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(Original Signature of Member)

117TH CONGRESS
2D SESSION

H. R. ll

To require the Federal Trade Commission to issue a short-form terms ofservice summary statement, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES
Mrs. TRAHAN introduced the following bill; which was referred to theCommittee on llllllllllllll

A BILLTo require the Federal Trade Commission to issue a shortform terms of service summary statement, and for otherpurposes.
1Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,
3

SECTION 1. SHORT TITLE.

4This Act may be cited as the ‘‘Terms-of-service La-

5 beling, Design, and Readability Act’’ or the ‘‘TLDR Act’’.

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G:\M\17\TRAHAN\TRAHAN_024.XML21SEC. 2. STANDARD TERMS OF SERVICE SUMMARY STATE-

23MENT.

(a) DEADLINE FOR TERMS OF SERVICE SUMMARY

4 STATEMENT.—Not later than 360 days after the date of
5 the enactment of this Act, the Commission shall issue a
6 rule under section 553 of title 5, United States Code—7(1) that requires a covered entity to include a

8short-form terms of service summary statement on

9the website of the entity;

10(2) that requires a covered entity to include

11graphic data flow diagram on the website of the en-

12tity and includes guidance for such diagram; and13(3) that requires a covered entity to display the14full terms of service of the entity in an interactive

15

data format.

16(b) REQUIREMENTS FOR SHORT-FORM TERMS OF

17 SERVICE SUMMARY STATEMENT.—
18(1) IN

short-form terms of19

service summary statement described in subsection

20(a)—

21(A) shall be easy to understand, machine22

readable, and may include tables, graphic icons,

23

hyperlinks, or other means determined by the24

Commission; andg:\V\H\010522\H010522.008.xml
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GENERAL.—The

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31(B) may be established separately depend-2

ing on the interface or type of device on which3

the statement is being accessed by the user.

4(2) LOCATION OF SUMMARY STATEMENT AND

5GRAPHIC

6

statement shall be placed at the top of the perma-

7nent terms of service page of the covered entity and8

any graphic data flow diagram shall be located im-

9

mediately below the statement.

1011FLOWDIAGRAM.—Thesummary(3) CONTENTS OF SUMMARY STATEMENT.—Thesummary statement shall disclose the following:

12(A) The effort required by a user to read13

the entire terms of service text, such as through14

the total word count and approximate time to15

read the statement.

16(B) The categories of sensitive information

17

that the covered entity processes.

18(C) The sensitive information that is re-19

quired for the basic functioning of the service

20

and what sensitive information is needed for ad-

21

ditional features and future feature develop-

22

ment.

23

(D) A summary of the legal liabilities of a24

user and any rights transferred from the user

25

to the covered entity, such as mandatory arbi-

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DATA

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41

tration, class action waiver, any licensing by the2covered entity of the content of the user, and3

any waiver of moral rights.

4(E) Historical versions of the terms of5

service and change logs.

6(F) If the covered entity provides user de-7

letion services, directions for how the user can8

delete sensitive information or discontinue the9use of sensitive information.

10(G) A list of data breaches from the pre-11

vious 3 years reported to consumers under ex-12

isting Federal and State laws.

13(H) Anything else determined to be nec-

14essary by the Commission.

1516(c) GUIDANCEONGRAPHIC DATA FLOW DIA-GRAMS.—Not later than 360 days after the date of the17 enactment of this Act, the Commission shall publish guide18 lines on how a covered entity can graphically display how
19 sensitive information of a user is shared with a subsidiary
20 or corporate affiliate of such the entity and how sensitive
21 information is shared with third parties.
22(d) INTERACTIVE DATA FORMAT TERMS OF SERV-23ICE.—Not later than 360 days after the date of the enact-

24 ment of this Act, the Commission shall issue a rule under
25 section 553 of title 5, United States Code, that requires

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5
1 a covered entity to tag portions of the terms of services
2 of the entity according to an interactive data format.
3(e) ENFORCEMENT.—

4(1) UNFAIR OR DECEPTIVE ACTS OR PRAC-

5TICES.—A violation of this section or a regulation

6

promulgated under this section shall be treated as a7

violation of a regulation under section 18(a)(1)(B)

8of the Federal Trade Commission Act (15 U.S.C.

957a(a)(1)(B)) regarding unfair or deceptive acts or

10practices.

11(2) POWERS OF THE COMMISSION.—The Com-12

mission shall enforce this section and the regulations

13

promulgated under this section in the same manner,

14by the same means, and with the same jurisdiction,

15

powers, and duties as though all applicable terms

16and provisions of the Federal Trade Commission Act

17(15 U.S.C. 41 et seq.) were incorporated into and18

made a part of this section, and any person who vio-

19

lates this section or a regulation promulgated under

20

this section shall be subject to the penalties and en-21

titled to the privileges and immunities provided in22

the Federal Trade Commission Act.

23(3) ENFORCEMENT BY STATE ATTORNEYS GEN-

24

ERAL.—In any case in which the attorney general of25

a State has reason to believe that an interest of atg:\V\H\010522\H010522.008.xml
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6
1

least 1,000 residents of that State has been or is2

threatened or adversely affected by the engagement

3of any person in a practice that violates this section

4or a regulation promulgated under this section, the5State, as parens patriae, may bring a civil action on

6behalf of the residents of the State in a district

7

court of the United States of appropriate jurisdic-

8tion to—9(A) enjoin that practice;10(B) enforce compliance with the regulation;

11(C) obtain damage, restitution, or other12

compensation on behalf of residents of the13State; or14(D) obtain such other relief as the court15

may consider to be appropriate.

16(4) NOTICE.—

17(A) IN GENERAL.—Before filing an action

18

under paragraph (3), the attorney general of19

the State involved shall provide to the Commis-20sion—21(i) written notice of that action; and22(ii) a copy of the complaint for that

23action.

24(B) EXEMPTION.—

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71(i) IN GENERAL.—Subparagraph (A)2shall not apply with respect to the filing of3

an action by an attorney general of a State

4

under this subsection, if the attorney gen-5eral determines that it is not feasible to6

provide the notice described in that sub-7

paragraph before the filing of the action.

8(ii) NOTIFICATION.—In an action de-9

scribed in clause (i), the attorney general

10of a State shall provide notice and a copy

11of the complaint to the Commission at the12same time as the attorney general files the13action.

14(5) REMOVAL TO FEDERAL COURT.—The Com-15

mission may intervene in any action brought under16paragraph (3) and remove the action to the appro-

17

priate United States district court.

18(f) RULE OF CONSTRUCTION.—Nothing in this sec-

19 tion shall be construed to limit the authority of the Com20 mission under any other provision of law.
21(g) DEFINITIONS.—In this section:

2223(1) COMMISSION.—The term ‘‘Commission’’means the Federal Trade Commission.

2425(2) COVERED ENTITY.—The term ‘‘covered entity’’—

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81(A) means any person that operates a2

website located on the Internet or an online

3

service, that is operated for commercial pur-4

poses; and5(B) does not include a small business con-6cern (as defined in section 3 of the Small Busi-7ness Act (15 U.S.C. 632)).

8(3) INTERACTIVEterm

9‘‘interactive data format’’ means an electronic data

10

format in which pieces of information are identified

11

using an interactive data standard, such as eXten-

12sible Markup Language (XML), that is a standard-

13

ized list of electronic tags that mark the information

14

described in section 2(b)(3) within the terms of serv-

15

ice of a covered entity.

1617(4) SENSITIVE INFORMATION.—The term ‘‘sensitive information’’ means any of the following:

18(A) Health information.

19(B) Biometric information.

20(C) Precise geolocation information.

21(D) Social security number.

22(E) Information concerning the race, color,23

religion, national origin, sex, age, or disability

24of an individual.

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DATA FORMAT.—The

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3(G) Audio and video recordings captured

4through a consumer device.

5(H) Financial information, including a

6bank account number, credit card number,7debit card number, or insurance policy number.

8(I) Online browsing history related to the9information described in subparagraphs (A)10through (H).

11(5) STATE.—The term ‘‘State’’ means each of12

the several States, the District of Columbia, each

13

commonwealth, territory, or possession of the United

14

States, and each federally recognized Indian Tribe.

15(6) THIRD PARTY.—The term ‘‘third party’’16

means, with respect to a covered entity, a person—

17(A) to whom the covered entity disclosed

18

sensitive information; and19(B) is not—20(i) the covered entity;

21(ii) a subsidiary or corporate affiliate

22of the covered entity; or23(iii) a service provider of the covered

24entity.

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