Two months after the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (the "INFORM Consumers Act") took effect, and following the batch of letters it sent out to online marketplaces notifying them of their compliance obligations, the Federal Trade Commission is now offering advice to online sellers whose businesses may be affected by the new law.
The INFORM Consumers Act, which applies to online marketplaces through which third parties sell consumer products, imposes certain information collection, verification and disclosure requirements with respect to "high-volume third party sellers"-defined as those who, in any continuous 12-month period during the previous 24 months, have entered into 200 or more discrete sales of new or unused consumer products resulting in an aggregate total of $5,000 or more in gross revenues.
The new FTC publication, "What Third Party Sellers Need to Know About the INFORM Consumers Act," looks at the statute from the perspective of businesses that sell via online platforms, providing guidance on which sellers are impacted and how online marketplaces' obligations under the Act may impact them, including what information must be disclosed to consumers.
The new guidance also answers common questions about the law, including (i) how online marketplaces must protect sellers' confidential information; (ii) how to file complaints about competitors or marketplaces who are violating the Act; and (iii) how to report suspicious activity.
While noncompliant online marketplaces may face civil penalties of $50,120 per violation, the law requires them to suspend a high-volume third party seller if the seller fails to provide the marketplace with the required information within 10 days or fails to respond within 10 days to the marketplace's request for updated information.
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