Opposition Testimony - Tyler Diers, TechNet, HB 272 (October 12, 2021)

Summary

A letter dated October 12, 2021 to Chair Dick Stein and members of the Ohio House Commerce and Labor Committee, headed "Re: Opposition Testimony to HB 272", from Tyler Diers, executive director for the Midwest for TechNet. The letter says TechNet represents 85 member companies and opposes the bill for three main reasons: its effect on small sellers, privacy concerns, and that it would do little to curb organized retail crime (ORC). It says a person could be considered a high-volume seller for simply making 4 sales a week, and argues that the bill allows a private right of action. The letter asks the committee not to advance the bill.

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Full text

October 12, 2021


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

Re: Opposition Testimony to HB 272

Dear Chairman Stein and members of the Committee:


My name is Tyler Diers and I serve as the executive director for the Midwest for
TechNet.

TechNet is a national, bipartisan technology trade association advocating for the
innovation economy at the federal and state level. We represent 85 member
companies in the fields of information technology, e-commerce, the sharing and gig
economies, advanced energy, cybersecurity, venture capital, and finance.

I am before you today in opposition to HB 272.

First off, I want to state that we are opposed to organized retail crime. This is a
serious offense that our members do not take lightly. Which is why they are
invested in technologies, clear policies, personnel, and processes that identify bad
actors and remove them from their platforms.

We are opposed to HB 272 for 3 main reasons. One, this legislation would have a
negative effect on small sellers; two, there are some significant privacy concerns
with the bill; and three, it would do little to actually curb organized retail crime (or
ORC).

Impact on Small Sellers
This bill would have negative consequences on small marketplace sellers that sell
on online marketplaces. The bill seeks to define these small sellers as “high volume
sellers” even though you could be considered a high-volume seller for simply
making 4 sales a week on an online marketplace.

Many of you may have heard from several of these small sellers… They do not want
these burdensome and harmful verification requirements on their businesses. This


 Washington, D.C. • Silicon Valley • San Francisco • Sacramento • Austin • Boston • Chicago • Olympia • Denver
bill casts a wide net and treats all marketplace sellers as if they’re criminals, when
in reality an overwhelming majority of these sellers are good, honest actors.

At a time when many state governments are trying to find ways to reduce red tape
on businesses, this bill seems to be adding additional requirements on those who
need regulatory relief the most.

Privacy Implications
This bill also raises some significant privacy concerns. It would force Ohioans to
compromise privacy information in order to sell on online platforms and if they
don’t feel like supplying some of this sensitive information, then they’d have to
forgo selling and lose essential revenue streams.

How does posting someone’s personal information stop organized retail crime? It
doesn’t mean the person selling is the one whole stole the products. They may not
even know they are selling stolen goods. These criminals are sophisticated and will
work around this regulatory regime.

At a time when policymakers and companies are working to improve privacy
protection for individuals, this amendment is swimming against the tide of that
progress by requiring personal information to be plastered all over the internet.

Bill Does Little to Address ORC
This bill would do little to actually curb organized retail crime. Efforts to stem the
flow of counterfeit and other illegal goods cannot focus on online marketplaces
alone. They must consider the cooperative role physical marketplaces continue to
play.

The internet isn’t stealing items off of in-store shelves. Thieves and often times,
employees are. This is as much of shrink issue as it is anything else. Just as brick-
and-mortar retailers are able to institute voluntary business practices that help to
remediate the proliferation of organized retail crime, marketplaces similarly should
have the same flexibility to institute business practices without heavy-handed
regulation.

The seller verification requirements in the bill won’t stop bad actors. In fact, it could
help criminals and bad actors by creating a stagnant framework that criminals will
quickly learn how to evade. This bill is not responsive to a rapidly evolving
landscape and is too rigid to adapt to the dynamic nature of criminal operations
across all types of retail, whether brick and mortar or online.

This bill also sends a chilling effect on Ohio businesses by allowing a private right of
action to enforce the bill. Given the strict nature of these requirements, frivolous
lawsuits will certainly follow if this bill becomes law.
And lastly, I would like to point out that some of the big-box retailers that are for
the bill would be exempted from the bill because they have an ongoing contractual
relationship with third party sellers selling onto their platforms (page 2, line 42).

Closing
In closing, this legislation risks the privacy and personal information of small
businesses and online sellers, does little to address ORC, and would only add
additional red tape on businesses that need regulatory relief the most. Opening up
Ohio to frivolous lawsuits and finger pointing does not address ORC. TechNet
respectfully ask you do not advance this bill.

Thank you, Mr. Chair, for allowing me time today. I’d be happy to answer any
questions you or the committee may have.


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