Online Sellers’ Bill of Rights Act of 2026
- Sponsor
- Rep. Balint, Becca [D-VT-At Large]
- Committees
- Judiciary Committee (primary)
- Last action
- Jul 21, 2026
Bottom line
The bill aims to rebalance power between dominant online marketplaces and third-party sellers by imposing new transparency and due process obligations on platforms and expanding enforcement avenues for sellers.
What it actually does
This bill establishes a 'Bill of Rights' for third-party sellers on dominant online marketplaces, termed 'critical trading partners.' It mandates specific due process and transparency requirements for platforms regarding inventory and fund holds, policy changes, and investigations. The Federal Trade Commission (FTC) is directed to issue rules to implement these protections, and the bill creates both a private right of action and allows state attorneys general to enforce its provisions, explicitly overriding mandatory arbitration agreements.
Proponents argue
Supporters argue that the bill is essential to protect small and independent businesses from the unchecked power of dominant online platforms. They contend that platforms often suspend accounts, hold inventory, and freeze funds without sufficient notice or recourse, creating significant business risk for sellers. This bill would ensure fair treatment, transparency, and a level playing field, fostering a more competitive and stable online marketplace.
Opponents contend
Critics may argue that the bill could hinder platforms' ability to effectively combat fraud, counterfeits, and other illicit activities by imposing overly burdensome due process requirements. They might contend that increased compliance costs and potential litigation from the private right of action could lead platforms to raise fees for sellers, reduce services, or even limit the participation of third-party sellers, ultimately harming consumers and innovation.
The bill is short and relatively straightforward, allowing a reader to quickly grasp its core provisions and implications.
Section 3(a)(1)
Restrictions on Inventory Holds
This provision limits how long a critical trading partner can hold a seller's inventory to 30 calendar days. After this period, the platform must release the inventory unless it can demonstrate with a legally valid standard of proof that the goods are counterfeit or unlawful. Platforms must also notify sellers in writing within 72 hours of any hold, explaining the rationale and appeal procedures.
Supporters argue
Supporters argue this provision prevents platforms from arbitrarily seizing or holding seller inventory indefinitely, which can cripple small businesses. It ensures due process and forces platforms to have concrete evidence before disrupting a seller's operations.
Critics contend
Opponents might argue that the 30-day limit and burden of proof could make it harder for platforms to quickly respond to emerging threats of counterfeit or unlawful goods, potentially allowing more illicit products to circulate before platforms can act definitively.
Tradeoffs
This provision balances the need for platforms to maintain a safe marketplace against the need to protect sellers from arbitrary business disruptions. The tension lies in how quickly platforms can gather 'legally valid standard of proof' versus the immediate harm to sellers from holds.
Section 3(a)(2)
Restrictions on Fund Holds
This provision prevents critical trading partners from withholding a seller's funds for more than 30 calendar days. Funds must be disbursed unless the platform can demonstrate by a preponderance of evidence that the funds are derived from unlawful transactions. Similar to inventory holds, platforms must notify sellers in writing within 72 hours, providing the factual basis for the hold and an opportunity for appeal.
Section 3(a)(4)
Advance Notice for Policy Changes
This provision requires critical trading partners to provide sellers with at least 30 days' advance written notice before implementing any material policy changes. These changes include those affecting product eligibility, category or listing restrictions, compliance or documentation requirements, or commission and fee structures. This aims to give sellers time to adapt to new rules.
Section 3(a)(5)
Transparency in Investigations and Penalties
When a seller is under investigation, faces account deactivation, or listing suspension, the platform must provide specific details. This includes the exact policy violated, relevant facts and documentation, the proposed penalty, and clear steps for appeal or resolution, along with an anticipated timeline. The bill explicitly states that generic or templated responses are not sufficient.
Section 3(a)(6)
Presumption of Innocence
This provision establishes that no seller can be suspended, deactivated, or have inventory or funds withheld solely based on suspicion. The burden of proof to demonstrate a seller's violation of rules or laws explicitly lies with the critical trading partner. This means platforms must have evidence, not just suspicion, before taking punitive action.
Section 4(d)
Private Right of Action and Arbitration Override
This provision grants any person injured by a violation of this Act the right to bring a civil action in federal court. It explicitly states that this right exists 'notwithstanding any mandatory arbitration agreement,' allowing injured parties to recover threefold damages, costs of suit, and reasonable attorney's fees. This is a significant expansion of legal recourse for sellers.
Grants a private right of action to any injured person and explicitly overrides mandatory arbitration agreements, allowing civil actions in federal court for threefold damages, costs, and attorney's fees.
Section 4(d)
Why it matters:This is a standard legislative practice to place enforcement mechanisms in a dedicated section. However, the override of arbitration is a highly consequential detail that often appears in fine print of other bills, making its explicit inclusion here noteworthy.
Case for: Supporters argue that mandatory arbitration clauses in platform terms of service effectively deny sellers meaningful legal recourse, making the 'Bill of Rights' unenforceable. This provision ensures that sellers can genuinely seek justice in court.
Case against: Opponents contend that overriding arbitration will lead to a surge in litigation, increasing costs for platforms and potentially leading to inconsistent legal interpretations compared to a more streamlined arbitration process.
Estimated impact: Potentially significant increase in litigation against critical trading partners, with substantial financial implications due to treble damages and attorney's fees.
Defines 'critical trading partner' as any trading partner with the ability to restrict or impede a business user's access to its users/customers or to a tool/service needed to effectively serve its users/customers.
Section 5(1)
Why it matters:Placing definitions in a dedicated section is standard legislative practice. The functional definition is likely intended to be flexible and future-proof rather than tied to static metrics, but it requires careful interpretation.
Case for: Proponents argue that this functional definition is necessary to capture the true power dynamics of online marketplaces, regardless of their specific market share, and to ensure the bill applies to any platform that can exert outsized control over sellers.
Case against: Opponents might argue that the definition is overly broad and vague, creating uncertainty about which platforms are covered and potentially encompassing entities not intended to be regulated as 'critical trading partners,' leading to legal challenges.
Estimated impact: Determines the entire scope of the bill's applicability, potentially affecting a wide range of online platforms beyond the most obvious dominant players.
Defines 'legally valid standard of proof' as 'preponderance of the evidence or another applicable legal threshold as determined appropriate by the Federal Trade Commission.'
Section 5(3)
Why it matters:Definitions are typically grouped together. The inclusion of FTC discretion for 'another applicable legal threshold' grants the agency flexibility that could be significant in implementation.
Case for: Proponents argue that setting 'preponderance of the evidence' as a baseline ensures platforms must have solid justification for holds, while allowing the FTC flexibility to adapt to specific circumstances or types of violations is practical.
Case against: Opponents might argue that giving the FTC discretion to determine 'another applicable legal threshold' introduces uncertainty and could potentially weaken the protections if the FTC opts for a lower standard in certain cases, or conversely, make it too difficult for platforms to act if the standard is too high.
Estimated impact: Directly impacts the operational burden on platforms for justifying holds and the level of protection afforded to sellers against arbitrary actions.