Press Releases

Nadler, Johnson, Issa & Cline Introduce Bipartisan SHOP SAFE Act

House Judiciary Committee to Hold Hearing on SHOP SAFE Act on May 27th

Washington, May 20, 2021

Washington, D.C. - Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY), Subcommittee on Courts, Intellectual Property, and the Internet Chairman Henry C. "Hank" Johnson, Jr. (D-GA), Subcommittee on Courts, Intellectual Property, and the Internet Ranking Member Darrell Issa (R-CA), and Representative Ben Cline (R-VA) introduced the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce (SHOP SAFE) Act to protect consumers by stopping the online sale of harmful counterfeit products.

According to the U.S. Census Bureau, Americans spent $791.7 billion on e-commerce in 2020, up over 30% from 2019. As more consumers opt to shop online, they are increasingly vulnerable to the rising number of counterfeit goods sold on e-commerce platforms. The COVID-19 pandemic has also exacerbated this potential harm as the amount of time consumers spend online and the types of high-risk counterfeits available on these platforms have risen. The SHOP SAFE Act reduces the availability of harmful counterfeit products online by incentivizing platforms to engage in best practices for vetting sellers and goods, addressing repeat counterfeiter sellers, and ensuring consumers have access to relevant information at the time of purchase. 

“As American consumers increasingly turn to the Internet to shop, counterfeiters have kept pace. To stop this rising trend in online sales of unsafe counterfeit products, the law must keep pace too,” said House Judiciary Committee Chairman Nadler. “I am proud to reintroduce the bipartisan SHOP SAFE Act, which will protect consumers by making platforms appropriately responsible for harmful counterfeits sold through their websites by others and encouraging them to go on the offensive in the fight against fakes.”

“As more Americans move online for their everyday shopping – especially during the pandemic – it’s time that we recognize and combat counterfeiters who have moved online, too,” said Subcommittee on Courts, Intellectual Property and the Internet Chairman Johnson. “Some reports estimate that about one-quarter of U.S. consumers have unknowingly purchased a counterfeit product online. It’s not just fraud, but it poses serious health and safety concerns. The SHOP SAFE Act is a good first step to countering this troubling trend and protecting American consumers.”

“For too long, millions of Americans have been duped into purchasing counterfeit goods on online marketplaces,” said Subcommittee on Courts, Intellectual Property, and the Internet Ranking Member Issa. “Under current law, platforms that allow third-party sellers to peddle counterfeit products are seldom held responsible for this frequent fraud and damage to consumer confidence. This legislation ensures that online platforms hosting third-party sellers are incentivized to engage in best practices for screening and vetting sellers and products, addressing repeat counterfeiter sellers, and ensuring that consumers have access to valid information when they make their purchases online.”

“As online retailers continue to grow and increasingly work with unverified third-party vendors, Congress must take steps to protect American consumers from both physical and financial harm,” said Representative Cline. “The SHOP SAFE Act will help ensure consumers get the product they paid for and protect them by curbing the flow of counterfeit products, many of which come from China. It would also aid in dismantling revenue sources for terror organizations who rely in-part on the sale of fake goods to fund their operations.”   

The SHOP SAFE Act will:

  • Establish trademark liability for online marketplace platforms when a third-party sells a counterfeit product that poses a risk to consumer health or safety and that platform does not follow certain best practices;
  • Incentivize online platforms to establish best practices such as vetting sellers to ensure their legitimacy, removing counterfeit listings, and removing sellers who repeatedly sell counterfeits; and
  • Call for online marketplaces to take steps necessary to prevent the continued sale of counterfeits by the third-party seller or face contributory liability for their actions.

On Thursday, May 27th, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet will hold a hearing on the SHOP SAFE Act and efforts to stem the rising tide of unsafe counterfeit products online. 

A copy of the full bill text can be found here

A one-pager on the bill can be found here.  

A section by section analysis of the bill can be found here