SHOP SAFE Would Crush Small Businesses, Prop Up Big Foreign Brands
The recent string of smash-and-grab burglaries at retail stores across the country has contributed to a spike in the proliferation of counterfeit goods online. Lawmakers, understandably, are feeling the pressure to crack down on crime and are right to protect consumers from potentially hazardous products.
But instead of preventing customers from purchasing stolen goods, the SHOP SAFE Act recently passed with the House version of America COMPETES sets up a nightmarish web of regulations for small online businesses and gives mega-corporations, especially those overseas, the tools they need to crush whomever they deem to be competition.
Legislators behind the SHOP SAFE Act are taking a complicated and misguided policy approach to protect consumers by reorienting copyright and trademark law previously established by overturning standing court precedent. If passed, the bill would adopt a guilty-until-proven-innocent attitude towards internet retailers, forcing legitimate small businesses that operate online to prove they aren’t selling stolen items.
The bill’s broad interpretation of trademark law would allow big-name brands to copyright basic colors, common phrases, and simple words. This means online sellers would have to “proactively” hunt down trademarked items to comply with SHOP SAFE’s hastily put-together and poorly-written policies. Small business owners aren’t seasoned trademark attorneys. They simply shouldn’t be expected to become experts on complex trademark regulations, nor should they spend valuable time and resources agonizing over hypothetical issues with their product that could potentially put them out of business.
Unfortunately, SHOP SAFE’s impossible compliance standards and burdensome bureaucratic regulations are only the beginning of the bad news for small online businesses.
To make matters worse, this legislation green lights big brands to bully their small online competitors. Since the bill places the onus on online sellers to take down copyrighted goods, large corporations can abuse SHOP SAFE’s expansive and overly-broad interpretation of trademark law to aggressively pursue smaller competitors that sell similar products, forcing them to back down out of fear or bogging them down with expensive litigation.
These aren’t theoretical problems – we’ve already seen what happens when lawmakers write misguided laws that give big corporations power over small businesses. Companies like Monster Cable are famous for finding and misusing loopholes in trademark law, and they’re willing to spend their time and money browbeating small companies to “protect” their brands.
Of course, counterfeiting is a serious issue, and it’s going to require serious solutions. However, we should be able to depend on our elected leaders in Washington to craft and pass well-thought-out legislation instead of reaching for policies that’ll do more harm than good.
The real beneficiaries of the SHOP SAFE Act aren’t the consumers that this bill is meant to protect. Right now, our small business community is already contending with rising inflation and a global supply chain crisis. Now Congress is threatening to pass legislation that would doom small online sellers and cement the status of big brand names. We need our leaders in Washington to protect small businesses. We need them to vote ‘no’ on the SHOP SAFE Act.
The Midwest Council is a non-partisan alliance of businesses throughout the Midwest. Its goal is to advance the Midwest by promoting the shared strengths and diverse economies of the region.
