California’s New Law Changes the Online Selling Game Starting This July
California lawmakers have passed Senate Bill 1144 aimed at cracking down on the sale of irregular merchandise through online marketplaces. SB 1144 will take effect on July 1, 2025. The measure strengthens existing legislation by requiring increased transparency and accountability from sellers and marketplace platforms.
Under SB 1144, the definition of “high-volume third-party sellers” expands significantly. Previously, only sellers whose transactions were directly processed by online marketplaces fell under regulatory scrutiny. Now, sellers conducting 200 or more transactions totaling at least $5,000 in gross revenue within any continuous 12-month period during the past two years must register their identities and contact information with online marketplaces.
The expansion means thousands more sellers will be required to disclose their identities publicly, making it harder for stolen goods to be anonymously traded online.
Additionally, online platforms must adopt and maintain explicit policies prohibiting irregular merchandise. If marketplaces become aware—or should reasonably suspect—that such goods are being sold, they must report the activity immediately to local, regional, or state law enforcement. This mandatory reporting requirement aims to facilitate rapid responses from authorities and curb online avenues for organized theft.
Enforcement of SB 1144 will broaden significantly, allowing district attorneys, city attorneys, and county counsels to bring legal actions against platforms or sellers violating the law. Previously, such actions were primarily handled by the state’s Attorney General. Penalties include civil fines of up to $10,000 per violation, with the possibility of injunctions and other preventive measures aimed at compliance.
The legislation received strong backing from retail and local government organizations, including the California Retailers Association (CRA), the League of California Cities (Cal Cities), and the California State Association of Counties (CSAC). Supporters argue that the bill effectively enhances consumer protections.
However, some online marketplace platforms, notably OfferUp Inc., opposed the bill, stating it conflicts with the federal INFORM Consumers Act. Critics contend SB 1144 places excessive compliance burdens on smaller marketplaces and classified ad platforms, potentially restricting legitimate small-business activity.
SB 1144 is scheduled to take effect on July 1, 2025. As the nation’s largest state economy, California’s new law may set precedent, potentially influencing similar legislation across the country as policymakers grapple with the growing challenge of unregulated retail sales in the digital age.