Open App Markets Act
Bill: H.R.5017 | Sponsor: Rep. Johnson, Henry C. "Hank," Jr. (D-GA)
Policy area: Commerce

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 forbidden under the bill.

To promote competition and reduce gatekeeper power in the app economy, 
   increase choice, improve quality, and reduce costs for consumers.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Open App Markets Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) App.--The term ``App'' means a software application or 
        electronic service that may be run or directed by a user on a 
        computer, a mobile device, or any other general purpose 
        computing device.
            (2) App store.--The term ``App Store'' means a publicly 
        available website, software application, or other electronic 
        service that distributes Apps from third-party developers to 
        users of a computer, a mobile device, or any other general 
        purpose computing device.
            (3) Covered company.--The term ``Covered Company'' means 
        any person that owns or controls an App Store for which users 
        in the United States exceed 50,000,000.
            (4) Developer.--The term ``developer'' means a person that 
        owns or controls an App or an App Store.
            (5) In-app payment system.--The term ``In-App Payment 
        System'' means an application, service, or user interface to 
        process the payments from users of an App.
            (6) Non-public business information.--The term ``non-public 
        business information'' means non-public data that is--
                    (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.

SEC. 3. PROTECTING A COMPETITIVE APP MARKET.

    (a) Exclusivity and Tying.--A Covered Company shall not--
            (1) require developers to use an In-App Payment System 
        owned or controlled by the Covered Company or any of its 
        business partners as a condition of being distributed 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 the App through an App or direct outreach 
to a user concerning legitimate business offers, such as pricing terms 
and product or service offerings.
    (c) Non-Public Business Information.--A Covered Company shall not 
use non-public 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 the 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.
            (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.--Access to operating system interfaces, 
development information, and hardware and software features shall be 
provided 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.

SEC. 4. PROTECTING THE SECURITY AND PRIVACY OF USERS.

    (a) In General.--Subject to section (b), a Covered Company shall 
not be in violation of a subsection of section 3 for an action that 
is--
            (1) necessary to achieve user privacy, security, or digital 
        safety;
            (2) taken to prevent spam or fraud; or
            (3) taken to prevent a violation of, or comply with, 
        Federal or State law.
    (b) Requirements.--Section (a) shall only apply if the Covered 
Company establishes by clear and convincing evidence that the action 
described is--
            (1) applied on a demonstrably consistent basis to Apps of 
        the Covered Company or its business partners and to 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.

SEC. 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 (4) 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.) or the Clayton Act (15 U.S.C. 12 et seq.), as 
        appropriate, were incorporated into and made a part of this 
        Act.
            (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. 5).
            (3) 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 
        platform operator.
            (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.
    (b) Suits by Developers Injured.--
            (1) In general.--Any developer who shall be 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 him sustained, and the cost of suit, 
        including a reasonable attorney's fee. The court may award 
        under this subsection, pursuant to a motion by such developer 
        promptly made, simple interest on actual damages for the period 
        beginning on the date of service of such developer's pleading 
        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 subsection for any period is just in the 
        circumstances, the court shall consider only--
                    (A) whether such 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, 
                such 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 such 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.--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.

SEC. 6. RULE OF CONSTRUCTION.

    Nothing in this Act shall be construed to limit 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), the Federal Trade Commission Act (15 U.S.C. 41 et seq.), or 
any other provision of law or to limit the application of any law.

SEC. 7. 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 the provision held to be unconstitutional to any other 
person or circumstance, shall not be affected thereby.
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