2022 -- S 2431

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LC005203

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

DISCLOSURE OF INFORMATION BY ONLINE MARKETPLACES

     Introduced By: Senators Burke, DiMario, DiPalma, Coyne, Lombardo, and Archambault

     Date Introduced: March 01, 2022

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 6 of the General Laws entitled "COMMERCIAL LAW - GENERAL

REGULATORY PROVISIONS" is hereby amended by adding thereto the following chapter:

CHAPTER 59

DISCLOSURE OF INFORMATION BY ONLINE MARKETPLACES

     6-59-1. Definitions.

     As used in this chapter:

     (1) "Consumer product” means any tangible personal property which is distributed in

commerce and which is normally used for personal, family, or household purposes (including any

such property intended to be attached to or installed in any real property without regard to whether

it is so attached or installed).

     (2) "High-volume third-party seller" means a participant in an online marketplace who is a

third-party seller and who, in any continuous twelve (12) month period during the previous twenty-

four (24) months, has entered into two hundred (200) or more discrete sales or transactions of new

or unused consumer products resulting in the accumulation of an aggregate total of five thousand

dollars ($5,000) or more in gross revenues.

     (3) "Online marketplace" means any electronically based or accessed platform that:

     (i) Includes features that allow for, facilitate, or enable third-party sellers to engage in the

sale, purchase, payment, storage, shipping, or delivery of a consumer product in the United States;

and

     (ii) Hosts one or more third-party sellers.

     (4) "Seller" means a person who sells, offers to sell, or contracts to sell a consumer product

through an online marketplace.

     (5) "Third-party seller" means any seller, independent of an operator, facilitator, or owner

of an online marketplace, who sells, offers to sell, or contracts to sell a consumer product in the

United States through an online marketplace. The term "third-party seller" does not include a seller

who:

     (i) Is a business entity that has made available to the general public the entity’s name,

business address, and working contact information; or

     (ii) Has an ongoing contractual relationship with the owner of the online marketplace to

provide for the manufacture, distribution, wholesaling, or fulfillment of shipments of consumer

products; and

     (iii) Has provided to the online marketplace identifying information that has been verified

pursuant to this chapter.

     (6) "Verify" means to confirm information provided to an online marketplace pursuant to

this section by the use of a third-party or proprietary identity verification system that has the

capability to confirm a seller’s name, email address, physical address, and phone number; or a

combination of two (2) factor authentication, public records search, and the presentation of a

government-issued identification.

     6-59-2. Verification required.

     (a) Online marketplaces shall require that any high-volume third-party seller on the online

marketplace provide the online marketplace with the following information within twenty-four (24)

hours of becoming a high-volume third-party seller:

     (1) Bank account information, the accuracy of which has been confirmed directly by the

online marketplace or by a payment processor or other third-party contracted by the online

marketplace, or, if the high-volume third-party seller does not have a bank account, the name of

the payee for payments issued by the online marketplace to the high-volume third-party seller. Such

bank account or payee information may be provided by the seller either:

      (i) To the online marketplace; or

     (ii) To a payment processor or other third-party contracted by the online marketplace to

maintain such information, provided that the online marketplace may obtain such information on

demand from such payment processor or other third-party.

     (2) Contact information, including:

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     (i) If the high-volume third-party seller is an individual, a copy of a government issued

photo identification for the individual that includes the individual’s name and physical address; or

      (ii) If the high-volume third-party seller is not an individual, either:

     (A) A copy of a government-issued photo identification for an individual acting on behalf

of the high-volume third-party seller that includes the individual’s name and physical address; or

(B) A copy of a government-issued record or tax document that includes the business name

and physical address of the high-volume third-party seller; and

     (iii) A working email address and working phone number for the high-volume third-party

seller.

     (3) A business tax identification number or, if the high-volume third-party seller does not

have a business tax identification number, a taxpayer identification number.

     (4) Whether the high-volume third-party seller is exclusively advertising or offering the

consumer product or products on the online marketplace, or if the high-volume third-party seller is

currently advertising or offering for sale the same consumer product or products on any other

Internet websites other than the online marketplace.

     (b) Ongoing verification required. The online marketplace shall verify the information

provided in subsection (a) of this section within three (3) days, and shall verify within three (3)

days any changes to such information that is provided to the marketplace by a high-volume third-

party seller. If a high-volume third-party seller provides a copy of a valid government-issued tax

document, information contained within such tax document shall be presumed to be verified as of

the date of issuance of such record or document. The online marketplace shall, on at least an annual

basis, notify each high-volume third-party seller on the online marketplace that the seller must

inform the online marketplace of any changes to the information provided by the seller pursuant to

subsection (a) of this section within three (3) days of receiving the notification and shall instruct

each high-volume third-party seller, as part of the notification, to electronically certify either that

the seller’s information is unchanged or that the seller is providing changes to the information. If

the online marketplace becomes aware that a high-volume third-party seller has neither certified

that the seller’s information is unchanged nor has not provided such changed information within

three (3) days of receiving such notification, the online marketplace shall suspend the high-volume

third-party seller’s participation on the marketplace until the seller has either certified that the

seller’s information is unchanged or has provided such changed information and the information

has been verified.

     6-59-3. Disclosure required.

     (a) Any online marketplace shall require a high-volume third-party seller in such online

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marketplace to provide, and shall disclose to consumers in a conspicuous manner either on the

product listing or, for information other than the seller’s full name, through a conspicuously placed

link on the product listing, the following information:

     (1) The identity of the high-volume third-party seller which shall include the full name of

the seller, the full physical address of the seller, whether the seller also engages in the

manufacturing, importing, or reselling of consumer products; and the contact information for the

seller, including a working phone number and working email address. Such working email address

may be provided to the high-volume third-party seller by the online marketplace;

     (2) Any other information determined to be necessary to address circumvention or evasion

of the requirements of this subsection, provided that the additional information is limited to what

is necessary to address such circumvention or evasion.

     6-59-4. Exceptions.

     Upon the request of a high-volume third-party seller, an online marketplace may provide

for partial disclosure of the identity information required under this chapter in the following

situations:

     (1) If the high-volume third-party seller demonstrates to the online marketplace that the

seller does not have a business address and only has a residential street address, the online

marketplace may direct the high-volume third-party seller to disclose only the country and, if

applicable, the state in which the high-volume third-party seller resides on the product listing, and

may inform consumers that there is no business address available for the seller and that consumer

inquiries should be submitted to the seller by phone or email;

     (2) If the high-volume third-party seller demonstrates to the online marketplace that the

seller is a business that has a physical address for product returns, the online marketplace may direct

the high-volume third-party seller to disclose the seller’s physical address for product returns;

     (3) If a high-volume third-party seller demonstrates to the online marketplace that the seller

does not have a phone number other than a personal phone number, the online marketplace shall

inform consumers that there is no phone number available for the seller and that consumer inquiries

should be submitted to the seller’s email address.

     6-59-5. Limitations to Exceptions.

     If an online marketplace becomes aware that a high-volume third-party seller has made a

false representation to the online marketplace in order to justify the provision of a partial disclosure

under this chapter or that a high-volume third-party seller who has requested and received a

provision for a partial disclosure this chapter has not provided responsive answers within a

reasonable timeframe to consumer inquiries submitted to the seller by phone or email address, the

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online marketplace shall withdraw its provision for partial disclosure and require the full disclosure

of the high-volume third-party seller’s identity information required under this chapter upon

receiving three (3) business days’ notice to the high-volume third-party seller.

     6-59-6. Reporting mechanism.

     An online marketplace shall disclose to consumers, in a conspicuous manner on the product

listing of any high-volume third-party seller, a reporting mechanism that allows for electronic and

telephonic reporting of suspicious marketplace activity to the online marketplace and a message

encouraging individuals seeking goods for purchase to report suspicious activity to the online

marketplace.

     6-59-7. Fulfillment or shipment by different party than seller.

     In addition to any other requirements provided for herein, an online marketplace that

warehouses, distributes, or otherwise fulfills a consumer product order shall disclose to the

consumer the identification of any high-volume third-party seller supplying the consumer product

if different than the seller listed on the product listing page.

     6-59-8. Enforcement. Unfair and deceptive acts or practices.

     Any violation of this chapter shall be treated as a violation of chapters 13 and 13.1 of title

6.

     6-59-9. Powers of the attorney general.

     The attorney general shall enforce the provisions of this chapter.

     6-59-10. Regulations.

     The office of the attorney general, consumer protection division shall promulgate such

rules and regulations with respect to collecting and verifying information under this chapter,

provided that such regulations are limited to what is necessary to collect and verify such

information.

     6-59-11. Preemption.

     No political subdivision may establish, mandate, or otherwise require online marketplaces

to verify information from high-volume third-party sellers on a one-time or ongoing basis or

disclose information to consumers.

     SECTION 2. This act shall take effect on January 1, 2023.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO COMMERCIAL LAW -- GENERAL REGULATORY PROVISIONS --

DISCLOSURE OF INFORMATION BY ONLINE MARKETPLACES

***

     This act would require high-volume third-party sellers, selling consumer goods on online

marketplaces, to provide certain information to the marketplaces and disclose certain information

to consumers on product listings.

     The act also requires online marketplaces to verify information provided by high-volume

third-party sellers and periodically require those sellers to verify or update the information.

     This act would take effect on January 1, 2023.

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LC005203

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