or undermine the rights provided to customers under this
Act.
SEC. 4. ROLE OF SELF-REGULATORY ORGANIZATIONS.
For purposes of section 3(a)(2), a self-regulatory or-
ganization does not comply with the requirements of this
section unless—
(1) the self-regulatory organization is registered
with the Commission, by filing with the Commission
an application for registration that—
(A) is in such form as the Commission, by
rule, may prescribe;
(B) contains the rules of the self-regu-
latory organization and such other information
and documents as the Commission, by rule,
may prescribe as necessary or appropriate;
(2) the Commission determines that—
(A) such self-regulatory organization is so
organized and has the capacity to be able to
carry out the purposes of this Act and to com-
ply, and to enforce compliance by its members,
with the provisions of this Act, the rules there-
under, and the rules of the self-regulatory orga-
nization;
(B) the rules of the self-regulatory organi-
zation are designed to prevent fraudulent and
deceptive acts and practices, and, in general, to
protect consumers and the public interest;
(C) the rules of the self-regulatory organi-
zation provide that its members shall be appro-
priately disciplined for violation of the provi-
sions of this Act, the rules thereunder, or the
rules of the self-regulatory organization, by ex-
pulsion, revocation of the authority to display
or advertise any seal or insignia, or any other
fitting sanction; and
(D) the rules of the self-regulatory organi-
zation provide a fair procedure for the dis-
ciplining of members; and
(3) the Commission has not revoked or sus-
pended the Commission’s determination under para-
graph (2) with respect to such self-regulatory orga-
nization.
SEC. 5. ACTIONS BY STATES.
(a) IN GENERAL.—Whenever an attorney general of
any State has reason to believe that the interests of the
residents of that State have been or are being threatened
or adversely affected because any person has engaged or
is engaging in a pattern or practice which violates any rule
of the Commission under section 3(a), the State may bring
a civil action on behalf of its residents in an appropriate
district court of the United States to enjoin such pattern
or practice, to enforce compliance with such rule of the
Commission, to obtain damages on behalf of their resi-
dents, or to obtain such further and other relief as the
court may deem appropriate.
(b) NOTICE.—The State shall serve prior written no-
tice of any civil action under subsection (a) upon the Com-
mission and provide the Commission with a copy of its
complaint, except that if it is not feasible for the State
to provide such prior notice, the State shall serve such
notice immediately upon instituting such action. Upon re-
ceiving a notice respecting a civil action, the Commission
shall have the right (1) to intervene in such action, (2)
upon so intervening, to be heard on all matters arising
therein, and (3) to file petitions for appeal.
(c) VENUE.—Any civil action brought under this sec-
tion in a district court of the United States may be
brought in the district wherein the defendant is found or
is an inhabitant or transacts business or wherein the viola-
tion occurred or is occurring, and process in such cases
may be served in any district in which the defendant is
an inhabitant or wherever the defendant may be found.
(d) INVESTIGATORY
POWERS.—For purposes of
bringing any civil action under this section, nothing in this
Act shall prevent the attorney general from exercising the
powers conferred on the attorney general by the laws of
such State to conduct investigations or to administer oaths
or affirmations or to compel the attendance of witnesses
or the production of documentary and other evidence.
(e) EFFECT
ON STATE COURT PROCEEDINGS.—
Nothing contained in this section shall prohibit an author-
ized State official from proceeding in State court on the
basis of an alleged violation of any general civil or criminal
antifraud statute of such State.
(f) LIMITATION.—Whenever the Commission has in-
stituted a civil action for violation of any rule or regulation
under this Act, no State may, during the pendency of such
action instituted by the Commission, subsequently insti-
tute a civil action against any defendant named in the
Commission’s complaint for violation of any rule as alleged
in the Commission’s complaint.
(g) ACTIONS BY OTHER STATE OFFICIALS.—
(1) Nothing contained in this section shall pro-
hibit an authorized State official from proceeding in
State court on the basis of an alleged violation of
any general civil or criminal statute of such State.
(2) In addition to actions brought by an attor-
ney general of a State under subsection (a), such an
action may be brought by officers of such State who
are authorized by the State to bring actions in such
State for protection of consumers and who are des-
ignated by the Commission to bring an action under
subsection (a) against persons that the Commission
has determined have or are engaged in a pattern or
practice which violates a rule of the Commission
under section 3(a).
SEC. 6. ADMINISTRATION AND APPLICABILITY.
(a) IN GENERAL.—Except as otherwise provided in
section 5, this Act shall be enforced by the Commission
under the Federal Trade Commission Act (15 U.S.C. 41
et seq.). Consequently, no activity which is outside the ju-
risdiction of that Act shall be affected by this Act, except
for purposes of this Act.
(b) RULEMAKING.—The Commission shall prescribe
the rules under section 3(a) within 270 days after the date
of enactment of this Act. A rule issued under this sub-
section shall be treated as a rule issued under section
18(a)(1)(B) of the Federal Trade Commission Act (15
U.S.C. 57a(a)(1)(B)).
(c) ENFORCEMENT.—Any violation of any rule pre-
scribed under subsection (a) shall be treated as a violation
of a rule respecting unfair or deceptive acts or practices
under section 5 of the Federal Trade Commission Act (15
U.S.C. 45). Notwithstanding section 5(a)(2) of such Act
(15 U.S.C. 45(a)(2)), communications common carriers
shall be subject to the jurisdiction of the Commission for
purposes of this Act.
(d) ACTIONS BY THE COMMISSION.—The Commis-
sion shall prevent any person from violating a rule of the
Commission under section 3 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.)
were incorporated into and made a part of this Act. Any
person who violates such rule shall be subject to the pen-
alties and entitled to the privileges and immunities pro-
vided in the Federal Trade Commission Act in the same
manner, by the same means, and with the same jurisdic-
tion, power, and duties as though all applicable terms and
provisions of the Federal Trade Commission Act were in-
corporated into and made a part of this Act.
SEC. 7. DEFINITIONS.
As used in this Act:
(1) COMMISSION.—The term ‘‘Commission’’
means the Federal Trade Commission.
(2) NETWORK
GAME
OPERATOR.—The term
‘‘network game operator’’ means a public or private
business enterprise that engages in the business of
providing game playing services (as opposed to the
sale or download of a game as a publisher or dis-
tributor), either for a fee or for free, using a com-
munication path between the player and the game
operator that is part of a communications network.
(3) COMMUNICATIONS
NETWORK.—The term
‘‘communications network’’ means a public or pri-
vate communication system that is used for the ex-
change of information or participation in trans-
actions (or both) and includes systems such as the
telephone system, cable systems, satellite systems,
wireless systems, or the Internet.
(4) GAME OF SKILL.—The term ‘‘game of skill’’
means a game in which there are few or no inde-
pendent chance elements (such as die rolls, spinning
wheels, drawn cards, or other random event genera-
tors) that substantially affect a game’s outcome be-
yond the control of one or more of the players.
Æ