As we’ve written here, a brand new law governing online marketplaces and sellers takes effect TODAY, Tuesday, June 27. The new law (the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, or INFORM Consumers Act) is designed to deter criminals from selling counterfeit, stolen, defective, and dangerous products through online marketplaces. Passed in December 2022 with bipartisan support, the law requires online marketplaces to:

  • Collect and verify certain information from high-volume third party sellers”;
  • Suspend sellers that fail to comply;
  • Protect the information they collect against breaches and misuse;
  • Disclose sellers’ contact information to purchasers; and
  • Post a reporting mechanism” on each seller’s website where consumers can report suspicious activity.”

The law also charges the Federal Trade Commission (FTC), the state attorneys general (AGs), and other state officials” with enforcement; gives the FTC rulemaking authority; and authorizes substantial civil penalties for violations (as much as $50,120 per violation).

With the effective date upon us, here are some resources to aid companies with compliance:

The bottom line is that, if you’re covered by the law — whether as an online marketplace or a high-volume third party seller” — you should develop and implement a compliance plan now, train your employees on it, and monitor it for effectiveness. If you have questions, Kelley Drye can help.