SPONSORED:

It's time to require country of origin disclosures for products sold online

It's time to require country of origin disclosures for products sold online
© istock

Online consumers often lack a key piece of information when making a purchase: where a product was made. The Country of Origin Labeling Online Act, part of the U.S. Innovation and Competition Act currently pending in Congress, would require online retailers to disclose products’ country of origin. This bipartisan measure should be enacted in order to allow the same type of informed consumer choice as is available in brick-and-mortar stores and to fulfill the original purpose of the imported product marking requirements. 

Products imported into the U.S. are required to be physically marked with their country of origin. The marking has to be placed in a conspicuous location as legibly, indelibly and permanently as the nature of the item will permit. Items incapable of being marked directly or that are otherwise excused from direct marking, like eggs or works of art, have to be marked on their outermost packaging. The marking must indicate to the ultimate purchaser what the product’s country of origin was. This requirement originated with the Tariff Act of 1890, with the intent that consumers could inspect items before purchasing them. The reasoning was that consumers could use this information to buy products based on any preferences they had for foreign goods over domestic ones, or for goods of one foreign country over another. Failure to mark goods can cause an importer to incur additional import duties; obliterating or defacing markings can result in criminal penalties

But with online purchases, physical items aren’t available for inspection at the time of sale. Nor is there currently any requirement for country of origin to be disclosed on retail websites, and so this information is often unavailable to online customers. Only after a shopping decision is made does a purchased item arrive, allowing a customer to then physically examine it and learn the product’s country of origin. While customers can often return an item after making an online purchase, the decision to return is not necessarily equivalent to a decision to purchase, and the intended purpose of the marking requirements was to allow country of origin information to influence purchasing decisions. Research has shown that country of origin information can, in fact, influence consumers’ purchasing decisions for a variety of reasons, and can affect the willingness of consumers to pay higher prices. Without online country of origin disclosures, e-commerce consumers lack a key piece of information that they would otherwise be provided in a brick-and-mortar setting.

ADVERTISEMENT

The need for online country of origin disclosures is greater than ever. Online shopping rose dramatically during the pandemic; indeed, the senators who introduced the bill cited both the pandemic and the continual increase in e-commerce sales as motivating reasons for the legislation. Even if growth in e-commerce slows post-pandemic, online transactions represent a significant portion of total retail sales; according to the U.S. Census Bureau, e-commerce sales in the first quarter of 2021 comprised approximately 13.6 percent of total retail sales. 

Various online product disclosures are also required in other contexts. For example, the U.S. Consumer Product Safety Commission requires toy warning statements to be posted at online points of retail sale. Likewise, the Federal Trade Commission requires online retail advertising of wool and textile products to contain a statement about whether a product is either imported or of domestic origin.

Mandating online country of origin disclosures would close a major shortcoming of the current marking requirements, and it would allow for the type of informed consumer choice that the drafters of these provisions originally envisioned. This legislation has been supported by groups including the Alliance for American Manufacturing and the Coalition for a Prosperous America. It’s time to pass the Country of Origin Labeling Online Act and require country of origin disclosures for products sold online.  

Christine Abely is a faculty fellow teaching Contracts and Corporate Compliance at New England Law in Boston.