Commercial Law - Consumer Protection - Online Marketplace Disclosure Requirements (INFORM Consumers Act of 2022)
The bill's implementation is expected to significantly alter how online marketplaces operate. By enforcing strict disclosure standards for sellers, the legislation aims to protect consumers from potential fraud and ensure they can access important seller information prior to making purchases. Additionally, the bill prohibits local governments from imposing their verification requirements on online marketplaces, thereby standardizing requirements across the state. As a result, this could limit the ability of local jurisdictions to tailor consumer protection measures to their specific needs, leading to concerns about its implications for local governance.
Senate Bill 610, titled the INFORM Consumers Act of 2022, aims to enhance consumer protection in online marketplaces by instituting specific requirements for high-volume third-party sellers. The bill stipulates that these sellers must disclose various information, including accurate bank account details, contact information, and tax identification numbers within 24 hours of becoming a high-volume seller. This information is required to mitigate deceptive practices and improve transparency for consumers engaging with online platforms.
Notable points of contention surrounding SB610 include debates about the balance between consumer protection and the potential overreach of state regulations into local governance. Critics argue that while enhancing consumer protections is necessary, the blanket preemption of local regulations could undermine the ability of communities to address their unique consumer needs effectively. Proponents, on the other hand, emphasize the need for a uniform approach to online retail practices in order to provide clear guidelines for sellers and protection for consumers, arguing that this will foster a safer online shopping environment.