Online Sellers Bill Would Make Marketplaces Less Safe

By SBE Council at 20 August, 2026, 12:34 pm

By Karen Kerrigan –

The recently introduced Online Sellers’ Bill of Rights Act of 2026 (H.R. 9799) sounds like legislation small businesses should welcome. Its stated goal is to protect independent sellers from unfair treatment by large online marketplaces. But good intentions do not necessarily produce good policy. In the case of H.R. 9799, the legislation would interfere with marketplace practices that protect legitimate small businesses and consumers while creating new opportunities for counterfeiters and bad actors.

The bill would impose a series of federal mandates governing how large online marketplaces manage their relationships with third-party sellers. The bill specifies any “critical trading partner,” which can include online platforms, payment processors, software vendors, app stores, and software vendors, among others. Its reach is quite broad.

Among the various measures in H.R. 9799, online platforms would face new requirements before suspending sellers, holding inventory, or withholding funds. Sellers would effectively be presumed innocent, while platforms would carry the burden of proving violations. The legislation also creates significant new litigation exposure, including private lawsuits and potential treble damages.

This is an extraordinary degree of government intervention into the management of America’s private online marketplace ecosystem.

A Roadmap for Bad Actors

The bill’s requirements could produce troubling and costly outcomes for legitimate small businesses whose products, brands and reputations are threatened by counterfeiters.

Online marketplaces must constantly identify fraudulent sellers, counterfeit products and potentially unsafe merchandise. Effective enforcement sometimes requires platforms to act quickly while investigating suspicious activity. H.R. 9799 could make that considerably more difficult by restricting actions based on suspicion, imposing deadlines on inventory and fund holds, and requiring platforms to disclose detailed information about investigations.

The unintended consequence could give sophisticated bad actors a roadmap for evading enforcement and additional time or opportunity to continue harming legitimate sellers.

For a small business, a counterfeit product is not merely a marketplace violation. It can mean stolen intellectual property (IP), lost sales, damaged customer trust and years of painstaking brand-building put at risk. Small firms often lack the legal teams, financial resources and enforcement capabilities of larger companies, which makes strong and responsive marketplace enforcement particularly important to them.

That turns the concept of a “Sellers’ Bill of Rights” on its head. Legitimate entrepreneurs have rights, too. Including the ability to protect their IP, brands and customers from counterfeiters.

No Widespread Market Failure

There is another problem with the legislation. The marketplace “failure” some in Congress are attempting to fix is difficult to reconcile with what small businesses themselves are reporting about the value and benefit of online marketplaces.

SBE Council regularly surveys small businesses about their use of technology, digital platforms, e-commerce and the challenges they face. Our 2026 Small Business Technology Use Survey revealed extraordinary satisfaction with digital platforms and the choices – both online and off – that small business owners have for selling their goods and services. In fact, 93% use multiple channels to generate sales and 47% plan to add new channels this year.

The use and growth of digital channels and tools demonstrate confidence and success in partnering with marketplaces of all varieties for selling to and engaging with customers. This is a market ecosystem that is working, one that responds to the needs of small business sellers and their customers.

Amazon sellers are particularly positive. According to the survey, an extraordinary 98% of small sellers report the platform’s pricing structure is fair and allows them to compete, and 94% say Amazon provides significant platform support for small business sellers. Our previous surveys have similarly found high levels of satisfaction with the tools, services and support Amazon provides small sellers.

The concerns H.R. 9799 purports to solve simply have not surfaced as a significant problem in our surveys of small business owners.

That does not mean marketplaces are perfect or that individual sellers never encounter legitimate disputes. They do. Platforms have every incentive to continually improve their appeals processes, communication and seller support. Competition among marketplaces – and the ability of entrepreneurs to use multiple sales channels – creates pressure for continuous improvement.

Isolated disputes do not justify Washington imposing a new federal regulatory and litigation regime across dynamic online marketplaces. Moreover, small emerging marketplaces would face significant and costly barriers to entry that would undermine competition, thereby entrenching existing players.

Congress Must Not Create New Problems for Small Business

Congress should be especially careful about legislation that substitutes government rules for business decisions involving fraud, counterfeiting and marketplace integrity. Before intervening, policymakers should demonstrate a widespread market failure and carefully consider whether their proposed solution could actually make matters worse for the entrepreneurs and small businesses they intend to help.

With H.R. 9799, that case has not been made. Rather than creating new protections for legitimate small sellers, the Online Sellers’ Bill of Rights could end up providing some of its strongest protections to the very bad actors small businesses need marketplaces to stop.

Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council.