When the INFORM Consumers Act was introduced last week, several brands and retailers got behind the effort to thwart counterfeit operators with new seller transparency requirements. But not everyone.
On Tuesday, eBay, Etsy, Mercari, OfferUp and Poshmark said they’ve formed The Coalition to Protect America’s Small Sellers, or PASS Coalition, to address what they see as unfair rules that could harm small sellers. Up first is the proposed INFORM legislation.
The act, whose shortened name stands for “Integrity, Notification and Fairness in Online Retail Marketplaces,” would require online marketplaces to disclose third-party seller information to consumers, including name, address, email and telephone, or face civil penalties. The idea is to vet purveyors to sniff out and block counterfeiters, sellers of stolen merchandise, scam artists and other illicit operators, some of whom may even peddle dangerous goods.
The rules would apply to high-volume sellers with 200 or more sales totaling at least $5,000 over a one-year period.
The Buy Safe America Coalition — which includes Gap Inc., J.C. Penney Co. Inc., Levi Strauss & Co., Birkenstock, Dick’s Sporting Goods, Ulta Beauty and other retailers, as well as groups such as Retail Industry Leaders Association, American Apparel & Footwear Association, Footwear Distributors and Retailers of America and the Fashion Jewelry and Accessories Trade Association, among others — called the act a “common-sense” approach.
But critics describe INFORM as taking a sledgehammer to a problem when a scalpel is needed. Among them is the new PASS Coalition, which believes that the bill could harm independent sellers and smaller third-party merchants.
“These issues are critically important to the millions of Americans who rely on our marketplaces every day to make extra money selling secondhand and pre-owned items while supporting a more affordable and sustainable way to shop,” said Coalition founding member Amber McCasland, vice president of communications at Poshmark.
PASS believes big businesses could deal with the new requirements, creating advantages that would unfairly burden small online sellers and entrepreneurs. Indie sellers that don’t have a DBA (“doing business as” status) or other business entity would have to list their real names, addresses and other information.
“Requiring our sellers — many of whom are women casually selling items from their closets — to publicly disclose personally identifiable information is of great concern as doing so may compromise their privacy, security and ability to thrive,” she continued. “We believe it is possible to achieve policy solutions that both consider and protect the interests of America’s small online sellers.”
While Tuesday marks the official launch of the coalition, its members have been communicating with authors of the bill behind the scenes to shed light and urge more nuanced approaches. Etsy, for one, told WWD that it has been in talks with authors of the INFORM bill about the nuances of its marketplace.
For instance, if a seller’s contact information were shared with shoppers, that’s not only a risk to the person, but it also compromises Etsy’s ability to ensure seller integrity and consumer protections, if communications take place outside of its platform.
“We are committed to working with policymakers to find creative solutions that protect both consumers and small businesses,” Jeffrey Zubricki, Etsy’s head of U.S. government relations, said, “but a one-size-fits-all approach to combating counterfeit or stolen goods threatens the makers and curators of unique and vintage goods that rely on marketplaces to build their businesses.”
Retailers universally agree that counterfeiting is a scourge on the industry. But with new coalitions on trend, it’s clear they have different ideas on how to combat them, carving out new dividing lines between the models.
Buy Safe America, founded in August 2020, was formed to fight counterfeit goods on e-commerce platforms like Amazon. So it’s no surprise that the Retail Industry Leaders Association, which includes Amazon rivals like Best Buy Co. Inc., Target Corp. and Walmart Inc., would sign on to the coalition.
Critics like tech industry advocate Adam Kovacevich believe Walmart is using Amazon’s counterfeits struggle — and the congressional spotlight on it in recent months — as a weapon to regain market dominance. “If big retailers like Walmart can erect regulatory hurdles to Amazon’s marketplace business, it would give shoppers fewer options. And that would be fine with big box retail,” he wrote in a March Medium post.
Meanwhile, companies like Poshmark, Etsy, eBay, Mercari and OfferUp have their own interest in keeping individual sellers from becoming collateral damage.