Requiring sellers to have a business license would get marketplaces out of liability with no cost to anyone

The INFORM Act requires marketplaces to verify only those sellers who qualify as "high volume" sellers, those who enter into at least 200 sales transactions in a 12-month period with a minimum total of $5,000.157 To ensure that consumers do not fall victim to sellers with new accounts or who have yet to meet the [*234] minimum sale requirements, marketplaces should require all third-party sellers (not just "high volume" sellers) to provide some proof of identification when the seller creates their marketplace account. To ensure legitimacy, marketplaces should require sellers to provide a business tax ID or business license number as part of the seller registration process.158 Requiring a business license or business tax ID would add an extra step easily met by current, legitimate business owners, and registering a new business is relatively simple and inexpensive.159 Opponents of this requirement argue that the beauty of the online marketplace is that it allows any enterprising individual to participate and sell their wares, and by requiring a business license, the government is limiting who can sell.160 This argument ignores the fact that both brick-and-mortar retailers, as well as online store retailers, must possess a valid business license. Why should a seller on a virtual marketplace be held to a different standard? Admittedly, there is still a risk of sellers creating a false business and disguising themselves as a new, valid business entity to "circumvent [the] vetting process."161 Assuring that seller accounts are accurate and trustworthy requires ongoing verification and auditing of seller accounts to ensure compliance.162 This is a best practice that many marketplaces currently implement and the INFORM Act now requires.163 Requiring a business license or business tax ID for all sellers would ensure an extra layer of identity verification during the licensing process and add an extra deterrent to those who are looking for an easy way to access the market to sell fake goods.