New York bill would require warning before online seller suspensions

A proposed New York bill could force online marketplaces to give third-party sellers two weeks’ notice before certain suspensions and add new appeal rules. The measure has passed the state Senate and is now pending in the Assembly.

Why it matters: - Third-party sellers that depend on one marketplace could get time to fix issues before a suspension cuts off sales and disrupts fulfillment. - The proposal could create a clearer process for notices, documentation, and appeals when marketplaces move against sellers. - Account suspensions can affect inventory access, seller funds, customer orders, and revenue concentration for online businesses.

What happened: - New York Senate Bill S9546A and Assembly Bill A10762A would amend the state’s General Business Law to set procedures for suspending third-party sellers and seller profiles on online marketplaces. - S9546A passed the New York State Senate on June 3, 2026, by a 60–1 vote. - The bill was sent to the Assembly and referred to the Committee on Consumer Affairs and Protection. - The legislation has not become law.

The details: - The proposal would generally require online marketplaces to give a third-party seller or seller profile a two-week warning period before suspension. - During that period, the marketplace would have to provide reasonable documentation and details about the alleged violations. - Sellers would have the chance to offer a defense or justification and try to cure the alleged violations before losing selling privileges. - The bill covers suspensions tied to alleged policy violations, account integrity concerns, product quality or authenticity, intellectual property infringement, customer complaints, late shipments, cancellations, pricing or listing issues, and customer service. - The legislation would require online marketplaces to designate a representative to communicate with sellers who are suspended or facing suspension. - Suspended sellers would have the right to appeal the marketplace’s decision to seek reinstatement. - Marketplaces would have to acknowledge and reasonably respond to an appeal within one week of submission. - If a marketplace permanently suspends a seller, it would need to provide documentation and information supporting that decision if those materials had not already been shared.

Between the lines: - The bill appears aimed at reducing surprise suspensions and giving sellers a chance to correct problems before they escalate. - For marketplaces, the measure would add procedural steps that could slow enforcement but may also reduce disputes over opaque account actions. - Stockman & Poropat, PLLC works with e-commerce businesses on marketplace disputes, including account suspensions, appeals, intellectual property complaints, inventory issues, and other enforcement actions.

What's next: - S9546A remains pending in the New York State Assembly. - A10762A is also moving through the legislative process. - If both chambers pass the bill and it is signed into law, the rules would take effect on the 90th day after becoming law. - Stockman & Poropat says it will continue monitoring the legislation and other legal and regulatory developments affecting third-party sellers and e-commerce businesses.

The bottom line: - If enacted, the bill would give New York marketplace sellers more warning, more documentation, and more time to fight suspensions before losing access to a major sales channel.