For The Umpteenth Time, The INFORM Act Is Still Unconstitutional And Has No Business Being Attached To Any Bill Congress Needs To Pass

Policy

from the taps-the-sign-again dept

Writing about the terrible ideas Congress has is often like babysitting a toddler bent on sticking his finger in a socket. At a certain point there is the temptation to say, “Fine! Learn the hard way!”

But in the case of the INFORM Act it won’t be Congress who learns the hard lesson but all the Americans whom these bad, undercooked laws will hurt.

What is especially frustrating is that the INFORM Act is not a new bill. It has been lurking for a while in the corridors of the Capitol with political support so tepid that the only way it ever seems to have any chance of passage is if it can get glued to a different bill that Congress has the political will – and, indeed, the political need – to pass, like the annual NDAA (National Defense Authorization Act). We’ve seen the bill’s sponsors try to slip it past their colleagues like this before – in fact, just last year! But nothing about the bill has gotten better with age: it still is of dubious merit, and in its current form an unconstitutional incursion on rights of free expression protected by the First Amendment. So dubious and so unconstitutional is it that it is shocking that any member of Congress would want to be associated with it. And maybe they wouldn’t, if they’d actually had the chance to read it and not had it shoved down their legislative throats in the waning days of a lame duck session.

True, they may not be aware of the problems because superficially the bill may seem like a good idea: consumers buy things, sometimes they get hurt by these things, and when that happens it may be appropriate to bring a lawsuit against the party who sold the thing – law has long supported this sort of accountability. It does get tricky, however, when the things were purchased through an online marketplace and the identity of the seller may not be apparent to the buyer. It’s hard to bring a lawsuit against someone whose identity you don’t know. The INFORM Act is all about trying to make sure that buyers can always know who the seller is.

Which may sound innocuous enough, or even a potentially good idea. Accountability is a fine thing to encourage, but to actually require it is something else entirely – and not actually necessary. After all, consumers regularly make purchasing choices based on the identity of who is selling them a product when that reputation matters to them – it’s why we have the entire field of trademark law, so that consumers can identify the source of their goods. And they can choose, as they always can choose, whether to give their business to the business they can identify and trust, when being able to identify them is important to them. In other words, consumers can protect themselves: when it’s important for them to know who is selling them the good they want to buy they can pick the online vendor who supplies it over one who doesn’t.

So at best this law is superfluous to actual consumer need, creating needless compliance costs for online marketplaces that will ultimately be passed along to consumers already unhappy about higher prices. But the reality is much worse, because it essentially prohibits anonymous selling, and that is an enormous constitutional problem given all the things that do get sold online, including books, music, posters, t-shirts and all sorts of goods where the expression they convey is a significant factor driving the purchase. Because that means that people can no longer communicate online anonymously if they want to sell a good embodying that message.

And that matters, because one thing online marketplaces have helped foster is the democratization of commerce. It’s no wonder that some big companies have come out in support of the bill (see, e.g., the Home Depot, Walgreens, 3M, CVS Health, Nordstrom, Dick’s Sporting Goods, Gap Inc., HP, Levi Strauss & Co., Phillips, Rite Aid), because they know that it hurts the small, independent vendors whose competition undercuts their market share. But it makes no sense for the online marketplaces (e.g., eBay, Etsy, Poshmark, Pinterest, Redbubble), whose business is about supporting smaller, independent vendors, to also back it, except to the extent that it may be seen as a political compromise to forestall an even worse bill (see, e.g., SHOP SAFE, which is another ill-considered legislative idea of potentially catastrophic effect on American commerce that refuses to die). But no matter what the political expediency, the INFORM Act is simply not benign enough to support.

To see why it is such a bad idea, consider some examples. Want to publish a politically provocative book? You’ll have to do it under your own name. How about a CD or DVD? Same thing. How about pro-choice t-shirt? You’ll have to out yourself, which means that Texas Attorney General Ken Paxton is going to know who you are.

The bill could, of course, be fixed. It could, for instance, exempt expressive goods, for which there is unlikely to be any risk of physical harm to consumers and thus no justification for this incursion on seller privacy. But fixing it would involve actually reading the bill, studying the underlying policy challenge, and caring about whether and how a proposed regulatory solution might or might not be appropriate. Whereas the sponsors of the INFORM Act only care about scoring political points for “doing something,” regardless of how dumb and dangerous that something is, and getting their Congressional colleagues to go along by putting them in the position where they can’t say no, no matter how much they need to.

Filed Under: anonymity, commerce, e-commerce, inform act, ndaa, shopping