A new bill introduced in the Florida Senate would require online marketplaces like Amazon and eBay to verify and disclose the locations of third-party sellers. However, online marketplaces already provide this information to consumers because recent federal laws require them to do so. Additionally, differences between Florida's bill and existing federal law may create conflicting rules for online marketplaces operating in Florida. Therefore, while Florida's bill may not provide additional benefits to consumers, it could cause disruption to online markets.
The INFORM Consumer Act, a federal law that went into effect on June 27, 2023, requires online marketplaces to collect, verify, and disclose information about large amounts of third-party sellers on their platforms. The purpose of this disclosure is to inform consumers of the identity of third-party sellers, increase transparency in online commerce, and deter the sale of stolen, counterfeit, or dangerous products through third-party marketplaces. is. The law also requires online marketplaces to provide consumers with a way to report suspicious behavior or conduct regarding sellers. The INFORM Act is not a silver bullet to stop counterfeiting, but it will empower consumers and platforms by providing more information about products sold online.
Florida Bill 1342, introduced in January 2024, has essentially the same requirements. The bill would require marketplaces to verify the location of sellers and disclose that information to consumers if a seller resides or operates in a country of concern. There is. Countries of concern include China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria. The law also requires platforms to hold sales proceeds from countries of concern for 120 days before remitting them to sellers.
However, the bill does not address whether online marketplaces that already comply with the requirements of the INFORM Act would meet the requirements of Florida Bill 1342. For example, the INFORM Act requires online marketplaces to disclose the locations of bulk sellers. country of origin. Florida's bill requires disclosure of sellers operating in countries of concern. Will a marketplace violate Florida law if it discloses that a seller is operating from China but fails to disclose that China is considered a country of concern? Clarify this requirement If you do not, your online marketplace may violate Florida law without violating the INFORM Act.
Florida's bill would also slow down the operation of online marketplaces. Florida's bill requires online marketplaces to verify the location of all sellers, regardless of sales volume, but does it require online marketplaces to verify new sellers before listing their products? It is not specified whether. In contrast, the INFORM Act requires online marketplaces to verify information provided by sellers only if they exceed a threshold of 200 sales and $5,000 in gross revenue over a 12-month period. I am. As a result, online marketplaces have a buffer window before displaying information for new sellers. This difference creates new opportunities for platforms to violate Florida law without violating federal law.
Although the differences between these laws are small, a single comprehensive federal law is better for consumers and businesses than multiple inconsistent state laws. States should not pass laws that conflict with federal law. Doing so imposes unnecessary business costs that are ultimately passed on to consumers. This is especially true for e-commerce. In electronic commerce, buyers and sellers face significant obstacles in interstate commerce when they must comply with many different requirements.
State legislators should not decide foreign policy. If Florida legislators feel strongly about the need for additional consumer protections regarding products from countries of concern, they should work with Congress to enact stricter federal laws. However, state policymakers should not pass legislation like the INFORM Act that duplicates existing federal law with potentially confusing and contradictory provisions. Doing so would only pose compliance challenges and create barriers to online commerce within and outside the state.
