U.S. SHOP SAFE Act Counterfeit Liability for Domain Hosts

The Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act, commonly referred to as the SHOP SAFE Act, represents a significant legislative development in the fight against the online sale of counterfeit goods. Introduced in the U.S. House of Representatives and under continued consideration in various legislative sessions, the SHOP SAFE Act aims to amend the Lanham Act by imposing heightened accountability on e-commerce platforms and, by extension, domain hosts that facilitate the sale of infringing and counterfeit goods. While the primary targets of the legislation are online marketplaces like Amazon and eBay, its potential reach into the domain name ecosystem—particularly registrars, DNS hosts, and web hosting providers—signals a transformative shift in the landscape of secondary liability for intellectual property violations online.

The core provision of the SHOP SAFE Act is to create a cause of action under U.S. trademark law against platforms that fail to take reasonable measures to prevent the sale of counterfeit goods that pose a risk to consumer health and safety. To benefit from a safe harbor provision and avoid liability, a platform must demonstrate compliance with a series of detailed requirements. These include verifying the identity and contact information of third-party sellers, implementing proactive screening mechanisms for counterfeit listings, terminating repeat infringers, and displaying conspicuous information about sellers to consumers. Failure to meet these conditions may expose the platform to direct liability for contributory trademark infringement, even if it is not the direct seller of the infringing goods.

While the bill is tailored toward e-commerce platforms, its language does not explicitly exclude domain hosts or DNS service providers. This raises the possibility that domain registrars, web hosting providers, and DNS operators that enable the existence and visibility of counterfeit-selling websites could be pulled into the scope of enforcement. Under this interpretation, a domain host that knowingly allows a customer to operate a website trafficking in counterfeit goods—especially after receiving notice—could be found liable if it fails to take action to prevent ongoing infringement. This is a significant departure from the traditional approach to intermediary liability in the United States, which has typically shielded passive technical intermediaries from direct responsibility for user-generated content or actions.

The implications for domain hosts are substantial. First, the SHOP SAFE Act would incentivize—or arguably compel—registrars and hosting providers to implement more rigorous Know Your Customer (KYC) protocols. Where current industry norms often permit anonymous or pseudonymous domain registration, the Act would push domain hosts toward verifying the identity, location, and business legitimacy of registrants who offer physical goods for sale. This would align domain services more closely with financial and e-commerce platforms, where identity verification is already standard. However, it would also impose new compliance costs and administrative burdens, particularly on smaller registrars and hosting companies that lack the infrastructure of larger platforms.

Second, the SHOP SAFE Act’s emphasis on repeat infringers would likely lead to the development of internal blacklists and registrant tracking systems across the domain industry. Hosting providers and registrars would be under pressure to terminate or suspend services not just in response to a single infringement notice, but when patterns of abusive behavior emerge. This would require improved reporting mechanisms, record-keeping, and perhaps even collaboration with brand owners and third-party anti-counterfeiting services to identify bad actors efficiently. Such measures, while beneficial in combatting organized counterfeiting networks, could also raise concerns about due process and the potential for overreach if legitimate websites are taken down without sufficient review.

Moreover, the potential for liability would force domain hosts to reevaluate their terms of service, abuse response policies, and customer support procedures. Current industry practice varies widely in how hosts respond to allegations of infringement. Some providers take action only upon receiving a court order or UDRP ruling, while others act on private complaints from rights holders. The SHOP SAFE Act could compel a uniform, expedited process with legal consequences for inaction. This change would also necessitate staff training and legal guidance to ensure that abuse teams correctly identify counterfeit-related risks and take proportionate responses.

Another critical issue is the Act’s focus on goods that affect health and safety. While this narrows the scope somewhat, it still covers a broad array of products, including pharmaceuticals, cosmetics, dietary supplements, electronics, automotive parts, and children’s toys. A domain host unaware of the precise content of an e-commerce site it services may find itself inadvertently enabling the sale of regulated goods, thereby increasing its exposure. This dynamic creates a powerful incentive for providers to engage in deeper content monitoring or to proactively avoid servicing high-risk verticals altogether. In turn, this could result in a form of private censorship or over-compliance, where domains are disabled not due to proven violations but to mitigate perceived liability.

Internationally, the SHOP SAFE Act’s ripple effects could extend to non-U.S.-based domain hosts that target U.S. consumers or facilitate sales into the United States. Jurisdictional questions would arise, especially for platforms or registrars located abroad that do not have a U.S. presence but engage in cross-border domain sales or host websites with .com, .us, or other U.S.-associated TLDs. The U.S. has a long history of asserting extraterritorial jurisdiction in intellectual property matters when American consumers are affected, and the SHOP SAFE Act could amplify these assertions. As a result, even foreign registrars and DNS providers may need to consider implementing sanctions screening, sales verification protocols, and takedown procedures to avoid entanglement in U.S. trademark litigation.

Critics of the SHOP SAFE Act, including digital rights organizations and elements of the technology sector, warn that it could chill innovation, impose unreasonable compliance burdens, and erode longstanding legal protections for intermediaries under Section 230 of the Communications Decency Act and case law such as Tiffany v. eBay. They argue that shifting the burden of counterfeit enforcement from brand owners to platforms undermines the traditional model of notice-based takedown and creates uncertainty for service providers who may be caught between rights holders demanding removal and users asserting their rights to fair use or non-infringing commerce. These concerns are particularly salient in the domain industry, where the line between technical facilitation and content curation is often blurred.

Nonetheless, the policy momentum behind the SHOP SAFE Act reflects increasing frustration among legislators and brand owners with the proliferation of counterfeit goods online and the perceived inadequacy of voluntary enforcement measures. As domain names remain the entry point to e-commerce for many sellers—legitimate or otherwise—domain hosts can no longer assume immunity from downstream liability. The evolving regulatory environment, particularly when combined with other legislative initiatives targeting online marketplaces, suggests a new era in which domain-related services will be expected to play a more active role in securing the integrity of digital commerce.

In conclusion, while the SHOP SAFE Act is not yet law, its implications for domain hosts are profound and far-reaching. Should it be enacted in its current or modified form, it would mark a substantial shift in the liability landscape for domain name service providers. Proactive compliance planning, legal preparedness, and cross-industry collaboration will be essential for registrars, DNS operators, and hosting companies seeking to mitigate the legal and operational risks associated with counterfeit liability. In the broader context, the Act represents a pivotal moment in the redefinition of intermediary responsibility at the intersection of trademark law, online infrastructure, and global commerce.

The Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act, commonly referred to as the SHOP SAFE Act, represents a significant legislative development in the fight against the online sale of counterfeit goods. Introduced in the U.S. House of Representatives and under continued consideration in various legislative sessions, the SHOP SAFE Act…