House
Study
Bill
687
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
LUNDGREN)
A
BILL
FOR
An
Act
relating
to
the
disclosure
of
specified
information
in
1
connection
with
designated
online
marketplace
transactions
2
and
including
effective
date
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
NEW
SECTION
.
554E.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“Consumer
product”
means
goods
that
are
used
or
bought
4
for
use
primarily
for
personal,
family,
or
household
purposes.
5
2.
“High-volume
third-party
seller”
means
a
participant
on
6
an
online
marketplace
platform
who
is
a
third-party
seller
7
and
who,
in
any
continuous
twelve-month
period
during
the
8
previous
twenty-four
months,
has
entered
into
two
hundred
or
9
more
discrete
sales
or
transactions
of
new
or
unused
consumer
10
products
made
through
the
online
marketplace
and
for
which
11
payment
was
processed
by
the
online
marketplace,
either
12
directly
or
through
its
payment
processor,
and
an
aggregate
13
total
of
five
thousand
dollars
or
more
in
gross
revenues.
14
3.
“Online
marketplace”
means
a
person
or
entity
that
15
operates
a
consumer-directed
electronically
based
or
accessed
16
platform
as
follows:
17
a.
The
platform
includes
features
that
allow
for,
18
facilitate,
or
enable
third-party
sellers
to
engage
in
the
19
sale,
purchase,
payment,
storage,
shipping,
or
delivery
of
a
20
consumer
product
in
the
state.
21
b.
The
platform
is
used
by
one
or
more
third-party
sellers
22
for
the
purposes
specified
in
paragraph
“a”
.
23
c.
The
platform
has
a
contractual
or
similar
relationship
24
with
consumers
governing
their
use
of
the
platform
to
purchase
25
consumer
products.
26
4.
“Seller”
means
a
person
who
sells,
offers
to
sell,
27
or
contracts
to
sell
a
consumer
product
through
an
online
28
marketplace
platform
in
the
state.
29
5.
“Third-party
seller”
means
a
seller,
independent
of
an
30
online
marketplace,
who
sells,
offers
to
sell,
or
contracts
31
to
sell
a
consumer
product
in
the
state
through
an
online
32
marketplace
platform.
The
term
“third-party
seller”
does
not
33
include,
with
respect
to
an
online
marketplace,
the
following:
34
a.
A
seller
who
operates
an
online
marketplace
platform.
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b.
A
business
entity
that
has
made
available
to
the
general
1
public
the
entity’s
name,
business
address,
and
working
contact
2
information;
that
has
an
ongoing
contractual
relationship
with
3
the
online
marketplace
to
provide
the
online
marketplace
with
4
the
manufacture,
distribution,
wholesaling,
or
fulfillment
of
5
shipments
of
consumer
products;
and
that
has
provided
to
the
6
online
marketplace
identifying
information,
as
described
in
7
section
554E.2,
that
has
been
verified
in
accordance
with
that
8
section.
9
6.
“Verify”
means
to
confirm
information
provided
to
10
an
online
marketplace
pursuant
to
this
chapter,
which
may
11
include
the
use
of
one
or
more
methods
that
enable
the
online
12
marketplace
to
reliably
determine
that
any
information
and
13
documents
provided
are
valid,
corresponding
to
the
seller
or
an
14
individual
acting
on
the
seller’s
behalf,
not
misappropriated,
15
and
not
falsified.
16
Sec.
2.
NEW
SECTION
.
554E.2
Collection
of
information.
17
1.
An
online
marketplace
shall
require
any
high-volume
18
third-party
seller
on
an
online
marketplace
platform
to
19
provide,
not
later
than
ten
days
after
qualifying
as
a
20
high-volume
third-party
seller
on
the
platform,
the
following:
21
a.
A
bank
account
number,
or,
if
such
seller
does
not
have
a
22
bank
account,
the
name
of
the
payee
for
payments
issued
by
the
23
online
marketplace
to
such
seller.
24
b.
The
seller’s
contact
information.
25
c.
A
business
tax
identification
number,
or,
if
such
seller
26
does
not
have
a
business
tax
identification
number,
a
taxpayer
27
identification
number.
Any
information
contained
in
such
28
document
shall
be
presumed
to
be
verified
as
of
the
date
of
29
issuance
of
such
document.
30
d.
A
current
working
email
address
and
phone
number
for
such
31
seller.
32
2.
The
bank
account
or
payee
information
required
under
this
33
section
may
be
provided
by
the
seller
as
follows:
34
a.
To
the
online
marketplace.
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b.
To
a
payment
processor
or
other
third
party
contracted
by
1
the
online
marketplace
to
maintain
such
information,
provided
2
that
the
online
marketplace
ensures
that
it
can
obtain
such
3
information
on
demand
from
such
payment
processor
or
other
4
third
party.
5
3.
Acceptable
forms
of
seller
contact
information
include
6
the
following:
7
a.
With
respect
to
a
high-volume
third-party
seller
that
is
8
an
individual,
the
individual’s
name.
9
b.
With
respect
to
a
high-volume
third-party
seller
that
10
is
not
an
individual,
one
of
the
following
forms
of
contact
11
information:
12
(1)
A
copy
of
a
valid
government-issued
identification
for
13
an
individual
acting
on
behalf
of
such
seller
that
includes
the
14
individual’s
name.
15
(2)
A
copy
of
a
valid
government-issued
record
or
tax
16
document
that
includes
the
business
name
and
physical
address
17
of
such
seller.
Any
information
contained
in
such
document
18
shall
be
presumed
to
be
verified
as
of
the
date
of
issuance
of
19
such
document.
20
4.
An
online
marketplace
shall
verify
the
information
21
collected
under
this
section
not
later
than
ten
days
after
22
collection.
23
Sec.
3.
NEW
SECTION
.
554E.3
Information
updates.
24
1.
An
online
marketplace
shall
do
the
following:
25
a.
Periodically,
but
not
less
than
annually,
notify
a
26
high-volume
third-party
seller
on
an
online
marketplace
27
platform
of
the
requirement
to
keep
any
information
collected
28
under
this
chapter
current.
29
b.
Require
a
high-volume
third-party
seller
on
an
online
30
marketplace
platform
to,
not
later
than
ten
days
after
31
receiving
the
notice
under
this
section,
electronically
certify
32
that
the
following:
33
(1)
That
the
seller
has
provided
any
changes
to
such
34
information
to
the
online
marketplace,
if
any
such
changes
have
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occurred.
1
(2)
That
there
have
been
no
changes
to
such
seller’s
2
information.
3
(3)
That
the
seller
has
provided
any
changes
to
such
4
information
to
the
online
marketplace.
5
2.
An
online
marketplace
shall
verify
any
change
to
such
6
information
not
later
than
ten
days
after
being
notified
of
the
7
change
by
a
high-volume
third-party
seller
under
this
section.
8
Sec.
4.
NEW
SECTION
.
554E.4
Suspension.
9
In
the
event
that
a
high-volume
third-party
seller
does
not
10
provide
the
information
or
certification
required
under
this
11
chapter,
the
online
marketplace
shall,
after
providing
the
12
seller
with
written
or
electronic
notice
and
an
opportunity
13
to
provide
such
information
or
certification
not
later
than
14
ten
days
after
the
issuance
of
such
notice,
suspend
any
future
15
sales
activity
of
the
seller
until
the
seller
provides
such
16
information
or
certification.
17
Sec.
5.
NEW
SECTION
.
554E.5
Data
collection.
18
1.
Data
collected
solely
to
comply
with
the
requirements
19
of
this
section
may
not
be
used
for
any
other
purpose
unless
20
required
by
law.
21
2.
An
online
marketplace
shall
implement
and
maintain
22
reasonable
security
procedures
and
practices,
including
23
administrative,
physical,
and
technical
safeguards,
appropriate
24
to
the
nature
of
the
data
and
the
purposes
for
which
the
data
25
will
be
used,
to
protect
the
data
collected
to
comply
with
the
26
requirements
of
this
section
from
unauthorized
use,
disclosure,
27
access,
destruction,
or
modification.
28
Sec.
6.
NEW
SECTION
.
554E.6
Disclosure
requirements.
29
1.
An
online
marketplace
shall
do
the
following:
30
a.
Require
a
high-volume
third-party
seller
with
an
31
aggregate
total
of
twenty
thousand
dollars
or
more
in
annual
32
gross
revenues
on
an
online
marketplace,
and
that
uses
an
33
online
marketplace
platform,
to
provide
the
information
as
34
specified
in
subsection
2
to
the
online
marketplace.
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b.
Disclose
the
information
described
in
this
section
to
1
consumers
in
a
clear
and
conspicuous
manner,
either
on
the
2
product
listing
page,
including
through
hyperlink,
or
in
the
3
order
confirmation
message
or
other
document
or
communication
4
made
to
the
consumer
after
the
purchase
is
finalized
and
in
the
5
consumer’s
account
transaction
history.
6
2.
A
high-volume
third-party
seller
subject
to
this
section
7
shall
disclose
the
following:
8
a.
The
full
name
of
the
seller,
which
may
include
the
9
seller’s
name
or
seller’s
company
name,
or
the
name
by
which
10
the
seller
or
company
operates
on
the
online
marketplace.
11
b.
The
physical
address
of
the
seller.
12
c.
Contact
information
for
the
seller,
to
allow
for
the
13
direct,
unhindered
communication
with
high-volume
third-party
14
sellers
by
users
of
the
online
marketplace,
including
a
current
15
working
phone
number,
a
current
working
email
address,
or
other
16
means
of
direct
electronic
messaging
which
may
be
provided
to
17
the
seller
by
the
online
marketplace.
18
d.
When
a
high-volume
third-party
seller
uses
a
different
19
seller
to
supply
the
consumer
product
to
the
consumer
upon
20
purchase,
and
upon
the
request
of
an
authenticated
purchaser,
21
the
information
described
in
this
section
relating
to
any
such
22
seller
that
supplied
the
consumer
product
to
the
purchaser,
if
23
the
seller
is
different
than
the
high-volume
third-party
seller
24
listed
on
the
product
listing
prior
to
purchase.
25
3.
An
online
marketplace
shall
disclose
to
consumers
in
26
a
clear
and
conspicuous
manner
on
the
product
listing
of
the
27
high-volume
third-party
seller
a
reporting
mechanism
that
28
allows
for
electronic
and
telephonic
reporting
of
suspicious
29
marketplace
activity
to
the
online
marketplace.
30
4.
If
a
high-volume
third-party
seller
does
not
comply
with
31
the
requirements
to
provide
and
disclose
information
under
this
32
section,
the
online
marketplace
shall,
after
providing
the
33
seller
with
written
or
electronic
notice
and
an
opportunity
to
34
provide
or
disclose
such
information
not
later
than
ten
days
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after
the
issuance
of
such
notice,
suspend
any
future
sales
1
activity
of
the
seller
until
the
seller
complies
with
the
2
requirements.
3
Sec.
7.
NEW
SECTION
.
554E.7
Exceptions.
4
1.
Subject
to
section
554E.6,
upon
the
request
of
a
5
high-volume
third-party
seller,
an
online
marketplace
may
6
provide
for
partial
disclosure
of
the
identity
information
7
required
under
section
554E.6
as
follows:
8
a.
If
the
seller
certifies
to
the
online
marketplace
that
9
the
seller
does
not
have
a
business
address
and
only
has
a
10
residential
street
address,
or
has
a
combined
business
and
11
residential
address,
the
online
marketplace
may
disclose
only
12
the
country
and,
if
applicable,
the
state
in
which
such
seller
13
resides;
and
inform
consumers
that
there
is
no
business
address
14
available
for
the
seller
and
that
consumer
inquiries
should
15
be
submitted
to
the
seller
by
phone,
email,
or
other
means
of
16
electronic
messaging
provided
to
such
seller
by
the
online
17
marketplace.
18
b.
If
the
seller
certifies
to
the
online
marketplace
19
that
the
seller
is
a
business
that
has
a
physical
address
20
for
product
returns,
the
online
marketplace
may
disclose
the
21
seller’s
physical
address
for
product
returns.
22
c.
If
the
seller
certifies
to
the
online
marketplace
that
23
the
seller
does
not
have
a
phone
number
other
than
a
personal
24
phone
number,
the
online
marketplace
shall
inform
consumers
25
that
there
is
no
phone
number
available
for
the
seller
and
that
26
consumer
inquiries
should
be
submitted
to
the
seller’s
email
27
address
or
other
means
of
electronic
messaging
provided
to
such
28
seller
by
the
online
marketplace.
29
2.
If
an
online
marketplace
becomes
aware
that
a
high-volume
30
third-party
seller
has
made
a
false
representation
to
the
31
online
marketplace
in
order
to
justify
the
provision
of
a
32
partial
disclosure
under
section
554E.6
or
that
a
high-volume
33
third-party
seller
who
has
requested
and
received
a
provision
34
for
a
partial
disclosure
under
section
554E.6
has
not
provided
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responsive
answers
within
a
reasonable
time
frame
to
consumer
1
inquiries
submitted
to
the
seller
by
phone,
email,
or
other
2
means
of
electronic
messaging
provided
to
such
seller
by
3
the
online
marketplace,
the
online
marketplace
shall,
after
4
providing
the
seller
with
written
or
electronic
notice
and
5
the
opportunity
to
respond
not
later
than
ten
days
after
the
6
issuance
of
such
notice,
suspend
any
future
sales
activity
of
7
such
seller
unless
such
seller
consents
to
the
disclosure
of
8
the
identity
information
required
under
section
554E.6.
9
Sec.
8.
NEW
SECTION
.
554E.8
Enforcement
——
penalties.
10
1.
If
the
attorney
general
has
reasonable
belief
that
11
an
online
marketplace
is
in
violation
of
this
chapter,
the
12
attorney
general
may
bring
a
civil
action
to
provide
for
all
13
of
the
following:
14
a.
Enjoin
further
violations
by
the
online
marketplace.
15
b.
Enforce
compliance
with
this
chapter.
16
c.
Assess
civil
penalties
in
an
amount
not
more
than
one
17
hundred
thousand
dollars.
18
d.
Obtain
other
remedies
permitted
under
law.
19
e.
Obtain
damages,
restitution,
or
other
compensation
on
20
behalf
of
residents
of
the
state.
21
2.
This
chapter
shall
not
be
construed
to
prevent
the
state
22
from
exercising
the
power
to
conduct
investigations,
administer
23
oaths
or
affirmations,
or
compel
the
attendance
of
witnesses
or
24
the
production
of
documentary
and
other
evidence.
25
3.
The
attorney
general
may
adopt
rules
as
necessary
to
26
implement
this
chapter.
27
Sec.
9.
NEW
SECTION
.
554E.9
Severability.
28
If
any
provision
of
this
chapter
or
the
application
29
thereof
to
any
person
or
circumstances
is
held
invalid,
the
30
validity
shall
not
affect
other
provisions
or
applications
31
of
the
chapter
which
can
be
given
effect
without
the
invalid
32
provisions
or
application
and,
to
this
end,
the
provisions
of
33
this
chapter
are
severable.
34
Sec.
10.
EFFECTIVE
DATE.
This
Act
takes
effect
January
1,
35
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H.F.
_____
2023.
1
EXPLANATION
2
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
3
the
explanation’s
substance
by
the
members
of
the
general
assembly.
4
This
bill
relates
to
high-volume
third-party
sellers
5
participating
in
an
online
marketplace.
6
The
bill
defines
“online
marketplace”
to
mean
a
person
7
or
business
that
operates
a
consumer-directed
electronic
8
platform
that
third-party
sellers
use
to
sell
products
to
9
consumers
and
has
a
contractually
similar
relationship
with
10
consumers
governing
their
use
of
the
platform.
The
bill
11
defines
“third-party
seller”
to
mean
any
seller
that
is
12
independent
of
an
online
marketplace
that
sells,
offers
to
13
sell,
or
contracts
to
sell
a
consumer
product
in
the
state
14
through
an
online
marketplace
platform.
Third-party
sellers
15
do
not
include
a
seller
that
operates
the
online
marketplace
16
platform
or
a
business
entity
meeting
specified
requirements.
17
The
bill
defines
a
“high-volume
third-party
seller”
to
mean
18
a
participant
on
an
online
marketplace
platform
that
is
a
19
third-party
seller
and
for
a
continuous
12-month
period
within
20
the
previous
24
months
entered
into
200
or
more
sales
or
21
transactions
of
consumer
products,
made
through
the
online
22
marketplace
and
for
which
payment
was
processed
by
the
online
23
marketplace,
with
an
aggregate
total
of
$5,000
or
more
in
gross
24
revenue.
25
The
bill
provides
that
an
online
marketplace
shall
require
26
that
a
high-volume
third-party
seller
disclose
certain
27
information
to
the
online
marketplace,
including
bank
account
28
information,
a
business
or
individual
tax
number,
and
email
29
address,
phone
number,
and
other
contact
information.
The
bill
30
requires
that
an
online
marketplace
shall
send
a
notification
31
to
a
high-volume
third-party
seller
at
least
once
per
year
32
requesting
updated
information.
The
online
marketplace
33
shall
verify
that
the
information
the
seller
is
providing
34
is
correct.
If
a
high-volume
third-party
seller
fails
to
35
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_____
provide
the
required
information,
the
online
marketplace
shall
1
issue
a
notice
to
the
seller,
and
upon
the
expiration
of
10
2
days
following
the
notice
with
no
additional
information
3
supplied,
the
online
marketplace
shall
suspend
the
high-volume
4
third-party
seller
from
additional
sales
until
the
information
5
is
provided.
6
The
bill
provides
that
an
online
marketplace
shall
collect
7
data
solely
to
comply
with
the
requirements
of
the
bill
8
and
any
applicable
laws
and
that
the
data
may
not
be
used
9
for
other
purposes.
An
online
marketplace
shall
maintain
10
security
practices
to
protect
data
collected
from
a
high-volume
11
third-party
seller
from
unauthorized
use,
disclosure,
access,
12
destruction,
or
modification.
13
The
bill
provides
that
a
high-volume
third-party
seller
with
14
a
cumulative
total
of
$20,000
or
more
in
annual
gross
revenues
15
on
an
online
marketplace
shall
disclose
specified
information
16
to
the
online
marketplace
for
the
benefit
of
consumers.
17
High-volume
third-party
sellers
shall
disclose
the
full
name
18
of
the
seller,
the
physical
address
of
the
seller,
and
contact
19
information.
High-volume
third-party
sellers
may
use
as
a
20
name
an
individual
natural
person,
the
name
of
the
company,
or
21
the
name
by
which
the
seller
or
company
operates
on
the
online
22
marketplace.
High-volume
third-party
sellers
shall
provide
23
users
of
the
online
marketplace
a
current
working
phone
number,
24
a
current
working
email
address,
or
other
means
of
direct
25
electronic
messaging
to
facilitate
direct
communication
with
26
consumers.
High-volume
third-party
seller
contact
information
27
shall
be
displayed
in
a
conspicuous
manner
on
an
internet
site
28
maintained
by
the
seller.
High-volume
third-party
sellers
29
using
a
different
seller
to
supply
the
consumer
products
must
30
disclose
contact
information
for
a
consumer
upon
purchase
and
31
consumer
request.
32
The
bill
provides
that
online
marketplaces
shall
disclose
a
33
reporting
mechanism
for
consumers
to
use
in
sales
or
potential
34
sales
involving
suspicious
marketplace
activity.
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The
bill
provides
that
high-volume
third-party
sellers
may
1
request
to
have
a
partial
disclosure
of
contact
information
2
upon
request
to
the
online
marketplace.
False
representations
3
relating
to
partial
disclosure
or
failure
of
a
seller
who
4
obtained
partial
disclosure
to
communicate
with
consumers
shall
5
be
contacted
by
the
online
marketplace.
The
online
marketplace
6
shall
provide
notice
and
shall
suspend
any
future
sales
7
activity
of
such
seller
unless
such
seller
discloses
additional
8
contact
information.
9
The
bill
provides
that
the
attorney
general
has
authority
10
to
enforce
provisions
of
the
bill
and
may
bring
a
civil
action
11
against
an
online
marketplace
operating
in
violation
of
the
12
provisions
of
the
bill.
A
violation
of
the
bill’s
provisions
13
is
punishable
by
a
civil
penalty
in
an
amount
up
to
$100,000.
14
The
attorney
general
shall
adopt
rules
as
necessary
to
15
implement
the
bill’s
provisions.
16
The
bill
takes
effect
January
1,
2023.
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