The Federal Trade Commission (FTC) has published its INFORM Consumers Act guidance, intended to clarify the new rules for third-party sellers who operate on large online marketplaces.
The INFORM Consumers Act came into effect on June 27, marking a significant shift in the US regulation of online platforms that host high-volume third-party sellers. The Act demands that these platforms must ‘collect, verify and disclose certain information’ about sellers who are offering new or unused consumer products, according to the Sheppard Mullin Richter & Hampton LLP.
The Act also stipulates that these platforms need to provide a clear mechanism for consumers to report any suspicious activity, which is designed to increase transparency and foster greater consumer confidence in these online marketplaces.
Published on August 18, the FTC’s new guidance is intended to aid third-party sellers in understanding how this Act may impact their operation. It is therefore of interest not only to those who operate in large-scale online marketplaces, but also to legal professionals and corporate policy makers whose role includes keeping pace with the evolving legal landscape surrounding e-commerce.
- The FTC’s new guidance delves into what exact ‘certain information’ third-party sellers will need to collect, verify, and disclose.
- It provides crucial insight into how the Act’s stipulation for online platforms to provide a mechanism for reporting suspicious activity should actually be implemented.
- It also explores the potential impacts and consequences for third-party sellers, online platforms, and consumers alike who fail to comply with these new regulations.
As e-commerce continues to grow in scale and complexity, such regulatory developments carry significant implications for a large swathe of businesses and service providers participating in online commerce, along with the legal professionals who guide them. As such, the FTC’s INFORM Consumers Act guidance provides a crucial window into the future of online marketplace regulation, and is a must-read for all involved in e-commerce law.