American Innovation and Choice Online Act

To provide that certain discriminatory conduct by covered platforms shall be unlawful, and for other purposes. 1. Short title This Act may be cited as the American Innovation and Choice Online Act 2. Unlawful conduct (a) Violation It shall be unlawful for a person operating a covered platform, in or affecting commerce, if it is shown, by a preponderance of the evidence, that the person has engaged in conduct that would— (1) unfairly preference the covered platform operator’s own products, services, or lines of business over those of another business user on the covered platform in a manner that would materially harm competition on the covered platform; (2) unfairly limit the ability of another business user’s products, services, or lines of business to compete on the covered platform relative to the covered platform operator’s own products, services, or lines of business in a manner that would materially harm competition on the covered platform; or (3) discriminate in the application or enforcement of the covered platform’s terms of service among similarly situated business users in a manner that may materially harm competition on the covered platform. (b) Unlawful conduct It shall be unlawful for a person operating a covered platform, in or affecting commerce, if it is shown, by a preponderance of the evidence, that the person has engaged in conduct that would— (1) materially restrict or impede the capacity of a business user to access or interoperate with the same platform, operating system, hardware or software features that are available to the covered platform operator’s own products, services, or lines of business that compete or would compete with products or services offered by business users on the covered platform; (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 that are not part of or intrinsic to the covered platform itself; (3) use non-public data that are obtained from or generated on the covered platform by the activities of a business user or by the interaction of a covered platform user with the products or services of a business user to offer, or support the offering of, the covered platform operator’s own products or services that compete or would compete with products or services offered by business users on the covered platform; (4) materially restrict or impede a business user from accessing data generated on the covered platform by the activities of the business user, or through an interaction of a covered platform user with the business user’s products or services, such as by establishing contractual or technical restrictions that prevent the portability of the business user's data by the business user to other systems or applications; (5) unless necessary for the security or functioning of the covered platform, materially 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) in connection with any covered platform user interface, 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 relative to those of another business user than they would be treated under standards mandating the neutral, fair, and non-discriminatory treatment of all business users; or (7) 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) Rule of construction Subsections (a) and (b) shall not be construed to require a covered platform operator to divulge, license, or otherwise grant the use of the covered platform operator’s intellectual property, trade or business secrets, or other confidential proprietary business processes to a business user. (d) Affirmative defenses (1) In general Subsection (a) shall not apply if the defendant establishes by a preponderance of the evidence that the conduct described in subsections (a) was narrowly tailored, was nonpretextual, and was necessary to— (A) prevent a violation of, or comply with, Federal or State law; (B) protect safety, user privacy, the security of non-public data, or the security of the covered platform; or (C) maintain or enhance the core functionality of the covered platform. (2) Unlawful conduct Subsection (b) shall not apply if the defendant establishes by a preponderance of the evidence that the conduct described in subsection (b)— (A) has not resulted in and would not result in material harm to the competitive process by restricting or impeding legitimate activity by business users; or (B) was narrowly tailored, could not be achieved through less discriminatory means, was nonpretextual, and was necessary to— (i) prevent a violation of, or comply with, Federal or State law; (ii) protect safety, user privacy, the security of non-public data, or the security of the covered platform; or (iii) maintain or enhance the core functionality of the covered platform. (e) Covered platform designation The Federal Trade Commission and Department of Justice may jointly, with concurrence of the other, 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 clauses (i) through (iii) of subsection (h)(4) are met; (2) be issued in writing and published in the Federal Register; and (3) apply for 7 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 under subsection (f). (f) Removal of covered platform designation The Commission or the Department of Justice shall— (1) consider whether its designation of a covered platform under subsection (e) should be removed prior to the expiration of the 7-year period if the covered platform operator files a request with the Commission or the Department of Justice, which shows that the online platform no longer meets the criteria set forth in clauses (i) through (iii) of subsection (h)(4); (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; and (3) obtain the concurrence of the Commission or the Department of Justice, as appropriate, before granting a request submitted under paragraph (1). (g) Remedies The remedies provided in this subsection are in addition to, and not in lieu of, any other remedy available under Federal or State law. (1) Civil penalty Any person 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 Treasury, in an amount not more than 15 percent of the total United States revenue of the person for the period of time the violation occurred. (2) Injunctions The Assistant Attorney General of the Antitrust Division, the Commission, or the attorney general of any State may seek, and the court may order, relief in equity as necessary to prevent, restrain, or prohibit violations of this Act. (3) Repeat offenders If the fact finder determines that a person has engaged in a pattern or practice of violating this Act, the court shall consider requiring, and may order, that the Chief Executive Officer, and any other corporate officer as appropriate to deter violations of this Act, 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. (h) Definitions In this section: (1) Antitrust laws The term antitrust laws 15 U.S.C. 12 (2) Business user The term Business User (3) Commission The term Commission (4) Covered platform The term covered platform (A) that has been designated as a covered platform under section 2(e); or (B) that— (i) at any point during the 12 months preceding a designation under section 2(e) or at any point during 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 online platform; (ii) at any point during the 2 years preceding a designation under section 2(e) or at any point during the 2 years preceding the filing of a complaint for an alleged violation of this Act, is owned or controlled by a person with United States net annual sales or a market capitalization greater than $550,000,000,000, adjusted for inflation on the basis of the Consumer Price Index; 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) Critical trading partner The term critical trading partner (A) a business user to its users or customers; or (B) a business user to a tool or service that it needs to effectively serve its users or customers. (6) Person The term person 15 U.S.C. 12 (7) Data (A) In general Not later than 6 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 (B) Data The term data (i) user or customer of the covered platform; or (ii) user or customer of a business user. (8) Online platform The term online platform (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 products or services, including software applications, between and among consumers or businesses not controlled by the platform operator; or (C) enables user searches or queries that access or display a large volume of information. (9) Control The term control (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. (10) State The term State (i) Enforcement (1) In general Except as otherwise provided in this Act— (A) the Commission 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 of the Federal Trade Commission Act ( 15 U.S.C. 41 et seq. (B) the Attorney General 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 of the Sherman Act ( 15 U.S.C. 1 et seq. 15 U.S.C. 12 et seq. 15 U.S.C. 1311 et seq. (C) any attorney general of a State 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 of the Sherman Act ( 15 U.S.C. 1 et seq. 15 U.S.C. 12 et seq. (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. 45 (3) Commission independent litigation authority If the Commission has reason to believe that a person 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. (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. (j) Emergency relief (1) In general 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 may grant such relief if the Commission, the United States, or the attorney general of a State proves— (A) there is a claim that a covered platform operator took an action that would violate this Act; and (B) that action impairs the ability of business users to compete with the covered platform operator. (2) Emergency relief The emergency relief shall not last more than 120 days from the filing of the complaint. (3) Termination 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) Other equitable relief 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 (g) of this section. (k) Statute of limitations A proceeding for a violation of this section may be commenced not later than 6 years after such violation occurs. 3. Judicial review (a) In general Any party that is subject to a covered platform designation under section 2(e) of this Act, a decision in response to a request to remove a covered platform designation under section 2(f) of this Act, a final order issued in any district court of the United States under this Act, or a final order of the Commission issued in an administrative adjudicative proceeding under this Act may within 30 days of the issuance of such designation, decision, or order, petition for review of such designation, decision, or 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 section 2(e) of this Act, a decision in response to a request to remove a covered platform designation under section 2(f) of this Act, or a final order of the Commission issued in an administrative adjudicative proceeding under this Act, the findings of the Commission or the Assistant Attorney General as to the facts, if supported by evidence, shall be conclusive. 4. 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, including policies for determining the appropriate amount of a civil penalty to be sought under section 2(g)(1) of this Act, with the goal of promoting transparency, deterring violations, and imposing sanctions proportionate to the gravity of individual 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 they operate to bind the Commission, Department of Justice, or any person, State, or locality to the approach recommended in such Guidelines. 5. Rule of construction (a) Notwithstanding any other provision of law, whether user conduct would constitute a violation of section 1030 of title 18 of the United States Code is not dispositive of whether the defendant has established an affirmative defense under this Act. (b) An action taken by a covered platform operator that is reasonably tailored to protect the rights of third parties under sections 106, 1101, 1201, or 1401 of title 17 of the United States Code or rights actionable under sections 32 or 43 of the Lanham Act ( 15 U.S.C. 1114 (c) Nothing in this Act shall be construed to limit any authority of the Attorney General or the Commission under the antitrust laws, the Federal Trade Commission Act ( 15 U.S.C. 45 6. 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.

Summary: American Innovation and Choice Online Act This bill prohibits certain large online platforms from engaging in specified acts, including giving preference to their own products on the platform, unfairly limiting the availability on the platform of competing products from another business, or discriminating in the application or enforcement of the platform's terms of service 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 and 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, and the forfeit of profits for repeat offenders.