Amazon and a who’s who of online-only retailers are trying to crack down on proposed federal and state legislation that would cause companies to disclose contact information for third-party sellers.
The bills would force Amazon and others to verify the identities of third-party sellers and provide consumers with ways to communicate with stores. The proposed legislation pits traditional retailers, including Home Depot, Walgreens and JCPenney, who back the bills, against online retailers such as Amazon, Etsy, eBay, Poshmark and others, who argue that the legislation would hurt small sellers. .
The invoices come as traditional retailers lost ground to online retailers during the pandemic: In 2020, 20 percent of consumers’ retail purchases were made online, up from about 14 percent in 2019. But the legislation is also being proposed in response to a large number of counterfeit, stolen and dangerous items that have appeared on market sites .
Online retailers argue that the bills would compromise the privacy of third-party sellers. On some platforms, most merchants run their businesses from their homes. Etsy, for example, says that 97 percent of its sellers do. A. Amazon seller survey It found that 70 percent work outside of their Amazon businesses, suggesting that they, too, run the business from home.
“When you look at the unintended consequences of sellers trying to choose between their privacy and their security and their livelihood, the result is that you will have fewer sellers online, and that really only benefits Walmart, Home Depots and Lowes,” Alexis Marvel, spokesperson for the Makers and Merchants Coalition, said Axios.
However, that anonymity provides cover for scammers. It is not uncommon to find counterfeit and potentially harmful items on market sites. In 2018, the Government Accountability Office ordered 47 items– including shoes, travel mugs, cosmetics, and phone chargers – from third-party vendors on “popular consumer websites” and found 20 of them to be counterfeit.
Even non-counterfeit items purchased from third-party sellers have been implicated in consumer harm. In April 2018, a 19-month-old boy in Texas was injured after swallowing a battery that fell from a loose battery compartment in a third-party Apple TV remote. The parents asked Amazon to stop selling the defective product and asked for the contact information of Hu Xi Jie, who ran the Amazon store “USA Shopping 7693” that sold the remote control. Hu Xi Jie never responded and Amazon was unable to locate the individual. The parents sued Amazon in Texas state court, arguing that the retailer is responsible for the defective product. Amazon, on the other hand, says that it serves as an intermediary and does not take any responsibility.
It’s that argument, among others, that has traditional retailers pushing for change. Consumer product laws hold companies like Target and Home Depot liable for injuries if stores don’t take enough steps to prevent defective products from reaching consumers. Online marketplaces have not been bound by those rules, as they do not control outside sellers.
That doesn’t mean that Amazon didn’t feel pressure to address the issue. Last month, the company issued a report that it had “seized and destroyed” more than 2 million counterfeit products shipped to its warehouses last year. To fight counterfeiters, Amazon said it introduced a new seller verification system that “connects one-on-one with prospective sellers via video chat or in person at an Amazon office to verify sellers’ identities and government-issued documentation. “
Online retailers have formed two groups to fight bills. One started just six weeks ago and calls itself the Coalition of Creators and Merchants. It is funded by the Internet Association, which is supported by a number of companies, including retailers Amazon, Etsy, and Rakuten, and other Internet-related companies such as PayPal, Google, and Microsoft. The other, the Coalition to Protect America’s Small Sellers, was started ten weeks ago by platforms like eBay, Etsy and Poshmark, which sell items exclusively from third parties.
On the other hand, physical retailers have formed the Buy Safe America Coalition, which includes Home Depot, Lowes, Walgreens, CVS and others.
No fewer than 17 states have proposed legislation to encourage online retailers to offer more transparency about third-party sellers. Federal legislation has also been proposed. In March, Senator Richard Durbin (D-Ill.) And Senator Bill Cassidy (R-La.) Introduced the INFORM Consumers Act and recently try to include it as an amendment to the United States Competition and Innovation Act. That effort failed, although the bill remains in the Senate.