The INFORM Act—What You Should Know

What’s the INFORM Act? Spurred by sellers in China and other countries outside the United States offering counterfeit and stolen merchandise, the bipartisan INFORM Act (Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act ) was signed into law in December; it took effect on June 27.

The act provides for appropriate verification and transparency of high-volume third-party sellers and deters online sales of stolen, counterfeit, and unsafe goods. Here’s what it does:

Focused on combating the sale of illegal and counterfeit products in eCommerce, the act seeks to establish national standards for marketplaces and sellers, requiring marketplaces to collect information on high-volume sellers.

It requires high-volume third-party sellers making 200 or more sales in a year that total more than $5,000 to provide identification and contact information to large marketplace platforms. They are required to complete the legal identification process within 10 days—failure to comply results in the suspension of their seller account.

Enforcement falls on the Federal Trade Commission (FTC) in conjunction with state attorneys general. Individuals cannot take legal action based on this legislation.

While the INFORM Act primarily targets fraudulent sellers, the act tries to strike a balance between consumer protection and supporting small businesses.

So far, support is high. Amazon commented: “…We applaud the new Inform regulation in establishing a baseline expectation for the entire industry.”  Amazon claims it thwarted the entry of 6 million counterfeit products into its ecosystem in 2022 through its Anti-Counterfeiting Exchange, which lets participating stores exchange information regarding counterfeiters.