INFORM Consumers Act Being Considered At State & Federal Levels

May 25, 2021

Over the last 12 months, Big Box retailers have launched a coordinated effort at the State and Federal levels to make it more difficult for small businesses and entrepreneurs to sell goods through online marketplaces. The INFORM Consumers Act would mandate the public disclosure of business  information on every product a seller lists on a marketplace. The legislation also  imposes burdensome and discriminatory collection of information requirements that harm legitimate small businesses and entrepreneurs who sell on online marketplaces.

The INFORM Consumers Act is pushed by proponents as an effort to “improve transparency in the online buying process.” However, all the bill would do is make it harder for small businesses and entrepreneurs to sell online – while at the same time making it better for Big Box retailers.

What would this bill do?

  • Marketplaces would be required to collect sellers’ drivers license and other unnecessary information as a means of “verifying” who each seller is and how to contact them.
    • eBay already has advanced trust and safety measures in place to verify the legitimacy of sellers on its platform.  
  • Sellers would be required to disclose (next to each product listing) the full nameaddressphone number, and email address of their businessWhile there are attempts to provide some limited protections for home-based sellers who “demonstrate” the need for partial disclosure, the bill still mandates the disclosure of sensitive personal information and removes any protections if a seller does not respond to a consumer inquiry in a “reasonable” time.
    • eBay provides a very transparent online shopping process where a buyer knows who is selling each product, the seller's reviews and other items listed, where an item listed for sale is located, and a means to contact the seller directly.
  • If eBay does not collect and verify seller information in an artificially short timeline and does not receive notification from sellers annually on a change of information or verification that no information has changed, eBay would be required to immediately suspend the seller from selling on eBay.
    • There is no grace period to correct the data before suspension
    • A seller on vacation, dealing with a personal matter, or inadvertently failing to see the annual notice - could see their accounts suspended.

Federal Status

  • Proponents of the INFORM Act are considering legislation in both the US House and the US Senate. eBay and other third-party marketplaces are actively working with House and Senate leaders to ensure US small businesses and individuals aren't unnecessarily burdened by some of the current legislative proposals.

State Status

  • Legislation mirroring the federal INFORM Consumers Act has been introduced in 18 state legislatures in 2021. Nearly every state legislature that has taken up this type of legislation has rejected such proposals.  One state - Arkansas - passed legislation amidst aggressive lobbying by Big Box retailers.

eBay is committed to ensuring its platform is a trusted and safe marketplace for buyers and sellers. The INFORM Consumers Act, which threatens the privacy of eBay sellers, picks winners and losers in the marketplace, and leaves consumers with fewer choices when they shop online, and is not the right solution to address bad actors that try to defraud online buyers and sellers.