As you may be aware, the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act – the “INFORM Consumers Act” – was included as part of the final text of the Consolidated Appropriations Act of 2023, passed by the United States Congress just before the end of the year, and signed into law by President Biden on December 29, 2022.

First introduced by Senator Bill Cassidy in early 2020, INFORM seeks to address a number of long-standing concerns related to the trafficking of counterfeit goods (and other illicit sales) through e-commerce platforms, by providing a framework for the collection, verification, and disclosure of information related to high-volume third-party sellers who avail themselves of an online marketplace.  As defined in the legislation, a “high-volume third-party seller” is one who has 200 or more sales transactions, or sales with an aggregate value of at least $5,000, during any 12-month period within the past 2 years.

Among the bill’s provisions is a requirement that the operator of an e-commerce platform collect and verify a range of information from high-volume third-party sellers, including, for example, sellers’ banking information, government-issued identification confirming the individual's or business’ identity, physical address, email address and phone number, and tax identification information.  Online marketplaces are required to suspend further sales by individuals or businesses who fail to provide the required information, or to update it upon request.

In addition, where the seller’s total sales volume exceeds $20,000, the legislation requires the disclosure to consumers (e.g., via the product listing on the platform) of the seller’s identifying information.  This measure is intended to provide additional transparency, and to ensure that consumers can determine with increased certainty, with whom they are transacting business. 

Further, the bill provides a mechanism for reporting to the e-commerce platform suspicious activity by a high-volume third-party seller.

The obligations imposed by the INFORM Consumers Act are subject to enforcement by the Federal Trade Commission and State Attorneys General, and are set to take effect in late-June of this year.  Prior to its effective date, we would expect the FTC to promulgate regulations to further flesh out some of the details of the new statutory provisions; and we will, of course, keep you apprised of any developments in that regard.

In recent years, the IACC has consistently voiced the need for better and more consistent vetting of sellers in the online space, and we welcome the enactment of INFORM as a significant step forward in that regard.   

If you have any questions related to the INFORM Consumers Act, or how you can support the IACC’s advocacy efforts, please contact me directly.

Best regards,

Travis D. Johnson
Vice President - Legislative Affairs, Senior Counsel