Should online marketplaces be required to verify third-party sellers for safety’s sake?
Home Depot, Walgreens and many of the largest retailers in the U.S. are throwing their support behind proposed legislation that would require online marketplace operators such as Amazon.com to verify third-party seller information and provide direct contact information to consumers.
The proposed legislation, known as the INFORM Consumers Act, is intended to provide greater transparency to consumers and assist law enforcement authorities to identify sellers suspected of trafficking in counterfeit, stolen and sometimes dangerous products.
“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 Michael Hanson, senior executive vice president of public affairs for the Retail Industry Leaders Association (RILA). “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 through these platforms.”
Mr. Hanson said that large online marketplaces have the technology and human expertise to “shut down criminal elements and fraudsters” if they direct resources to doing so.
Alex Gourlay, president of Walgreens, echoed Mr. Hanson’s comments adding in a statement, “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.”
Amazon has been the most frequent target of critics who say that online marketplaces are not doing enough to put an end to illegal and unsafe activity.
Earlier this year, Amazon introduced a program that involved in-person verification of third-party marketplace sellers. That program was adapted to handle seller verification via video calls once the coronavirus pandemic began spreading across the U.S. Amazon has representatives make calls using a videoconferencing app to check the identification of third-party sellers and confirm they match their applications.
Legislation crafted by Democratic and Republic Party congressional members known as the Shop Safe Act was introduced in March to amend the Trademark Act of 1946. The legislation, which has not been voted on by the full House, would make online platforms liable if products sold by third parties posed a health risk to consumers and had not been verified by the marketplace.
Rep. Doug Collins (R-GA), ranking member of the Judiciary Committee, and one of the authors said, “Consumer lives are at risk because of dangerous counterfeit products that are flooding the online marketplace. Congress must create accountability to prevent these hazardous items from infiltrating the homes of millions of Americans. The Shop Safe Act would make families safer by requiring online sellers to help prevent the sale of counterfeit products to consumers.”
- Online Marketplaces Should be Required to Verify Sellers Information – Retail Industry Leaders Association
- Walgreens Supports INFORM Consumers Act Introduction in U.S. House of Representatives – Walgreens
- Can Amazon weed out marketplace fraudsters via video chat? – RetailWire
- H.R. 6058 – Shop Safe Act of 2020 – U.S. House of Representatives
- Everything you should know about the Shop Safe Act – Red Points
DISCUSSION QUESTIONS: Should online marketplaces be required to verify third-party sellers? Should these marketplaces be legally liable for dangerous products sold to customers by third parties?