For The Umpteenth Time, The INFORM Act Is Still Unconstitutional And Has No Business Being Attached To Any Bill Congress Needs To Pass
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
Comments on “For The Umpteenth Time, The INFORM Act Is Still Unconstitutional And Has No Business Being Attached To Any Bill Congress Needs To Pass”
Great, while we’re at it why don’t we add the Earn It Act to complete this trifecta of awful legislation.
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Don’t jinx it.
Even in the real world, car boot sales and the like mean that you are buying from someone who can be even less traceable than an online seller.
The problem that needs addressed isn’t so much that consumers need to know who’s selling the goods, it’s more that online marketplaces are deceptive about who’s selling the goods. In a physical store there’s no question but that the store is the seller. If you walk into a Walmart and buy X and it’s defective or dangerous, Walmart can’t turn around and say it was a distributor who sold the item, not Walmart, and the consumer can’t sue Walmart over it. On Amazon, though, it’s often not clear whether an item is being sold by Amazon, sold by a third party and only warehoused and shipped by Amazon, or sold and shipped by a third party with Amazon only handling the payment processing. We have businesses that do third-party sales in the physical world, but normally they don’t mix selling their own goods alongside third-party items.
Solving the problem with any subtlety is hard because marketplaces like Amazon have a vested interest in the confusion so phrases like “clearly state” get interpreted in convoluted ways and consumers end up spending too much time in court arguing about exact phrasing and presentation.
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You point to retail locations where the consumer knows exactly from whom they are purchasing yet I will point to those retailers masquerading as something they are not.
For example that retail chain with a 4 letter name pretending to be Japanese and selling uniquely Japanese products. Dig deep enough and it’s Chinese owned and operated and selling cheap knockoffs of questionable quality and safety.
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“If you walk into a Walmart and buy X and it’s defective or dangerous, Walmart can’t turn around and say it was a distributor who sold the item, not Walmart, and the consumer can’t sue Walmart over it”
No, because in order to be in that store, someone employed by Walmart will have had to approve the item, sign contracts to buy stock, etc.
“On Amazon, though, it’s often not clear whether an item is being sold by Amazon, sold by a third party and only warehoused and shipped by Amazon, or sold and shipped by a third party with Amazon only handling the payment processing”
I don’t know why people claim this, it’s fairly clearly represented by the status telling you if it’s shipped by Amazon, through Amazon Warehouse or Marketplace, etc. Some sellers clearly try to confuse people, but I’ve never had any doubt which items are first and third party supplied.
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The issue as it’s described, and as I have had personal experience with, is that even if it says shipped by Amazon or shipped by Amazon services or ship and sold by some derivation or permutation with the word Amazon in it, it doesn’t necessarily mean that Amazon was the company that sold it to you.
Third party vendors that are not suppliers to Amazon use Amazon Services, Amazon Choice Partners, or whatever seller with the name Amazon in it and “shipped by Amazon” to obfuscate and conflate the fact that they’re actually a third party vendor and to make buyers believe Amazon sold it to you.
Re: Re: Not always
There are cases where the seller is not clearly stated. This happens a lot with rare back stock. I see it in film and books all the time. A high end seller of an item amazon doesn’t carry can be the default click to buy option. Less often this comes up in electronics as well. And other items.
There are such cases but you need to be off the standard consumption to run into it.
It is one place where I feel amazon should make a change. But again: I support buyer knowledge.
A buyer should always know the full details of the seller.
Nobody complains about this with eBay, Shopee, Micari, etc. all of which make the seller info available after the sale. On request or as default.
Even amazon will supply full seller details on request.
Reading the news it seems the INFORM Consumers Act (don’t know if its the same bill) pass the House today.
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Looks like it’s on its way to becoming law.
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Well shit.
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Still needs to pass the Senate.
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Still needs to pass the Senate and that may take time.
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I actually believe this is more ammo for it to be attached to either the year-end spending bill or NDAA so it might not even need to pass the senate.
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Why do you think that?
First Amendment question
Is it clear that the First Amendment right to speak anonymously applies to commercial speech — that is, to sellers of non-speech items? I am trying to think of the cases in which that was decided
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With the Supreme Court’s ruling in Roe v. Wade, declaring that there is no right to privacy in the Constitution, the basis for anonymous speech has been undermined.
The only reason the court had previously ruled that there was a right to anonymous speech was the belief that there’s a right to privacy because there can be no other reason for anonymous speech other than privacy.
If there is no right to privacy in the Constitution, there is no right to anonymous speech.
Obviously you have the right to not speak, silence is protected speech. However, without privacy as the foundation for anonymity, the basis for anonymous speech being protected evaporates.
Furthermore, business arrangements are a very long way from the right to anonymously associate.
Regulation in the interest of the public good even regulation that impairs constitutional rights is a foundation of anti-discrimination and consumer protection laws.
In today’s day and age you should not have to be “buyer beware”. You have to identify your business when you get a business license. Because you’re association with another company informs the product you’re selling, there’s no way that association should be considered speech of any kind.
Conducting business is not a right, it’s a privilege. Privilege is come with responsibilities and regulations.
INFORM requiring the disclosure of business associations in the furtherance of know your seller laws is in no way shape or form unconstitutional.
If it is constitutional for the United States government to require defense contractors to disclose all business associations within and without the United States, then it is constitutional for the United States government to require Amazon to disclose its business relationships and identify sellers that sell on its platform.
a lot of words
Thats a lot of words just to avoid saying Amazon.
haha no, AMAZON. This bill is meant to stop Amazon from pretending they didnt sell you hoverboard with no safety certifications that burned your house and they reply “LOL sucks to be you go ahead and sue this XYZ noname that registered with us in Shenzhen”.
It only took 4 years for Amazon to settle out of court for undisclosed amount after hoverboard almost burned alive two children in a house fire.
The key thing to remember is, our very structure of government was created to try to prevent abuses by the government. It is anathema to those in power and they will seek to undermine it at every turn. Techdirt probably wouldn’t exist if those in power were interested in our best interests.
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The key thing to remember is, your very structure of government was created in the 18th century and hasn’t been seriously reformed since.
Riders are a terrible idea and should done away with.
Lame duck sessions should not have survived the invention of the aeroplane.
Really?
There’s no surprise why ebay supports it: they already do this. The full information of the seller is supplied to the buyer upon request.
I still don’t see anything bad with this. If you are willing to sell a dildo, you should be willing to do so publicly, at the very least to the person buying it.
If your product is illegal (Texas pro choice shirts) and you are selling from within Texas your are a criminal (at this point).
It’s that simple!
its now in the omnibus spending bill
They put the Inform Consumers Act in the omnibus spending bill they are trying to get passed this week.