Durbin Seeks Commerce Committee Direction on E-Commerce Bill
Legislation to require online marketplaces like Amazon to verify third-party sellers got strong bipartisan support from the Senate Judiciary Committee Tuesday. But leadership needs to confer with the Senate Commerce Committee, which has jurisdiction, said Judiciary Chairman Dick Durbin, D-Ill.
Introduced by Durbin and Sen. Bill Cassidy, R-La., the Inform Consumers Act (S-936) would require platforms to “collect, verify, and disclose certain information from high-volume, third-party sellers.” It's an effort to combat counterfeit and stolen goods sold online, a problem Durbin said has gotten “much, much worse” since 2008, when he first tried to legislate on the matter. Walmart's senior government affairs director recently said the retailer endorses the bill (see 2110140054).
Ranking member Chuck Grassley, R-Iowa, is a co-sponsor, along with Sens. Mazie Hirono, D-Hawaii; Chris Coons, D-Del.; Thom Tillis, R-N.C.; Marco Rubio, R-Fla.; and Raphael Warnock, D-Ga. House Consumer Protection Subcommittee Chair Jan Schakowsky, D-Ill., and ranking member Gus Bilirakis, R-Fla., introduced companion legislation in the House, which is endorsed by Amazon, Etsy and eBay. Durbin said during a Tuesday hearing he hopes it “becomes law soon,” but it will have to go through Commerce. He told us after the hearing he had discussions with Chair Maria Cantwell, D-Wash., but there’s no plan for advancing the bill. “I’m going to look into it probably, give it some attention,” Cantwell told us.
Most online sellers and goods “are legitimate,” and these types of crimes weren’t created by online marketplaces, Internet Association CEO Dane Snowden told Judiciary members during opening remarks. He noted platforms don’t permit illegal activity on their platforms, and they remove content proactively. Legislation should preempt state laws, and Congress should avoid imposing any unreasonable thresholds or timelines on smaller businesses trying to verify sellers, he said. The Senate bill allows sellers two days after qualifying as a high-volume third party seller, for that seller to report identifying data like banking, contact and tax information. The House version allows 10 days, and Snowden said the Senate should consider the latter.
Grassley highlighted issues about drug traffickers on platforms and the spike in professional shoplifters. Durbin cited complaints from Home Depot about stolen goods being sold on Amazon. Voluntary efforts from platforms are a good start but not enough because the platforms profit from the illegal behavior, said Grassley.
Amazon is proactive about removing illegal sellers, said Snowden. Online stores don’t want illegal activity, which hurts member reputations, he said. Durbin noted Amazon said it will work with Congress to strengthen the bill: “We’re going to test your statement that they’re on our side.”
None of the e-commerce platforms currently has the transparency needed to prevent crime, said Ben Dugan, director-CVS Health organized retail crime and corporate investigations. Notice and takedown processes are necessary, but platforms need to take a proactive approach before content is posted, said Michigan State University adjunct law professor Kari Kammel.
Sen. Amy Klobuchar, D-Minn., asked if IA would support legislation she introduced that would make it illegal for platforms to use special access to data to make copycat versions of products. Crazy Aaron's President Aaron Muderick testified that Amazon recently attempted to sell Amazon Basics versions of his company’s products, which violated various trademarks. Amazon quickly removed the products from its marketplace, but it highlights the problem, said Muderick. Snowden said IA hasn’t taken a stance on competition-related legislation because it has members on both sides of the issue.