Bill Text: IA HF2401 | 2021-2022 | 89th General Assembly | Enrolled

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Bill Title: A bill for an act relating to the disclosure of specified information in connection with designated online marketplace transactions and including effective date provisions. (Formerly HSB 687.) Effective date: 01/01/2023.

Spectrum: Committee Bill

Status: (Passed) 2022-06-13 - Signed by Governor. H.J. 944. [HF2401 Detail]

Download: Iowa-2021-HF2401-Enrolled.html

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House File 2401 - Enrolled
House File 2401
AN ACT
RELATING TO THE DISCLOSURE OF SPECIFIED INFORMATION IN
CONNECTION WITH DESIGNATED ONLINE MARKETPLACE TRANSACTIONS
AND INCLUDING EFFECTIVE DATE PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
Section 1. NEW SECTION . 554E.1 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “Consumer product” means goods that are used or bought
for use primarily for personal, family, or household purposes.
2. “High-volume third-party seller” means a participant on
an online marketplace platform who is a third-party seller
and who, in any continuous twelve-month period during the
previous twenty-four months, has entered into two hundred or
more discrete sales or transactions of new or unused consumer

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products made through the online marketplace and for which
payment was processed by the online marketplace, either
directly or through its payment processor, and an aggregate
total of five thousand dollars or more in gross revenues.
3. “Online marketplace” means a person or entity that
operates a consumer-directed electronically based or accessed
platform as follows:
a. The platform includes features that allow for,
facilitate, or enable third-party sellers to engage in the
sale, purchase, payment, storage, shipping, or delivery of a
consumer product in the state.
b. The platform is used by one or more third-party sellers
for the purposes specified in paragraph “a” .
c. The platform has a contractual or similar relationship
with consumers governing their use of the platform to purchase
consumer products.
4. “Seller” means a person who sells, offers to sell,
or contracts to sell a consumer product through an online
marketplace platform in the state.
5. “Third-party seller” means a seller, independent of an
online marketplace, who sells, offers to sell, or contracts
to sell a consumer product in the state through an online
marketplace platform. The term “third-party seller” does not
include, with respect to an online marketplace, the following:
a. A seller who operates an online marketplace platform.
b. A business entity that has made available to the general
public the entity’s name, business address, and working contact
information; that has an ongoing contractual relationship with
the online marketplace to provide the online marketplace with
the manufacture, distribution, wholesaling, or fulfillment of
shipments of consumer products; and that has provided to the
online marketplace identifying information, as described in
section 554E.2, that has been verified in accordance with that
section.
6. “Verify” means to confirm information provided to
an online marketplace pursuant to this chapter, which may
include the use of one or more methods that enable the online
marketplace to reliably determine that any information and

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documents provided are valid, corresponding to the seller or an
individual acting on the seller’s behalf, not misappropriated,
and not falsified.
Sec. 2. NEW SECTION . 554E.2 Collection of information.
1. An online marketplace shall require any high-volume
third-party seller on an online marketplace platform to
provide, not later than ten days after qualifying as a
high-volume third-party seller on the platform, the following:
a. A bank account number, or, if such seller does not have a
bank account, the name of the payee for payments issued by the
online marketplace to such seller.
b. The seller’s contact information.
c. A business tax identification number, or, if such seller
does not have a business tax identification number, a taxpayer
identification number. Any information contained in such
document shall be presumed to be verified as of the date of
issuance of such document.
d. A current working email address and phone number for such
seller.
2. The bank account or payee information required under this
section may be provided by the seller as follows:
a. To the online marketplace.
b. To a payment processor or other third party contracted by
the online marketplace to maintain such information, provided
that the online marketplace ensures that it can obtain such
information on demand from such payment processor or other
third party.
3. Acceptable forms of seller contact information include
the following:
a. With respect to a high-volume third-party seller that is
an individual, the individual’s name.
b. With respect to a high-volume third-party seller that
is not an individual, one of the following forms of contact
information:
(1) A copy of a valid government-issued identification for
an individual acting on behalf of such seller that includes the
individual’s name.
(2) A copy of a valid government-issued record or tax
document that includes the business name and physical address

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of such seller. Any information contained in such document
shall be presumed to be verified as of the date of issuance of
such document.
4. An online marketplace shall verify the information
collected under this section not later than ten days after
collection.
Sec. 3. NEW SECTION . 554E.3 Information updates.
1. An online marketplace shall do the following:
a. Periodically, but not less than annually, notify a
high-volume third-party seller on an online marketplace
platform of the requirement to keep any information collected
under this chapter current.
b. Require a high-volume third-party seller on an online
marketplace platform to, not later than ten days after
receiving the notice under this section, electronically certify
that the following:
(1) That the seller has provided any changes to such
information to the online marketplace, if any such changes have
occurred.
(2) That there have been no changes to such seller’s
information.
(3) That the seller has provided any changes to such
information to the online marketplace.
2. An online marketplace shall verify any change to such
information not later than ten days after being notified of the
change by a high-volume third-party seller under this section.
Sec. 4. NEW SECTION . 554E.4 Suspension.
In the event that a high-volume third-party seller does not
provide the information or certification required under this
chapter, the online marketplace shall, after providing the
seller with written or electronic notice and an opportunity
to provide such information or certification not later than
ten days after the issuance of such notice, suspend any future
sales activity of the seller until the seller provides such
information or certification.
Sec. 5. NEW SECTION . 554E.5 Data collection.
1. Data collected solely to comply with the requirements
of this section may not be used for any other purpose unless
required by law.

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2. An online marketplace shall implement and maintain
reasonable security procedures and practices, including
administrative, physical, and technical safeguards, appropriate
to the nature of the data and the purposes for which the data
will be used, to protect the data collected to comply with the
requirements of this section from unauthorized use, disclosure,
access, destruction, or modification.
Sec. 6. NEW SECTION . 554E.6 Disclosure requirements.
1. An online marketplace shall do the following:
a. Require a high-volume third-party seller with an
aggregate total of twenty thousand dollars or more in annual
gross revenues on an online marketplace, and that uses an
online marketplace platform, to provide the information as
specified in subsection 2 to the online marketplace.
b. Disclose the information described in this section
to consumers in a clear and conspicuous manner in the order
confirmation message or other document or communication made
to the consumer after the purchase is finalized and in the
consumer’s account transaction history.
2. A high-volume third-party seller subject to this section
shall disclose the following:
a. The full name of the seller, which may include the
seller’s name or seller’s company name, or the name by which
the seller or company operates on the online marketplace.
b. The physical address of the seller.
c. Contact information for the seller, to allow for the
direct, unhindered communication with high-volume third-party
sellers by users of the online marketplace, including a current
working phone number, a current working email address, or other
means of direct electronic messaging which may be provided to
the seller by the online marketplace.
d. When a high-volume third-party seller uses a different
seller to supply the consumer product to the consumer upon
purchase, and upon the request of an authenticated purchaser,
the information described in this section relating to any such
seller that supplied the consumer product to the purchaser, if
the seller is different than the high-volume third-party seller
listed on the product listing prior to purchase.
3. An online marketplace shall disclose to consumers in

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a clear and conspicuous manner on the product listing of the
high-volume third-party seller a reporting mechanism that
allows for electronic and telephonic reporting of suspicious
marketplace activity to the online marketplace.
4. If a high-volume third-party seller does not comply with
the requirements to provide and disclose information under this
section, the online marketplace shall, after providing the
seller with written or electronic notice and an opportunity to
provide or disclose such information not later than ten days
after the issuance of such notice, suspend any future sales
activity of the seller until the seller complies with the
requirements.
Sec. 7. NEW SECTION . 554E.7 Exceptions.
1. Subject to section 554E.6, upon the request of a
high-volume third-party seller, an online marketplace may
provide for partial disclosure of the identity information
required under section 554E.6 as follows:
a. If the seller certifies to the online marketplace that
the seller does not have a business address and only has a
residential street address, or has a combined business and
residential address, the online marketplace may disclose only
the country and, if applicable, the state in which such seller
resides; and inform consumers that there is no business address
available for the seller and that consumer inquiries should
be submitted to the seller by phone, email, or other means of
electronic messaging provided to such seller by the online
marketplace.
b. If the seller certifies to the online marketplace
that the seller is a business that has a physical address
for product returns, the online marketplace may disclose the
seller’s physical address for product returns.
c. If the seller certifies to the online marketplace that
the seller does not have a phone number other than a personal
phone number, the online marketplace shall inform consumers
that there is no phone number available for the seller and that
consumer inquiries should be submitted to the seller’s email
address or other means of electronic messaging provided to such
seller by the online marketplace.
2. If an online marketplace becomes aware that a high-volume

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third-party seller has made a false representation to the
online marketplace in order to justify the provision of a
partial disclosure under section 554E.6 or that a high-volume
third-party seller who has requested and received a provision
for a partial disclosure under section 554E.6 has not provided
responsive answers within a reasonable time frame to consumer
inquiries submitted to the seller by phone, email, or other
means of electronic messaging provided to such seller by
the online marketplace, the online marketplace shall, after
providing the seller with written or electronic notice and
the opportunity to respond not later than ten days after the
issuance of such notice, suspend any future sales activity of
such seller unless such seller consents to the disclosure of
the identity information required under section 554E.6.
Sec. 8. NEW SECTION . 554E.8 Enforcement —— penalties.
1. If the attorney general has reasonable belief that
an online marketplace is in violation of this chapter, the
attorney general has the sole authority to bring civil action
to provide for all of the following:
a. Enjoin further violations by the online marketplace.
b. Enforce compliance with this chapter.
c. Assess civil penalties in an amount not more than one
hundred thousand dollars.
d. Obtain other remedies permitted under law.
e. Obtain damages, restitution, or other compensation on
behalf of residents of the state.
2. This chapter shall not be construed to prevent the state
from exercising the power to conduct investigations, administer
oaths or affirmations, or compel the attendance of witnesses or
the production of documentary and other evidence.
3. The attorney general may adopt rules as necessary to
implement this chapter.
Sec. 9. NEW SECTION . 554E.9 Severability.
If any provision of this chapter or the application
thereof to any person or circumstances is held invalid, the
validity shall not affect other provisions or applications
of the chapter which can be given effect without the invalid
provisions or application and, to this end, the provisions of
this chapter are severable.

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Sec. 10. EFFECTIVE DATE. This Act takes effect January 1,
2023.
______________________________ ______________________________
PAT GRASSLEY JAKE CHAPMAN
Speaker of the House President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 2401, Eighty-ninth General Assembly.
______________________________
MEGHAN NELSON
Chief Clerk of the House
Approved _______________, 2022 ______________________________
KIM REYNOLDS
Governor