Bill Overview
Title: To require online marketplaces to verify certain information regarding high-volume third party sellers of consumer products on such online marketplaces and to disclose to consumers certain contact and other information regarding such high-volume third party sellers.
Description: This bill requires online marketplaces (e.g., Amazon) to collect and verify certain contact and financial information from third-party sellers whose transactions and related revenues exceed specified thresholds. Subject to certain exceptions, online marketplaces must clearly and conspicuously disclose the contact information of certain high-volume third-party sellers to consumers and must also provide consumers with methods to report suspicious activity on the marketplace. The bill provides the Federal Trade Commission and state attorneys general with the authority to enforce these requirements.
Sponsors: Rep. Schakowsky, Janice D. [D-IL-9]
Target Audience
Population: People using or working for online marketplaces
Estimated Size: 300000000
- The bill targets online marketplaces that enable transactions between sellers and consumers.
- High-volume third-party sellers on online marketplaces will directly be impacted as they will need to provide and verify their contact and financial information.
- Consumers who shop on online marketplaces are also impacted as they gain access to seller information and tools to report suspicious activities.
- The Federal Trade Commission and state attorneys general are tasked with enforcement, impacting their operations.
Reasoning
- The budget for the policy indicates that enforcement and operational costs are significant but feasible given the scale of impact across millions of users of online marketplaces in the U.S.
- The primary groups affected are third-party sellers on these platforms and consumers who may have concerns about product legitimacy and safety.
- The policy aims to increase transparency and trust, potentially raising user satisfaction and consumer wellbeing marginally for those purchasing frequently on e-commerce platforms.
- In contrast, for sellers, especially those whose revenue and transaction volumes put them under the new requirements, there could be an impact on ease of doing business and administrative burden, affecting their wellbeing.
- Since nearly 82% of Americans utilize online marketplaces, the actual impact on individual consumers from the policy itself (absent of other variables) may be minimal in terms of wellbeing but assure greater security.
Simulated Interviews
Online retailer (San Francisco, CA)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The policy could make it more complicated for me to maintain compliance, adding extra paperwork and requiring more detailed disclosures.
- I believe this will increase trust with customers, but it might also lead some small sellers to quit.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 9 |
Software engineer (Austin, TX)
Age: 29 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- This seems like a positive step to improve trust in online transactions.
- I am less likely to encounter counterfeit products with these measures.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Federal Trade Commission employee (New York, NY)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 2/20
Statement of Opinion:
- This will increase our workload significantly, but it's a necessary effort to ensure consumer safety.
- We will need to adapt quickly to manage and enforce this policy effectively.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Third-party seller (Salt Lake City, UT)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 4.0 years
Commonness: 3/20
Statement of Opinion:
- This policy might mean more headaches and potential losses if I can't meet the verification requirements.
- Increased transparency might benefit sales in the long term if consumers feel safer buying.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Student (Seattle, WA)
Age: 23 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 18/20
Statement of Opinion:
- I think it makes sense to have more data on sellers, but as occasional shopper, it's not a huge impact for me.
- Hopefully, it makes online shopping safer by weeding out bad sellers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Attorney General's office staff (Miami, FL)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 2/20
Statement of Opinion:
- This will provide us with more tools to prosecute fraud, which is good.
- There is a challenge in effectively managing additional data.
- Policy promotes consumer confidence but needs adequate funding to be successful.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
E-commerce platform manager (Los Angeles, CA)
Age: 42 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- Implementing this will require significant changes to our systems to verify seller information.
- This kind of policy should benefit the platforms by reducing fraudulent activities.
- Increases work pressure and initially complicates seller operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Retired (Chicago, IL)
Age: 61 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- I like that there's more oversight on sellers; I feel this will make my online shopping experience safer.
- As someone on a fixed income, I worry less about getting tricked now.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Social Worker (Boston, MA)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- The policy offers a sense of increased safety for online consumers mainly, something I find beneficial for my clients.
- However, for those already overwhelmed with online shopping complexities, new rules could add confusion.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Independent seller (Portland, OR)
Age: 33 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 4.0 years
Commonness: 4/20
Statement of Opinion:
- This might help maintain a level playing field, but verification processes seem tough for small entrepreneurs like myself.
- I hope this policy will deter larger scams, keeping genuine businesses in operation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 9 | 9 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $70000000)
Year 2: $45000000 (Low: $35000000, High: $65000000)
Year 3: $40000000 (Low: $30000000, High: $60000000)
Year 5: $35000000 (Low: $25000000, High: $55000000)
Year 10: $30000000 (Low: $20000000, High: $50000000)
Year 100: $10000000 (Low: $5000000, High: $20000000)
Key Considerations
- The balance between consumer protection, marketplace efficiency, and regulatory oversight needs to be carefully managed.
- There will be initial costs related to the setup of verification systems, legal adjustments, and enforcement processes.
- Potential pushback from online marketplaces due to the increased burden of compliance.