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Congress Wants To Give Small Businesses An Impossible Choice: Success Or Privacy?

By Jessica Pate

Anyone running a small business in March 2020 woke up to a devastating crisis that not only threatened their health but their livelihoods too. For the past 19 months, many of us have struggled to stay afloat. Those that were fortunate to stay in business owe much of their success to online marketplaces like eBay, Etsy, and Amazon Marketplace, which allowed sellers to bypass expensive brick-and-mortar locations and connect with more customers.

But a bill circulating in the U.S. Senate threatens to put our businesses in jeopardy again. The INFORM Consumer’s Act would impose new requirements and burdens on the millions of people who run small businesses. Similar bills introduced in more than a dozen state legislatures are generally supported by big-box retailers eager to siphon online money back to their stores. Lawmakers should reject them all.

On their face, the INFORM bills claim to make improvements to online marketplaces. In response to increasing instances of so-called “retail crime,” including counterfeit goods and online scams, the bills would require every online seller above a certain volume to disclose their current business and contact information to be available and searchable online.

The first problem is that the arbitrary volume requirement to qualify for these requirements is extremely low. Any business with gross revenue of more than $5,000 or more than 200 customer transitions per year would be classified as a “high volume seller.” This classification is laughable to millions of small sellers who sell bracelets, paintings, or rare books online. Two hundred transactions per year is less than one a day, and while $5,000 is real money, it’s nowhere near the billions in gross revenue of actual high-volume online sellers like Walmart, Amazon, or Target.

Why is this such a problem? Because the bills would also require these “high volume sellers” to disclose their personal business information. Many small online businesses don’t have formal business addresses in strip malls or high-end office parks. Many of them operate out of homes, in an extra bedroom or the shed out back. Requiring owners to publicly register their home addresses and personal phone numbers risks opening them up to harassment, scams, even theft. Imagine if an angry customer decides to show up at the owner’s house to complain about a product. Or if a robber learns exactly where a small jeweler keeps her valuable materials.

At the same time, these bills do little to deter the criminals behind online scams and counterfeit products that have become such a problem. The majority of online counterfeiting occurs overseas, well beyond the reach of INFORM legislation. Criminals could keep selling their fake goods with no repercussions, while American small businesses bear the burden of vanishing privacy. For this exact reason, the marketplaces rigorously police their own networks. Etsy announced that it removed almost half a million suspect listings in 2019, and closed 13,906 shops for repeat infringement. Amazon went a step further and blocked 2.5 million accounts believed to be selling counterfeits.

I operate my business from my home, and it scares me that the INFORM Act would make my home address listed publicly on each of my 2,000 eBay listings. I have a huge 5,000 sq ft building on my property that looks like a barn, but it is actually the warehouse for a million dollars worth of eBay goods. This would make my building a target for thieves. The INFORM Act compromises the safety of my family to publicly display my home address. I don’t want to imagine the consequences if my 10-year-old daughter is home alone and answers the door to an angry customer or any stranger from the internet who is interested in my eBay products. I don’t post my personal information anywhere on the internet, and it is a breach of my privacy to mandate my personal address and phone number to be publicly available just because I run an eBay store.

Lawmakers tend to agree that small businesses are a powerful engine of the economy. We provide jobs, offer valuable services, and enrich our communities. Both political parties believe we should be making it easier to start and run businesses, and doing whatever we can at the national and state level to clear the way to new markets, customers and sources of capital.

The INFORM Act isn’t it. No small business owner should have to make the impossible choice between the success of our business and the privacy of our families. We should leave online marketplaces alone, and focus our collective energy on real online criminals, not the rest of us just doing our best in a challenging time.

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