PASS Coalition Praises Recommerce Caucus, But Do They Really Have Small Seller Interests At Heart?
The Coalition to Protect America’s Small Sellers (PASS Coalition) is praising the launch of a newly created bipartisan Recommerce Caucus, led by Congresswomen Nicole Malliotakis (NY-11) and Sydney Kamlager-Dove (CA-37) - but do they really have small business interests at heart is this just corporate lobbying by another name?
PASS Coalition Endorses Bipartisan Recommerce Caucus to Advance Economic Opportunity and Sustainability in America’s Secondhand Market
Washington, D.C. — The Coalition to Protect America’s Small Sellers (PASS Coalition) today praised the creation of the newly launched bipartisan Recommerce Caucus, led by Congresswomen Nicole Malliotakis (NY-11) and Sydney Kamlager-Dove (CA-37).
The caucus is dedicated to promoting policies that support the growing economy of pre-owned, refurbished, and secondhand goods — a sector projected to reach $1.04 trillion globally by 2035 and already embraced by more than half of U.S. consumers.
“As a coalition representing the voices of small sellers and digital marketplaces nationwide, we applaud Representatives Malliotakis and Kamlager-Dove for creating the Recommerce Caucus which will highlight policies affecting entrepreneurs and consumers alike,” said Chris Lamond, Executive Director of the PASS Coalition.
“With the recommerce industry continuing to grow exponentially, this caucus serves as an important platform to inform policy makers on how to empower small businesses to ensure the secondhand economy continues to thrive and deliver meaningful benefits to millions of Americans.”
Small sellers across a variety of online platforms will likely cheer for many of the positions PASS and the Recommerce Caucus are championing - like opposing the SHOP SAFE Act and advocating for returning the 1099-K reporting threshold to it's previous levels.
However, when you look at the members page for PASS, it becomes clear this isn't a group for sellers - it's a powerful lobbying coalition for the marketplaces themselves including eBay, Etsy, Mercari, Poshmark, OfferUp, Red Bubble and more.
As with many of corporate lobbying efforts, publicly these marketplaces and PASS may say they are fighting for small sellers and consumers but that doesn't mean the companies doesn't have their own vested interests in the issues they choose to support, oppose, or simply stay silent about.
eBay, Etsy, Mercari, Poshmark and other marketplaces which depend on third party sellers to provide inventory are in a particularly precarious position with billions of dollars in annual GMV from consumer to consumer sales of pre-owned goods on the line.
If that inventory is no longer sold online due increased burdens of tax reporting or identity verification and selling fetting requirements, that means less sales (and less fees collected) for these platforms.
Beyond that, there are significant costs of overhead, compliance and reporting for the marketplaces when tax, identification and other legal or regulatory requirements expand to include a larger portion of their seller base - costs those companies and their shareholders would of course rather not have to bear.
So in that sense, support for increasing the 1099-K threshold or favoring the INFORM Consumers Act over the SHOP SAFE Act is not an altruistic position for these companies to take, it's simply self preservation.
These multi-billion dollar companies often use their small business sellers for opportunistic photo-ops meeting with federal and state politicians, masking corporate lobbying in mom and pop Main Street appeal.
For example, eBay recently visited lawmakers in Illinois to urge them not to pass proposed legislation which would hold both "high-volume" online sellers and ecommerce marketplaces responsible for product liability claims.
Liz Morton
eBay's press release about the event positioned the lobbying efforts as advocating for both buyers and sellers who they say will be hurt by this legislation if it passes, but of course the ~$31 Billion corporation obviously has its own reasons for wanting to avoid potential product liability since they have much deeper pockets than most sellers for plaintiffs to try to dig into.
Those questions about product liability and consumer harm often bump up against Section 230 of the Communications Decency Act of 1996, the so called "26 words that created the internet," which provides broad immunity to online platforms for content posted by their users.
eBay won the dismissal of a potential ~$2 Billion lawsuit filed by the EPA seeking to hold the company liable for the sale of dangerous and illegal goods through their site on Section 230 grounds last year, and other marketplaces, like Walmart, have used the same argument as a defense for why they believe they shouldn't be liable for enabling and profiting from allowing massive amount of fraud to proliferate across their platform.
And as these marketplaces increasing stuff AI into every part of the user experience for both buyers and sellers, Section 230 will continue to be an important "get out of liability free" card that they will lobby hard to retain.
Liz Morton
Similarly, eBay and other PASS members often lobby for legislation like the Combating Organized Retail Crime Act (CORCA) which would focus legal and regulatory scrutiny on brick and mortar shoplifting while ignoring much larger online fraud and digital theft problems that plague these marketplaces.
Liz Morton
Importantly, it's not just the spectre of direct fines or lawsuits that has these marketplaces clamoring to hold onto the Section 230 shield at all costs - if that protection went away, it could expose just how much of their publicly reported Gross Merchandise Volume/Sales comes from illegal activity, potentially impacting stock prices and leading to shareholder action and/or SEC investigations for the publicly traded companies like eBay and Etsy.
But the most important point that PASS ignores is this - often the biggest obstacles, burdens, and threats small sellers face don't come from regulators and legislators, they come directly from the large multi-billion dollar marketplaces that PASS really represents.
In 2022, Etsy sellers made a public relations splash by organizing a seller strike to protest increasing fees and unfair policies, resulting in the formation of real grassroots advocacy groups and alternatives like the Indie Sellers Guild and the Artisans Cooperative.
Liz Morton
From automated policy enforcement that often catches good sellers in the bot dragnet with no ability to appeal to unannounced changes that can suddenly band millions of items from sale on the site - many sellers would likely tell you that Etsy itself presents the largest obstacles on their path to small business success.
Liz Morton
Mercari sellers have been on a roller coaster ride for over a year as massive changes to the fee structure negatively impacted sales, and the company turned to deceptive, dark pattern practices to goose GMV in an effort to keep their Japanese shareholders happy at the expense of sellers on the platform.
Liz Morton
Poshmark made similar changes to their fee structure last year that were quickly reversed after massive seller pushback, but more recently has put in a place a heavy-handed and punitive policy which punishing sellers for deleting items from the platform - putting those who cross-list to multiple marketplaces in an untenable position.
Liz Morton
eBay has a long history of policies and practices which harm, obstruct or burden small sellers on their platform rather than help them succeed - including but not limited to a punitive seller rating system which financially benefits eBay, near daily technical issues which negatively impact sales, forced return policies and lack of control over key aspects of how sellers choose to run their businesses, and Promoted Listings advertising products with confusing and opaque attribution policies and dark pattern design practices aimed at extracting more cash for eBay with little return on investment for sellers.
Liz Morton
And of course, if sellers object to any of that, their ability to seek any legal remedies has been severely curtailed with eBay's recent user agreement which forces arbitration and requires sellers to waive their right to a jury trial for disputes.
Liz Morton
PASS is clearly on the side of their members on these subjects and likely will not be advocating or lobbying for any additional regulatory or legislative action to protect small sellers from those multi-billion dollar corporations - so who really does have seller interests at heart?
In addition to the Indie Sellers Guild and Artists Cooperative, the Responsible Online Commerce Coalition has been doing some fantastic work on behalf of online sellers in the last year, including urging the FTC to investigate eBay's acquisition of collectible trading card marketplace TCGPlayer for alleged violations of federal antitrust law, anticompetitive business practices, and overcharging sellers and consumers through unfair and deceptive junk fees.
Liz Morton
ROCC co-founder Amanda Lewis has been a steadfast advocate for both TCGPlayer and eBay sellers on this subject, drawing attention to the ways the acquisition has harmed sellers and consumers on both platforms - including eBay competing directly against 3rd party sellers on their own marketplace with no disclosure.
Most recently, ROCC submitted a statement to the Subcommittee on Antitrust, Competition Policy, and Consumer Rights shining a light on how established online marketplaces use algorithmic manipulation, forced arbitration and the significant power they hold over sellers to financially benefit themselves to the expense and detriment of small businesses who are dependant on their platforms.
Phoebe Sanders
My take for online sellers: don't let mega-corporations use you as a PR pawn - give PASS a pass and support organizations like ROCC and others who really do put small businesses first.
