Big Tech platforms must stop thieves from reselling goods.

Cracking Down on Reselling: New Law Targets Online Retailers and Big Tech Giants

Online retailers and Big Tech giants, including Amazon, are facing a new law that aims to put an end to the reselling of stolen merchandise on their platforms. The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, which goes into effect today, will impose strict rules on these companies, with hefty fines for non-compliance.

Protecting Consumers and Businesses

The law, passed by Congress last summer, requires third-party sellers on online marketplaces like Amazon and Facebook to provide personal identifying information if they regularly sell products. Retailers are now obligated to remove sellers from their platforms if they fail to provide this information and must also offer tools for reporting suspicious behavior.

“The illegal sales of counterfeits, knockoffs, falsified products, and other intellectual property infringing items not only damages legitimate U.S. businesses but also fuels other illicit crimes and poses significant safety risks for all consumers,” emphasized David Kiddoo, the executive director of the Communications Cable and Connectivity Association.

Amazon expressed its support for the legislation, stating in a blog post, “We strongly support legislative efforts to stop bad actors from harming consumers, including increasing penalties against online criminals and providing greater resources for law enforcement.”

eBay also voiced its compliance, with a spokesperson stating, “We are fully prepared to comply with the new law, and we thank the bipartisan congressional sponsors for their leadership in passing the INFORM Act.”

Impacting High-Volume Sellers

The INFORM Consumers Act specifically targets high-volume third-party sellers who conduct 200 or more transactions valued at $5,000 or more over a 12-month period. These sellers must provide identifying information, including bank accounts, identification, tax info, and contact info. Marketplaces that fail to comply could face civil penalties of up to $50,120 per violation.

This new law aims to combat the rising issue of organized retail crime. Senior officials from the Department of Homeland Security have labeled retail crime as an “absolute threat,” with violent gangs, international crime syndicates, and groups allegedly connected to terrorist organizations increasingly engaging in these activities.

The surge in crime has forced stores to take measures such as placing more products behind glass or even closing stores in heavily populated areas due to rampant theft.

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