Internet group sues Georgia to block law requiring sites to collect data on sellers

An Internet trading group is suing the state of Georgia to block a law that would require online classified sites to collect data on major sellers who advertise online but collect payment in cash or other offline means.

NetChoice, which represents companies including Facebook parent Meta and Craigslist, filed the lawsuit Thursday in federal court in Atlanta. The group claims that the Georgian law which is scheduled to take effect July 1, is blocked by a previous federal law, violates the First Amendment rights of sellers, buyers and online services, and is unconstitutionally vague.

The lawsuit asks U.S. District Judge Steven D. Grimberg to temporarily block the law's enactment and then permanently annul it.

Kara Murray, spokesperson for Georgia Attorney General Chris Carr, declined to comment. Carr, a Republican, is charged with enforcing the law, which carries civil penalties of up to $5,000 per violation.

Advocates have said the law is needed to further address the fight organized thieves who steal goods from stores and then advertise them online.

“This would be a deterrent to the criminals who come in and steal products from our retailers,” Ben Cowart, a lobbyist for the trade group Georgia Retailers, told a state House committee in March. “It would be a deterrent for them because it makes them accountable for what they do in terms of online sales.”

Georgia passed a law in 2022, which was followed by a law federal law in 2023requiring high volume merchants to collect electronic payments on platforms such as Amazon and eBay provide bank account and contact information to the platform. The rules apply to sellers who make at least 200 unique sales worth at least $5,000 in a given year.

The idea is that thieves will be less likely to resell stolen goods if authorities can track them down.

But retailers say the law should be extended to people who advertise goods online but collect payments in other ways. That includes online advertising services like Facebook Marketplace, Craigslist, Nextdoor and OfferUp.

“What wasn't taken into account were those marketplaces where you organize something, you meet someone somewhere and pay for it in Venmo or cash,” Brian Hudson, a lobbyist for Atlanta-based Home Depot and Rhode Island-based CVS, told me. , to a Senate committee. in February.

Supporters say the bill closes a loophole in the previous law. But NetChoice says Georgia is trying to force internet services to collect information about activities that take place offline, beyond the sites' reach. NetChoice calls the law “a virtually impossible requirement that all kinds of online services – including those that merely facilitate the speeches of third parties – investigate and retain information about sales that occur entirely off-platform.”

The trade group says Georgia should not enact the law because the 2023 federal law prevents states from writing further laws on the subject.

“Georgia's definition is much broader than Congress's because it covers not just transactions 'processed by an online marketplace,' but countless transactions where an advertising platform or other online service was merely 'used' – even if the sale took place completely outside the platform. or entirely in cash,” NetChoice’s attorneys wrote in the lawsuit.

The trade group also says the law violates the First Amendment by imposing obligations on websites that engage in speech, even if it is the paid speech of advertisements. The trade group also says the rule violates the right of sellers to speak and buyers to hear that speech.

“If this law goes into effect, it will create regulatory chaos, benefit certain incumbents at the expense of competition and the free market, and undermine free speech,” said Chris Marchese, director of the NetChoice Litigation Center, in a statement. “(This bill) does nothing to address the underlying problem – ensuring law enforcement has the necessary resources to put shoplifters in jail.”

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