{"id":85307,"date":"2025-11-17T08:58:08","date_gmt":"2025-11-17T13:58:08","guid":{"rendered":"https:\/\/www.mytotalretail.com\/?post_type=article&p=85307"},"modified":"2025-11-18T08:17:09","modified_gmt":"2025-11-18T13:17:09","slug":"the-inform-consumers-act-a-must-know-for-online-marketplaces","status":"publish","type":"article","link":"https:\/\/www.mytotalretail.com\/article\/the-inform-consumers-act-a-must-know-for-online-marketplaces\/","title":{"rendered":"The INFORM Consumers Act: A Must-Know for Online Marketplaces"},"content":{"rendered":"

While the Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Act<\/a>) went into effect on June 27, 2023, very few online marketplaces have focused on this law since then. However, the INFORM Act is now receiving increased attention from Congress and the Federal Trade Commission. Online marketplaces that operate platforms for third-party sellers may have certain compliance obligations to tackle before a regulator (or Congress) comes calling.<\/p>\n

The INFORM Act was passed in 2021 by Senators Dick Durbin and Bill Cassidy to combat what they perceived as a noticeable rise in organized retail crime rings’ online resale of stolen items from brick-and-mortar retailers. The act aims to address these activities by requiring online marketplaces to collect, verify, and disclose information about high-volume third-party sellers who offer new or unused consumer products for sale.<\/p>\n

This past July, Durbin publicly criticized<\/a> the FTC for its failure to issue regulations or enforce the act against online marketplaces, stating at a Senate Judiciary Committee hearing that “the Federal Trade Commission has literally dropped the ball on enforcing the INFORM Consumers Act.” Senator Durbin also sent a letter to the FTC requesting a broad range of information about the agency’s involvement in enforcing the act. Less than a month later, the FTC announced a $2,000,000 settlement with Temu, which also imposed a variety of injunctive relief obligations on the company, many of which arguably extend beyond the act’s requirements.<\/p>\n

What is an Online Marketplace or High-Volume Third-Party Seller?<\/strong><\/h2>\n

Following the hearing, Durbin and Cassidy identified and sent letters to 46 companies allegedly operating online marketplaces regulated by the INFORM Act. An entity qualifies as an online marketplace under the act if it operates an electronic platform that:<\/p>\n

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  1. Includes features that allow for, facilitate, or enable third-party sellers to engage in the sale, purchase, payment, storage, shipping, or delivery of a consumer product in the United States.<\/li>\n
  2. Is used by one or more third-party sellers for such purposes.<\/li>\n
  3. Has a contractual or similar relationship with consumers governing their use of the platform to purchase consumer products.<\/li>\n<\/ol>\n

    A high-volume third-party seller is “a participant on an online marketplace’s platform who is a third-party seller and, in any continuous 12-month period during the previous 24 months, has entered into 200 or more discrete sales or transactions of new or unused consumer products and an aggregate total of $5,000 or more in gross revenues.”<\/p>\n

    Requirements for Online Marketplaces<\/strong><\/h2>\n

    Online marketplaces subject to the act must do the following:<\/p>\n