Myth vs. Fact Debunking Myths about the Online Marketplace

On its face, S.936, and similar state bills, appears to be legislation about combatting counterfeit goods being sold online. In reality, these bills are Big ’s attempt to slow down the success of individual sellers and small businesses earning a living on Virtual Main Street. The Makers and Merchants Coalition breaks down the misconceptions about this legislation.

Myth S.936 and similar state bills would require the divulgence of personal information. Disclosing this information will not hurt small, online sellers. Fact Many small, online sellers work from home, and hence do not have business addresses or separate business telephone numbers. Asking these merchants to provide personal and sensitive information on their listings could act as a deterrent to their continued operations, as it would force them to choose between continuing to sell online and their personal privacy and safety. There are provisions for protecting seller information, however stating “No Business Address” on a listing could negatively impact . Myth S.936 and similar state bills will only require high-volume sellers to divulge their personal information to customers. Fact The majority of anti-online marketplace legislation defines “high volume sellers” as those who complete 200 separate transactions or gross $5,000 in sales over a two-year period. This amounts to roughly four transactions a week, or around $6.80 of revenue per day. Under this definition, the majority of online sellers would qualify as “high volume”— including hobbyists and those who depend on online commerce for supplemental income. Debunking Myths about the Online Marketplace

Myth Counterfeited goods and fraudulent business practices are exclusive to online marketplaces. Fact Counterfeiting and fraudulent business practices present challenges both in-person and online. Pointing to online marketplaces as an exclusive channel for counterfeiters to operate is dishonest and misleading. Legislation singling out the online sellers would only serve to funnel money from small online businesses to brick-and-mortar conglomerates like Walmart.

Myth Online marketplaces lack incentive to regulate third-party sellers. Fact Third party sellers make up a large portion of the goods and services sold on online marketplaces, many of which sell products unavailable in any retail store. As in brick and mortar stores, fraudulent or counterfeit goods would result in the online marketplaces losing customers. Online marketplaces have a strong incentive to weed out bad actors in order to retain customers.

Myth Online marketplaces are ill-equipped to prevent counterfeit and fraud. Fact Most online marketplaces already have robust anti-counterfeiting and -fraud technologies and policies in place. Platforms such as , eBay, and Etsy spend millions of dollars annually to combat fraudulent business practices on their platforms, removing hundreds of thousands of bogus listings and fraudulent merchants each year.

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