COOL Online Act
- Sponsor
- Sen. Baldwin, Tammy [D-WI]
- Committees
- Commerce, Science, and Transportation Committee (primary)
- Last action
- Jan 29, 2025
Bottom line
The COOL Online Act aims to increase transparency for consumers purchasing foreign-made products online by requiring clear disclosure of product origin and seller location, with specific exemptions and a framework for federal enforcement.
What it actually does
This bill mandates that internet websites conspicuously display the country of origin for new foreign products and the country of the seller's principal place of business. It includes specific exemptions for agricultural products, FDA-regulated food and drugs, used articles, and small sellers. The Federal Trade Commission is designated as the primary enforcement agency, and the bill requires an interagency agreement for consistent implementation.
Proponents argue
Proponents argue this bill empowers consumers by providing critical information about where products are made and who is selling them, enabling more informed purchasing decisions. They contend it helps level the playing field for domestic manufacturers and addresses a lack of transparency in the rapidly expanding online marketplace.
Opponents contend
Opponents might argue that these new disclosure requirements impose significant compliance costs and administrative burdens on online sellers, particularly those with extensive international product catalogs. They could also raise concerns about the practicality of verifying origin for multi-sourced products and the potential for these costs to be passed on to consumers.
The bill is concise and clearly written, allowing a reader to grasp its core provisions and implications within a short timeframe.
Section 2(a)(1)(A)
Mandatory Country of Origin and Seller Location Disclosure for Online Products
This provision makes it unlawful to sell, advertise, or offer for sale any product online that is required to be marked with a country of origin (under 19 U.S.C. 1304) unless the website description clearly indicates the product's country of origin (or countries for multi-sourced products) and the country where the seller's principal place of business is located.
Supporters argue
Supporters argue this empowers consumers to make informed choices, potentially favoring domestically produced goods or products from specific countries based on personal values or quality perceptions. It also helps level the playing field for domestic manufacturers by making origin information readily available.
Critics contend
Critics might contend that this adds an administrative burden to online sellers, potentially increasing costs and complexity for businesses, especially those dealing with a wide array of international products and diverse supply chains.
Tradeoffs
This provision balances the consumer's right to know about product origins and seller locations with the potential for increased compliance burdens on online businesses.
Section 2(a)(1)(B)
Exclusions for Certain Product Categories and Small Sellers
This section outlines specific categories of products and sellers that are exempt from the mandatory disclosure requirements. These include agricultural products already subject to other labeling laws, FDA-regulated food and drugs, used or previously-owned articles sold on marketplaces, and 'small sellers' defined as those with less than $20,000 in annual sales and fewer than 200 discrete sales.
Section 2(a)(2)
Manufacturer/Packer/Distributor Disclosure for Certain Non-Prescription Drugs
For non-prescription drugs that are required to be marked with a country of origin and are not subject to prescription drug labeling rules, the internet website description must conspicuously display the name and place of business of the manufacturer, packer, or distributor as it appears on the drug's physical label.
Section 2(a)(3)-(4)
Information Provision Obligation and Retailer Safe Harbor
This section places the obligation on manufacturers, importers, distributors, sellers, suppliers, or private labelers to provide the necessary origin and seller information to retailers. It also establishes a 'safe harbor' for retailers and marketplace sellers, meaning they are not in violation if they relied in good faith on false or deceptive information provided by a third party and took immediate corrective action upon notice.
Section 2(b)
FTC Enforcement and Interagency Agreement
Violations of the bill's disclosure requirements will be treated as unfair or deceptive acts or practices under the Federal Trade Commission Act, granting the FTC enforcement powers. The bill also mandates that the FTC, U.S. Customs and Border Protection (CBP), and the Department of Agriculture (USDA) enter into a Memorandum of Understanding (MOU) within six months to ensure consistent implementation and publish it for public guidance.
Defines 'small seller' as a seller with annual sales of less than $20,000 and fewer than 200 discrete sales, exempting them from the mandatory origin and location disclosure requirements.
Section 2(a)(1)(B)(iv)
Why it matters:This is standard legislative practice to define terms within the relevant section rather than a separate definitions section, but the specific thresholds are consequential for the bill's practical scope.
Case for: Supporters argue this threshold protects very small businesses and casual sellers from burdensome compliance costs, focusing regulatory efforts on larger commercial operations that have a greater market impact.
Case against: Critics might argue that even small sellers collectively contribute to a significant volume of online transactions, and their exemption could create a loophole where consumers still lack origin transparency for a substantial portion of goods.
Estimated impact: Exempts a potentially large number of very small online sellers from direct compliance, reducing the immediate regulatory burden on micro-businesses but also limiting the scope of transparency for consumers.
Defines a 'multi-sourced product' as a finished product where identical versions are produced in multiple countries, requiring disclosure of all countries of origin for such products.
Section 2(a)(1)(C)
Why it matters:This is standard legislative practice to clarify terms relevant to a specific provision, but its implications for compliance complexity are significant.
Case for: Proponents argue this ensures comprehensive transparency for complex global supply chains, preventing sellers from selectively disclosing origin information and providing consumers with a complete picture.
Case against: Opponents might argue that tracking and disclosing all possible countries of origin for identical multi-sourced products could be administratively complex, costly, and potentially confusing for both sellers and consumers.
Estimated impact: Increases the complexity of compliance for sellers dealing with products manufactured in various locations, potentially leading to more detailed but also more cumbersome disclosures.