Opposition to HB 272 — Letter to the Honorable Dick Stein, House Commerce and Labor Committee (October 12, 2021)

Summary

A letter dated October 12, 2021 to Chair Dick Stein and the House Commerce and Labor Committee, from member companies of the Coalition to Protect America's Small Sellers (PASS), opposing HB 272 (Verification and Disclosure of Third Party Seller Information on Online Marketplaces). The letter says similar legislation has been rejected in at least 14 other states, and that the bill's disclosure requirements and thresholds are impractical. It describes the threshold as sellers who engage in 200 or more sales totaling $5,000 or more. It urges Ohio to reject the bill as introduced, and the signature block lists the PASS Coalition, eBay, Etsy, Mercari, OfferUp, and Poshmark.

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October 12, 2021



The Honorable Dick Stein
Chair, House House Commerce and Labor Committee
77 South High Street, 12th Floor
Columbus, OH 43215

Re: Opposition to HB 272 (Verification and Disclosure of Third Party Seller Information on
Online Marketplaces)

Chair Stein, Ranking Member Lepore - Hagan, and members of the House Commerce and Labor
Committee,

On behalf of the undersigned member companies of the Coalition to Protect America’s Small
Sellers (PASS), we write to respectfully express our opposition to HB 272. While we share the
goal of protecting consumers and curtailing organized retail crime (ORC), this bill does little to
achieve that goal and instead imposes regulations that will discourage Ohio small businesses
and entrepreneurs from increasing their sales through online marketplaces. We are also
concerned that the bill forces these sellers to choose between compromising private
information or suspending sales on online platforms. We do not believe small businesses should
be forced to make this choice – certainly not now as many are struggling to remain open.

Legislation similar to HB 272 introduced at the behest of Big Box retailers has been rejected in at
least 14 other states. One state, Arkansas, home to Walmart, rushed onerous legislation
through the process in three weeks with little debate despite substantial criticism of the law,
including the harm it poses to legitimate small businesses selling online. Congress is also looking
at this issue and included language in both the House and Senate versions preempting state
laws to prevent a patchwork of differing requirements. The PASS Coalition endorsed the
recently introduced House INFORM Consumers Act which substantially differs from the bill
before you by providing necessary protections for consumers and small business sellers. We
strongly urge Ohio to reject HB 272 as introduced and instead examine ways to holistically
address bad actors engaged in ORC or other illicit activities through the continued collaboration
between law enforcement agencies, retailers, brand owners, online marketplaces, and other
relevant stakeholders.

Chief among our concerns are the disclosure requirements under HB 272 which run counter to
most public sentiment and laws regarding consumer privacy and data security. Because of the
artificially low threshold, even relatively small sellers would be required to disclose sensitive
personal information like their full name, home address, telephone number, and email address
on each of their product listings. While there are attempts to provide some protections to
home-based sellers, these exceptions are insufficient and will risk exposing sellers to
harassment, fraud or worse. This will ultimately have a chilling effect on ecommerce by
deterring many Ohioans from selling online.

The proposed thresholds and requirements for verification are impractical and overly
prescriptive. The volume of sellers on our platforms who would be required to disclose personal
information under the bill – those who engage in 200 or more sales totaling $5,000 or more – is
staggering and not at all reflective of a “high-volume” seller. We are unclear as to how this
threshold was included. Additionally, HB 272 also takes a one-size-fits-all approach to vastly
different business models for the broadly-defined “online marketplaces.”

The requirements of HB 272 also disregard existing efforts to protect consumers deployed by
online marketplaces. Our member companies heavily invest in technological tools, processes
and personnel to prevent prohibited, stolen, and counterfeit items from being listed on our
platforms. We have proactively partnered with retailers, brands, and regulators; implemented
clear policies; and worked collaboratively with law enforcement and other relevant stakeholders
to enforce our policies to find and remove bad actors unlawfully using our marketplace.

We appreciate the opportunity to share our opposition to HB 272. As a coalition of third-party
ecommerce platforms powered by small sellers, including hundreds of thousands across Ohio,
our companies are deeply committed to protecting consumers who use our platforms, including
preserving the privacy of our sellers. We welcome the opportunity to work with the legislature
and other partners to combat illegal goods, protect consumers, and support small businesses,
but unfortunately, HB 272 in its current form does not advance these important goals.

Sincerely,
PASS Coalition
eBay
Etsy
Mercari
OfferUp
Poshmark



cc:    Members of the House Commerce and Labor Committee
       The Honorable Phil Plummer
       The Honorable Haraz N. Ghanbari



About the PASS Coalition

The PASS Coalition is a policy-oriented coalition of third-party marketplaces and eCommerce
platforms that have joined forces to educate policymakers on the benefits and variance of our
eCommerce business models while also working collaboratively to find thoughtful solutions to
consumer protection, competition and economic development issues impacting eCommerce.
Together, our member companies enable hundreds of thousands of small businesses and
individual sellers throughout Ohio to reach customers down the street and around the world.
These online small businesses and individual sellers are located across Ohio communities large
and small, rural and urban, and provide access to consumers for a wide variety of products.
These entrepreneurs have been especially instrumental during the COVID-19 crisis in helping
consumers receive essential goods while sheltering in place or socially distancing.


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