NetChoice, Chris Marchese — Opposition to HB 272 (October 13, 2021)

Summary

A NetChoice letter dated October 13, 2021 from Chris Marchese, Counsel, headed "Re: Opposition to the Unconstitutional and Discriminatory HB 272". It asks the committee to oppose HB 272 because it hurts Ohio's small businesses, undercuts constituents' privacy rights, requires online marketplaces to make up for big-box store's own failures, discriminates against businesses that sell online, and conflicts with federal law. As an example, it says that a neighbor who sells over 200 candles on Nextdoor would require the platform to collect the neighbor's address, contact information, and bank account. It also argues that the bill conflicts with the Communications Decency Act (CDA).

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NetChoice Promoting free expression and free enterprise on the net
Chris Marchese, Counsel
1401 K St NW, Suite 502
Washington, DC 20005
202-420-7485
www.netchoice.org
                                                                                    October 13, 2021



Re: Opposition to the Unconstitutional and Discriminatory HB 272
We ask you to oppose HB 272 because it:
    •   hurts Ohio’s small businesses;
    •   undercuts your constituents’ privacy rights;
    •   requires online marketplaces to make up for big-box store’s own failures;
    •   discriminates against businesses—large and small—that sell online; and
    •   conflicts with federal law.
HB 272 boils down to a demand that online marketplaces treat online sellers like criminals. This
is neither reasonable nor necessary. HB 272 also fails to address the root of retail criminal theft:
the actual theft itself. Nor does HB 272 address the theft of goods traveling to retail stores. And
it doesn’t it address the ability of criminal enterprises to steal hundreds of products from the
stores themselves.
Instead, HB 272 just makes it harder for Ohio’s small businesses to compete with the big-box
stores.

    1. The bill imposes burdensome requirements on digital marketplaces, small
       businesses, and even Ohio residents.
If a neighbor sells over 200 candles on Nextdoor, the platform would have to collect the
neighbor’s address, contact information, and even bank account—information that platforms
like Nextdoor and Craigslist are unable to access easily.
The upshot: Ohio’s small businesses and residents will be forced off digital marketplaces.
HB 272’s liability on online marketplaces also puts small businesses across Ohio at a significant
disadvantage against big box retailers that don’t rely on online marketplaces to reach potential
customers and that already dominate our retail landscape. Given these businesses’ struggle to
survive the pandemic, let alone to turn a profit, it’s hard to see how this cost could be justified.
       2. The bill will force Ohioans to choose between protecting their legitimate
          privacy interests and earning an income.
HB 272 risks the privacy of anyone selling an item on Nextdoor, Craigslist, or even through an
online classified ad. That’s because it requires sales listings on sites like Craigslist to post the
seller’s name and address in the listing itself. In other words, the public will learn that a
grandma living in Ohio makes and sells hand-knitted face masks—even if that grandma would
rather others not know what she does with her spare time.
It doesn’t require too much imagination to see how requiring such sensitive information be
made public could lead to very dangerous—even deadly—situations.

       3. The bill requires online marketplaces to do the job that big-box stores aren’t.
The chief proponents of this legislation—big-box stores—are asking the Ohio legislature to
saddle online marketplaces with responsibilities that are unrelated to those marketplaces.
Consider that when we hear about activities of organized crime and loss from stores, we are
not talking about the average shoplifter. We are talking about coordinated high-volume theft.
This theft in retail stores is happening in one of two locations: either while the goods are in
transit to the store or once the goods have arrived. That means the theft is occurring at the
points connected to the store’s logistics or by the store’s own workers.
This means the best way for stores to stop the criminal theft of products is for the stores to
better police their own stores. Instead of doing the hard work of cleaning up their own
problems, these big-box stores instead want to shift the responsibility to online marketplaces.
Note that today law enforcement can take action against any seller, online or off, who traffics in
illegal goods. Likewise, online marketplaces have a vested interest in making sure that goods
sold on their platforms are legitimate as noting in federal law protects online marketplaces
from liability for violations of federal criminal law nor violations of intellectual property rights.

       4. The bill conflicts with federal law.
As if all that were not bad enough, the bill also runs afoul of federal laws like the
Communications Decency Act (CDA). The bill imposes liability requirements for platforms based
on the postings of others. But federal law states that “[n]o provider or user of an interactive
computer service shall be treated as the publisher or speaker of any information provided by
another information content provider.”1
So even if this bill were passed, it would not withstand judicial review under the federal
Constitution’s Supremacy Clause.
                                          *       *       *


1
    47 USC § 230(c)(1).


                                                  2
Although we recognize that HB 272 seeks to remedy commercial problems, this bill serves only
to make those problems worse—and adds even more (unintended) problems on top of those.
Bad actors who use the internet to do their bidding should not be rewarded at the expense of
Ohio’s small businesses. Nor should Ohioans pay the price by giving up their privacy.
We ask that you not support HB 272.

Sincerely,

Chris Marchese
Counsel, NetChoice


NetChoice is a trade association of businesses who share the goal of promoting free expression and free
enterprise on the net. www.netchoice.org




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