A new U.S. law designed to protect consumers and small businesses will become effective on June 27. The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act, known as the INFORM Consumers Act, is a federal law that requires online retailers to collect, verify, and disclose identifying information about high-volume third-party sellers.
Amazon supported this bill before it was passed last year because we believe establishing a standard, nationally consistent expectation for the entire industry is a positive development that will help ensure small businesses selling products online do not have to manage an unworkable patchwork of state-level regulations.
We are working diligently to support our selling partners in meeting the new INFORM compliance obligations. While the new federal law is much better for small businesses than having to comply with many different state-level regulations, it still requires businesses to do some work. The INFORM Consumers Act requires regular verification of certain seller data on a determined set of thresholds and timeline, which should prove helpful for retailers, marketplace service providers, and customers.
To ensure sellers go through the proper steps and to help them comply, Amazon began contacting the sellers covered by this new law several months ago. We have been communicating regularly with instructions and resources, and we have a large group dedicated to calling sellers to walk them through the verification process and answer any questions.
Since long before the INFORM Consumers Act, Amazon has maintained and continued to innovate on a robust set of processes and tools for vetting and monitoring sellers in our store. This is a critical part of our ongoing commitment to customer and seller trust, and our processes go beyond the new federal law’s requirements.
For example, the INFORM Consumers Act requires transparency around seller contact information—something we have published for sellers in our store since 2020, so any customer can see the business name and address of an independent seller that they are considering purchasing from. For many years, we also have provided customers with a way to contact sellers (and vice versa) through a managed messaging service. This provides a direct communications channel that it is protected from fraud, abuse, spam, and other harmful activity.
We have found other effective means to thwart bad actors as well. Our verification processes, coupled with continued advancements in our machine learning-based detection to proactively and continuously monitor our stores, are deterring bad actors from even attempting to create new Amazon selling accounts. The number of bad actor attempts to create new selling accounts decreased from 6 million attempts in 2020 to 2.5 million attempts in 2021, to 800,000 in 2022.
While Amazon has been working with our selling partners to ensure compliance with the new INFORM Consumers Act, we are excited about how we will continue our own work to protect our customers, selling partners, and store integrity through even more robust approaches. We also continue to work with industry partners, policymakers, and law enforcement to ensure a safe and trusted experience for consumers.
