FTC Puts Online Marketplaces on Notice About Their Responsibilities Under the New INFORM Consumers Act

The Federal Trade Commission (FTC) sent letters to 50 online marketplaces nationwide notifying them about their obligation to comply with the new Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act – or the INFORM Consumers Act – as soon as it takes effect on June 27, 2023. “The INFORM Consumers Act requires online marketplaces to protect consumers from counterfeit, unsafe, and stolen goods by verifying their high-volume third-party sellers’ identities, and making it easier for consumers to report suspicious marketplace activity,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. The letters enclose a copy of the act, highlight the responsibilities the act places on online marketplaces, and urge that businesses carefully review the statute and take all steps necessary to fully comply by June 27. In the letters, FTC staff also urge online marketplaces to communicate with their third-party sellers about the information the act requires to be collected, verified, and disclosed. Finally, the letters emphasize that a violation of the act may be treated as a violation of an FTC rule, and thus noncompliant online marketplaces may face enforcement that could result in civil penalties of $50,120 per violation.