Open App Markets Act

To promote competition and reduce gatekeeper power in the app economy, increase choice, improve quality, and reduce costs for consumers. 1. Short title This Act may be cited as the Open App Markets Act 2. Definitions In this Act: (1) App The term app (2) App store The term app store (3) Covered company The term covered company (4) Developer The term developer (5) In-app payment system The term in-app payment system (6) Nonpublic business information The term nonpublic business information (A) derived from a developer or an app or app store owned or controlled by a developer, including interactions between users and the app or app store of the developer; and (B) collected by a covered company in the course of operating an app store or providing an operating system. 3. Protecting a competitive app market (a) Exclusivity and tying A covered company shall not— (1) require developers to use or enable an in-app payment system owned or controlled by the covered company or any of its business partners as a condition of the distribution of an app on an app store or accessible on an operating system; (2) require as a term of distribution on an app store that pricing terms or conditions of sale be equal to or more favorable on its app store than the terms or conditions under another app store; or (3) take punitive action or otherwise impose less favorable terms and conditions against a developer for using or offering different pricing terms or conditions of sale through another in-app payment system or on another app store. (b) Interference with legitimate business communications A covered company shall not impose restrictions on communications of developers with the users of an app of the developer through the app or direct outreach to a user concerning legitimate business offers, such as pricing terms and product or service offerings. Nothing in this subsection shall prohibit a covered company from providing a user the option to offer consent prior to the collection and sharing of the data of the user by an app. (c) Nonpublic business information A covered company shall not use nonpublic business information derived from a third-party app for the purpose of competing with that app. (d) Interoperability A covered company that controls the operating system or operating system configuration on which its app store operates shall allow and provide readily accessible means for users of that operating system to— (1) choose third-party apps or app stores as defaults for categories appropriate to the app or app store; (2) install third-party apps or app stores through means other than its app store; and (3) hide or delete apps or app stores provided or preinstalled by the app store owner or any of its business partners. (e) Self-Preferencing in search (1) In general A covered company shall not provide unequal treatment of apps in an app store through unreasonably preferencing or ranking the apps of the covered company or any of its business partners over those of other apps in organic search results. (2) Considerations Unreasonably preferencing— (A) includes applying ranking schemes or algorithms that prioritize apps based on a criterion of ownership interest by the covered company or its business partners; and (B) does not include clearly disclosed advertising. (f) Open app development A covered company shall provide access to operating system interfaces, development information, and hardware and software features to developers on a timely basis and on terms that are equivalent or functionally equivalent to the terms for access by similar apps or functions provided by the covered company or to its business partners. 4. Protecting the security and privacy of users (a) In general (1) No violation Subject to section (b), a covered company shall not be in violation of section 3 for an action that is— (A) necessary to achieve user privacy, security, or digital safety; (B) taken to prevent spam or fraud; (C) necessary to prevent unlawful infringement of preexisting intellectual property; or (D) taken to prevent a violation of, or comply with, Federal or State law. (2) Privacy and security protections In paragraph (1), the term necessary to achieve user privacy, security, or digital safety (A) allowing an end user to opt in, and providing information regarding the reasonable risks, prior to enabling installation of the third-party apps or app stores; (B) removing malicious or fraudulent apps or app stores from an end user device; (C) providing an end user with the technical means to verify the authenticity and origin of third-party apps or app stores; and (D) providing an end user with option to limit the collection sharing of the data of the user with third-party apps or app stores. (b) Requirements Subsection (a) shall only apply if the covered company establishes by a preponderance of the evidence that the action described in that subsection is— (1) applied on a demonstrably consistent basis to— (A) apps of the covered company or its business partners; and (B) other apps; (2) not used as a pretext to exclude, or impose unnecessary or discriminatory terms on, third-party apps, in-app payment systems, or app stores; and (3) narrowly tailored and could not be achieved through a less discriminatory and technically possible means. 5. Enforcement (a) Enforcement (1) In general The Federal Trade Commission, the Attorney General, and any attorney general of a State subject to the requirements in paragraph (3) 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. 15 U.S.C. 1 et seq. 15 U.S.C. 12 et seq. 15 U.S.C. 1311 et seq. (2) Federal trade commission independent litigation authority If the Federal Trade Commission has reason to believe that a covered company violated this Act, the Federal Trade 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 company. (3) 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. (b) Suits by developers injured (1) In general Except as provided in paragraph (3), any developer injured by reason of anything forbidden in this Act may 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 the developer sustained and the cost of suit, including a reasonable attorney’s fee. The court may award under this paragraph, pursuant to a motion by such developer promptly made, simple interest on actual damages for the period beginning on the date of service of the pleading of the developer setting forth a claim under this Act 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 paragraph for any period is just in the circumstances, the court shall consider only— (A) whether the developer 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; (B) whether, in the course of the action involved, the developer 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 (C) whether the developer 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. (2) Injunctive relief Except as provided in paragraph (3), any developer 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. In any action under this paragraph in which the plaintiff substantially prevails, the court shall award the cost of suit, including a reasonable attorney’s fee, to such plaintiff. (3) Foreign state-owned enterprises A developer of an app that is owned by, or under the control of, a foreign state may not bring an action under this subsection. 6. Reporting Not later than 3 years after the date of enactment of this Act, the Federal Trade Commission, the Comptroller General of the United States, and the Antitrust Division of the Department of Justice shall each separately review and provide an in-depth analysis of the impact of this Act on competition, innovation, barriers to entry, and concentrations of market power or market share after the date of enactment of this Act. 7. Rule of construction Nothing in this Act may be construed— (1) to limit— (A) any authority of the Attorney General or the Federal Trade Commission under the antitrust laws (as defined in the first section of the Clayton Act ( 15 U.S.C. 12 15 U.S.C. 41 et seq. (B) the application of any law; (2) to require— (A) a covered company to provide service under a hardware or software warranty for damage caused by third-party apps or app stores installed through means other than the app store of the covered company; or (B) customer service for the installation or operation of third-party apps or app stores described in subparagraph (A); (3) to prevent an action taken by a covered company that is reasonably tailored to protect the rights of third parties under section 106, 1101, 1201, or 1401 of title 17, United States Code, or rights actionable under sections 32 or 43 of the Act entitled An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes Lanham Act Trademark Act of 1946 15 U.S.C. 1114 (4) to require a covered company to license any intellectual property, including any trade secrets, owned by or licensed to the covered company; (5) to prevent a covered company from asserting preexisting rights of the covered company under intellectual property law to prevent the unlawful use of any intellectual property owned by or duly licensed to the covered company; or (6) to require a covered company to interoperate or share data with persons or business users that— (A) are on any list maintained by the Federal Government by which entities are identified as limited or prohibited from engaging in economic transactions as part of United States sanctions or export control regimes; or (B) have been identified by the Federal Government as national security, intelligence, or law enforcement risks. 8. Severability If any provision of this Act, or the application of such a provision to any person or circumstance, is held to be unconstitutional, the remaining provisions of this Act, and the application of such provisions to any person or circumstance shall not be affected thereby. 9. Effective date This Act shall take effect on the date that is 180 days after the date of enactment of this Act.

Summary: Open App Markets Act This bill establishes rules related to the operation of an app store by a covered company (i.e., the owner or controller of an app store with more than 50 million U.S. users). An app is a software application or electronic service that may be run or directed by a user on a computer or mobile device. An app store is a publicly available website, software application, or other electronic service that distributes apps from third-party developers to users. The bill prohibits a covered company from (1) requiring developers to use an in-app payment system owned or controlled by the company as a condition of distribution or accessibility, (2) requiring that pricing or conditions of sale be equal to or more favorable on its app store than another app store, or (3) taking punitive action against a developer for using or offering different pricing terms or conditions of sale through another in-app payment system or on another app store. A covered company may not interfere with legitimate business communications between developers and users, use non-public business information from a third-party app to compete with the app, or unreasonably prefer or rank its own apps (or those of its business partners) over other apps. The bill provides for enforcement of its provisions by the Federal Trade Commission and the Department of Justice, as well as through suits brought by developers that are injured by reason of anything prohibited by this bill.