Sens. Coons, Tillis introduce bipartisan, bicameral SHOP SAFE Act

Press Release

Today, U.S. Senators Chris Coons (D-Del.) and Thom Tillis (R-N.C.) introduced the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act to protect consumers by stopping the online sale of harmful counterfeit products. Companion legislation was introduced in the House by U.S. Representatives Jerrold Nadler (D-N.Y.), Darrell Issa (R-Calif.), Henry C. "Hank" Johnson, Jr. (D-Ga.), and Ben Cline (R-Va.).

According to the U.S. Census Bureau, Americans spent $791.7 billion on e-commerce in 2020, up over 30% from 2019. As more consumers opt to shop online, they are increasingly vulnerable to the rising number of counterfeit goods sold on e-commerce platforms. The COVID-19 pandemic has also exacerbated this potential harm as the amount of time consumers spend online and the types of high-risk counterfeits available on these platforms have risen. The SHOP SAFE Act reduces the availability of harmful counterfeit products online by incentivizing platforms to engage in best practices for vetting sellers and goods, addressing repeat counterfeiter sellers, and ensuring consumers have access to relevant information at the time of purchase.

"American consumers increasingly have turned to e-commerce for convenience, selection, and safety, particularly during the COVID-19 pandemic," said Senator Coons. "Unfortunately, some third-party sellers have taken advantage of consumers' trust in established online marketplaces to trick them into purchasing dangerous counterfeit goods, which pose health and safety risks, damage the reputations of legitimate brands, and line the pockets of organized crime. The SHOP SAFE Act is an important step to protect consumers and encourage greater transparency and accountability."

"The number of Americans using e-commerce platforms to purchase basic and necessary goods is growing and so is the number of counterfeit goods being sold by third-party sellers on these platforms," said Senator Tillis. "With Americans continuing to rely on online shopping, it's crucial that we do all we can to protect consumers from dangerous counterfeit sales which are often coming from China. I look forward to working with my colleagues to effectively reduce online counterfeit sales without unnecessarily disrupting legitimate business and e-commerce platforms."

The SHOP SAFE Act will:

Establish trademark liability for online marketplace platforms when a third-party sells a counterfeit product that poses a risk to consumer health or safety and that platform does not follow certain best practices;
Incentivize online platforms to establish best practices such as vetting sellers to ensure their legitimacy, removing counterfeit listings, and removing sellers who repeatedly sell counterfeits; and
Call for online marketplaces to take steps necessary to prevent the continued sale of counterfeits by the third-party seller or face contributory liability for their actions.
On Thursday, May 27th, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet will hold a hearing on the SHOP SAFE Act and efforts to stem the rising tide of unsafe counterfeit products online.

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