Amazon recently made headlines when it curiously reversed its longstanding opposition to federal consumer protection legislation — known as the INFORM Consumers Act — that aims to reduce counterfeit items on ecommerce platforms.
Despite this, Amazon has made it clear it opposes similar state-level measures and has stepped up its lobbying efforts across the country to kill these bills. Now, with an INFORM bill recently passing the Virginia Senate, state lawmakers must prevent Amazon from using its growing influence in Richmond to thwart common-sense legislation that benefits Virginia consumers and small businesses alike.
The goal of INFORM legislation is simple. It would require online marketplaces to verify high-volume, third-party sellers to remove the veil of anonymity that allows bad actors to peddle fake and potentially dangerous products that inundate platforms like Amazon. But throughout 2021, Amazon worked tirelessly to oppose INFORM bills nationwide — from Iowa to Nevada. Meanwhile, the company’s federal lobbyists are reportedly attempting to water down the INFORM bill in Congress, even as it publicly supports the proposal.
At the same time, Amazon has increased spending on its Virginia lobbying operations, racking up a $441,000 tab from May 2018 to April 2021 to influence state policies. The company has reportedly lobbied on more than 50 bills in the Virginia legislature since May 2015 — on issues ranging from facial recognition technology to data centers.
So far, these efforts are paying handsome dividends. In 2019, lawmakers rewarded Amazon — the world’s most valuable public company — with a massive $750 million grant to establish a headquarters right in Arlington County. In fact, several of the lawmakers who sponsored the bill either had received donations from Amazon or owned Amazon stock.
Last year, Amazon scored another major victory when it successfully swayed Richmond into passing a watered-down consumer privacy bill. In fact, it was an Amazon lobbyist who originally presented a state senator with the text of the bill. While the company may have deemed this language as a “starting point,” they ended up getting exactly what they wanted all along.
Amazon, along with other Big Tech firms, have now all but guaranteed that the industry-backed Virginia data privacy framework is used when drafting other bills nationwide. Many of these measures would require individuals to opt out — instead of opting in — to being tracked online while also failing to provide users with the ability to sue over violations.
What Big Tech won’t tell you is that the underlying goal here was to establish a weak precedent for a federal privacy bill, as opposed to the more robust solutions enacted by California lawmakers. This strategy seems to be working, with 14 of 20 proposed state privacy bills being built upon the same industry-backed framework as Virginia’s, or, in certain cases, a weaker framework.
Now, with state lawmakers considering a new landmark consumer protection bill, Amazon can dust off its Virginia influence playbook and pressure lawmakers into thwarting the measure — despite the fact that Virginians stand to gain from this commonsense bill.
Counterfeits plague ecommerce platforms, putting innocent shoppers in considerable harm. We know that the criminals behind these products aren’t abiding by the robust safety tests and standards that legitimate online sellers adhere to.
In 2020, Amazon created a Counterfeit Crimes Unit that included former federal prosecutors, investigators and data analysts to address the issue of counterfeit sellers on its marketplace. The year before, the U.S. Trade Representative’s office was considering adding Amazon sites in the UK, Canada, Germany, India and France to the so-called Notorious Markets list due to alleged growth in sale of counterfeit goods, based on a request from an apparel trade group.
Virginia businesses also suffer directly when fraudsters peddle fakes at cheap prices. Small businesses have done everything in their power to protect their brands from counterfeits, but it’s much easier said than done. Listings for cheap knockoffs continue to spring up on online marketplaces, with many of these fakes coming directly from China-based sellers. INFORM would expose these online criminals by forcing technology companies to vet their sellers, and better protect families and small businesses across the commonwealth.
Given that Virginia now has a clear opportunity to safeguard consumers and online merchants, lawmakers must resist any of Amazon’s underhanded, backroom dealings. Amazon’s investment in the state isn’t benefitting anyone but itself. Lawmakers in Richmond must realize this before Amazon buys itself another policy victory at the expense of Virginia residents.
Jason Boyce is the author of “The Amazon Jungle” and the founder of Avenue7Media
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