Just one week before the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (the "INFORM Consumers Act") takes effect, the Federal Trade Commission has sent letters to 50 online marketplaces nationwide, notifying them about their obligation to comply with the Act's requirements beginning on June 27.
As we previously blogged about, 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 letters sent by the FTC (to undisclosed recipients) enclose a copy of the Act, highlight compliance obligations, and urge online marketplaces to take all steps necessary to fully comply by the Act's effective date, June 27, including by communicating with their third-party sellers about the information that needs to be collected, verified and disclosed. The letters also emphasize that failure to comply with the Act may be treated as a violation of an FTC rule, and thus noncompliant online marketplaces may face civil penalties of $50,120 per violation.
"The INFORM Consumers Act requires online marketplaces to protect consumers from counterfeit, unsafe, and stolen goods by verifying their high-volume third-party sellers' identities, and making it easier for consumers to report suspicious marketplace activity," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "The Commission will enforce the Act to the fullest extent possible and will collaborate with our state partners to hold online marketplaces accountable."
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