ITIF Says COOL Online Act Would Create Double Standard for Retailers
The Internet Technology and Innovation Foundation's Center for Data Innovation says The COOL Online Act, which exited the Senate Commerce Committee in late July (see 2307280069) "presents a significant risk for online retailers," and would result in uneven enforcement of country of origin labeling in stores and at retailers online.
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The proposed bill gives the Federal Trade Commission enforcement powers, but CBP enforces COOL for products sold in stores. The think tank wrote that "enforcement by two different agencies will create needless confusion and uneven enforcement, especially for businesses that operate both brick-and-mortar and online retail."
"Lawmakers should review the proposed text, consider the implications of different enforcement standards by different agencies, and offer a safe harbor that applies to all online businesses, not just third-party marketplaces. This would allow essentially all online retailers to have the same liability protections that apply to brick-and-mortar businesses," the think tank said.
The bill, co-sponsored by Sens. Tammy Baldwin, D-Wis., and J.D. Vance, R-Ohio, gives online marketplaces safe harbor as long as an outside seller was told it's obligated to provide the country of origin, and was given a way to post that information.
But ITIF said online retailers deserve the same safe harbor that marketplaces that host third-party sellers would have.
It also notes that stores are not held liable for a manufacturer's mislabeling, yet online retailers would have to verify country of origin provided by vendors.
"While this legislation is intended to promote transparency for consumers, it could create confusion given other requirements online retailers must satisfy. For example, the INFORM Act requires online marketplaces to collect and display information about where the product sellers are located. However, the product seller may be located in a different country than the product. Displaying this information side-by-side may confuse consumers who don’t understand the difference between the product and seller," ITIF wrote.