The Federal Trade Commission (FTC) recently sent letters to 50 online marketplaces across the United States, notifying them of their obligation to comply with the new Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act — AKA the INFORM Consumers Act. The FTC’s letter was purposed to proactively ensure that online marketplaces understand and fulfill their responsibilities by the time the act takes effect on June 27.
Under the INFORM Consumers Act, online marketplaces must take measures to protect consumers from counterfeit, unsafe, and stolen goods. This includes verifying the identities of their high-volume third-party sellers and making it easier for consumers to report suspicious activity on their platforms.
The FTC included copies of the act and a clear outline of the responsibilities online marketplaces must adhere to along with the letter. The agency emphasized the importance of carefully reviewing the statute and taking all necessary steps to ensure full compliance by the June 27 due date. The FTC also urges online marketplaces to communicate with their third-party sellers to inform them about the information required for collection, verification, and disclosure per the act.
What online marketplaces must know is that violations of the INFORM Consumers Act can be treated as a violation of an FTC rule, potentially leading to enforcement actions and civil penalties of $50,120 per violation. In Tuesday’s announcement, the FTC did not disclose the names of letter recipients.
The INFORM Consumers Act signifies a significant step in protecting consumers from fraudulent and unsafe products in the online retail space. By enforcing stricter measures on online marketplaces, the FTC aims to safeguard consumers, helping to increase confidence when shopping online.
