Updated on March 18, 2022
Over 2,000 pages were folded into the bill and passed under America Competes Act in order to curb harmful counterfeit items sold through online marketplaces. The long folded Shop Safe bill includes everything from research funding to shark fin sales and focuses on America’s competitiveness with China. While the goal of the bill can be laudable, the bill itself is a legit counterfeit that uses consumers’ “health and safety” as a defense to make the bill seem more tapered and balanced than it actually is.
A mammoth piece of legislation that includes policy topics from telecommunications to manufacturing, promises key investments in scientific research and supply-chain management. The stated goals of the bill are undermined and tucked within the dark recesses of America Competes, designed to crumble American small e-commerce sellers.
With the approval of Competes and Shop Safe, the Senate rumpled how 300 million Americans shop online. While they still have an opportunity to fix the mess and strip Shop Safe from the omnibus, the question is, will they?
Shop Safe allows global brands to outpower Small Businesses
Shop Safe sweeps e-commerce regulations that concern us about its breadth and potentially anticompetitive effects and liabilities on small online businesses and marketplaces like eBay, Etsy, and others.
Rather than increasing the resources for anti-counterfeit measures, the Act places onerous requirements on e-commerce sellers that will hit retailers, individuals, and small online marketplaces, empowering trademark holders more power over small online businesses.
The provision takes small businesses on a hook to counter convoluted compliance standards and passe a subjective pre-screening process that consists of a huge set of anti-counterfeit regulations that most small online businesses would find laborious.
It takes a combination of AI, manual power, and software to prevent buyers from counterfeit experiences. The marketplace takes necessary steps to remove the listing if any defective, illegal, or counterfeit products are noticed. Heaps of resources are utilized to prevent scams.
Unfortunately, the Shop Safe provision now capsizes the entire process and puts the onus on small online businesses.
Shop Safe can cause Small Businesses and Online Sellers a lot to lose
A number of Americans rely on online selling to earn their bread and policies like these can put them out of work.
Furthermore, the language is so vague that reselling clothes or getting rid of old furniture or old bike on Craigslist will demand you to provide your Government ID or set up an email account. This doesn’t only adds up to the hustle but also exposes you to the danger of identity theft, fraud, or cybercrime.
These new federal mandates can make it difficult for small businesses and people selling online to keep their virtual doors open, as the consequence of non-compliance can force them out of the marketplace.
The law was promised to be passed after working on both sides of the aisle, addressing all the concerns. But the peers rather observed the packaging of the broken policy without a solution with no significant way to fix the death blow for American e-commerce.
Ironically, piling up screening obligations on marketplaces or small businesses and stirring litigation is not how America can compete. Shop Safe clearly advantages larger marketplace at the cost of smaller ones discourage small businesses off the board.
The solution to this controversial provision already exists. Online marketplaces are incentivized to crop off the bad actors, as counterfeited products yield fewer returning customers and the marketplace is equipped enough with robust, advanced technologies to prevent bad-screening products from going live.