Online Marketplaces Should be Required to Verify Seller Info

Legislation is first step in curbing organized retail crime

By [ Michael Hanson ]
Washington, DC
07/23/2020

The Retail Industry Leaders Association (RILA) announced its support for the INFORM Consumers Act, legislation introduced today by Rep. Jan Schakowsky (D-Ill.) which will require common-sense disclosures and accountability from big tech platforms like Amazon.com who increasingly sell products from third party sellers on their websites. The bill is designed to provide consumers with greater transparency by requiring online marketplaces to simply verify a seller’s information and for the seller to provide contact information to consumers. This legislation will hold big tech marketplaces accountable for fraudulent transactions and allow law enforcement to better identify high-frequency sellers suspected of trafficking stolen and counterfeit goods.

“Consumers continue to buy items online in record numbers, and that shift has exposed a growing and dangerous trend that must be dealt with immediately—the exponential growth of stolen and counterfeit goods sold through online marketplaces,” said RILA Senior Executive Vice President for Public Affairs Michael Hanson "The INFORM Consumers Act provides a measured response to this problem by requiring online marketplaces to verify information about the sellers on their platform.”

Retailers have seen a dramatic increase in organized retail crime (ORC) in recent years, with career criminals targeting stores with alarming frequency, and in many cases, escalating levels of violence. This is because perpetrators, often organized and coordinated to target multiple retailers, are increasingly turning to online marketplaces to move large quantities of stolen merchandise.

A report released earlier this year by the Department of Homeland Security (DHS) underscored the growing problem of counterfeit goods sold on marketplace platforms, highlighting the need for Congress and regulators to do more to hold sellers and the platforms accountable when fake or illicit products are sold to unsuspecting consumers.

“Big tech marketplace platforms have their place in an increasingly diverse and digital economy, connecting legitimate sellers—often small businesses—to a large and growing pool of online shoppers,” said Hanson. “But their growth cannot be a golden ticket for criminal rings targeting legitimate businesses and innocent consumers.”

“The continued anonymity and unregulated environment in which these platforms operate have made them a stage to sell products that would never be allowed on a store shelf,” said Hanson. “Stolen goods, expired and defective products, products made with unsafe levels of chemical substances, and products that do not meet U.S. quality and safety standards are often deceptively marketed and sold though these platforms.”

Tackling the sale of counterfeit and stolen goods is a top priority for leading retailers, but it will require the tech community to step up and do their part.

“Large marketplace platforms employ some of the most sophisticated data scientists and logistics professionals in the world, and it is clear the knowhow exists to identify and crack down on these illegitimate sales,” said Hanson. “It’s time these companies use their considerable resources and savvy to verify their sellers and shut down criminal elements and fraudsters that are using their platforms as a pipeline for unloading stolen and counterfeit goods.”

“We’re pleased to partner with government and other retailers to keep online marketplaces accountable for the products sold on their sites. We believe this is an important step in preventing the sale of counterfeit and stolen items to customers who believe they are buying legitimate products,” said Scott Glenn, VP of Asset Protection, The Home Depot.

“The lack of transparency and accountability in today’s digital marketplaces has contributed to the rapid rise of organized retail crime, which has become one of the top challenges facing the retail industry today. Walgreens strongly supports Congresswoman Schakowsky’s INFORM Consumers Act, which complements the bipartisan Senate bill introduced earlier this year to require online marketplaces to verify high-volume sellers, remove incentives for retail theft and help make our communities safer. Now, more than ever, consumers deserve to know who they are buying products from online, in order to make safe and informed purchasing decisions for themselves and their families,” said Alex Gourlay, Co-Chief Operating Officer Walgreens Boots Alliance, and President, Walgreens.

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