Home News California lawmakers fast-track bill that would require online sellers to verify their...

California lawmakers fast-track bill that would require online sellers to verify their identity


By TRÂN NGUYỄN | Associated Press

SACRAMENTO — A California bill that would require marketplaces like eBay and Nextdoor to start collecting bank accounts and tax identification numbers from high-volume sellers who advertise online but collect payments offline is being fast-tracked by Democratic lawmakers with committees voting on it Tuesday.

The idea is that thieves will be less likely to resell stolen merchandise if authorities can track them down.

The measure is part of a legislative package of 14 bills to combat retail theft in the state. The California Retailers Association has said the issue has reached crisis levels, though it’s challenging to quantify because many stores don’t share their data.

Proponents, including district attorneys and some big box retailers, said the data collection proposal would shut down organized theft rings seeking to resell stolen goods and would close a loophole in existing laws that don’t require platforms to track offline transactions.

The rules under the bill would apply to sellers who make at least $5,000 profit and engage in at least 200 transactions in a year.

Opponents say the measure’s new requirement is so broad and vague that some platforms would have to start collecting sensitive information from all users, harming California’s e-commerce businesses.

“This is basically going to force businesses out of California,” said David Edmonson of TechNet, a technology advocacy group. “I imagine most sellers will have to think long and hard about whether or not they want to provide that information to the online marketplace just to be able to sell, you know, household products.”

Nathan Garnett, general counsel of OfferUp, a mobile marketplace that connects local buyers and sellers so they can complete transactions in-person, said the proposal would significantly benefit big box retailers and cripple classified ad sites’ ability to do business in the state.

In the case of OfferUp, its 11 million users in California would have to hand over their personal information before they could list something like a used coffee table or an old truck on the platform, Garnett said.

Opponents say the measure also runs contrary to a federal law that went into effect last July, which requires online marketplaces like Amazon to verify high-volume sellers on their platforms as part of an effort to tamp down the amount of goods being stolen from brick-and-mortar stores and resold online.

The federal law was negotiated to protect classified websites, and there was no legal loophole, said Carl Szabo, the general counsel of an Internet trade group NetChoice. The group, which represents companies including Facebook parent Meta and Etsy, filed a lawsuit against Georgia last week to halt the implementation of a state law that would establish similar requirements.

Requiring platforms to monitor all transactions, including those happening offline, is an impossible task, Szabo said.

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