12.28.21 – SIW –By Jim Provance Source The Blade, Toledo, Ohio
Proposed legislation would require online marketplaces to crackdown on ORC gangs using their platforms
COLUMBUS — A Perrysburg Township police cruiser was recently parked at a Walmart on the alert for organized retail theft sprees that have plagued brick-and-mortar stores in the community.
Suddenly, a woman came running out of the Kohl’s store across the street with a full shopping cart to begin throwing its clothing contents into a vehicle where an accomplice was waiting. Both were from Toledo.
“This is right along [Route] 20, all these big box stores,” said Rep. Haraz Ghanbari (R., Perrysburg), who was on a ride-along with police that day. “Every day — whether it’s Kohl’s, Walmart, or Home Depot, you name it — these people are pretty brazen.”
The suspects had used a magnetized tool to remove security tags. When arrested, one of the suspects said she had planned to give the stolen items as Christmas presents.
But often such items stolen from bricks-and-mortar retail stores end up on online marketplace platforms to be sold at unrealistically lower prices to unsuspecting consumers looking for bargains.
Reacting to such organized theft rings, including the more recent phenomenon of smash-and-grabs, as well as the sale of counterfeit knock-offs, the Ohio House and Senate recently passed separate bills requiring online marketplaces to know exactly who that “high-volume seller” is using their platforms. And then those marketplaces would have to make some of that information available to buyers.
Shortly before recessing for the holidays, the House voted 75-20 for House Bill 272, sponsored by Mr. Ghanbari and Rep. Phil Plummer (R., Dayton). The Senate later unanimously passed Senate Bill 184, sponsored by Sens. George Lang (R., West Chester) and Michael Rulli (R., Salem).
The two chambers will have to decide which of the slightly differing bills to send to Gov. Mike DeWine’s desk when they return to the Statehouse in January.
“Our biggest thing is we don’t want criminal elements coming into our community,” said Perrysburg Township Police Lt. Matt Gazarek.”If we proactively stop these people, they will go back and spread the word that you’ll get caught out there.”
The bills are supported by traditional retailers — big names such as Walmart, Home Depot, and Walgreens — that seek to level the playing field with sometimes faceless online competitors that suspiciously undercut their prices. They hope to make themselves less of a theft target.
But the digital marketplace — including names such as eBay and Etsy — has pushed back, arguing that the bills would place a regulatory burden on legitimate small businesses that depend on online sales while having little direct impact on the actual crime of stealing from store shelves.
“While we share the goal of protecting consumers and curtailing organized retail crime, this bill does little to achieve that goal and instead imposes regulations that will discourage Ohio small businesses and entrepreneurs from increasing their sales on online marketplaces,” the Coalition to Protect America’s Small Sellers, which counts eBay and Etsy among its members, said in testimony submitted to the House Commerce and Labor Committee.
“We are also concerned that the bill forces these sellers to choose between compromising private information or suspending sales on online platforms,” it said. “We do not believe small businesses should be forced to make this choice, certainly not now as many are struggling to remain open.”
House Bill 272 would define a “high-volume seller” as one who, over the course of one year, has made at least 200 sales worth $20,000 or more via an online marketplace such as Amazon, Facebook, or eBay. Once that threshold is surpassed, the marketplace would have 10 days to obtain such information as the seller’s name, contact information, and banking and tax information.
The online marketplace must then make the nonconfidential details — such as name and contact information — of those sellers available to their customers via digital confirmations of orders.
Failure of a seller to comply could lead to a ban from the platform.
The state attorney general could sue as the office would with other consumer law violations, but it would bar local governments from passing laws that differ from or go further than state law.
The 20 “no” votes in the House crossed party lines. The sole negative votes from northwest Ohio were cast by Reps. Lisa Sobecki and Paula Hicks-Hudson, both Toledo Democrats.
Rep. Jeff Crossman (D., Parma), a candidate for attorney general and one of the no votes, said the bill takes the current responsibility of businesses to provide information to the secretary of state’s office and instead requires online entities to collect it.
“I don’t understand the willingness to trust Big Tech here,” he said on the House floor. “We don’t trust them with other things, so I don’t understand why we want to trust a company that doesn’t want to do the job.”
He also took issue with a provision barring individuals from bringing their own lawsuits against sellers in local courts.
“Quite frankly, it’s a much more cost-effective mechanism than relying on the Ohio attorney general’s office that’s already overloaded with consumer protection cases,” he said.
Lieutenant Gazarek said Perrysburg Township’s location at a confluence of interstates makes it attractive to out-of-state organized theft rings. They can prey on desperate individuals such as the drug-addicted, putting them on the front lines in stores while accomplices wait in the parking lot, ready to flee at the first sign of trouble and literally leave the thief inside holding the bag.
“It’s much like the dope game,” he said. “We try to get to the kingpin, the next guy. But a lot of people don’t want to roll over on anybody.”
First Published December 27, 2021, 2:31pm