II 

116TH CONGRESS 

2D SESSION S. 5052 

To increase fairness and transparency in algorithmic eligibility determinations. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 17, 2020 

Mr. COONS introduced the following bill; which was read twice and referred 

to the Committee on Commerce, Science, and Transportation 

A BILL 

To increase fairness and transparency in algorithmic 

eligibility determinations. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Algorithmic Fairness Act of 2020’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. FTC study and report on ways companies are developing and implementing algorithmic eligibility determinations. 

Sec. 4. Substantive fairness. 

Sec. 5. Procedural fairness. 

Sec. 6. Enforcement. 

Sec. 7. Research grants for the study of fair and transparent data analytics. 


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Sec. 8. Leadership program. 

Sec. 9. Avoiding duplication. 

1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) ALGORITHMIC ELIGIBILITY DETERMINA4 TION.—The term ‘‘algorithmic eligibility determina5 tion’’ means a determination based in whole or in 

6 significant part on an algorithmic process that uti7 lizes methods of machine learning, advanced statis8 tical techniques, artificial intelligence, or similar 

9 techniques to determine the eligibility for, the denial 

10 of access to, the receipt of information about, the 

11 cost of acquiring, the opportunity to access, or the 

12 revocation of important opportunities including, but 

13 not limited to, education, employment, credit, health 

14 care insurance, and housing. 

15 (2) COMMISSION.—The term ‘‘Commission’’ 

16 means the Federal Trade Commission. 

17 (3) COVERED ENTITY.—The term ‘‘covered en18 tity’’ means an entity that— 

19 (A) makes an algorithmic eligibility deter20 mination; and 

21 (B) is— 

22 (i) a person over which the Commis23 sion has authority pursuant to section 

24 5(a)(2) of the Federal Trade Commission 


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1 Act (15 U.S.C. 45(a)(2)), but including 

2 banks, savings and loan institutions, and 

3 Federal credit unions that are otherwise 

4 excluded under such section; 

5 (ii) a common carrier subject to the 

6 Communications Act of 1934 (47 U.S.C. 

7 151 et seq.), notwithstanding the definition 

8 of the term ‘‘Acts to regulate commerce’’ 

9 in section 4 of the Federal Trade Commis10 sion Act (15 U.S.C. 44) and the exception 

11 provided by section 5(a)(2) of the Federal 

12 Trade Commission Act (15 U.S.C. 

13 45(a)(2)) for such carriers; or 

14 (iii) a nonprofit organization, includ15 ing any organization described in section 

16 501(c) of the Internal Revenue Code of 

17 1986 that is exempt from taxation under 

18 section 501(a) of such Code, notwith19 standing the definition of the term ‘‘Acts 

20 to regulate commerce’’ in section 4 of the 

21 Federal Trade Commission Act (15 U.S.C. 

22 44) and the exception provided by section 

23 5(a)(2) of the Federal Trade Commission 

24 Act (15 U.S.C. 45(a)(2)) for such organi25 zations. 


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1 (4) ONLINE ADVERTISEMENT.—The term ‘‘on2 line advertisement’’ means an algorithmic eligibility 

3 determination that determines whether an individual 

4 receives promotional information from a covered en5 tity through the use of paid internet or paid digital 

6 communication. 

7 (5) SEARCH RESULT.—The term ‘‘search re8 sult’’ means an algorithmic eligibility determination 

9 that determines the information an individual is pre10 sented after querying an internet search engine. 

11 SEC. 3. FTC STUDY AND REPORT ON WAYS COMPANIES ARE 

12 DEVELOPING AND IMPLEMENTING ALGO13 RITHMIC ELIGIBILITY DETERMINATIONS. 

14 (a) STUDY.—The Commission shall conduct a study 

15 on the ways covered entities are developing and imple16 menting algorithmic eligibility determinations. Such study 

17 shall include an analysis of— 

18 (1) the industries that most commonly utilize 

19 algorithmic eligibility determinations; 

20 (2) the types of algorithmic eligibility deter21 minations that covered entities make; 

22 (3) the data, data sources, pre-processing strat23 egies and other practices, data collection tech24 nologies, and methodologies that covered entities use 

25 to make such determinations; 


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1 (4) the transparency of algorithmic eligibility 

2 determinations, including the types of explanations 

3 that covered entities disclose to— 

4 (A) individuals or entities that are the sub5 ject of an algorithmic eligibility determination; 

6 (B) regulators; and 

7 (C) the general public; 

8 (5) whether and how human decision makers 

9 are involved in rendering algorithmic eligibility de10 terminations; 

11 (6) whether covered entities have a mechanism 

12 to receive complaints about algorithmic eligibility de13 terminations, and the number and nature of such 

14 complaints received from individuals regarding such 

15 determinations; 

16 (7) whether covered entities have accountability 

17 procedures in place should an algorithmic eligibility 

18 determination be questioned or challenged, a de19 scription of such accountability procedures, and 

20 what remedial steps covered entities have taken, if 

21 any; 

22 (8) what information a covered entity could rea23 sonably be required to disclose such that an indi24 vidual could understand, question, or challenge an 

25 algorithmic eligibility determination; 


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1 (9) whether covered entities perform algo2 rithmic audits to understand whether algorithmic eli3 gibility determinations are fair, how covered entities 

4 define fairness for this purpose, and whether any 

5 such audit techniques and outcomes of audits are 

6 available to individuals or groups challenging an al7 gorithmic eligibility determination; 

8 (10) the extent to which, if any, algorithmic eli9 gibility determinations consider factors such as geo10 graphic information, income, ethnicity, race, religion, 

11 national origin, age, sex, sexual orientation, dis12 ability information, pregnancy, marital status, phys13 ical or mental health status, criminal history status, 

14 or proxies for such factors; 

15 (11) the extent to which algorithmic eligibility 

16 determinations could result in negative or differen17 tial treatment of individuals based on the factors de18 scribed in paragraph (10); and 

19 (12) the best way to address intellectual prop20 erty concerns of covered entities, like trade secret 

21 protections, that may arise if the Federal Govern22 ment requires companies to share information re23 lated to their algorithmic eligibility determination 

24 processes. 

25 (b) REPORTS.— 


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1 (1) INITIAL REPORT.—Not later than 1 year 

2 after the date of the enactment of this Act, and once 

3 every 3 years thereafter (until a total of 4 reports 

4 have been submitted), the Commission shall submit 

5 to Congress a report on the study conducted under 

6 subsection (a), together with recommendations for 

7 such additional legislation and administrative action 

8 as the Commission determines appropriate. 

9 (2) SPECIAL RULE.—In the final report sub10 mitted in accordance with paragraph (1), the Com11 mission shall include a recommendation as to wheth12 er to continue conducting the study under subsection 

13 (a) (and submitting corresponding reports under this 

14 subsection). 

15 (c) CONSULTATION.—In conducting the study under 

16 subsection (a) and preparing the reports under subsection 

17 (b), the Commission shall consult with— 

18 (1) the National Institute of Standards and 

19 Technology; 

20 (2) the Department of Homeland Security; 

21 (3) the Consumer Financial Protection Bureau; 

22 (4) the Department of Housing and Urban De23 velopment; 

24 (5) the Department of Health and Human 

25 Services; 


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1 (6) the Department of Veterans Affairs; 

2 (7) the Department of Education; 

3 (8) the Federal Communications Commission; 

4 (9) the Equal Employment Opportunity Com5 mission; and 

6 (10) the Civil Rights Division of the Depart7 ment of Justice. 

8 SEC. 4. SUBSTANTIVE FAIRNESS. 

9 (a) IN GENERAL.—A covered entity shall not act on 

10 an unfair algorithmic eligibility determination in or affect11 ing commerce. 

12 (b) CONSIDERATIONS.—In determining whether a 

13 particular algorithmic eligibility determination is unfair, 

14 the Commission— 

15 (1) shall consider the factors specified in sec16 tion 5(n) of the Federal Trade Commission Act (15 

17 U.S.C. 45(n)); and 

18 (2) may consider— 

19 (A) established public policies; 

20 (B) emotional distress, bias on the basis of 

21 protected class status, and other noneconomic 

22 injuries, and may conclude that these injuries 

23 contribute to substantial injury to consumers 

24 for the purposes of section 5(n) of the Federal 

25 Trade Commission Act (15 U.S.C. 45(n)); and 


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1 (C) any code of conduct developed by in2 dustry sectors, civil rights groups, consumer 

3 protection groups, or academics, as long as the 

4 Commission has first published such code of 

5 conduct in the Federal Register and provided 

6 for a period of public comment in accordance 

7 with section 553 of title 5, United States Code. 

8 SEC. 5. PROCEDURAL FAIRNESS. 

9 (a) IN GENERAL.—Beginning 1 year after the date 

10 of the enactment of this Act, each covered entity shall, 

11 for each algorithmic eligibility determination— 

12 (1) retain for at least 5 years an audit trail 

13 that records— 

14 (A) the data used by the algorithm, as it 

15 existed at the time the algorithm was deployed 

16 and rendered the algorithmic eligibility deter17 mination; 

18 (B) the source of pre-processing tech19 niques, or any other technique used to produce 

20 any such data described in subparagraph (A); 

21 (C) the methodology used by the entity to 

22 develop the algorithm; 

23 (D) the version of the design of the algo24 rithm utilized to make the determination; 


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1 (E) any data or sets of data used to train 

2 the algorithm; 

3 (F) any testing for model performance for 

4 discriminatory effects across different sub5 groups and the results of such testing; 

6 (G) the methodology used to render the de7 termination; and 

8 (H) the ultimate determination rendered; 

9 (2) notify the individual that they have been the 

10 subject of an algorithmic eligibility determination; 

11 and 

12 (3) upon request, provide the individual with 

13 the opportunity to— 

14 (A) access the data pertaining to that indi15 vidual that the covered entity employed to make 

16 the determination, in a human-readable format 

17 that a reasonable individual can understand; 

18 (B) submit corrections to the data per19 taining to that individual that the covered enti20 ty used in the algorithmic eligibility determina21 tion; and 

22 (C) request that the covered entity conduct 

23 a reevaluation of the relevant algorithmic eligi24 bility determination based on the corrected 

25 data. 


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1 (b) REVIEW.—Upon the request of the Commission, 

2 a covered entity shall make available to the Commission 

3 the full audit trail described in subsection (a)(1). The 

4 Commission shall establish a secure and confidential proc5 ess for reviewing the materials created and retained under 

6 such subsection. 

7 (c) REQUEST TO THE COMMISSION.—An individual 

8 who has been the subject of an algorithmic eligibility de9 termination may request that the Commission conduct a 

10 review (and the Commission may conduct such a review) 

11 of— 

12 (1) the algorithmic eligibility determination to 

13 determine if it was unfair (determined pursuant to 

14 section (4)); and 

15 (2) a covered entity’s reevaluation of an algo16 rithmic eligibility determination where an individual 

17 has submitted corrected data. 

18 (d) RULE OF CONSTRUCTION.—Nothing in this sec19 tion shall be construed to require a covered entity to pro20 vide an individual with the algorithm or model used to 

21 make the eligibility determination, or otherwise divulge le22 gally protected trade secrets. 

23 (e) SCOPE.—Notwithstanding any of the preceding 

24 provisions of this section, subsection (a)(2) shall not apply 

25 to— 


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1 (1) online advertisements; 

2 (2) search results; or 

3 (3) any other use case for which the Commis4 sion determines, by rulemaking in accordance with 

5 section 553 of title 5, United States Code, that the 

6 requirements of subsection (a)(2) would impose an 

7 undue burden on or prove to be infeasible for that 

8 general class of use case. 

9 SEC. 6. ENFORCEMENT. 

10 (a) ENFORCEMENT BY THE FEDERAL TRADE COM11 MISSION.— 

12 (1) UNFAIR ACT OR PRACTICE.—Any covered 

13 entity that violates section 4 or section 5 shall be 

14 deemed to have committed an unfair act or practice 

15 under section 5(a)(1) of the Federal Trade Commis16 sion Act (15 U.S.C. 45(a)(1)). 

17 (2) POWERS OF THE COMMISSION.— 

18 (A) IN GENERAL.—The Commission shall 

19 enforce sections 4 and 5 in the same manner, 

20 by the same means, and with the same jurisdic21 tion, powers, and duties as though all applicable 

22 terms and provisions of the Federal Trade 

23 Commission Act (15 U.S.C. 41 et seq.) were in24 corporated into and made a part of this section. 


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1 (B) CIVIL PENALTY AUTHORITY.—When 

2 enforcing section 4 or 5, the Commission may, 

3 depending on the nature and severity of the vio4 lation, include an assessment of a civil penalty 

5 in the cease and desist order provided for under 

6 section 5(b) of the Federal Trade Commission 

7 Act (15 U.S.C. 45). 

8 (C) PRIVILEGES AND IMMUNITIES.—Any 

9 covered entity that violates section 4 or 5 shall 

10 be subject to the penalties and entitled to the 

11 privileges and immunities provided in the Fed12 eral Trade Commission Act (15 U.S.C. 41 et 

13 seq.). 

14 (D) AUTHORITY PRESERVED.—Nothing in 

15 this subsection shall be construed to limit the 

16 authority of the Commission under any other 

17 provision of law. 

18 (b) REGULATIONS.— 

19 (1) IN GENERAL.—The Commission may pro20 mulgate, in accordance with section 553 of title 5, 

21 United States Code, regulations to— 

22 (A) carry out section 4, including by de23 scribing which algorithmic eligibility determina24 tions are unfair for the purposes of section 5 of 


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1 the Federal Trade Commission Act (15 U.S.C. 

2 45); and 

3 (B) carry out section 5. 

4 (2) NO REQUIREMENT FOR REGULATIONS.— 

5 Nothing in this Act shall require the Commission to 

6 promulgate regulations before enforcing violations of 

7 section 4 or 5. 

8 (c) REFERRAL REGARDING A POTENTIAL VIOLATION

9 OF A FEDERAL ANTI-DISCRIMINATION LAW.—If the Com10 mission finds that an algorithmic eligibility determination 

11 may be in violation of a Federal anti-discrimination law, 

12 the Commission shall refer the matter to the appropriate 

13 Federal or State agency with authority to initiate pro14 ceedings relating to such violation. 

15 SEC. 7. RESEARCH GRANTS FOR THE STUDY OF FAIR AND 

16 TRANSPARENT DATA ANALYTICS. 

17 (a) GRANT AUTHORITY.—The Director of the Na18 tional Institute of Standards and Technology may award 

19 grants for research into fair, accountable, and transparent 

20 data analytics and machine learning, particularly with re21 spect to algorithmic eligibility determinations. 

22 (b) FUNDING.—There are authorized to be appro23 priated $10,000,000 for each of fiscal years 2021 through 

24 2026, to carry out this section. Amounts appropriated 


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1 under the preceding sentence shall remain available until 

2 expended. 

3 SEC. 8. LEADERSHIP PROGRAM. 

4 (a) IN GENERAL.—By not later than 1 year after the 

5 date of the enactment of this Act, the Commission shall 

6 establish a leadership program under which the Commis7 sion recognizes covered entities that display excellence in 

8 fair, accountable, and transparent data science or machine 

9 learning, particularly with respect to algorithmic eligibility 

10 determinations. 

11 (b) PROCESS.—Such leadership program shall in12 clude a process for— 

13 (1) covered entities to apply to the Commission 

14 for such recognition; 

15 (2) the Commission, in consultation with the 

16 National Institute of Standards and Technology, to 

17 evaluate the merits of applications in accordance 

18 with standards that the Commission shall promul19 gate as a rule under section 553 of title 5, United 

20 States Code; and 

21 (3) recognizing covered entities that the Com22 mission determines have achieved excellence in fair, 

23 accountable, and transparent data science or ma24 chine learning, particularly with respect to algo25 rithmic eligibility determinations. 


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1 SEC. 9. AVOIDING DUPLICATION. 

2 In implementing the provisions of this Act, the Com3 mission shall work with other Federal agencies to avoid 

4 the burden on a covered entity from having to comply with 

5 requirements under this Act that may be duplicative of 

6 requirements under other provisions of Federal law. 

Æ 


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