Phil Plummer and Haraz N. Ghanbari — Sponsor Testimony, House Commerce and Labor Committee

Summary

Sponsor testimony on House Bill No. 272, the Online Marketplace Transparency and Consumer Protection Act, from State Representatives Phil Plummer and Haraz N. Ghanbari to the House Commerce and Labor Committee. It states the bill requires marketplace facilitators of a third-party seller to collect and verify six basic pieces of information: business name, business address, business email, business phone number, tax ID, and bank account information. The testimony says tax ID and bank account information will be kept confidential between the sellers and the online marketplace. It notes that Congress lowered the 1099 threshold for third-party marketplace sellers to $600 of revenue (or income), and that the bill would help the Attorney General's office locate perpetrators of counterfeit goods.

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        Phil Plummer                                               Haraz N. Ghanbari
    State Representative, 40th District                       State Representative, 3rd District


Chairman Stein, Vice Chair Johnson, Ranking Member Lapore-Hagan and colleagues of the House
Commerce and Labor Committee:
Thank you for the opportunity to provide sponsor testimony for House Bill No. 272, the Online
Marketplace Transparency and Consumer Protection Act. This piece of legislation protects consumers by
preventing counterfeit and stolen goods from being sold online. The COVID-19 pandemic forced many
Ohio consumers to turn to online marketplaces to find Clorox wipes, N95 masks and other essential items
to keep themselves safe while sheltering in place. Our constituents should have the right to know who
they are doing business with. Are these goods coming from a local business or from another state or
country?

This is a fairly simple bill. It requires these marketplace facilitators of a third-party seller to
collect and verify six basic pieces of information that every legitimate business should have in
order to conduct business. The six pieces of information are - the business name, business
address, business email, business phone number, tax ID, and bank account information. To be
clear, sensitive information such as tax ID and bank account information will be kept
confidential between the sellers and the online marketplace. The only information required to be
made publicly available are business name, location and basic contact information such as a
valid email address. We must note for members of this committee that just two months ago
Congress lowered the 1099 threshold for third-party marketplace sellers to $600 of revenue (or
income). That means starting in 2022, marketplaces will be mandated by federal law to collect
this information from third-party sellers in order to stay compliant.
In addition, this bill requires disclosure of limited contact information to consumers that is a clickable link
if you're going through the facilitator’s website. There are privacy provisions in the bill that protects the
individual small seller and does not require the marketplaces to list someone's home address. If the small
business owner has a warehouse on their private residence that would also be protected. Protecting the
privacy of our small business owners is important to us and this bill will do just that by requiring that the
online facilitator only list the state and country that the business or the individual is located in.
This bill also creates a level playing for Ohio small business owners. These businesses are competing in a
new world that involves online marketplaces. And as third-party sellers they're competing against
companies that are selling counterfeit and stolen goods from all over the world. This globalized virtual
market puts them at a disadvantage when they're trying to run a legitimate business, selling legitimate
products to people here at home.
 Lastly this bill provides an additional tool for enforcement. Requiring all this information to be collected
and verified will help the Attorney General’s office in their investigations stemming from the pandemic
and beyond. At the outset, bad actors abused the system by price gouging through hoarding and reselling
of hand sanitizers and other cleaning products to name a few. This bill also protects the small business
owner and their patents if it's being infringed upon. HB 272gives the Attorney General the ability to
locate perpetrators or illegal networks of counterfeit goods by shutting them down and making legitimate
and verified sellers whole.
In summary, this legislation is beneficial for consumers and legitimate businesses alike. By simply
requiring online marketplaces to verify their third-party sellers, we can stem the flow of illicit products on
these platforms. We believe it is incumbent upon us as leaders in the Ohio Legislature to do that which is
within our power to protect consumers and that is exactly what this bill does. We hope you will join us in
this important effort. Thank Chairman Stein and members of the committee. We would be happy to
answer any questions you may have.


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