 seller is currently advertising or offering for 5 sale the same consumer product or products on 6 any other internet websites other than the on- 7 line marketplace. 8 (2) ONGOING VERIFICATION.— 9 (A) The online marketplace shall verify the 10 information provided in paragraph (1) within 3 11 days, and shall verify within 3 days any 12 changes to such information that is provided to 13 the marketplace by a high-volume third-party 14 seller. If a high-volume third-party seller pro- 15 vides a copy of a valid government-issued tax 16 document, information contained within such 17 tax document shall be presumed to be verified 18 as of the date of issuance of such record or doc- 19 ument. 20 (B) The online marketplace shall, on at 21 least an annual basis, notify each high-volume 22 third-party seller on the online marketplace that 23 the seller must inform the online marketplace of 24 any changes to the information provided by the 25 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 7756 IH seller pursuant to paragraph (1) within 3 days 1 of receiving the notification and shall instruct 2 each high-volume third-party seller, as part of 3 the notification, to electronically certify either 4 that the seller’s information is unchanged or 5 that the seller is providing changes to the infor- 6 mation. If the online marketplace becomes 7 aware that a high-volume third-party seller has 8 neither certified that the seller’s information is 9 unchanged nor has not provided such changed 10 information within 3 days of receiving such no- 11 tification, the online marketplace shall suspend 12 the high-volume third-party seller’s participa- 13 tion on the marketplace until the seller has ei- 14 ther certified that the seller’s information is un- 15 changed or has provided such changed informa- 16 tion and the information has been verified. 17 (b) DISCLOSURE REQUIRED.— 18 (1) IN GENERAL.—Any online marketplace shall 19 require a high-volume third-party seller in such on- 20 line marketplace to provide, and shall disclose to 21 consumers in a conspicuous manner either on the 22 product listing or, for information other than the 23 seller’s full name, through a conspicuously placed 24 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 7756 IH link on the product listing, the following informa- 1 tion: 2 (A) Subject to paragraph (2), the identity 3 of the high-volume third-party seller which shall 4 include— 5 (i) the full name of the seller; 6 (ii) the full physical address of the 7 seller; 8 (iii) whether the seller also engages in 9 the manufacturing, importing, or reselling 10 of consumer products; and 11 (iv) contact information for the seller, 12 including a working phone number and 13 working email address. Such working email 14 address may be provided to the high-vol- 15 ume third-party seller by the online mar- 16 ketplace. 17 (B) Any other information that the Com- 18 mission determines to be necessary to address 19 circumvention or evasion of the requirements of 20 this paragraph, provided that the additional in- 21 formation is limited to what is necessary to ad- 22 dress such circumvention or evasion. 23 (2) EXCEPTION.— 24 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 7756 IH (A) IN GENERAL.—Subject to subpara- 1 graph (B), upon the request of a high-volume 2 third-party seller, an online marketplace may 3 provide for partial disclosure of the identity in- 4 formation required under paragraph (1)(A) in 5 the following situations: 6 (i) If the high-volume third-party sell- 7 er demonstrates to the online marketplace 8 that the seller does not have a business ad- 9 dress and only has a residential street ad- 10 dress, the online marketplace may direct 11 the high-volume third-party seller to dis- 12 close only the country and, if applicable, 13 the State in which the high-volume third- 14 party seller resides on the product listing, 15 and may inform consumers that there is no 16 business address available for the seller 17 and that consumer inquiries should be sub- 18 mitted to the seller by phone or email. 19 (ii) If the high-volume third-party sell- 20 er demonstrates to the online marketplace 21 that the seller is a business that has a 22 physical address for product returns, the 23 online marketplace may direct the high-vol- 24 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 7756 IH ume third-party seller to disclose the sell- 1 er’s physical address for product returns. 2 (iii) If a high-volume third-party seller 3 demonstrates to the online marketplace 4 that the seller does not have a phone num- 5 ber other than a personal phone number, 6 the online marketplace shall inform con- 7 sumers that there is no phone number 8 available for the seller and that consumer 9 inquiries should be submitted to the sell- 10 er’s email address. 11 (B) LIMITATION ON EXCEPTION.—If an 12 online marketplace becomes aware that a high- 13 volume third-party seller has made a false rep- 14 resentation to the online marketplace in order 15 to justify the provision of a partial disclosure 16 under subparagraph (A) or that a high-volume 17 third-party seller who has requested and re- 18 ceived a provision for a partial disclosure under 19 subparagraph (A) has not provided responsive 20 answers within a reasonable timeframe to con- 21 sumer inquiries submitted to the seller by phone 22 or email address, the online marketplace shall 23 withdraw its provision for partial disclosure and 24 require the full disclosure of the high-volume 25 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 7756 IH third-party seller’s identity information required 1 under paragraph (1)(A) upon 3 business days’ 2 notice to the high-volume third-party seller. 3 (3) REPORTING MECHANISM.—An online mar- 4 ketplace shall disclose to consumers, in a con- 5 spicuous manner on the product listing of any high- 6 volume third-party seller, a reporting mechanism 7 that allows for electronic and telephonic reporting of 8 suspicious marketplace activity to the online market- 9 place and a message encouraging individuals seeking 10 goods for purchase to report suspicious activity to 11 the online marketplace. 12 (c) FULFILLMENT OR SHIPMENT BY DIFFERENT 13 PARTY THAN SELLER.—In addition to the requirements 14 of subsection (b), an online marketplace that warehouses, 15 distributes, or otherwise fulfills a consumer product order 16 shall disclose to the consumer the identification of any 17 high-volume third-party seller supplying the consumer 18 product if different than the seller listed on the product 19 listing page. 20 (d) ENFORCEMENT.— 21 (1) UNFAIR AND DECEPTIVE ACTS OR PRAC- 22 TICES.—A violation of subsection (a), (b), or (c) 23 shall be treated as a violation of a rule defining an 24 unfair or deceptive act or practice prescribed under 25 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 7756 IH section 18(a)(1)(B) of the Federal Trade Commis- 1 sion Act (15 U.S.C. 57a(a)(1)(B)). 2 (2) POWERS OF THE COMMISSION.— 3 (A) IN GENERAL.—The Commission shall 4 enforce this Act in the same manner, by the 5 same means, and with the same jurisdiction, 6 powers, and duties as though all applicable 7 terms and provisions of the Federal Trade 8 Commission Act (15 U.S.C. 41 et seq.) were in- 9 corporated into and made a part of this Act. 10 (B) PRIVILEGES AND IMMUNITIES.—Any 11 person that violates subsection (a), (b), or (c) 12 shall be subject to the penalties, and entitled to 13 the privileges and immunities, provided in the 14 Federal Trade Commission Act (15 U.S.C. 41 15 et seq.). 16 (3) REGULATIONS.—The Federal Trade Com- 17 mission may promulgate regulations under section 18 553 of title 5, United States Code, with respect to 19 collecting and verifying information under this sec- 20 tion, provided that such regulations are limited to 21 what is necessary to collect and verify such informa- 22 tion. 23 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 7756 IH (4) AUTHORITY PRESERVED.—Nothing in this 1 Act shall be construed to limit the authority of the 2 Commission under any other provision of law. 3 (e) DEFINITIONS.—In this Act: 4 (1) COMMISSION.—The term ‘‘Commission’’ 5 means the Federal Trade Commission. 6 (2) CONSUMER PRODUCT.—The term ‘‘con- 7 sumer product’’ means any tangible personal prop- 8 erty which is distributed in commerce and which is 9 normally used for personal, family, or household 10 purposes (including any such property intended to 11 be attached to or installed in any real property with- 12 out regard to whether it is so attached or installed). 13 (3) HIGH-VOLUME THIRD-PARTY SELLER.—The 14 term ‘‘high-volume third-party seller’’ means a par- 15 ticipant in an online marketplace who is a third- 16 party seller and who, in any continuous 12-month 17 period during the previous 24 months, has entered 18 into 200 or more discrete sales or transactions of 19 new or unused consumer products resulting in the 20 accumulation of an aggregate total of $5,000 or 21 more in gross revenues. 22 (4) ONLINE MARKETPLACE.—The term ‘‘online 23 marketplace’’ means any electronically based or 24 accessed platform that— 25 VerDate Sep 11 2014 23:36 Aug 22, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H7756.IH H7756 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 7756 IH (A) includes features that allow for, facili- 1 tate, or enable third-party sellers to engage in 2 the sale, purchase, payment, storage, shipping, 3 or delivery of a consumer product in the United 4 States; and 5 (B) hosts one or more third-party sellers. 6 (5) SELLER.—The term ‘‘seller’’ means a per- 7 son who sells, offers to sell, or contracts to sell a 8 consumer product through an online marketplace. 9 (6) THIRD-PARTY SELLER.— 10 (A) IN GENERAL.—The term ‘‘third-party 11 seller’’ means any seller, independent of an op- 12 erator, facilitator, or owner of an online mar- 13 ketplace, who sells, offers to sell, or contracts to 14 sell a consumer product in the United States 15 through an online marketplace. 16 (B) EXCLUSION.—The term ‘‘third-party 17 seller’’ does not include a seller who— 18 (i) is a business entity that has made 19 available to the general public the entity’s 20 name, business address, and working con- 21 tact information; 22 (ii) has an ongoing contractual rela- 23 tionship with the owner of [Text truncated for display. 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