Bipartisan Agreement During Senate Hearing That Shop SAFE Act, INFORM Act Needed
Most Senate Judiciary Committee members from both parties said that two bills aimed at fighting the sale of counterfeits on e-commerce platforms are needed, though neither would be a silver bullet for a growing problem. The CEO of the Internet Association, one of the witnesses at the Nov. 2 hearing, also said his companies could support the INFORM Consumers Act, if it was more like the reworked version in the House, and they think the threshold for being considered a "high-volume seller" needs to be higher (see 2110280061).
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Judiciary Chairman Dick Durbin, D-Ill., said, "My observation is Amazon is late to the party, but I welcome them as a guest." He said, however, that he felt that some of Amazon's suggestions on how to "strengthen" the bills were less about making it harder for bad actors to sell on e-commerce platforms and more about strengthening Amazon's ability to avoid responsibility for policing its third-party sellers.
"I, for one, am not going to stand by and let this get watered down any further," Durbin said. At issue is how long high-volume sellers have to respond to a request for information -- three business days vs. 10 -- and who is considered a high-volume seller. Senators think it should be vendors that have made 200 or more sales in a 12-month period, worth $5,000 or more. The Internet Association wants the threshold to be $20,000 in annual sales.
The INFORM Consumers Act aims to both crack down on sellers of counterfeit goods and to make it harder for shoplifting rings to sell the stolen goods online. Sen. Chris Coons, D-Del., said he thinks the INFORM Consumers Act and the Shop SAFE Act complement each other, and he's pleased that there was a strong bipartisan vote in the House Judiciary Committee to advance the Shop SAFE bill. Ranking member Sen. Chuck Grassley, R-Iowa, said in his opening remarks, "It’s clear that voluntary efforts by big tech companies, while a good first step, are not enough. Online companies profit off every sale of an item on their platform, even if it’s counterfeit or stolen. Consumers need more accountability and transparency, including who’s operating online and selling these products. We should promote better screening, more transparent seller information, and increased collaboration and data sharing."
In a brief hallway interview after the hearing, Durbin said he could not take a guess at whether the bills could get votes this year or during this Congress, as the Commerce Committee has jurisdiction in the matter.
Coons asked a scholar of counterfeiting issues, Kari Kammel from the Center for Anti-Counterfeiting and Product Protection at Michigan State University, if critics of the Shop SAFE Act have a point when they say that the bill is a handout to large technology companies because the tech companies are not agreeing to anything meaningful. Kammel said she disagreed, and that if the bills pass, there would be a more proactive approach to fighting the sale of counterfeit goods than the current resource-intensive notice and takedown, whack-a-mole approach.
Witness Aaron Muderick, owner of a toy manufacturer known as Crazy Aaron's, talked about how much effort his company has had to take to get copycat, infringing products removed from e-commerce platforms, and sometimes the listing is still there after he provided notice more than month before. Muderick said intellectual property protection has improved in e-commerce since he first started fighting counterfeits eight years ago, but he's concerned about how little enforcement there is of consumer safety in the small-package environment.
Muderick's lead product is a magnetic putty, and he said knock-offs use dangerously strong magnets that can tear holes in a child's intestines if ingested or even shatter when they meet each other, cutting a user on the shards. He said there needs to be a more formal process to identify products that are unsafe not just a way to complain about trademark infringement.