Ohio has taken a step to protect brands that are dealing with unauthorized, counterfeit and gray market sales from online marketplaces. Governor Mike DeWine recently signed the bipartisan Ohio House Bill 272 (H.B. 272) into law. H.B. 272 is Ohio’s version of the federal INFORM Consumers Act, designed to protect consumers and legitimate businesses by verifying third-party sellers’ identities.
High Volume Third-Party Sellers
H.B. 272 requires online marketplaces, such as Amazon, eBay and Walmart, to retain and verify a high-volume third-party seller’s bank account number, contact information and business or individual tax identification number. A high-volume third-party seller is defined as one that in any continuous 12-month period during the previous 24-four month period has had at least 200 discreet sales for an aggregate total of $5,000 or more in gross revenues.
Further, an online marketplace is required to disclose to consumers a high-volume third-party seller’s full name, physical address and contact information when that seller has exceeded $20,000 or more in annual gross revenue on that marketplace’s platform. If a high-volume third-party seller does not comply with these requirements, the online marketplace shall provide notice to the seller and suspend any future sales activity of the seller until compliance is met.
Brand Enforcement
While the federal government has been unable to pass The INFORM Consumers Act, Ohio joins a handful of states, including Arkansas and Colorado, to pass a state law designed to protect brands from unauthorized sales. It should be noted there is no private cause of action under H.B. 272, rather only the Ohio Attorney General has the authority to enforce it.
Nevertheless, H.B. 272 is a step in the right direction toward protecting brands from the unauthorized resale or sale of counterfeit, gray-market or used products on Amazon, Walmart and eBay. If your brand is facing issues with unauthorized resellers on these sites, contact Alex Jones (AEJ@kjk.com; 216.736.7241) or KJK’s eCommerce and Brand Enforcement practice group.