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Shady third-party sellers are running rampant online. It’s time for Congress to step in

If Amazon won’t fix it, the INFORM Consumers Act will

Boxes are seen during a rally for Amazon workers in New York in 2020. Online marketplaces like Amazon are not doing enough to prevent dangerous and counterfeit products from being sold to customers, Durbin and Cassidy write.
Boxes are seen during a rally for Amazon workers in New York in 2020. Online marketplaces like Amazon are not doing enough to prevent dangerous and counterfeit products from being sold to customers, Durbin and Cassidy write. (Tayfun Coskun/Anadolu Agency via Getty Images file photo)

The internet marketplace has fundamentally changed the way Americans shop. From back-to-school supplies to Christmas gifts, even medicines to everyday needs like groceries, anyone’s shopping list is only a few clicks away.

The growth of this marketplace has provided many benefits, but it has also revealed how vulnerable consumers are to bad actors who sell fake, stolen or dangerous goods online.  

It is well documented that third parties are selling massive amounts of counterfeit, stolen and unsafe consumer products on online marketplaces. The Office of the U.S. Trade Representative reported last year that the “rapid growth of e-commerce platforms has helped fuel the growth of counterfeit and pirated goods into a half trillion dollar industry.” Also last year, the Department of Homeland Security stated that such trafficked goods “threaten public health and safety, as well as national security.”

Even Amazon — a company with wealth capable of launching its founder into outer space — is struggling to prevent dangerous and counterfeit products from being sold to its customers. That was underscored recently when the U.S. Consumer Product Safety Commission filed a complaint to compel Amazon to stop selling hazardous products to customers. Products listed in the complaint included carbon monoxide detectors that failed to alarm, kids’ pajamas that could catch fire and hair dryers capable of electrocuting users if dropped in water.

How do these products end up on large online marketplaces like Amazon? Through third-party sellers, many of which are anonymous and based overseas. Consumers often do not even know the identity of the businesses that sell them goods. Unfortunately, online marketplaces like Amazon are going to great lengths to keep it that way.

We have introduced legislation the past two Congresses called the INFORM Consumers Act, which would increase online marketplace transparency for consumers and ensure that marketplaces verify who their high-volume third-party sellers are. If a consumer buys a product online that turns out to be stolen, fake or dangerous, they deserve to know who sold them that item. And marketplaces should not let that seller slip into the shadows and escape accountability.

Our bill is supported by a broad coalition of consumer groups, as well as manufacturers and retailers who are tired of their products being counterfeited and stolen for online resale. But Amazon and the powerful online marketplace lobby say our bill is too onerous. They say that they already do a great job of policing who is selling what from where on their websites and that the best solution is to leave the status quo in place.

Reality couldn’t be further from the rosy picture painted by these companies. We need to take stronger steps to both prevent illicit sales on online marketplaces and to make sure bad actors are held accountable. As The Wall Street Journal recently reported, law enforcement investigators say they struggle to obtain information from Amazon about shady sellers on their marketplace. 

We are pleased to see Illinois and other states increasing their enforcement efforts, in an attempt to crack down on the criminal networks that sell illicit retail goods.  But we also need to shine a light on these marketplaces and inform consumers who these shady sellers are and make sure they cannot keep hawking flawed products to American buyers. That’s what our bill would do.

Some online platforms are getting rich from looking the other way and want to pretend the house isn’t on fire. They lobby Congress to keep allowing shady sellers on their marketplaces to sell high volumes of illicit and dangerous goods to unknowing Americans, and to prevent the INFORM Consumers Act from becoming law. But if you bought a carbon monoxide detector, unknowingly from a large third-party seller in China, and it turns out to be a fake and won’t alert you to danger in your own home, wouldn’t you want accountability?

The answer is obvious. Standing in the way of accountability and transparency only serves to hurt consumers and enrich this growing criminal enterprise.

Sen. Richard J. Durbin is a Democrat representing the state of Illinois and serves as the Senate majority whip.

Sen. Bill Cassidy is a Republican representing the state of Louisiana. 

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