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A10096 Summary:

Add Art 45 §§1500 - 1504, Gen Bus L
Requires certain high-volume third-party sellers in the online marketplace to provide certain information to the online marketplace; requires verification of such information and technical safeguards for use of such data; requires notifications; preempts local laws.
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A10096 Text:

                STATE OF NEW YORK
                   IN ASSEMBLY
                                     April 29, 2022
        Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
          tee on Consumer Affairs and Protection
        AN  ACT  to  amend  the general business law, in relation to high-volume
          third-party sellers
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section 1. The general business law is amended by adding a new article
     2  45 to read as follows:
     3                                 ARTICLE 45
     4                       HIGH-VOLUME THIRD-PARTY SELLERS
     5  Section 1500. Definitions.
     6          1501. Collection and verification of information.
     7          1502. Disclosures required.
     8          1503. Enforcement.
     9          1504. Preemption.
    10    §  1500. Definitions. For purposes of this article: 1. "Consumer prod-
    11  uct" means tangible personal property that is  distributed  in  commerce
    12  and normally used for personal, family, or household purposes, including
    13  property  intended  to  be  attached  to  or  installed in real property
    14  regardless of whether it is actually attached or installed.
    15    2. "High-volume third-party seller" means a participant in  an  online
    16  marketplace  who  is  a  third-party  seller  and who, in any continuous
    17  twelve-month period during the previous twenty-four months, has  entered
    18  into two hundred or more discrete sales to, or transactions with, buyers
    19  located in New York for new or unused consumer products resulting in the
    20  accumulation  of an aggregate total of five thousand dollars ($5,000) or
    21  more in gross revenues.  For purposes of this subdivision, the number of
    22  discrete sales or transactions includes only those sales or transactions
    23  made through the online marketplace and for which payment  is  processed
    24  by the online marketplace directly or through its payment processor.
    25    3.  "Online  marketplace"  means  a  person  or entity that operates a
    26  consumer-directed, electronically accessed platform in a manner in which
    27  all of the following are true:
    28    (a) the platform includes features  that  allow  for,  facilitate,  or
    29  enable  third-party  sellers  to  engage in the sale, purchase, payment,
    30  storage, shipping, or delivery of a consumer product in this state;
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 10096                            2
     1    (b) the features set forth in paragraph (a) of  this  subdivision  are
     2  used by third-party sellers; and
     3    (c)  the  person  or  entity has a contractual or similar relationship
     4  with consumers governing their use of the platform to purchase  consumer
     5  products.
     6    4.  "Seller"  means  a  person or entity who sells, offers to sell, or
     7  contracts to sell a consumer product  through  an  online  marketplace's
     8  platform.
     9    5.  (a)  "Third-party seller" means a seller, independent of an online
    10  marketplace, who sells, offers to sell, or contracts to sell a  consumer
    11  product in this state through an online marketplace's platform.
    12    (b)  "Third-party  seller" does not mean a seller that meets either of
    13  the following criteria:
    14    (i) The seller is a business entity that meets all  of  the  following
    15  criteria:
    16    (A)  The  seller has made available to the general public the entity's
    17  name, business address, and working contact information;
    18    (B) The seller has an ongoing contractual relationship with the  owner
    19  of  the online marketplace to provide for the manufacture, distribution,
    20  wholesaling, or fulfillment of shipments of consumer products; and
    21    (C) The seller has provided  to  the  online  marketplace  identifying
    22  information that has been verified; or
    23    (ii) The seller operates the online marketplace's platform.
    24    6. "Verify" means to confirm information provided to an online market-
    25  place pursuant to this article, including the use of one or more methods
    26  that  enable  the online marketplace to reliably determine that informa-
    27  tion and documents provided are valid, corresponding to the seller or an
    28  individual acting on the seller's behalf, not misappropriated,  and  not
    29  falsified.
    30    §  1501.  Collection  and  verification  of  information. 1. An online
    31  marketplace shall require a high-volume third-party seller on the online
    32  marketplace's platform to provide, not later than ten days after  quali-
    33  fying  as  a  high-volume third-party seller on the platform, all of the
    34  following information to the online marketplace:
    35    (a) A bank account number, or, if the seller  does  not  have  a  bank
    36  account, the name of the payee for payments issued by the online market-
    37  place  to  the seller.  The information required by this paragraph shall
    38  be provided by either of the following methods:
    39    (i) to the online marketplace; or
    40    (ii) to a payment processor or other third  party  contracted  by  the
    41  online  marketplace  to  maintain  the  information  only  if the online
    42  marketplace ensures that it can obtain the information  on  demand  from
    43  that payment processor or other third party.
    44    (b) All of the following contact information, as applicable:
    45    (i)  If the high-volume third-party seller is an individual, the sell-
    46  er's name;
    47    (ii) If the high-volume third-party seller is not an  individual,  one
    48  of the following:
    49    (A) A copy of a valid government-issued identification for an individ-
    50  ual  acting on behalf of the seller that includes the individual's name;
    51  or
    52    (B) A copy of a valid government record or tax document that  includes
    53  the business name and physical address of the seller;
    54    (c)  A  business tax identification number, or, if the seller does not
    55  have a business tax identification  number,  a  taxpayer  identification
    56  number; and

        A. 10096                            3
     1    (d) A valid email address and telephone number for the seller.
     2    2.  An online marketplace shall verify the information provided pursu-
     3  ant to subdivision one of this section within ten days and shall verify,
     4  within ten days, any changes to the information that is provided to  the
     5  marketplace by a high-volume third-party seller. If a high-volume third-
     6  party  seller provides a copy of a valid government-issued tax document,
     7  information contained within the tax document shall be  presumed  to  be
     8  verified as of the date of issuance of the record or document.
     9    3. An online marketplace shall implement and maintain reasonable secu-
    10  rity  procedures  and practices, including administrative, physical, and
    11  technical safeguards, appropriate to the nature  of  the  data  and  the
    12  purposes  for which the data will be used, to protect the data collected
    13  to comply with the requirements of this article from  unauthorized  use,
    14  disclosure, access, destruction, or modification. The online marketplace
    15  shall  keep  the information provided in subdivision one of this section
    16  on a secured server for a period of no less than five years.
    17    4. (a) The online marketplace shall, on  at  least  an  annual  basis,
    18  notify  each  high-volume third-party seller on the online marketplace's
    19  platform of the requirement that the seller inform  the  online  market-
    20  place  of any changes to the information provided by the seller pursuant
    21  to subdivision one of this section within  ten  days  of  receiving  the
    22  notification  and shall instruct each high-volume third-party seller, as
    23  part of the notification, to  electronically  certify  either  that  the
    24  seller's information is unchanged or that the seller is providing chang-
    25  es to the information.
    26    (b)  If a high-volume third-party seller does not provide the informa-
    27  tion or certification required under this section,  the  online  market-
    28  place  shall,  after  providing  the  seller  with written or electronic
    29  notice and opportunity to provide the information or  certification  not
    30  later than ten days after the issuance of the notice, suspend any future
    31  sales  activity  of the seller until the seller provides the information
    32  or certification.
    33    5. Data collected solely to  comply  with  the  requirements  of  this
    34  section  shall  not  be  used  for  any other purpose unless that use is
    35  required by law.
    36    § 1502. Disclosures required. 1. An online marketplace shall require a
    37  high-volume third-party seller with at  least  twenty  thousand  dollars
    38  ($20,000)  of gross annual revenues from sales to, or transactions with,
    39  buyers in New York derived from the  online  marketplace's  platform  in
    40  either of the two prior calendar years to provide the following informa-
    41  tion  to  the  online  marketplace  and  to  disclose the information to
    42  consumers in a clear and conspicuous manner in  the  order  confirmation
    43  message,  or  other communication made to a consumer after a purchase is
    44  finalized, and in the consumer's account transaction history:
    45    (a) (i) Except as provided in subparagraph (ii) of this paragraph, all
    46  of the following identifying information:
    47    (1) The full name of the seller, which may include the  seller's  name
    48  or  company name, or the name by which the seller or company operates on
    49  the online marketplace;
    50    (2) The seller's physical address; and
    51    (3) Contact information for  the  seller  to  allow  for  the  direct,
    52  unhindered  communication  with high-volume third-party sellers by users
    53  of the online marketplace, including a current working telephone number,
    54  email address, or any other means of direct electronic messaging.
    55    (ii) (1) Subject to clause two of this subparagraph, upon the  request
    56  of  a  high-volume third-party seller, an online marketplace may provide

        A. 10096                            4
     1  only partial disclosure of the information described in  this  paragraph
     2  as follows:
     3    (A)  If  the  high-volume  third-party  seller certifies to the online
     4  marketplace that the seller does not have a physical address other  than
     5  a residential physical address, the online marketplace may disclose only
     6  the  country  and  state, if applicable, in which the seller resides and
     7  inform consumers that inquiries should be submitted  to  the  seller  by
     8  telephone,  email,  or  electronic  means provided by the online market-
     9  place; or
    10    (B) If the high-volume third-party  seller  certifies  to  the  online
    11  marketplace  that the seller does not have a telephone number other than
    12  a personal telephone number, the online marketplace shall inform consum-
    13  ers that there is not a telephone number available for the  seller,  and
    14  inquiries should be submitted to the seller's email address or electron-
    15  ic means provided by the online marketplace.
    16    (2) An online marketplace shall, after providing the seller notice and
    17  at  least  ten  days  to  respond, suspend future sales activity of that
    18  seller unless the seller consents to the disclosure of  all  information
    19  described  in paragraph (a) of this subdivision if either of the follow-
    20  ing is true:
    21    (A) A high-volume third-party seller has made a  false  representation
    22  to  the online marketplace in order to justify partial disclosure pursu-
    23  ant to this subparagraph;
    24    (B) A seller that has received  a  provision  for  partial  disclosure
    25  pursuant to this subparagraph has not answered consumer inquiries within
    26  a reasonable timeframe.
    27    (b)(i)  Whether  or  not  the  high-volume  third-party  seller used a
    28  different seller to supply the product to the consumer upon purchase.
    29    (ii) If requested  by  an  authenticated  purchaser,  the  information
    30  described  in  paragraph  (a)  of  this subdivision that is related to a
    31  seller described by subparagraph (i) of paragraph (a) of  this  subdivi-
    32  sion  if  that  seller  is  not the seller on the product listing before
    33  purchase.
    34    2. An online marketplace shall disclose to consumers, in a  clear  and
    35  conspicuous  manner  on the product listing of a high-volume third-party
    36  seller, a reporting mechanism that allows for electronic and  telephonic
    37  reporting  of  suspicious activity by the high-volume third-party seller
    38  to the online marketplace.
    39    3. An online marketplace shall suspend  future  sales  activity  of  a
    40  high-volume  third-party  seller  that  is  not  in  compliance with the
    41  requirements of this article. An online marketplace shall provide notice
    42  of an impending suspension  pursuant  to  this  section  and  shall  not
    43  suspend the seller if the seller becomes in compliance with this section
    44  on or before ten days after the notice was issued.
    45    §  1503. Enforcement. A person or entity who violates any provision of
    46  this article shall be liable for a civil penalty not to exceed ten thou-
    47  sand dollars ($10,000) for each violation, which  may  be  assessed  and
    48  recovered  only  in  a civil action brought in the name of the people by
    49  the attorney general.
    50    § 1504. Preemption. This  article  shall  supersede  and  preempt  all
    51  rules,  regulations,  codes,  ordinances,  and other laws adopted by any
    52  city, county, municipality, or local  agency  regarding  online  market-
    53  places  requirements  in  relation  to  verification of information from
    54  high-volume third-party sellers.
    55    § 2. This act shall take effect July 1, 2023.
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