[Congressional Record Volume 168, Number 175 (Monday, November 14, 2022)]
[House]
[Pages H8477-H8480]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTEGRITY, NOTIFICATION, AND FAIRNESS IN ONLINE RETAIL MARKETPLACES FOR
CONSUMERS ACT
Mr. PALLONE. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5502) to require online marketplaces to verify certain
information regarding high-volume third party sellers of consumer
products on such online marketplaces and to disclose to consumers
certain contact and other information regarding such high-volume third
party sellers, as amended.
=========================== NOTE ===========================
November 14, 2022, on page H8477, in the first column, the
following appeared: ------------------------ COLLECTION,
VERIFICATION, AND DISCLOSURE OF INFORMATION BY ONLINE MARKETPLACES
TO INFORM CONSUMERS Mr. PALLONE. Mr. Speaker, I move to suspend
the rules and pass the bill
The online version has been corrected to read: ----------------
-------- INTEGRITY, NOTIFICATION, AND FAIRNESS IN ONLINE RETAIL
MARKETPLACES FOR CONSUMERS ACT Mr. PALLONE. Mr. Speaker, I move to
suspend the rules and pass the bill
========================= END NOTE =========================
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5502
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Integrity, Notification, and
Fairness in Online Retail Marketplaces for Consumers Act'' or
the ``INFORM Consumers Act''.
SEC. 2. COLLECTION, VERIFICATION, AND DISCLOSURE OF
INFORMATION BY ONLINE MARKETPLACES TO INFORM
CONSUMERS.
(a) Collection and Verification of Information.--
(1) Collection.--
(A) In general.--An online marketplace shall require any
high-volume third party seller on such online marketplace's
platform to provide, not later than 10 days after qualifying
as a high-volume third party seller on the platform, the
following information to the online marketplace:
(i) Bank account.--
(I) In general.--A bank account number, or, if such seller
does not have a bank account, the name of the payee for
payments issued by the online marketplace to such seller.
(II) Provision of information.--The bank account or payee
information required under subclause (I) may be provided by
the seller in the following ways:
(aa) To the online marketplace.
(bb) To a payment processor or other third party contracted
by the online marketplace to maintain such information,
provided that the online marketplace ensures that it can
obtain such information within 3 business days from such
payment processor or other third party.
(ii) Contact information.--Contact information for such
seller as follows:
(I) With respect to a high-volume third party seller that
is an individual, the individual's name.
(II) With respect to a high-volume third party seller that
is not an individual, one of the following forms of contact
information:
(aa) A copy of a valid government-issued identification for
an individual acting on behalf of such seller that includes
the individual's name.
(bb) A copy of a valid government-issued record or tax
document that includes the business name and physical address
of such seller.
(iii) Tax id.--A business tax identification number, or, if
such seller does not have a business tax identification
number, a taxpayer identification number.
(iv) Working email and phone number.--A current working
email address and phone number for such seller.
(B) Notification of change; annual certification.--An
online marketplace shall--
(i) periodically, but not less than annually, notify any
high-volume third party seller on such online marketplace's
platform of the requirement to keep any information collected
under subparagraph (A) current; and
(ii) require any high-volume third party seller on such
online marketplace's platform to, not later than 10 days
after receiving the notice under clause (i), electronically
certify that--
(I) the seller has provided any changes to such information
to the online marketplace, if any such changes have occurred;
or
(II) there have been no changes to such seller's
information.
(C) Suspension.--In the event that a high-volume third
party seller does not provide the information or
certification required under this paragraph, the online
marketplace shall, after providing the seller with written or
electronic notice and an opportunity to provide such
information or certification not later than 10 days after the
issuance of such notice, suspend any future sales activity of
such seller until such seller provides such information or
certification.
(2) Verification.--
(A) In general.--An online marketplace shall--
(i) verify the information collected under paragraph (1)(A)
not later than 10 days after such collection; and
(ii) verify any change to such information not later than
10 days after being notified of such change by a high-volume
third party seller under paragraph (1)(B).
(B) Presumption of verification.--In the case of a high-
volume third party seller that provides a copy of a valid
government-issued tax document, any information contained in
such document shall be presumed to be verified as of the date
of issuance of such document.
(3) Data use limitation.--Data collected solely to comply
with the requirements of this section may not be used for any
other purpose unless required by law.
(4) Data security requirement.--An online marketplace shall
implement and maintain reasonable security procedures and
practices, including administrative, physical, and technical
safeguards, appropriate to the nature of the data and the
purposes for which the data will be used, to protect the data
collected to comply with the requirements of this section
from unauthorized use, disclosure, access, destruction, or
modification.
(b) Disclosure Required.--
(1) Requirement.--
(A) In general.--An online marketplace shall--
(i) require any high-volume third party seller with an
aggregate total of $20,000 or more in annual gross revenues
on such online marketplace, and that uses such online
marketplace's platform, to provide the information described
in subparagraph (B) to the online marketplace; and
(ii) disclose the information described in subparagraph (B)
to consumers in a clear and conspicuous manner--
(I) on the product listing page (including via hyperlink);
or
(II) in the order confirmation message or other document or
communication made to the consumer after the purchase is
finalized and in the consumer's account transaction history.
(B) Information described.--The information described in
this subparagraph is the following:
(i) Subject to paragraph (2), the identity of the high-
volume third party seller, including--
(I) the full name of the seller, which may include the
seller name or seller's company name, or the name by which
the seller or company operates on the online marketplace;
(II) the physical address of the seller; and
(III) contact information for the seller, to allow for the
direct, unhindered communication with high-volume third party
sellers by users of the online marketplace, including--
(aa) a current working phone number;
(bb) a current working email address; or
(cc) other means of direct electronic messaging (which may
be provided to such seller by the online marketplace),
provided that the requirements of this item shall not prevent
an online marketplace from monitoring communications between
high-volume third party sellers and users of the online
marketplace for fraud, abuse, or spam.
(ii) Whether the high-volume third party seller used a
different seller to supply the consumer product to the
consumer upon purchase, and, upon the request of an
authenticated purchaser, the information described in clause
(i) relating to any such seller that supplied the consumer
product to the purchaser, if such seller is different than
the high-volume third party seller listed on the product
listing prior to purchase.
(2) Exception.--
(A) In general.--Subject to subparagraph (B), upon the
request of a high-volume third party seller, an online
marketplace may provide for partial disclosure of the
identity information required under paragraph (1)(B)(i) in
the following situations:
(i) If such seller certifies to the online marketplace that
the seller does not have a business address and only has a
residential street address, or has a combined business and
residential address, the online marketplace may--
(I) disclose only the country and, if applicable, the State
in which such seller resides; and
(II) inform consumers that there is no business address
available for the seller and that consumer inquiries should
be submitted to the seller by phone, email, or other means of
electronic messaging provided to such seller by the online
marketplace.
(ii) If such seller certifies to the online marketplace
that the seller is a business that has a physical address for
product returns, the online marketplace may disclose the
seller's physical address for product returns.
(iii) If such seller certifies to the online marketplace
that the seller does not have a phone number other than a
personal phone number, the online marketplace shall inform
consumers that there is no phone number available for the
seller and that consumer inquiries should be submitted to the
seller's email address or other means of electronic messaging
provided to such seller by the online marketplace.
(B) Limitation on exception.--If an online marketplace
becomes aware that a high-volume third party seller has made
a false representation to the online marketplace in order to
justify the provision of a partial disclosure under
subparagraph (A) or that a high-volume third party seller who
has requested and received a provision for a partial
disclosure under subparagraph (A) has not provided responsive
answers within a reasonable time frame to consumer inquiries
submitted to the seller by phone, email, or other means of
electronic messaging provided to such seller by the online
marketplace, the online marketplace shall, after providing
the seller with written or electronic notice and an
opportunity to respond not later than 10
[[Page H8478]]
days after the issuance of such notice, suspend any future
sales activity of such seller unless such seller consents to
the disclosure of the identity information required under
paragraph (1)(B)(i).
(3) Reporting mechanism.--An online marketplace shall
disclose to consumers in a clear and conspicuous manner on
the product listing of any high-volume third party seller a
reporting mechanism that allows for electronic and telephonic
reporting of suspicious marketplace activity to the online
marketplace.
(4) Compliance.--If a high-volume third party seller does
not comply with the requirements to provide and disclose
information under this subsection, the online marketplace
shall, after providing the seller with written or electronic
notice and an opportunity to provide or disclose such
information not later than 10 days after the issuance of such
notice, suspend any future sales activity of such seller
until the seller complies with such requirements.
(c) Enforcement by Federal Trade Commission.--
(1) Unfair and deceptive acts or practices.--A violation of
subsection (a) or (b) by an online marketplace shall be
treated as a violation of a rule defining an unfair or
deceptive act or practice prescribed under section
18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C.
57a(a)(1)(B)).
(2) Powers of the commission.--
(A) In general.--The Commission shall enforce subsections
(a) and (b) in the same manner, by the same means, and with
the same jurisdiction, powers, and duties as though all
applicable terms and provisions of the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) were incorporated into
and made a part of this section.
(B) Privileges and immunities.--Any person that violates
subsection (a) or (b) shall be subject to the penalties, and
entitled to the privileges and immunities, provided in the
Federal Trade Commission Act (15 U.S.C. 41 et seq.).
(3) Regulations.--The Commission may promulgate regulations
under section 553 of title 5, United States Code, with
respect to the collection, verification, or disclosure of
information under this section, provided that such
regulations are limited to what is necessary to collect,
verify, and disclose such information.
(4) Authority preserved.--Nothing in this section shall be
construed to limit the authority of the Commission under any
other provision of law.
(d) Enforcement by State Attorneys General.--
(1) In general.--If the attorney general of a State has
reason to believe that any online marketplace has violated or
is violating this section or a regulation promulgated under
this section that affects one or more residents of that
State, the attorney general of the State may bring a civil
action in any appropriate district court of the United
States, to--
(A) enjoin further such violation by the defendant;
(B) enforce compliance with this section or such
regulation;
(C) obtain civil penalties in the amount provided for under
subsection (c);
(D) obtain other remedies permitted under State law; and
(E) obtain damages, restitution, or other compensation on
behalf of residents of the State.
(2) Notice.--The attorney general of a State shall provide
prior written notice of any action under paragraph (1) to the
Commission and provide the Commission with a copy of the
complaint in the action, except in any case in which such
prior notice is not feasible, in which case the attorney
general shall serve such notice immediately upon instituting
such action.
(3) Intervention by the commission.--Upon receiving notice
under paragraph (2), the Commission shall have the right--
(A) to intervene in the action;
(B) upon so intervening, to be heard on all matters arising
therein; and
(C) to file petitions for appeal.
(4) Limitation on state action while federal action is
pending.--If the Commission has instituted a civil action for
violation of this section or a regulation promulgated under
this section, no State attorney general, or official or
agency of a State, may bring a separate action under
paragraph (1) during the pendency of that action against any
defendant named in the complaint of the Commission for any
violation of this section or a regulation promulgated under
this section that is alleged in the complaint. A State
attorney general, or official or agency of a State, may join
a civil action for a violation of this section or regulation
promulgated under this section filed by the Commission.
(5) Rule of construction.--For purposes of bringing a civil
action under paragraph (1), nothing in this section shall be
construed to prevent the chief law enforcement officer, or
official or agency of a State, from exercising the powers
conferred on such chief law enforcement officer, or official
or agency of a State, by the laws of the State to conduct
investigations, administer oaths or affirmations, or compel
the attendance of witnesses or the production of documentary
and other evidence.
(6) Actions by other state officials.--
(A) In general.--In addition to civil actions brought by
attorneys general under paragraph (1), any other officer of a
State who is authorized by the State to do so, except for any
private person on behalf of the State attorney general, may
bring a civil action under paragraph (1), subject to the same
requirements and limitations that apply under this subsection
to civil actions brought by attorneys general.
(B) Savings provision.--Nothing in this subsection may be
construed to prohibit an authorized official of a State from
initiating or continuing any proceeding in a court of the
State for a violation of any civil or criminal law of the
State.
(e) Severability.--If any provision of this section, or the
application thereof to any person or circumstance, is held
invalid, the remainder of this section and the application of
such provision to other persons not similarly situated or to
other circumstances shall not be affected by the
invalidation.
(f) Definitions.--In this section:
(1) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(2) Consumer product.--The term ``consumer product'' has
the meaning given such term in section 101 of the Magnuson-
Moss Warranty--Federal Trade Commission Improvement Act (15
U.S.C. 2301) and section 700.1 of title 16, Code of Federal
Regulations.
(3) High-volume third party seller.--
(A) In general.--The term ``high-volume third party
seller'' means a participant on an online marketplace's
platform who is a third party seller and, in any continuous
12-month period during the previous 24 months, has entered
into 200 or more discrete sales or transactions of new or
unused consumer products and an aggregate total of $5,000 or
more in gross revenues.
(B) Clarification.--For purposes of calculating the number
of discrete sales or transactions or the aggregate gross
revenues under subparagraph (A), an online marketplace shall
only be required to count sales or transactions made through
the online marketplace and for which payment was processed by
the online marketplace, either directly or through its
payment processor.
(4) Online marketplace.--The term ``online marketplace''
means any person or entity that operates a consumer-directed
electronically based or accessed platform that--
(A) includes features that allow for, facilitate, or enable
third party sellers to engage in the sale, purchase, payment,
storage, shipping, or delivery of a consumer product in the
United States;
(B) is used by one or more third party sellers for such
purposes; and
(C) has a contractual or similar relationship with
consumers governing their use of the platform to purchase
consumer products.
(5) Seller.--The term ``seller'' means a person who sells,
offers to sell, or contracts to sell a consumer product
through an online marketplace's platform.
(6) Third party seller.--
(A) In general.--The term ``third party seller'' means any
seller, independent of an online marketplace, who sells,
offers to sell, or contracts to sell a consumer product in
the United States through such online marketplace's platform.
(B) Exclusions.--The term ``third party seller'' does not
include, with respect to an online marketplace--
(i) a seller who operates the online marketplace's
platform; or
(ii) a business entity that has--
(I) made available to the general public the entity's name,
business address, and working contact information;
(II) an ongoing contractual relationship with the online
marketplace to provide the online marketplace with the
manufacture, distribution, wholesaling, or fulfillment of
shipments of consumer products; and
(III) provided to the online marketplace identifying
information, as described in subsection (a), that has been
verified in accordance with that subsection.
(7) Verify.--The term ``verify'' means to confirm
information provided to an online marketplace pursuant to
this section, which may include the use of one or more
methods that enable the online marketplace to reliably
determine that any information and documents provided are
valid, corresponding to the seller or an individual acting on
the seller's behalf, not misappropriated, and not falsified.
(g) Relationship to State Laws.--No State or political
subdivision of a State, or territory of the United States,
may establish or continue in effect any law, regulation,
rule, requirement, or standard that conflicts with the
requirements of this section.
(h) Effective Date.--This section shall take effect 180
days after the date of the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
Jersey (Mr. Pallone) and the gentleman from Florida (Mr. Bilirakis)
each will control 20 minutes.
The Chair recognizes the gentleman from New Jersey.
General Leave
Mr. PALLONE. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on H.R. 5502.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New Jersey?
There was no objection.
Mr. PALLONE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise to speak in support of H.R. 5502, the Integrity,
Notification, and Fairness in Online Retail
[[Page H8479]]
Marketplaces for Consumers Act, also known as the INFORM Consumers Act.
In the 21st century, e-commerce is no longer a luxury but a necessity
for millions of Americans seeking to purchase household essentials. For
thousands of businesses across the country, e-commerce sites serve as a
vital platform connecting American producers to consumers worldwide.
Regrettably, online marketplaces have become pervasive sources of
counterfeit, defective, and unsafe goods. The Government Accountability
Office found that 20 of 47 items it purchased from third-party sellers
on popular consumer websites were counterfeit.
Sixteen percent of counterfeit products seized in fiscal year 2018
posed a direct risk to health, safety, and security. Such frauds steal
market share from legitimate businesses and can cause severe
reputational damage to the companies and products they impersonate.
The INFORM Consumers Act will help curb the deluge of counterfeit,
defective, and unsafe products on e-commerce sites. The bill requires
these sites to display critical information about high-volume sellers,
including contact information, business tax ID numbers, and working
email addresses and phone numbers. Such transparency will help prevent
those fake and unsafe goods from getting into our homes and empower
consumers and businesses to seek recourse.
I commend Consumer Protection and Commerce Subcommittee Chairwoman
Schakowsky and Ranking Member Bilirakis for coming together on this
bill. It passed out of the Energy and Commerce Committee by voice vote
last November.
Mr. Speaker, I urge my colleagues to help protect consumers by
supporting this bill, and I reserve the balance of my time.
Mr. BILIRAKIS. Mr. Speaker, I yield myself such time as I may
consume.
I rise today in strong support of H.R. 5502, the INFORM Consumers
Act.
This is a big deal, Mr. Speaker. It really is. We worked really hard
to get consensus on this particular bill in the Energy and Commerce
Committee.
I commend the chairman of the Energy and Commerce Committee; the
ranking member, Cathy McMorris Rodgers; and the chair of the
subcommittee, my colleague, Jan Schakowsky. She is the lead sponsor of
the bill, and I am the Republican sponsor of the bill. It is a great
accomplishment.
At the height of the COVID-19 pandemic, when physical storefronts
were unable to open their doors, many consumers turned to online
marketplaces for all of their goods. However, with such a rise in
online purchases, criminals saw a new way to prey upon innocent
consumers.
These storefronts were now bombarded with thousands of similar
products with little to no information about the background of the
goods. Some of the goods available were originally stolen from retail
stores, counterfeited--and this happens in all our congressional
districts--counterfeited from a foreign nation, or even made with
dangerous components or forced labor.
That is why this bipartisan, bicameral legislation is necessary to
increase transparency and safety online, and I am proud to help co-lead
this bill with the chairwoman of the subcommittee, Ms. Schakowsky.
If H.R. 5502 is signed into law--and I think it will be--consumers
and storefronts will be armed with information to understand where
these products come from and whether they are real or not. That is not
much to ask for.
It also provides protections to our small sellers and local mom-and-
pop stores whose privacy is protected while also being able to operate
with clear guidelines and one set of rules for doing business in all 50
States.
The INFORM Consumers Act establishes a uniform national standard to
protect consumers from bad actors and online marketplaces by requiring
certain large sellers of new and used consumer goods to verify their
contact information, such as email, phone number, and business tax ID,
within days of being listed as a high-volume seller on an online
platform.
I thank, again, Chairwoman Schakowsky, for working with me in good
faith to make this a strong product with broad consensus from
Congress--it takes both parties to get these things done--and from a
diverse set of stakeholders like Etsy, Poshmark, eBay, Amazon, but also
retail industry leaders such as Home Depot, Walgreens, and Walmart.
The support around this legislation demonstrates what happens when
Congress works together to move important legislation that will protect
all Americans. That was our goal. I am glad to see that this bill will
move forward in regular order, and I urge all of my colleagues to
support this legislation out of the House today. Let's get this signed
into law as soon as possible.
Mr. Speaker, I reserve the balance of my time.
Mr. PALLONE. Mr. Speaker, I yield such time as she may consume to the
gentlewoman from Illinois (Ms. Schakowsky), the sponsor of this
legislation and the chair of the subcommittee from which it came.
Ms. SCHAKOWSKY. Mr. Speaker, I thank the gentleman for yielding, and
I thank so many in the Energy and Commerce Committee for their hard
work. I want to say a special thank-you to Gus Bilirakis, who is the
Republican cosponsor of this very important and bipartisan legislation.
I also want to ditto all the words that he said about this important
bill.
What we know is that the INFORM Consumers Act, H.R. 5502, protects
American consumers when they shop online.
Counterfeit and stolen goods have become readily available on popular
websites like Amazon and Facebook and beyond. As a result, American
consumers face new dangers when they shop online. Counterfeit and
stolen products defraud consumers, and they pose a risk to consumers'
health, their safety, and their security.
Online marketplaces are failing right now to crack down on fraudsters
and scammers. Instead, they actually have fueled high-profile cases of
organized crime rings that are now brazenly hitting retail stores.
We have heard from consumers that Mr. Bilirakis mentioned. Many
retailers are being hurt by this.
These stolen goods too often end up on the online marketplaces, and
the INFORM Consumers Act puts an end to the online sale of dangerous
products and stolen goods and limits criminal behavior.
The bill holds online marketplaces accountable for enabling criminal
activity on their platforms. It requires online marketplaces to verify
the identity of their third-party sellers. Verifying sellers lets
Americans have confidence now, which we want them to have, when they
shop online.
The bill empowers the Federal Trade Commission to enforce compliance
with this bill.
I am grateful to my colleague, Mr. Bilirakis, and to all of those who
have been supporting this legislation to finally protect consumers. I
am proud that this bill has bipartisan support, and I certainly urge
all of my colleagues to support the INFORM Consumers Act, H.R. 5502.
Let's vote for it today.
Mr. BILIRAKIS. Mr. Speaker, I thank the staff for doing an
outstanding job on this bill. It was not easy to find consensus, but we
persevered. We did not give up. We didn't give up, and guess what? The
American people are going to be benefiting from this. That is the most
important thing. Our constituents will benefit from this bill.
Again, my subcommittee staffer, Tim Kurth, has done an outstanding
job, along with the other members of the staff and Jan's staff, as
well.
Mr. Speaker, I hope we pass this bill unanimously, and I yield back
the balance of my time.
Mr. PALLONE. Mr. Speaker, as you can see, this bill is truly
bipartisan, and I urge all of my colleagues on both sides of the aisle
to vote in favor of it.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New Jersey (Mr. Pallone) that the House suspend the
rules and pass the bill, H.R. 5502, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. ROSENDALE. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
[[Page H8480]]
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________