Global: California Bill Mandates Digital ID Collection from High-Volume Sellers on Marketplaces

California’s Democratic lawmakers are swiftly advancing a bill that would require online marketplaces to collect identity data from high-volume sellers who advertise online but conduct transactions offline. According to a report from ABC News, this bill, SB 1144, mandates that platforms such as Craigslist, Facebook Marketplace, and NextDoor gather information like bank account details and tax ID numbers from these sellers.

If the bill passes, users who sell large volumes of goods through these third-party websites will need to provide identity verification. This data could include biometrics or personal information such as Social Security numbers or driver’s licenses.

The proposal has drawn criticism from tech lobby groups, including TechNet, a national, bipartisan network of technology CEOs and senior executives promoting the growth of the innovation economy. TechNet argues that this additional data collection is unnecessary and could harm the economy. David Edmonson, TechNet’s Senior Vice President of State Policy and Government Relations, contends that the identity verification requirements will drive businesses out of California. “Most sellers will have to consider whether they want to provide such personal information to the online marketplace just to sell household products,” he says.

The bill aims to combat the resale of stolen merchandise and targets sellers who make at least $5,000 in profit and conduct at least 200 transactions annually. It is part of a legislative package of 14 bills designed to address retail theft in California, which the California Retailers Association describes as having reached “crisis levels.” Supporters, including some large retailers, argue that collecting seller data will help prevent organized theft rings from reselling stolen goods and close a loophole concerning offline transactions.

Opponents of the bill claim it favors large retailers at the expense of smaller online classified sites. They also argue that the requirement is too vague and could inadvertently apply to unintended sites and users. Additionally, some argue that excluding offline transactions is a deliberate design feature to limit regulatory scope.

The debate follows familiar lines: Big Tech argues that the bill infringes on rights and threatens businesses, questioning the feasibility of tracking every user transaction. On the other hand, law enforcement advocates argue that data collection is essential for crime prevention, pointing out that platforms like Facebook already specialize in data collection.

The expedited bill is expected to reach Governor Gavin Newsom’s desk within weeks.