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This week the House Commerce Committee held a hearing entitled “Buyer Beware: Fake and Unsafe Products on Online Marketplaces.” ICSC believes the growing trend of misinformation on online sales platforms is an important issue that Congress should be looking at, especially in light of the fact that brick-and-mortar sellers face serious penalties for deceptive marketing or selling dangerous and counterfeit products.
While the Internet was initially envisioned to be a platform for full and free information, those who shop on today’s online marketplaces are subject to misleading marketing schemes including fake reviews, hidden fees and marketing tactics that create a false sense of urgency. As well, there is a growing issue with online marketplaces hiding behind existing communications law that they claim removes the responsibility to monitor their platforms for stolen, counterfeit, recalled, mislabeled or expired and inappropriately stored products. The hearing took special exception with counterfeit safety products such as bicycle and motorcycle helmets and child car seats.
In addition to providing a discussion of the problem, a handful of policy options were suggested.
“Online marketplaces must have sufficient incentives to put consumers first by aggressively policing their platforms for dangerous products, counterfeits, and false, misleading or manipulative information,” Consumer Reports Advocacy Vice President Thomas Friedman told the panel. “As a baseline, these incentives should be evaluated against the level of incentives they would face in a physical market.”
Friedman also said government agencies must focus on finding problems, holding bad actors accountable and adjusting rules as necessary. He also pointed to a Wall Street Journal investigation published in August 2019 that found 4,152 items for sale on Amazon.com Inc.’s site that have been declared unsafe by federal agencies, are deceptively labeled or are banned by federal regulators—items that big-box retailers’ policies would bar from their shelves.
For more information, contact Jennifer Platt at jplatt@icsc.com.