§45f Collection, Verification, and Disclosure of Information by Online Marketplaces to Inform Consumers

Summary

Require online marketplaces to collect and check certain seller information when a seller becomes a high-volume third-party seller. Within 10 days after qualifying, the marketplace must get a bank account number or a payee name if there is no bank account, contact information (an individual’s name or a government ID or business record showing the business name and address), a business tax ID or taxpayer ID, and a current working email and phone number. Bank or payee details may be given directly to the marketplace or stored by a payment processor or other third party, but the marketplace must be able to get that information within 3 business days. The marketplace must verify the information within 10 days of collecting it and must verify any reported changes within 10 days of learning about them. If a seller provides a valid government tax document, the information in that document is treated as verified as of its issue date. Marketplaces must remind high-volume sellers at least once a year to keep their information current and must require sellers to electronically confirm within 10 days after that notice whether information changed or stayed the same. If a seller fails to give required information or to certify, the marketplace must notify the seller and give them 10 days to comply. If the seller still does not comply, the marketplace must suspend the seller’s future sales. Data collected only to follow these rules may not be used for other purposes unless law requires it, and the marketplace must keep the data secure with reasonable administrative, physical, and technical safeguards. Make clear seller identity to consumers when a seller has $20,000 or more in annual gross revenue on the marketplace. The marketplace must display, on the product page or in the order confirmation and the buyer’s transaction history, the seller’s full name (company or operating name), physical address, and contact methods (a working phone, working email, or a direct messaging method). The marketplace must say if a different seller actually supplied the product at the time of purchase, and must give the buyer the supplier’s identity and contact details on request. A seller may ask to partially hide address or phone details in limited cases (for example if the seller uses a residential address, or provides a separate return address, or has no phone other than a personal number); the marketplace may then show only country and state or only the return address and must tell buyers how to contact the seller by phone, email, or messaging. If the marketplace learns a seller lied to get partial disclosure or the seller fails to respond to buyer inquiries in a reasonable time, the marketplace must notify the seller and give 10 days to respond, and may suspend sales unless the seller agrees to full disclosure. The marketplace must also give a clear way for consumers to report suspicious activity by phone or electronically. The Federal Trade Commission enforces these rules as unfair or deceptive acts and may make limited regulations to implement them. State attorneys general and certain state officials may bring civil actions with notice to the Commission. If any part of the rule is held invalid, the rest remains in effect. Definitions (one line each): Commission = Federal Trade Commission; Consumer product = product meant for consumers; High-volume third-party seller = a third-party seller with 200 or more separate sales and $5,000 or more in gross revenue in any 12-month period during the prior 24 months; Online marketplace = a platform that lets third-party sellers sell, take payments, or arrange shipping to U.S. consumers; Seller/Third-party seller = a person or business selling through the marketplace; Verify = confirm that information and documents are real and match the seller. These rules took effect 180 days after December 29, 2022.