Introduction

In recent months, Amazon, the e-commerce giant, has gained attention due to the suspension of several seller accounts on its platform. These account suspensions are a direct response to the enforcement of the INFORM Consumers Act in the United States. This act aims to regulate online marketplaces and enhance consumer protection by addressing the sale of counterfeit and unsafe products. Let’s delve into the implications of the US INFORM Consumers Act on Amazon and explore the reasons behind these account suspensions.

The US INFORM Consumers Act: 

An Overview

The INFORM Consumers Act, formally known as the “Integrity, Notification, and Fairness in Online Retail Marketplaces Consumers Act,” was enacted in December 2020. This legislation primarily focuses on online marketplaces such as Amazon, with the objective of establishing stronger safeguards for consumers against counterfeit and potentially hazardous products.

Under this act, marketplaces are required to implement mechanisms to verify the identity of third-party sellers and provide transparent information about these sellers to consumers. It also mandates the removal of counterfeit listings and imposes penalties on platforms that fail to comply with these requirements. The ultimate goal is to protect consumers from unknowingly purchasing counterfeit goods, which can jeopardize their health and safety.

What Information Must an Online Marketplace Collect?

Timing is crucial in this context. Once an individual or business meets the definition of a “high-volume third-party seller,” the online marketplace has a 10-day window to collect the following information from them:

Bank account information: The online marketplace must collect the seller’s bank account number. In cases where the seller doesn’t have a bank account, the name of the payee for payments issued by the online marketplace should be provided. The seller may submit this information directly to the online marketplace or to a designated payment processor or third party.

Tax ID information: The online marketplace must collect the business tax identification number of a high-volume third-party seller. If the seller doesn’t possess a business tax identification number, a taxpayer identification number should be provided.

Contact information: For an individual classified as a high-volume third-party seller, the online marketplace must obtain the person’s name, a working email address, and a phone number. In the case of legal entities like corporations or partnerships acting as high-volume third-party sellers, the online marketplace must collect a working email address, phone number, and one of the following forms of identification: a copy of a valid government-issued identification for an individual representing the seller, or a copy of a valid government-issued record or tax document that includes the business name and physical address of the seller.

Key Provisions of the INFORM Consumers Act

Account Suspension and Removal: The INFORM Consumers Act grants online marketplaces the authority to suspend or remove accounts found to be involved in the sale of counterfeit products or failing to comply with required safety standards.

Verification of Sellers: Online platforms are obligated to verify the identity of sellers and disclose specific information about them, such as their contact details and location. This increased transparency and accountability benefits consumers.

Third-Party Certification: The legislation encourages the adoption of third-party certification programs to ensure the authenticity and safety of products sold on online marketplaces. This allows consumers to make informed decisions when making purchases.

Complaint Handling and Reporting: The INFORM Consumers Act emphasizes the importance of clear and accessible complaint-handling procedures. Online platforms like Amazon are required to establish effective mechanisms for consumers to report counterfeit or unsafe products promptly, with a commitment to addressing these complaints.

Amazon’s Response: Account Suspension

As a prominent online marketplace, Amazon has taken the INFORM Consumers Act seriously and implemented robust measures to comply with the legislation. Account suspension is one of the most significant actions taken by Amazon to maintain the integrity of its platform. Whenever an account is suspected of violating the INFORM Consumers Act, Amazon conducts thorough investigations to assess the extent of the violation and takes appropriate actions accordingly.

The account suspension may occur if sellers are found to be selling counterfeit or unsafe products, engaging in deceptive practices, or failing to meet the requirements outlined in the INFORM Consumers Act. Suspended accounts are temporarily restricted from conducting any business on the platform until the issues are resolved.

Account Suspension Process

Investigation: Amazon initiates an investigation when a seller’s account is suspected of violating the INFORM Consumers Act. This investigation involves reviewing product listings, customer complaints, and any other pertinent information.

Notice and Suspension: If Amazon discovers substantial evidence of non-compliance, the seller is notified of the violations, and their account is suspended. Sellers are provided with specific details regarding the reasons for the suspension.

Appeal and Resolution: Suspended sellers have the opportunity to appeal the suspension and provide additional information to support their case. Amazon reviews the appeal and may reinstate the account if the seller demonstrates compliance with the INFORM Consumers Act.

Compliance Requirements: To regain access to their account, sellers must take the necessary steps to address the violations. This may involve removing counterfeit listings, enhancing product safety measures, or providing additional documentation as requested by Amazon.

Conclusion

The introduction of the INFORM Consumers Act has compelled online marketplaces like Amazon to prioritize consumer safety and crack down on counterfeit and unsafe products. Account suspension serves as a crucial tool for Amazon to enforce compliance with the legislation and protect its customers from fraudulent or dangerous goods. Through the implementation of these measures, Amazon aims to create a more trustworthy and transparent platform for online shopping, benefiting both consumers and legitimate sellers.