American Choice and Innovation Online Act
This bill prohibits certain large online platforms from engaging in specified acts, including giving preference to their own products on the platform, excluding or disadvantaging competing products from another business on the platform, or discriminating among similarly situated users.
Further, a platform may not materially restrict or impede the capacity of a competing business user to access or interoperate with the same platform, operating system, or hardware or software features. The bill also restricts the platform's use of nonpublic data obtained from or generated on the platform and prohibits the platform from restricting access to platform data generated by the activity of a competing business user. The bill also provides additional restrictions related to installing or uninstalling software, search or ranking functionality, and retaliation for contact with law enforcement regarding actual or potential violations of law.
The bill establishes affirmative defenses for the prohibited conduct.
The Federal Trade Commission or the Department of Justice must designate whether an entity is a platform covered by the bill, and both must carry out enforcement activities.
The bill also provides for civil penalties, injunctions, conflicts of interest, a private right of action, and the forfeit of profits for repeat offenders.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3816 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 3816
To provide that certain discriminatory conduct by covered platforms
shall be unlawful, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 11, 2021
Mr. Cicilline (for himself, Mr. Gooden of Texas, Mr. Nadler, and Mr.
Buck) introduced the following bill; which was referred to the
Committee on the Judiciary
_______________________________________________________________________
A BILL
To provide that certain discriminatory conduct by covered platforms
shall be unlawful, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Choice and Innovation
Online Act''.
SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT.
(a) Violation.--It shall be unlawful for a person operating a
covered platform, in or affecting commerce, to engage in any conduct in
connection with the operation of the covered platform that--
(1) advantages the covered platform operator's own
products, services, or lines of business over those of another
business user;
(2) excludes or disadvantages the products, services, or
lines of business of another business user relative to the
covered platform operator's own products, services, or lines of
business; or
(3) discriminates among similarly situated business users.
(b) Other Discriminatory Conduct.--It shall be unlawful for a
person operating a covered platform, in or affecting commerce, to--
(1) restrict or impede the capacity of a business user to
access or interoperate with the same platform, operating
system, hardware and software features that are available to
the covered platform operator's own products, services, or
lines of business;
(2) condition access to the covered platform or preferred
status or placement on the covered platform on the purchase or
use of other products or services offered by the covered
platform operator;
(3) use non-public data obtained from or generated on the
platform by the activities of a business user or its customers
that is generated through an interaction with the business
user's products or services to offer or support the offering of
the covered platform operator's own products or services;
(4) restrict or impede a business user from accessing data
generated on the platform by the activities of the business
user or its customers through an interaction with the business
user's products or services, such as contractual or technical
restrictions that prevent the portability of such data by the
business user to other systems or applications;
(5) restrict or impede covered platform users from un-
installing software applications that have been preinstalled on
the covered platform or changing default settings that direct
or steer covered platform users to products or services offered
by the covered platform operator;
(6) restrict or impede businesses users from communicating
information or providing hyperlinks on the covered platform to
covered platform users to facilitate business transactions;
(7) in connection with any user interfaces, including
search or ranking functionality offered by the covered
platform, treat the covered platform operator's own products,
services, or lines of business more favorably than those of
another business user;
(8) interfere or restrict a business user's pricing of its
goods or services;
(9) restrict or impede a business user, or a business
user's customers or users, from interoperating or connecting to
any product or service; and
(10) retaliate against any business user or covered
platform user that raises concerns with any law enforcement
authority about actual or potential violations of State or
Federal law.
(c) Affirmative Defense.--
(1) In general.--Subsection (a) and (b) shall not apply if
the defendant establishes by clear and convincing evidence that
the conduct described in subsections (a) or (b)--
(A) would not result in harm to the competitive
process by restricting or impeding legitimate activity
by business users; or
(B) was narrowly tailored, could not be achieved
through a less discriminatory means, was nonpretextual,
and was necessary to--
(i) prevent a violation of, or comply with,
Federal or State law; or
(ii) protect user privacy or other non-
public data.
(2) Availability of affirmative defense.--Notwithstanding
any other provision of law, whether user conduct would
constitute a violation of section 1030 of title 18, United
States Code, is not dispositive of whether the defendant has
established the affirmative defense under this section.
(d) Covered Platform Designation.--The Federal Trade Commission or
Department of Justice shall designate a covered platform for the
purpose of implementing and enforcing this Act. Such designation
shall--
(1) be based on a finding that the criteria set forth in
subsection (f)(4)(i)-(iii) are met;
(2) be issued in writing and published in the Federal
Register; and
(3) will apply for ten years from its issuance regardless
of whether there is a change in control or ownership over the
covered platform unless the Commission or the Department of
Justice removes the designation pursuant to subsection (f).
(e) Removal of Covered Platform Designation.--The Commission or the
Department of Justice shall--
(1) consider whether its designation of a covered platform
pursuant to subsection (d) should be removed prior to the
expiration of the ten-year period if the covered platform
operator files a request with the Commission or the Department
of Justice, which shows that the online platform is no longer a
critical trading partner; and
(2) determine whether to grant a request submitted under
paragraph 1 not later than 120 days after the date of the
filing of such request.
(f) Remedies.--
(1) Civil penalty.--Any covered platform operator who is
found to have violated subsections (a) or (b) shall be liable
to the United States or the Commission for a civil penalty,
which shall accrue to the United States, in an amount not more
than the greater of--
(A) 15 percent of the total United States revenue
of the person for the previous calendar year; or
(B) 30 percent of the United States revenue of the
person in any line of business affected or targeted by
the unlawful conduct during the period of the unlawful
conduct. This civil penalty may be recovered in a civil
action brought by the United States or the Commission.
(2) Remedies in addition.--Remedies provided in this
subsection are in addition to, and not in lieu of, any other
remedy available under Federal or State law.
(A) Restitution; contract rescission and
reformation; refunds; return of property.--The
Assistant Attorney General of the Antitrust Division,
the Commission, or the attorney general of any State
may seek, and the court may order, with respect to the
violation that gives rise to the suit, restitution for
losses, rescission or reformation of contracts, refund
of money, or return of property.
(B) Disgorgement.--The Assistant Attorney General
of the Antitrust Division or the Commission may seek,
and the court may order, disgorgement of any unjust
enrichment that a covered platform operator obtained as
a result of the violation that gives rise to the suit.
(C) Injunctions.--The Assistant Attorney General of
the Antitrust Division or the Commission may seek, and
the court may order, relief in equity as necessary to
prevent, restrain, or prohibit violations of this Act.
(D) Conflict of interest.--
(i) If the fact finder determines that a
violation of this Act arises from a conflict of
interest related to the covered platform's
concurrent operation of multiple lines of
business, the court shall consider requiring
divestiture of the line or lines of business
that give rise to such conflict.
(ii) For purposes of this section, the term
``conflict of interest'' includes the conflict
of interest that arises when--
(I) a covered platform operator
owns or controls a line of business,
other than the covered platform; and
(II) the covered platform's
ownership or control of that line of
business creates the incentive and
ability for the covered platform to--
(aa) advantage the covered
platform operator's own
products, services, or lines of
business on the covered
platform over those of a
competing business or a
business that constitutes
nascent or potential
competition to the covered
platform operator; or
(bb) exclude from, or
disadvantage, the products,
services, or lines of business
on the covered platform of a
competing business or a
business that constitutes
nascent or potential
competition to the covered
platform operator.
(3) Repeat offenders.--If the fact finder determines that a
covered platform has engaged in a pattern or practice of
violating this Act, the court shall consider requiring that the
Chief Executive Officer forfeit to the United States Treasury
any compensation received by that person during the 12 months
preceding or following the filing of a complaint for an alleged
violation of this Act.
(g) Definitions.--In this section:
(1) Antitrust laws.--The term ``antitrust laws'' has the
meaning given the term in subsection (a) of section 1 of the
Clayton Act (15 U.S.C. 12).
(2) Business user.--The term ``Business User'' means a
person that utilizes or plans to utilize the covered platform
for the sale or provision of products or services.
(3) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(4) Covered platform.--The term ``covered platform'' means
an online platform--
(A) that has been designated as a ``covered
platform'' under section 2(d); or
(B) that--
(i) at the time of the Commission's or the
Department of Justice's designation under
section 2(d), or any of the twelve months
preceding that time, or in any of the 12 months
preceding the filing of a complaint for an
alleged violation of this Act--
(I) has at least 50,000,000 United
States-based monthly active users on
the online platform; or
(II) has at least 100,000 United
States-based monthly active business
users on the platform;
(ii) is owned or controlled by a person
with net annual sales, or a market
capitalization greater than $600,000,000,000,
adjusted for inflation on the basis of the
Consumer Price Index, at the time of the
Commission's or the Department of Justice's
designation under section 2(d) or any of the
two years preceding that time, or at any time
in the 2 years preceding the filing of a
complaint for an alleged violation of this Act;
and
(iii) is a critical trading partner for the
sale or provision of any product or service
offered on or directly related to the online
platform.
(5) Covered platform operator.--The term ``covered platform
operator'' means a person that owns or controls a covered
platform.
(6) Critical trading partner.--The term ``critical trading
partner'' means a trading partner that has the ability to
restrict or impede--
(A) the access of a business user to its users or
customers; or
(B) the access of a business user to a tool or
service that it needs to effectively serve its users or
customers.
(7) Person.--The term ``person'' has the meaning given the
term in subsection (a) of section 1 of the Clayton Act (15
U.S.C. 12).
(8) Data.--
(A) In general.--Not later than six months after
the date of enactment of this Act, the Commission shall
adopt rules in accordance with section 553 of title 5,
United States Code, to define the term ``data'' for the
purpose of implementing and enforcing this Act.
(B) Data.--The term ``data'' shall include
information that is collected by or provided to a
covered platform or competing business or a potential
competing business that is linked, or reasonably
linkable, to a specific user or customer of the covered
platform or a competing business or a potential
competing business.
(9) Business user.--The term ``business user'' means a
person that utilizes or plans to utilize the covered platform
for the sale or provision of products or services.
(10) Online platform.--The term ``online platform'' means a
website, online or mobile application, operating system,
digital assistant, or online service that--
(A) enables a user to generate content that can be
viewed by other users on the platform or to interact
with other content on the platform;
(B) facilitates the offering, sale, purchase,
payment, or shipping of goods or services, including
software applications, between and among consumers or
businesses not controlled by the platform; or
(C) enables user searches or queries that access or
display a large volume of information.
(11) Control.--The term ``control'' with respect to a
person means--
(A) holding 25 percent or more of the stock of the
person;
(B) having the right to 25 percent or more of the
profits of the person;
(C) having the right to 25 percent or more of the
assets of the person, in the event of the person's
dissolution;
(D) if the person is a corporation, having the
power to designate 25 percent or more of the directors
of the person;
(E) if the person is a trust, having the power to
designate 25 percent or more of the trustees; or
(F) otherwise exercises substantial control over
the person.
(h) Enforcement.--
(1) In general.--.The Commission, Department of Justice,
and any attorney general of a State subject to the requirements
in paragraph (4) shall enforce this Act in the same manner, by
the same means, and with the same jurisdiction, powers, and
duties as though all applicable terms and provisions of the
Federal Trade Commission Act (15 U.S.C. 41 et seq.) or the
Clayton Act (15 U.S.C. 12 et seq.), as appropriate, were
incorporated into and made a part of this Act.
(2) Unfair methods of competition.--A violation of this Act
shall also constitute an unfair method of competition under
section 5 of the Federal Trade Commission Act (15 U.S.C. 5).
(3) Commission independent litigation authority.--If the
Commission has reason to believe that a covered platform
violated this Act, the Commission may commence a civil action,
in its own name by any of its attorneys designated by it for
such purpose, to recover a civil penalty and seek other
appropriate relief in a district court of the United States
against the covered platform operator.
(4) Parens patriae.--Any attorney general of a State may
bring a civil action in the name of such State for a violation
of this Act as parens patriae on behalf of natural persons
residing in such State, in any district court of the United
States having jurisdiction of the defendant, and may secure any
form of relief provided for in this section.
(i) Emergency Relief.--
(1) The Commission, Assistant Attorney General of the
Antitrust Division, or any attorney general of a State may seek
a temporary injunction requiring the covered platform operator
to take or stop taking any action for not more than 120 days
and the court shall grant such relief if the Commission, the
United States, or the attorney general of a State proves--
(A) there is a plausible claim that a covered
platform operator took an action that violates this
Act; and
(B) that action impairs the ability of at least one
company to compete with the covered platform.
(2) The emergency relief shall not last more than 120 days
from the filing of the complaint.
(3) The court shall terminate the emergency relief at any
time that the covered platform operator proves that the
Commission, the United States, or the attorney general of the
State seeking relief under this section has not taken
reasonable steps to investigate whether a violation has
occurred.
(4) Nothing in this subsection prevents or limits the
Commission, the United States, or any attorney general of any
State from seeking other equitable relief as provided in
subsection (h) of this section.
(j) Statute of Limitations.--A proceeding for a violation of this
section may be commenced not later than 6 years after such violation
occurs.
SEC. 3. JUDICIAL REVIEW.
(a) In General.--Any party that is subject to a covered platform
designation under section 2(d) of this Act, a final order issued in any
district court, or a final order of the Commission issued in an
administrative adjudicative proceeding may within 30 days of the
issuance of such order, petition for review of such order in the United
States Court of Appeals for the District of Columbia Circuit.
(b) Treatment of Findings.--In a proceeding for judicial review of
a covered platform designation under to section 2(d) of this Act or a
final order of the Commission, the findings of the Commission or the
Assistant Attorney General as to the facts, if supported by evidence,
shall be conclusive.
SEC. 4. BUREAU OF DIGITAL MARKETS.
(a) Establishment of Bureau.--As soon as practicable, but not later
than 180 days after the date of enactment of this Act, the Federal
Trade Commission shall establish within the Commission a bureau of
digital markets for purposes of enforcement of this Act.
(b) Leadership.--The head of the Bureau of Digital Markets shall be
the Director of the Bureau of Digital Markets, who shall--
(1) report directly to the Chair of the Federal Trade
Commission; and
(2) be appointed by the Chair of the Federal Trade
Commission.
(c) Bureau Staff.--The Bureau of Digital Markets shall retain or
employ legal, technology, economic, research, and service staff
sufficient to carry out the functions, powers, and duties of the
Bureau.
(d) Reporting Requirement.--Not later than 1 year after the date of
enactment of this Act, the Bureau of Digital Markets shall on an annual
basis publish and submit a report to the Committee on the Judiciary of
the House of Representatives and the Committee on the Judiciary of the
Senate describing the Bureau's enforcement activities during the
previous 12-month period.
SEC. 5. ENFORCEMENT GUIDELINES.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Commission and the Assistant Attorney General of the
Antitrust Division shall jointly issue guidelines outlining policies
and practices, relating to agency enforcement of this Act, with the
goal of promoting transparency and deterring violations.
(b) Updates.--The Commission and the Assistant Attorney General of
the Antitrust Division shall update the joint guidelines issued under
subsection (a), as needed to reflect current agency policies and
practices, but not less frequently than once every 4 years beginning on
the date of enactment of this Act.
(c) Operation.--The Joint Guidelines issued under this section do
not confer any rights upon any person, State, or locality, nor shall
operate to bind the Commission, Department of Justice, or any person,
State, or locality to the approach recommended in such Guidelines.
SEC. 6. SUITS BY PERSONS INJURED.
(a) In General.--Except as provided in subsection (b), any person
who shall be injured in his business or property by reason of anything
forbidden in this Act sue therefor in any district court of the United
States in the district in which the defendant resides or is found or
has an agent, without respect to the amount in controversy, and shall
recover threefold the damages by him sustained, and the cost of suit,
including a reasonable attorney's fee. The court may award under this
section, pursuant to a motion by such person promptly made, simple
interest on actual damages for the period beginning on the date of
service of such person's pleading setting forth a claim under the
antitrust laws and ending on the date of judgment, or for any shorter
period therein, if the court finds that the award of such interest for
such period is just in the circumstances. In determining whether an
award of interest under this section for any period is just in the
circumstances, the court shall consider only--
(1) whether such person or the opposing party, or either
party's representative, made motions or asserted claims or
defenses so lacking in merit as to show that such party or
representative acted intentionally for delay, or otherwise
acted in bad faith;
(2) whether, in the course of the action involved, such
person or the opposing party, or either party's representative,
violated any applicable rule, statute, or court order providing
for sanctions for dilatory behavior or otherwise providing for
expeditious proceedings; and
(3) whether such person or the opposing party, or either
party's representative, engaged in conduct primarily for the
purpose of delaying the litigation or increasing the cost
thereof.
(b) Amount of Damages Payable to Foreign States and
Instrumentalities of Foreign States.--
(1) Except as provided in paragraph (2), any person who is
a foreign state may not recover under subsection (a) an amount
in excess of the actual damages sustained by it and the cost of
suit, including a reasonable attorney's fee.
(2) Paragraph (1) shall not apply to a foreign state if--
(A) such foreign state would be denied, under
section 1605(a)(2) of title 28, immunity in a case in
which the action is based upon a commercial activity,
or an act, that is the subject matter of its claim
under this section;
(B) such foreign state waives all defenses based
upon or arising out of its status as a foreign state,
to any claims brought against it in the same action;
(C) such foreign state engages primarily in
commercial activities; and
(D) such foreign state does not function, with
respect to the commercial activity, or the act, that is
the subject matter of its claim under this section as a
procurement entity for itself or for another foreign
state.
(c) Injunctive Relief.--Any person, firm, corporation, or
association shall be entitled to sue for and have injunctive relief, in
any court of the United States having jurisdiction over the parties,
against threatened loss or damage by a violation of this Act, when and
under the same conditions and principles as injunctive relief against
threatened conduct that will cause loss or damage is granted by courts
of equity, under the rules governing such proceedings, and upon the
execution of proper bond against damages for an injunction
improvidently granted and a showing that the danger of irreparable loss
or damage is immediate, a preliminary injunction may issue: Provided,
That nothing herein contained shall be construed to entitle any person,
firm, corporation, or association, except the United States, to bring
suit for injunctive relief against any common carrier subject to the
jurisdiction of the Surface Transportation Board under subtitle IV of
title 49. In any action under this section in which the plaintiff
substantially prevails, the court shall award the cost of suit,
including a reasonable attorney's fee, to such plaintiff.
SEC. 7. RULE OF CONSTRUCTION.
Nothing in this Act shall be construed to limit any authority of
the Attorney General or the Federal Trade Commission under the
antitrust laws, the Federal Trade Commission Act (15 U.S.C. 45), or any
other provision of law or to limit the application of any law.
SEC. 8. SEVERABILITY.
If any provision of this Act, an amendment made by this Act, or the
application of such provision or amendment to any person or
circumstance is held to be unconstitutional, the remainder of this Act
and of the amendments made by this Act, and the application of the
remaining provisions of this Act and amendments to any person or
circumstance shall not be affected.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on the Judiciary.
Committee Consideration and Mark-up Session Held.
Committee Consideration and Mark-up Session Held.
Ordered to be Reported (Amended).
Reported (Amended) by the Committee on Judiciary. H. Rept. 117-655.
Reported (Amended) by the Committee on Judiciary. H. Rept. 117-655.
Placed on the Union Calendar, Calendar No. 475.
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