California law wants marketplaces to collect digital ID data from high-volume sellers

Democratic lawmakers in the golden state are fast-tracking a bill that would force online marketplaces to start collecting identity data such as bank account and tax ID numbers from high-volume sellers who advertise online but transact offline, according to a report from ABC News.

If SB 1144 passes, users who sell large volumes of goods through third-party websites such as Craigslist, Facebook Marketplace and NextDoor will be required to provide identity verification. Data could include biometrics or personal information such as bank account details, Social Security numbers or drivers licenses.

The proposal has predictably raised the ire of tech lobby groups, including TechNet, “the national, bipartisan network of technology CEOs and senior executives that promotes the growth of the innovation economy,” which argues that unnecessary data collection will harm the economy.

The group’s Senior Vice President of State Policy and Government Relations David Edmonson says the imposition of identity verification rules will force businesses out of California. “I imagine most sellers will have to think long and hard about whether or not they want to provide that information to the online marketplace just to be able to sell, you know, household products,” he says.

The bill is ostensibly intended to crack down on the resale of stolen merchandise, and will apply to sellers who make at least $5,000 profit and engage in at least 200 transactions in a year. It is part of a legislative package of 14 bills to address retail theft in the state – which the California Retailers Association says has reached “crisis levels.” Its supporters, which include some big box retailers, say collecting sellers’ data would help prevent organized theft rings from reselling stolen goods and close a loophole in the rules around offline transactions.

Other arguments against the bill say it will benefit those same big box retailers at the expense of smaller online classified sites. Or, that the requirement is so vague that it could end up applying to sites and users it doesn’t intend to target. Or, that the exclusion of offline transactions is no loophole, but a design feature, intended to limit the scope of regulation.

The tale of the tape essentially hashes out along familiar lines. Big Tech says rights are being violated and businesses threatened; and besides, how is it possible to track every single user transaction? Big Law law says police need to collect data to crack down on crime; and besides, isn’t collecting data what Facebook and other online marketplaces are best at?

The expedited bill is expected to hit Governor Gavin Newsom’s desk within weeks.

Article Topics

biometrics  |  California  |  digital identity  |  identity verification  |  legislation  |  secure transactions