California lawmakers are considering a bill that would require online marketplaces like eBay and Nextdoor to collect bank accounts and tax identification numbers from high-volume sellers who advertise online but collect payments offline.
The bill is part of a set of 14 legislative measures designed to combat retail theft in the state, as the California Retailers Association emphasizes the crisis-level situation, although it is challenging to quantify due to lack of data sharing by many stores.
The big picture: Proponents argue that the data collection proposal will help authorities track down thieves who resell stolen merchandise and shut down organized theft rings seeking to resell stolen goods.
- This aims to close a loophole in current laws that do not require platforms to track offline transactions.
- The bill’s rules would apply to sellers who make at least $5,000 in profit and engage in at least 200 transactions in a year.
- However, opponents argue that the bill’s new requirements are broad and vague, potentially leading to harm for California’s e-commerce businesses by forcing platforms to collect sensitive information from all users.
Go deeper: Specifically, the bill is criticized for potentially forcing businesses out of California and significantly benefiting big box retailers while harming classified ad sites’ ability to conduct business in the state.
- Opponents also argue that the bill runs counter to a federal law requiring online marketplaces to verify high-volume sellers and that requiring platforms to monitor all transactions, including those offline, is an impossible task.
- TechNet’s David Edmonson told the Associated Press that businesses would be forced out of California.
What we’re watching: Despite the opposition, the bill is part of a legislative package that aims to increase penalties for organized crime rings, expand drug court programs, and close legal loopholes to make it easier to prosecute auto thefts.
- Lawmakers are hurrying to deliver the bills to Democratic Gov. Gavin Newsom in a few weeks, and once signed, the bills would take immediate effect, reflecting a new get-tough-on-crime strategy in an election year while preserving progressive policies to keep people out of prison.
