Why Are Etsy & eBay Scaring Sellers Regarding The Cassidy INFORM Consumers Act?

Over the weekend both Etsy and eBay contacted US sellers drawing their attention to proposed legislation at the US Senate called the Cassidy INFORM Consumers Act.

eBay led with the subject of their email as “Tell Your Senators Not To Harm Local Small Businesses!”. Meanwhile, Etsy has a dedicated page on its website with the headline, “Tell your senators to keep sellers’ private information confidential”

On the Etsy page, one of the main concerns it has is as follows: “Lawmakers have simply not considered how this bill would impact the privacy, safety, and security of Etsy sellers who run their businesses from their homes. That’s why they need to hear from you!”

Why The Cause For Alarm?

The core of the issue stems from a part of the INFORM (Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act) which will require contact details for sellers to be made available on marketplace platforms.

Whilst this is commonplace for larger sellers with dedicated business premises, this would be understandably worrying if you were running your business from your home and forced to divulge these same details.

I don’t think any small business would feel comfortable knowing their home address and personal phone number was available for anyone to see on marketplace listings.

If you are interested you can see the full bill on the Congress website here.

The piece of the bill which has seemed to cause this concern from eBay and Etsy is the following section which states:

“Sec 2 (b) (1): Any online marketplace shall require a high-volume third-party seller on the online marketplace to provide, and shall disclose to consumers in a conspicuous manner on the product listing or through a conspicuously placed link on the product listing, the following information:

(A) Subject to paragraph (2), the identity of the high-volume third party seller which shall include—
(i) the full name of the seller;
(ii) the full business address of the seller;
(iii) whether the seller engages in the manufacturing, importing, retail, or reselling of consumer products; and
(iv) contact information for the seller, including a phone number and working email address.”

Senate Bill 3431

The INFORM Act identifies a high-volume third-party seller as: “a user of an online marketplace who is a third-party seller and who, 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 resulting in the accumulation of an aggregate total of $5,000 or more in gross revenues.”

By anyone’s standards those criteria are incredibly low to be considered a ‘High volume seller’ and we could maybe understand some hesitation on that point.

Why are eBay and Etsy Ignoring The Exceptions?

Whilst there has been some coverage of eBay and Etsy publicly getting involved in this and seemingly trying to mobilize their sellers to put enough pressure on Congress through their Senators to block this bill.

Etsy are blatantly using language aimed to scare sellers into believing their personal details will be available for everyone to see online if they are a home-based business.

For many home-based business owners, this legislation would mean sharing your personal information widely online, including your full name, home address, telephone number, and email address.

Etsy Statement

From our understanding though this is simply not true (Just to clarify here at eSeller365 we are not lawyers) but there is a very clear exception stated in the bill which surely alleviates all of Etsy and eBay’s fearmongering for sellers.

(2) EXCEPTION.—
(A) IN GENERAL.—Subject to subparagraph (B), upon the request of a high-volume third-party seller, an online marketplace may provide for partial disclosure of the identity information required under paragraph (1)(A) in the following situations:

(i) If the high-volume third party seller demonstrates to the online marketplace that the seller does not have a business address and only has a personal street address, the online marketplace may direct the high-volume third-party seller to disclose only the country and, if applicable, the State in which the high-volume third-party seller resides on the product listing, and may inform consumers that there is no business address available for the seller and that consumer inquiries should be submitted to the seller’s email address.

(ii) If a high-volume third party seller demonstrates to the online marketplace that the seller does not have a phone number other than a personal phone number, the online marketplace may inform consumers that there is no phone number available for the seller and that consumer inquiries should be submitted to the seller’s email address.

Senate Bill 3431

So this leaves us to ask the question of what is the real motive for eBay and Etsy to oppose the INFORM Act so strongly. Surely both parties didn’t just miss this huge section on the exception? Maybe assuming sellers wouldn’t check for themselves the wording of the INFORM Act they are hoping to use their influence to stop this getting through Congress.

Dave Furness

Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.

Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.