Title: Online Consumer Protection Act
Policy area: Commerce

Summary:
Online Consumer Protection Act
This bill requires social media platforms and online marketplaces to establish and maintain terms of service that include a consumer protection policy.
The terms must cover issues such as payment methods, content ownership, and policies related to sharing user content with third parties.
Further, the consumer protection policy must address what content or products are permitted on the platform or marketplace and how content or products may be blocked, removed, or modified.
Social media platforms and online marketplaces must develop and implement a consumer protection program to maintain compliance with their consumer protection policies and other consumer protection laws. Platforms and marketplaces above certain revenues or monthly users also must submit to the Federal Trade Commission annual filings with respect to the requirements of this bill.
The bill provides for enforcement by the commission, state attorneys general, and private civil action.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3067 Introduced in House (IH)]

<DOC>






117th CONGRESS
  1st Session
                                H. R. 3067

  To clarify that a violation of certain terms of service and related 
  materials is an unfair or deceptive act or practice and subject to 
              enforcement by the Federal Trade Commission.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 7, 2021

 Ms. Schakowsky (for herself and Ms. Castor of Florida) introduced the 
   following bill; which was referred to the Committee on Energy and 
                                Commerce

_______________________________________________________________________

                                 A BILL


 
  To clarify that a violation of certain terms of service and related 
  materials is an unfair or deceptive act or practice and subject to 
              enforcement by the Federal Trade Commission.

    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 ``Online Consumer Protection Act''.

SEC. 2. TERMS OF SERVICE REQUIRED FOR SOCIAL MEDIA PLATFORMS AND ONLINE 
              MARKETPLACES.

    (a) In General.--Each social media platform or online marketplace 
shall establish, maintain, and make publicly available at all times and 
in a machine-readable format, terms of service in a manner that is 
clear, easily understood, and written in plain and concise language. 
The terms of service shall meet the following requirements:
            (1) The terms of service shall include--
                    (A) any terms or conditions of use of any service 
                provided by such person to a consumer;
                    (B) any policies of such person with regard to such 
                service or use of such service by a consumer; and
                    (C) the consumer protection policy consistent with 
                subsection (b).
            (2) The terms of service shall cover issues related to the 
        behavior of a service or a user of such service, and shall at a 
        minimum include terms of use related to--
                    (A) payment methods;
                    (B) content ownership, including content generated 
                by a user;
                    (C) policies related to sharing user content with 
                third parties;
                    (D) any disclaimers, limitations, notices of 
                nonliability, or the consequences of not agreeing to or 
                complying with the terms of service; and
                    (E) any other topic the Commission deems 
                appropriate.
    (b) Required Consumer Protection Policy.--
            (1) For social media platforms.--For social media 
        platforms, the consumer protection policy required by 
        subsection (a) shall include--
                    (A) a description of the content and behavior 
                permitted or prohibited on its service both by the 
                platform and by users;
                    (B) whether content may be blocked, removed, or 
                modified, or if service to users may be terminated and 
                the grounds upon which such actions will be taken;
                    (C) whether a person can request that content be 
                blocked, removed, or modified, or that a user's service 
                be terminated, and how to make such a request;
                    (D) a description of how a user will be notified of 
                and can respond to a request that his or her content be 
                blocked, removed, or modified, or service be 
                terminated, if such actions are taken;
                    (E) how a person can appeal a decision to block, 
                remove, or modify content, allow content to remain, or 
                terminate or not terminate service to a user, if such 
                actions are taken; and
                    (F) any other topic the Commission deems 
                appropriate.
            (2) For online marketplaces.--For online marketplaces, the 
        consumer protection policy required by subsection (a) shall 
        include--
                    (A) a description of the products, product 
                descriptions, and marketing material, allowed or 
                disallowed on the marketplace;
                    (B) whether a product, product descriptions, and 
                marketing material may be blocked, removed, or 
                modified, or if service to a user may be terminated and 
                the grounds upon which such actions will be taken;
                    (C) whether users will be notified of products that 
                have been recalled or are dangerous, and how they will 
                be notified;
                    (D) for users--
                            (i) whether a user can report suspected 
                        fraud, deception, dangerous products, or 
                        violations of the online marketplace's terms of 
                        service, and how to make such report;
                            (ii) whether a user who submitted a report 
                        will be notified of whether action was taken as 
                        a result of the report, the action that was 
                        taken and the reason why action was taken or 
                        not taken, and how the user will be notified;
                            (iii) how to appeal the result of a report; 
                        and
                            (iv) under what circumstances a user is 
                        entitled to refund, repair, or other remedy and 
                        the remedy to which the user may be entitled, 
                        how the user will be notified of such 
                        entitlement, and how the user may claim such 
                        remedy; and
                    (E) for sellers--
                            (i) how sellers are notified of a report by 
                        a user or a violation of the terms of service 
                        or consumer protection policy;
                            (ii) how to contest a report by a user;
                            (iii) how a seller who is the subject of a 
                        report will be notified of what action will be 
                        or must be taken as a result of the report and 
                        the justification for such action;
                            (iv) how to appeal a decision of the online 
                        marketplace to take an action in response to a 
                        user report or for a violation of the terms of 
                        service or consumer protection policy; and
                            (v) the policy regarding refunds, repairs, 
                        replacements, or other remedies as a result of 
                        a user report or a violation of the terms of 
                        service or consumer protection policy.
    (c) Standard Short-Form Statements and Graphic Icons for Consumer 
Protection Practices.--
            (1) Study and report.--Not later than 180 days after the 
        date of the enactment of this Act, the Commission shall conduct 
        a study to determine the most effective method of communicating 
        common consumer protection practices in short-form consumer 
        disclosure statements or graphic icons that disclose the 
        consumer protection and content moderation practices of social 
        media platforms and online marketplaces. The Commission shall 
        submit a report to the Committee on Energy and Commerce of the 
        House of Representatives and the Committee on Commerce, 
        Science, and Transportation of the Senate with the results of 
        the study. The report shall also be made publicly available on 
        the website of the Commission.
            (2) Regulations.--Except as provided in paragraph (3), 
        after completion of the study and not later than 1 year after 
        the date of the enactment of this Act, the Commission shall 
        finalize regulations based on the results of such study that 
        require social media platforms and online marketplaces to 
        communicate their consumer protection and content moderation 
        practices, and any other information as the Commission may 
        determine, in a clear and conspicuous manner.
            (3) Exception.--If the Commission determines, by a majority 
        vote of the Commissioners, that short-form consumer disclosure 
        statements or graphic icons will not advance consumer 
        understanding of consumer protection and content moderation 
        practices of social media platforms and online marketplaces, 
        the Commission shall include its reasoning for making that 
        determination in the report to Congress required by paragraph 
        (1) and shall not finalize the rulemaking until it determines 
        such rules would advance consumer understanding of consumer 
        protection and content moderation practices of social media 
        platforms and online marketplaces.

SEC. 3. CONSUMER PROTECTION PROGRAM.

    (a) In General.--Each social media platform and online marketplace 
shall establish and implement a consumer protection program that 
includes policies, practices, and procedures regarding consumer 
protection and content moderation--
            (1) to--
                    (A) ensure compliance with applicable Federal, 
                State, and local consumer protection laws;
                    (B) develop, implement, and ensure compliance with 
                the terms of service required by section 2;
                    (C) develop and implement policies regarding the 
                content and behavior permitted on its service both by 
                the platform and users, and ensure compliance with such 
                policies, practices and procedures;
                    (D) mitigate risks that could be harmful to 
                consumer's safety, well-being, and reasonable 
                expectations of users of the social media platform or 
                online marketplace;
                    (E) implement reasonable safeguards within, and 
                training and education of employees and contractors of, 
                the social media platform or online marketplace to 
                promote compliance with all consumer protection laws 
                and the consumer protection program; and
                    (F) disclose any other requirement the Commission 
                deems appropriate; and
            (2) taking into consideration--
                    (A) the size of, and the nature, scope, and 
                complexity of the activities engaged in by the social 
                media platform and online marketplace;
                    (B) the activities engaged in by users on the 
                social media platform or online marketplace; and
                    (C) the cost of implementing the program.
    (b) Additional Requirements.--As part of the consumer protection 
program, a social media platform or online marketplace shall--
            (1) establish processes to monitor, manage, and enforce the 
        social media platform's or online marketplace's consumer 
        protection program, and demonstrate the covered entity's 
        compliance with Federal, State, and local consumer protection 
        laws;
            (2) establish processes to assess and mitigate the risks to 
        individuals resulting from the social media platform's or 
        online marketplace's amplification of content or products not 
        in compliance with its terms of service;
            (3) establish a process to periodically review and update 
        the consumer protection program;
            (4) appoint a consumer protection officer, who reports 
        directly to the chief executive officer; and
            (5) establish and implement controls to monitor and 
        mitigate known or reasonably foreseeable risks to consumers 
        resulting from hosting content or products.
    (c) Annual Filings to the FTC.--
            (1) Filing requirements.--Each social media platform or 
        online marketplace that either has annual revenue in excess of 
        $250,000 in the prior year or that has more than 10,000 monthly 
        active users on average in the prior year, shall be required to 
        submit to the Commission, on an annual basis, a filing that 
        includes--
                    (A) a detailed and granular description of each of 
                the requirements in section 2 and this section;
                    (B) the name and contact information of the 
                consumer protection officer required under subsection 
                (b)(4); and
                    (C) a description of any material changes in the 
                consumer protection program or the terms of service 
                since the most recent prior disclosure to the 
                Commission.
            (2) Officer certification.--For each entity that submits an 
        annual filing under paragraph (1), the entity's principal 
        executive officer and the consumer protection officer required 
        under subsection (b)(4), shall be required to certify in each 
        such annual filing that--
                    (A) the signing officer has reviewed the filing;
                    (B) based on such officer's knowledge, the filing 
                does not contain any untrue statement of a material 
                fact or omit to state a material fact necessary to make 
                the statements, in light of the circumstances under 
                which such statements were made, not misleading;
                    (C) based on such officer's knowledge, the filing 
                fairly presents in all material respects the consumer 
                protection practices of the social media platform or 
                online marketplace; and
                    (D) the signing consumer protection officer--
                            (i) is responsible for establishing and 
                        maintaining safeguards and controls to protect 
                        consumers and administer the consumer 
                        protection program; and
                            (ii) has provided all material conclusions 
                        about the effectiveness of such safeguards and 
                        controls.
            (3) Public availability.--The Commission shall make 
        publicly available on the website of the Commission the filings 
        submitted under paragraph (1). The Commission may withhold 
        information included in such a filing if the Commission 
        determines such information should not be public. If the 
        Commission withholds any information, the Commission shall make 
        publicly available on the website the category of information 
        withheld and the reasons for withholding it.

SEC. 4. ENFORCEMENT.

    (a) Enforcement by Federal Trade Commission.--
            (1) Unfair or deceptive acts or practices.--Any violation 
        of this Act shall be treated as a violation of a regulation 
        under section 18(a)(1)(B) of the Federal Trade Commission Act 
        (15 U.S.C. 57a(a)(1)(B)) regarding unfair or deceptive acts or 
        practices.
            (2) Powers of commission.--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 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 this Act shall be subject to 
        the penalties and entitled to the privileges and immunities 
        provided in the Federal Trade Commission Act.
    (b) Regulations.--The Commission shall promulgate regulations under 
section 553 of title 5, United States Code, to carry out the purposes 
of this Act.
    (c) Private Right of Action.--
            (1) Enforcement by individuals.--
                    (A) In general.--An individual alleging damages as 
                a result of a violation of this Act may bring a civil 
                action in any court of competent jurisdiction, State or 
                Federal.
                    (B) Relief.--In a civil action brought under 
                subparagraph (A) in which the plaintiff prevails, the 
                court may award--
                            (i) damages as provided in subparagraph 
                        (C);
                            (ii) reasonable attorney's fees and 
                        litigation costs; and
                            (iii) any other relief, including equitable 
                        or declaratory relief, that the court 
                        determines appropriate.
                    (C) Damages.--A prevailing plaintiff is entitled to 
                actual damages as a result of the violation of this 
                Act.
            (2) Invalidity of pre-dispute arbitration agreements and 
        pre- dispute joint action waivers.--
                    (A) In general.--Notwithstanding any other 
                provision of law, no pre-dispute arbitration agreement 
                or pre-dispute joint action waiver shall be valid or 
                enforceable with respect to a dispute arising under 
                this Act.
                    (B) Applicability.--Any determination as to whether 
                or how this paragraph applies to any dispute shall be 
                made by a court, rather than an arbitrator, without 
                regard to whether such agreement purports to delegate 
                such determination to an arbitrator.
                    (C) Definitions.--In this paragraph:
                            (i) Pre-dispute arbitration agreement.--The 
                        term ``pre-dispute arbitration agreement'' 
                        means any agreement to arbitrate a dispute that 
                        has not arisen at the time of making the 
                        agreement.
                            (ii) Pre-dispute joint-action waiver.--The 
                        term ``pre-dispute joint-action waiver'' means 
                        an agreement, whether or not part of a pre-
                        dispute arbitration agreement, that would 
                        prohibit, or waive the right of, one of the 
                        parties to the agreement to participate in a 
                        joint, class, or collective action in a 
                        judicial, arbitral, administration, or other 
                        forum, concerning a dispute that has not yet 
                        arisen at the time of making the agreement.
                            (iii) Dispute.--The term ``dispute'' means 
                        any claim related to an alleged violation of 
                        this Act and between an individual and a 
                        covered organization.
    (d) Enforcement by State Attorneys General.--
            (1) In general.--If the chief law enforcement officer of a 
        State, or an official or agency designated by a State, has 
        reason to believe that any person has violated or is violating 
        this Act, the attorney general, official, or agency of the 
        State, in addition to any authority it may have to bring an 
        action in State court under its consumer protection law, may 
        bring a civil action in any appropriate United States district 
        court or in any other court of competent jurisdiction, 
        including a State court, to--
                    (A) enjoin further such violation by such person;
                    (B) enforce compliance with this Act;
                    (C) obtain civil penalties; and
                    (D) obtain damages, restitution, or other 
                compensation on behalf of residents of the State.
            (2) Notice and intervention by the ftc.--The attorney 
        general of a State shall provide prior written notice of any 
        action under paragraph (1) to the Commission and provide the 
        Commission with a copy of the complaint in the action, except 
        in any case in which such prior notice is not feasible, in 
        which case the attorney general shall serve such notice 
        immediately upon instituting such action. The Commission shall 
        have the right--
                    (A) to intervene in the action;
                    (B) upon so intervening, to be heard on all matters 
                arising therein; and
                    (C) to file petitions for appeal.
            (3) Limitation on state action while federal action is 
        pending.--If the Commission has instituted a civil action for 
        violation of this Act, no State attorney general, or official 
        or agency of a State, may bring an action under this subsection 
        during the pendency of that action against any defendant named 
        in the complaint of the Commission for any violation of this 
        Act alleged in the complaint.
            (4) Relationship with state-law claims.--If the attorney 
        general of a State has authority to bring an action under State 
        law directed at acts or practices that also violate this Act, 
        the attorney general may assert the State-law claim and a claim 
        under this Act in the same civil action.

SEC. 5. RELATIONSHIP TO OTHER LAWS.

    (a) Effect of Other Laws.--Section 230 of the Communications Act of 
1934 (47 U.S.C. 230) shall not apply to any violation of this Act.
    (b) Effect on State Laws.--Nothing in this Act or any regulation 
promulgated under this Act shall preempt or otherwise affect any State 
or local law.
    (c) Severability.--If any provision of this Act, or the application 
thereof to any person or circumstance, is held invalid, the remainder 
of this Act and the application of such provision to other persons not 
similarly situated or to other circumstances shall not be affected by 
the invalidation.

SEC. 6. FTC ENFORCEMENT AUTHORITY.

    (a) In General.--Section 230(e) of the Communications Act of 1934 
(47 U.S.C. 230(e)) is amended by adding at the end the following:
            ``(6) No effect on ftc enforcement.--Nothing in this 
        section shall be construed to impair the enforcement by the 
        Federal Trade Commission of any provision of law enforced by 
        the Federal Trade Commission.''.
    (b) Applicability.--The amendment made by this section shall apply 
with respect to any action or proceeding that is commenced on or after 
the date of the enactment of this Act.

SEC. 7. DEFINITIONS.

    As used in this Act, the following definitions apply:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Consumer product.--The term ``consumer product'' has 
        the meaning given such term in section 3(a) of the Consumer 
        Product Safety Act (15 U.S.C. 2052(a)).
            (3) Online marketplace.--The term ``online marketplace'' 
        means a website or web application, that--
                    (A) includes features that allow for, facilitate, 
                or enable third-party sellers to engage in the sale, 
                purchase, payment, storage, shipping, or delivery of a 
                consumer product in the United States; and
                    (B) hosts one or more third-party sellers.
            (4) Seller.--The term ``seller'' means a person or entity 
        that sells, offers to sell, or contracts to sell a consumer 
        product through an online marketplace's platform.
            (5) Social media platform.--The term ``social media 
        platform'' means a website or mobile web application that--
                    (A) permits a person to become a registered user, 
                establish an account, or create a profile for the 
                purpose of allowing the user to create, share, and view 
                user-generated content through such an account or 
                profile;
                    (B) enables one or more users to generate content 
                that can be viewed by other users of the platform; and
                    (C) primarily serves as a medium for users to 
                interact with content generated by other users of the 
                medium and for the platform to deliver ads to users.
            (6) User.--The term ``user'' means a person or entity that 
        uses a social media platform or online marketplace for any 
        purpose, including advertisers and sellers, regardless of 
        whether that person has an account or is otherwise registered 
        with the platform.
                                 <all>