Open App Markets Act
Bill: S.2710 | Sponsor: Sen. Blumenthal, Richard (D-CT)
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 prohibited by this 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,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Open App Markets 
Act''.</DELETED>

<DELETED>SEC. 2. DEFINITIONS.</DELETED>

<DELETED>    In this Act:</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (4) Developer.--The term ``developer'' means a 
        person that owns or controls an App or an App Store.</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (6) Non-public business information.--The term 
        ``non-public business information'' means non-public data that 
        is--</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (B) collected by a Covered Company in the 
                course of operating an App Store or providing an 
                operating system.</DELETED>

<DELETED>SEC. 3. PROTECTING A COMPETITIVE APP MARKET.</DELETED>

<DELETED>    (a) Exclusivity and Tying.--A Covered Company shall not--
</DELETED>
        <DELETED>    (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;</DELETED>
        <DELETED>    (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</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (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--</DELETED>
        <DELETED>    (1) choose third-party Apps or App Stores as 
        defaults for categories appropriate to the App or App 
        Store;</DELETED>
        <DELETED>    (2) install third-party Apps or App Stores through 
        means other than its App Store; and</DELETED>
        <DELETED>    (3) hide or delete Apps or App Stores provided or 
        preinstalled by the App Store owner or any of its business 
        partners.</DELETED>
<DELETED>    (e) Self-Preferencing in Search.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Considerations.--Unreasonably preferencing--
        </DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (B) does not include clearly disclosed 
                advertising.</DELETED>
<DELETED>    (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.</DELETED>

<DELETED>SEC. 4. PROTECTING THE SECURITY AND PRIVACY OF 
              USERS.</DELETED>

<DELETED>    (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--</DELETED>
        <DELETED>    (1) necessary to achieve user privacy, security, 
        or digital safety;</DELETED>
        <DELETED>    (2) taken to prevent spam or fraud; or</DELETED>
        <DELETED>    (3) taken to prevent a violation of, or comply 
        with, Federal or State law.</DELETED>
<DELETED>    (b) Requirements.--Section (a) shall only apply if the 
Covered Company establishes by clear and convincing evidence that the 
action described is--</DELETED>
        <DELETED>    (1) applied on a demonstrably consistent basis to 
        Apps of the Covered Company or its business partners and to 
        other Apps;</DELETED>
        <DELETED>    (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</DELETED>
        <DELETED>    (3) narrowly tailored and could not be achieved 
        through a less discriminatory and technically possible 
        means.</DELETED>

<DELETED>SEC. 5. ENFORCEMENT.</DELETED>

<DELETED>    (a) Enforcement.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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).</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>
<DELETED>    (b) Suits by Developers Injured.--</DELETED>
        <DELETED>    (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--</DELETED>
                <DELETED>    (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;</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (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.</DELETED>
        <DELETED>    (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.</DELETED>

<DELETED>SEC. 6. RULE OF CONSTRUCTION.</DELETED>

<DELETED>    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.</DELETED>

<DELETED>SEC. 7. SEVERABILITY.</DELETED>

<DELETED>    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.</DELETED>

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 
        manage billing or process the payments from users of an app.
            (6) Nonpublic business information.--The term ``nonpublic 
        business information'' means nonpublic 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 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.

SEC. 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'' includes--
                    (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.

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 (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.), the Sherman Act (15 U.S.C. 1 et seq.), the Clayton Act 
        (15 U.S.C. 12 et seq.), and Antitrust Civil Process Act (15 
        U.S.C. 1311 et seq.), as appropriate, were incorporated into 
        and made a part of this Act.
            (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.

SEC. 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.

SEC. 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), the Federal Trade Commission Act (15 U.S.C. 
                41 et seq.), or any other provision of law; or
                    (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'', approved July 5, 1946 (commonly known as the 
        ``Lanham Act'' or the ``Trademark Act of 1946'') (15 U.S.C. 
        1114, 1125), or corollary State law;
            (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.

SEC. 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.

SEC. 9. EFFECTIVE DATE.

    This Act shall take effect on the date that is 180 days after the 
date of enactment of this Act.
                                                       Calendar No. 275

117th CONGRESS

  2d Session

                                S. 2710

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