eBay, Etsy, Mercari, OfferUp, Poshmark Unite Against Seller Transparency

Online marketplaces eBay, Etsy, Mercari, OfferUp, and Poshmark have launched "the Coalition to Protect America's Small Sellers" or the PASS Coalition, in opposition to a federal bill aimed at curtailing sales of fake and stolen goods through online marketplaces, reports Yahoo Finance. The federal bill in question is the bipartisan INFORM Act, which was introduced in the U.S. Senate last week. The act, whose shortened name stands for “Integrity, Notification and Fairness in Online Retail Marketplaces,” would require online marketplaces to disclose third-party seller information to consumers, including name, address, email and telephone, or face civil penalties. The rules would apply to high-volume sellers with 200 or more sales totaling at least $5,000 over a one-year period.

Many major brands and retailers support the effort to thwart counterfeit operators with new seller transparency requirements, including Walmart, whose marketplace is on the rise. PASS, however, believes the proposed one-size-fits-all disclosure requirement favors big-box retailers that have a local store or an established e-commerce presence, and harms the small sellers who have thrived developing their online businesses, according to the PASS website.

Total Retail's Take: Retailers universally agree that counterfeiting is a scourge on the industry. However, it’s clear they have different ideas on how to combat the problem, carving out new dividing lines between competing coalitions. Buy Safe America, a coalition of retailers that includes Walmart and Target, worked with lawmakers on the INFORM bill and called the act a “common sense” approach. In response to the PASS Coalition's criticisms, coalition spokesperson Michael Hanson says the bill does include exceptions and alternatives, including for sellers who may be using their personal address or phone number for their marketplace business. The marketplaces also kept their criticisms of the act vague and didn't offer specific alternatives to the bill's provisions.

The PASS Coalition is focusing its concerns on small sellers, as it believes independent sellers that don’t have a DBA (“doing business as” status) or other business entity would have to list their real names, addresses and other information. “Requiring our sellers — many of whom are women casually selling items from their closets — to publicly disclose personally identifiable information is of great concern as doing so may compromise their privacy, security and ability to thrive,” said coalition founding member Amber McCasland, vice president of communications at Poshmark. “We believe it is possible to achieve policy solutions that both consider and protect the interests of America’s small online sellers.”

Big-box retailers certainly have a lot to gain with a federal bill that will handle e-commerce fraud on their behalf, allowing for their offerings to dominate the market and mitigate thousands of dollars in loss. Conversely, marketplaces which cater to and thrive on third-party sellers have a lot to lose if sellers are rejected over sweeping fraud laws, chasing them away from the platform. The PASS coalition stated that the group is committed to working with policymakers to find creative solutions that protect both consumers and small businesses; however, finding a solution that will appeal to big-box retailers and niche marketplaces will be a challenging feat.