Small and medium businesses (SMBs) increasingly use and rely on online platforms to reach consumers. To protect users making transactions on their websites, online platforms create and enforce marketplace rules to address fraudulent activity. When a platform takes action against a seller, such as restricting an account, listing, inventory, or payment, legitimate sellers should be told why and given a meaningful opportunity to respond. This is the premise underlying the recently introduced Online Sellers’ Bill of Rights Act of 2026 (H.R. 9799), which seeks to protect online sellers. But the bill is far broader than its title suggests, and could make it harder for platforms to protect consumers from fraud and unsafe products.
H.R. 9799 would limit certain inventory and fund holds to 30 days, require detailed explanations of account and listing actions, and mandate advance notice of material policy changes. It would also authorize enforcement by the Federal Trade Commission (FTC) and state attorneys general, and create a private right of action providing treble damages, attorneys’ fees, and litigation costs. These provisions could affect services far beyond conventional online marketplaces by opening many businesses to potentially frivolous claims and increasing legal costs, likely to be passed on to consumers.
A Wide-Ranging Bill With an Unclear Target
Despite its marketplace-focused title, H.R. 9799’s broad definition of “critical trading partner” would cover any company or platform that can restrict or impede a business user’s access to customers or to a tool needed to serve them. This could cover unintended companies such as app stores, payment processors, business software providers, and logistics providers, even when they do not operate retail marketplaces or control physical inventory. Covered companies would be subject to legal requirements governing account restrictions, inventory and fund holds, and more. An operative definition lacking an objective threshold (e.g., based on marketplace size, transaction volume, revenue, seller dependence, or market power) could subject services of widely varying sizes and functions to the same obligations and potential liability.
That raises a basic question: whom is the bill intended to regulate and protect? A law framed around protecting marketplace sellers should not leave distinct digital services guessing whether rules designed for inventory, seller funds, and retail fulfillment apply to them.
Modern Retail Is Increasingly Competitive as SMBs Embrace Omnichanneling
The bill’s sponsors argue the measure is needed to protect sellers from “[dominant] platforms’ ability to steer shoppers to certain products and sellers.” But this framing misses the competition and variety that characterize modern retail.
As leading retailers continue to invest in their respective stores and logistics networks to better serve customers, retail competition remains fierce. In 2025, Walmart accounted for over 11 percent of total US retail sales, while Amazon came in second at 10.34 percent, marking the first time both retailers topped the 10 percent threshold. Consumer shopping is becoming increasingly fragmented across resale platforms, off-price chains, cross-border marketplaces, social commerce, and rapid-delivery services.
SMBs are responding to this fragmentation by embracing omnichanneling practices to increase their customer reach. A March 2025 survey of 1,500 U.S. SMBs selling goods online found that 70 percent used multiple sales methods, including independent web stores, wholesale, physical retail, and online marketplaces. Even among businesses that used online marketplaces, the average respondent used four different marketplaces.
Fair seller processes matter, but Congress should not assume that businesses uniformly depend on a few “dominant” services. Any federal framework should account for the varied and evolving ways businesses reach customers.
Seller Protections Should Not Weaken Marketplace Safeguards
H.R. 9799 would limit certain inventory and fund holds to 30 days and restrict action taken “solely on the basis of suspicion.” This could require a platform to release goods unless it satisfies the bill’s specified evidentiary standard. The separate restriction could make it harder to maintain precautionary safeguards during an active investigation.
Marketplaces frequently need to act before an investigation has produced evidence sufficient to satisfy a formal legal burden of proof. A product may be counterfeit, stolen, recalled, unsafe, improperly certified, or connected to fraud. Authenticity testing, obtaining information from rights holders, product-safety reviews, and law-enforcement inquiries may take time.
The bill’s disclosure requirements create another risk. When investigating or restricting a seller’s account or listing, a covered service could be required to provide supporting documentation. However, the bill lacks appropriate safeguards ensuring those requirements do not force disclosure of proprietary fraud-detection signals, confidential information supplied by rights holders or other reporting parties, or details of an ongoing law-enforcement matter. Bad actors could exploit that information to evade detection, retaliate against reporting parties, or compromise an ongoing investigation.
Congress should not prescribe rules that prevent immediate action when a platform identifies a recall, a new fraud scheme, or another urgent risk. Advance notice is sensible for ordinary fee or policy changes; it is not workable where law or consumer safety requires prompt action.
A Litigation-Heavy Enforcement Framework
To enforce its requirements, the bill would direct the FTC to establish implementing standards, and characterize violations as unfair methods of competition. The bill also authorizes legal actions by state attorneys general, and creates a private right of action, with up to treble damages, plus attorneys’ fees and litigation costs.
Rather than leaving enforcement in enforcers’ hands, a private right of action would expose covered services to legal claims over fact-specific decisions involving seller documentation, account restrictions, inventory, notices, and policy changes. Treble damages and fee shifting would create strong incentives to bring weak or opportunistic claims against covered services. Defending against frivolous suits would raise costs, likely passed on to marketplace sellers and consumers.
A Better Path Forward
Unless narrowed, H.R. 9799 risks applying marketplace-specific rules to services far removed from retail, weakening safeguards against fraud and unsafe products, and exposing fact-specific enforcement decisions to costly third-party litigation. Congress should ensure that any seller-protection framework is targeted, flexible, and preserves good-faith marketplace enforcement. Fair treatment for legitimate sellers and effective marketplace safeguards are not competing goals. A workable bill should protect both.