US lawmakers put INFORM act in 2023 spending package

In amongst the text of the $13.8 billion US Congressional spending package for fiscal 2023, is a bill that aims to make it harder for sellers of counterfeit goods to operate anonymously on online retail platforms.

The bipartisan INFORM Consumers act would make it mandatory for online commerce sites that allows third-party sellers – such as Amazon and eBay – to authenticate the identity of those who have made 200 or more discrete sales in a 12-month period amounting to $5,000 or more – so-called 'high-volume' sellers.

They would have to provide government and tax IDs, bank account information and contact information, including business address, email and phone number in order to operate on online marketplaces.

The bill has attracted broad support from retailers, e-commerce platforms, law enforcement officials, manufacturers, and consumers, and is the only piece of legislation that addresses both stolen and counterfeit merchandise being sold online, according to Michael Hanson, a spokesman for the Buy Safe America Coalition which represents "responsible retailers, consumer groups, manufacturers, intellectual property advocates and law enforcement officials."

The bipartisan bill has resulted in similar state-level legislation being tabled around the US, and is intended to allow consumers and online marketplaces to distinguish between genuine retailers and fraudsters.

"We are grateful that lawmakers on both sides of the aisle are one step closer to passing the INFORM Consumers Act that protects millions of American consumers, store employees, and business owners who are hurt by rampant organised retail crime and dangerous counterfeit goods," said Hanson.

Buy Safe America says retail theft costs retailers over $69bn annually and is responsible for the loss of hundreds of thousands of American jobs. It also cites a a study on the counterfeit industry which estimates that just 21 product types account for over 60 per cent of all the contraband goods entering the US — a loss of nearly $54.1bn in sales.

"It is vital that Congress enact the INFORM Consumers Act this year. With retail theft continuing to increase and counterfeits proliferating online, a legislative solution to these issues desperately needed," added Hanson. 

Not all are in support of the legislation. The Coalition to Protect America’s Small Sellers – which represents some big names in online retail including eBay, Poshmark, Etsy, Mercari and OfferUp – claims it would jeopardise the privacy and security of millions of small online sellers, particularly those selling second-hand items.