A bill requiring marketplaces like eBay and Nextdoor to collect bank accounts and tax identification numbers from high-volume sellers was fast-tracked by Democratic lawmakers in California, with committees voting on it Tuesday.
The bill aims to deter thieves from reselling stolen merchandise by making it easier for authorities to track sellers. This measure is part of a 14-bill legislative package addressing retail theft, a problem the California Retailers Association says has reached crisis levels, despite difficulties in quantifying due to stores not sharing data.
The bill would be voided if a tough-on-crime ballot initiative, which qualified for the November ballot and awaits certification, is passed by voters.
Proponents, including district attorneys and big box retailers, believe the data collection will disrupt organized theft rings and close a loophole in existing laws that don’t track offline transactions. The rules would apply to sellers making at least $5,000 in profit and engaging in at least 200 transactions a year.
Opponents argue the measure is too broad and vague, potentially forcing platforms to collect sensitive information from all users, harming California’s e-commerce businesses. David Edmonson of TechNet, a technology advocacy group, stated, “This is basically going to force businesses out of California.”
Nathan Garnett, general counsel of OfferUp, a mobile marketplace, said the proposal benefits big box retailers and would hinder classified ad sites. OfferUp’s 11 million users in California would need to provide personal information before listing items for sale.
Critics also say the measure contradicts a federal law effective last July, which requires online marketplaces to verify high-volume sellers to curb stolen goods resales. Carl Szabo, general counsel of NetChoice, an Internet trade group, said requiring platforms to monitor all transactions, including offline, is impossible.
Democratic California state Sen. Nancy Skinner, who authored the measure, emphasized the need for the tool to combat professional reseller schemes. She cited a San Diego case where a couple made roughly $8 million selling stolen goods online. Skinner noted that only high-volume sellers would need to provide additional information.
The legislative package includes increasing penalties for organized crime rings, expanding drug court programs, and closing a legal loophole to facilitate prosecuting auto thefts. Lawmakers aim to deliver the bills to Democratic Gov. Gavin Newsom within weeks for immediate effect, aligning with a get-tough-on-crime strategy amid an election year while maintaining progressive policies to keep people out of prison.