Lobbyists Cautiously Optimistic Inform Consumers Act Will Pass This Year

Advocates for more effective policing of counterfeit goods are hopeful that the inclusion of the Integrity, Notification, and Fairness in Online Retail Marketplaces (Inform) for Consumers Act as an amendment to a must-pass defense bill will mean the proposal will become law before the end of the year.

Jeff Hardy, director-General of the Transnational Alliance to Combat Illicit Trade (TRACIT), said in a telephone interview with International Trade Today, "I’m extremely encouraged. I am so encouraged I’m going to fall off my seat."

He said that brands have been trying to protect themselves from counterfeits sold on e-commerce platforms for years and years. If Inform becomes law, "after years of listening to the rhetoric on voluntary measures -- that is like a new dawn."

Travis Johnson, vice president for legislative affairs, and senior counsel at the International AntiCounterfeiting Coalition, said the Inform Consumers Act is among the top two legislative priorities for his members, with the other one being the Shop Safe Act.

Both were included in the House version of the Chips bill, but were not in the bicameral compromise. "There were some folks who were disappointed it didn’t make it through at that juncture," Johnson said in a telephone interview. "There certainly were some folks who thought the NDAA [National Defense Authorization Act] might be a bite at the apple. I don’t think it was necessarily expected."

The Inform Consumers Act was also attached to the NDAA in the Senate last year, but did not end up in the final bill (see 2111050021) The Inform Consumers Act requires high-volume third party sellers on e-commerce platforms to disclose their names and a way to contact them. A high-volume seller is defined as someone who has made 200 or more sales in a 12-month period, worth $5,000 or more. It also requires companies like Amazon or e-Bay to create a hotline to allow customers to report postings they believe to be stolen, counterfeit or dangerous products. Shop Safe stands for Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce, and it would require foreign sellers on e-commerce platforms to accept personal jurisdiction in the U.S. and allow themselves to be served in a lawsuit, and would ask platforms to make reasonable efforts to screen for sellers who are likely to sell counterfeit goods.

Johnson said he is more optimistic about the Inform Consumers Act this time, but added, "obviously there’s no such thing as a guarantee when it comes to legislation."

He said what gives him more confidence is "the additional year and certainly the additional continued negotiations on the language that have gone on over the last year or so have gone a fair way to making folks who weren’t entirely comfortable with it" more comfortable with the proposal. There is support for the bill from not just intellectual property rights holders but also Amazon, eBay, Etsy and others (see 2110280061). Still, those companies made their support public in October last year, and the NDAA last year moved later in the year.

Johnson said his group believes Inform Consumers and Shop Safe would work well in tandem, but he thinks Shop Safe is less likely to pass. "Certainly quite a few people remain opposed to Shop Safe," he said. "Generally speaking, there are some concerns when you talk about secondary liability."

Hardy said, "Even this [Inform Consumers Act] legislation doesn't go far enough, but it’s a start. It’s asking some of the most obvious things. In the end, this is a consumer protection issue more than an intellectual property rights issue. Let’s hope that it gets through."

Both Hardy and Johnson said it's wrong to think of the problem as e-commerce platforms vs. brands.

"I think it’s also very important to know that our view is not that Amazon or Facebook are malicious in any way," Hardy said of TRACIT members. "The maliciousness comes from those that are abusing those platforms." He said the same is true for counterfeits that come to America in bulk. "It’s not Maersk [to blame], it’s those who are putting illicit products in their containers and lying about it."

Johnson said, "All of us as stakeholders stand to benefit with consumers trusting the online marketplace, knowing they're going to get what they’re actually going to pay for. And knowing if that isn’t the case, the appropriate parties are going to be held accountable."