On June 27, 2023, the Federal Trade Commission (FTC), will begin enforcing a new law aimed at providing “…more transparency to online transactions and to deter criminals from acquiring stolen, counterfeit, or unsafe items and selling them through those marketplaces.” The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Consumers Act or the Act) requires “online marketplaces” to implement due diligence and disclosure measures to help protect consumers by deterring sales of stolen, counterfeit, or unsafe goods. Additionally, the Act requires online marketplaces to “implement and maintain reasonable security procedures and practices” including appropriate administrative, physical, and technical safeguards to protect data collected under the new law. 

The INFORM Consumers Act requires “online marketplaces,” where “high-volume third-party sellers” offer new or unused consumer products, to collect, verify, and disclose certain information about those sellers. The law defines “online marketplace” as a person or business that operates a consumer-directed platform that allows third party sellers to engage in the “sale, purchase, payment, storage, shipping, or delivery of a consumer product in the United States.”  

A “high-volume third-party seller” is an online vendor that makes 200 or more separate sales or transactions of new or unused consumer products, and $5,000 or more in gross revenues, on the online marketplace for a continuous 12-month period during the past 24 months. If a high-volume third-party seller has a total of $20,000 or more in annual gross revenues on the online marketplace, the marketplace is required to obtain and disclose to the consumer certain seller contact information. 

While the FTC acts as the federal enforcer of the new law, the Act allows any state attorney general to bring a civil action against a marketplace if they believe the marketplace has violated any of the Act’s requirements. Each violation under state or federal action could result in civil penalties of $50,120 per violation.

If you have questions concerning the impact of this new law on your business, Ice Miller has in-depth experience helping online marketplaces navigate supply chain regulatory compliance. Our team includes Business Group partner Meghann Supino, who regularly helps consumer products clients manage regulatory compliance in new and evolving legal landscapes. With decades of diverse consumer products experience, Of Counsel, Amber Littlejohn, of our Public Affairs Group, helps highly regulated industry clients manage regulatory risk and create new opportunities to meet their business objectives. Grace Dahm, an associate in Ice Miller’s Business Group, lends critical client support to address regulatory compliance needs. 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.