On Wednesday, California’s Department of Consumer Affairs said it will consider taking legal action against several companies that are seeking to stop state regulators from enacting a sweeping online retail regulation.
The department, which is responsible for overseeing California’s nearly 500 online retailing companies, announced in May that it was considering issuing a formal notice of intent to sue the three largest companies in the state, claiming that they are violating the state’s online retail regulatory law by refusing to provide consumers with the information they need to make informed purchases.
The Department of Commerce, which regulates the online retail industry, said in a statement Wednesday that the three companies have violated California’s rules by not complying with its requests to provide information about sales and other transactions to consumers.
The department is now considering legal action that could lead to a temporary halt to the implementation of the state regulations.
The three companies include the real estate brokerage REI and Home Depot, the home furnishings retailer Home Depot Inc. and the realtor RE/MAX.
They were the first companies to receive letters from the department in May, saying they had violated the state law by not providing consumers with data that could be used to make better informed decisions about buying.
The companies have argued that complying with the department’s request would cause their businesses to be placed under federal and state scrutiny and would cause them to lose millions of dollars in sales revenue.
The state’s new consumer protection agency, the Division of Consumer Finance, launched the program to address this problem last year and has been trying to implement online retail regulations since then.
The program was supposed to last for two years and require online retailers to comply with certain laws and regulations, including providing customers with the ability to see their credit score and to check whether they’re being charged a false credit card charge.
The new law was supposed have the potential to create tens of thousands of jobs, according to the Department of Finance.
But that program has proven to be extremely controversial, with critics alleging that it would allow banks and credit card companies to unfairly charge consumers for goods and services, thereby reducing their overall financial security.
Critics have also raised concerns about whether the online sales rules would lead to more retail stores opening up, which would lead directly to higher prices for consumers and ultimately lower the prices they pay for goods.