InfoBytes Blog
FTC notifies online marketplaces on INFORM compliance
On June 20, the FTC sent 50 letters to online marketplaces nationwide notifying them of their obligation to comply with the INFORM Consumers Act (the “Act”) set to take effect on June 27. The Act “imposes obligations on online marketplaces regarding the collection, verification, safeguarding, and disclosure of certain identifying information of ‘high-volume third party sellers’ that sell, offer to sell, or contract to sell new or unused consumer products in the United States through marketplaces’ platforms.” The Act also requires that online marketplaces make reporting of certain suspicious marketplace activity available. The letter warns that the FTC will enforce the Act to its fullest extent, and therefore encourages online vendors to prepare for the Act’s imposition, including by communicating with and informing third party sellers about the information the Act requires to be collected, verified, and disclosed. The FTC also emphasizes the civil penalties for violations of the Act, which are north of $50,000, in the letter. According to the FTC, the Act is designed to protect consumers from unsafe, stolen, and counterfeit goods by verifying the identity of their third-party sellers and simplifying the avenues for consumers to report suspicious activity.