Title: American Innovation and Choice Online Act
Policy area: Commerce

Summary:
American Innovation and Choice Online Act
This bill prohibits certain large online platforms from engaging in specified acts, including giving preference to their own products on the platform, unfairly limiting the availability on the platform of competing products from another business, or discriminating in the application or enforcement of the platform's terms of service among similarly situated users.
Further, a platform may not materially restrict or impede the capacity of a competing business user to access or interoperate with the same platform, operating system, or hardware or software features. The bill also restricts the platform's use of nonpublic data obtained from or generated on the platform and prohibits the platform from restricting access to platform data generated by the activity of a competing business user. The bill also provides additional restrictions related to installing or uninstalling software, search or ranking functionality, and retaliation for contact with law enforcement regarding actual or potential violations of law.
The bill establishes affirmative defenses for the prohibited conduct.
The Federal Trade Commission and the Department of Justice must designate whether an entity is a platform covered by the bill, and both must carry out enforcement activities.
The bill also provides for civil penalties, injunctions, and the forfeit of profits for repeat offenders.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2992 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                S. 2992

  To provide that certain discriminatory conduct by covered platforms 
               shall be unlawful, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 18, 2021

 Ms. Klobuchar (for herself, Mr. Grassley, Mr. Durbin, Mr. Graham, Mr. 
   Blumenthal, Mr. Kennedy, Mr. Booker, Ms. Lummis, Ms. Hirono, Mr. 
  Warner, Mr. Hawley, and Mr. Daines) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To provide that certain discriminatory conduct by covered platforms 
               shall be unlawful, and for other purposes.

    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 ``American Innovation and Choice 
Online Act''.

SEC. 2. UNLAWFUL CONDUCT.

    (a) Violation.--It shall be unlawful for a person operating a 
covered platform, in or affecting commerce, if it is shown, by a 
preponderance of the evidence, that the person has engaged in conduct 
that would--
            (1) unfairly preference the covered platform operator's own 
        products, services, or lines of business over those of another 
        business user on the covered platform in a manner that would 
        materially harm competition on the covered platform;
            (2) unfairly limit the ability of another business user's 
        products, services, or lines of business to compete on the 
        covered platform relative to the covered platform operator's 
        own products, services, or lines of business in a manner that 
        would materially harm competition on the covered platform; or
            (3) discriminate in the application or enforcement of the 
        covered platform's terms of service among similarly situated 
        business users in a manner that may materially harm competition 
        on the covered platform.
    (b) Unlawful Conduct.--It shall be unlawful for a person operating 
a covered platform, in or affecting commerce, if it is shown, by a 
preponderance of the evidence, that the person has engaged in conduct 
that would--
            (1) materially restrict or impede the capacity of a 
        business user to access or interoperate with the same platform, 
        operating system, hardware or software features that are 
        available to the covered platform operator's own products, 
        services, or lines of business that compete or would compete 
        with products or services offered by business users on the 
        covered platform;
            (2) condition access to the covered platform or preferred 
        status or placement on the covered platform on the purchase or 
        use of other products or services offered by the covered 
        platform operator that are not part of or intrinsic to the 
        covered platform itself;
            (3) use non-public data that are obtained from or generated 
        on the covered platform by the activities of a business user or 
        by the interaction of a covered platform user with the products 
        or services of a business user to offer, or support the 
        offering of, the covered platform operator's own products or 
        services that compete or would compete with products or 
        services offered by business users on the covered platform;
            (4) materially restrict or impede a business user from 
        accessing data generated on the covered platform by the 
        activities of the business user, or through an interaction of a 
        covered platform user with the business user's products or 
        services, such as by establishing contractual or technical 
        restrictions that prevent the portability of the business 
        user's data by the business user to other systems or 
        applications;
            (5) unless necessary for the security or functioning of the 
        covered platform, materially restrict or impede covered 
        platform users from un-installing software applications that 
        have been preinstalled on the covered platform or changing 
        default settings that direct or steer covered platform users to 
        products or services offered by the covered platform operator;
            (6) in connection with any covered platform user interface, 
        including search or ranking functionality offered by the 
        covered platform, treat the covered platform operator's own 
        products, services, or lines of business more favorably 
        relative to those of another business user than they would be 
        treated under standards mandating the neutral, fair, and non-
        discriminatory treatment of all business users; or
            (7) retaliate against any business user or covered platform 
        user that raises concerns with any law enforcement authority 
        about actual or potential violations of State or Federal law.
    (c) Rule of Construction.--Subsections (a) and (b) shall not be 
construed to require a covered platform operator to divulge, license, 
or otherwise grant the use of the covered platform operator's 
intellectual property, trade or business secrets, or other confidential 
proprietary business processes to a business user.
    (d) Affirmative Defenses.--
            (1) In general.--Subsection (a) shall not apply if the 
        defendant establishes by a preponderance of the evidence that 
        the conduct described in subsections (a) was narrowly tailored, 
        was nonpretextual, and was necessary to--
                    (A) prevent a violation of, or comply with, Federal 
                or State law;
                    (B) protect safety, user privacy, the security of 
                non-public data, or the security of the covered 
                platform; or
                    (C) maintain or enhance the core functionality of 
                the covered platform.
            (2) Unlawful conduct.--Subsection (b) shall not apply if 
        the defendant establishes by a preponderance of the evidence 
        that the conduct described in subsection (b)--
                    (A) has not resulted in and would not result in 
                material harm to the competitive process by restricting 
                or impeding legitimate activity by business users; or
                    (B) was narrowly tailored, could not be achieved 
                through less discriminatory means, was nonpretextual, 
                and was necessary to--
                            (i) prevent a violation of, or comply with, 
                        Federal or State law;
                            (ii) protect safety, user privacy, the 
                        security of non-public data, or the security of 
                        the covered platform; or
                            (iii) maintain or enhance the core 
                        functionality of the covered platform.
    (e) Covered Platform Designation.--The Federal Trade Commission and 
Department of Justice may jointly, with concurrence of the other, 
designate a covered platform for the purpose of implementing and 
enforcing this Act. Such designation shall--
            (1) be based on a finding that the criteria set forth in 
        clauses (i) through (iii) of subsection (h)(4) are met;
            (2) be issued in writing and published in the Federal 
        Register; and
            (3) apply for 7 years from its issuance regardless of 
        whether there is a change in control or ownership over the 
        covered platform unless the Commission or the Department of 
        Justice removes the designation under subsection (f).
    (f) Removal of Covered Platform Designation.--The Commission or the 
Department of Justice shall--
            (1) consider whether its designation of a covered platform 
        under subsection (e) should be removed prior to the expiration 
        of the 7-year period if the covered platform operator files a 
        request with the Commission or the Department of Justice, which 
        shows that the online platform no longer meets the criteria set 
        forth in clauses (i) through (iii) of subsection (h)(4);
            (2) determine whether to grant a request submitted under 
        paragraph 1 not later than 120 days after the date of the 
        filing of such request; and
            (3) obtain the concurrence of the Commission or the 
        Department of Justice, as appropriate, before granting a 
        request submitted under paragraph (1).
    (g) Remedies.--The remedies provided in this subsection are in 
addition to, and not in lieu of, any other remedy available under 
Federal or State law.
            (1) Civil penalty.--Any person who is found to have 
        violated subsections (a) or (b) shall be liable to the United 
        States or the Commission for a civil penalty, which shall 
        accrue to the United States Treasury, in an amount not more 
        than 15 percent of the total United States revenue of the 
        person for the period of time the violation occurred.
            (2) Injunctions.--The Assistant Attorney General of the 
        Antitrust Division, the Commission, or the attorney general of 
        any State may seek, and the court may order, relief in equity 
        as necessary to prevent, restrain, or prohibit violations of 
        this Act.
            (3) Repeat offenders.--If the fact finder determines that a 
        person has engaged in a pattern or practice of violating this 
        Act, the court shall consider requiring, and may order, that 
        the Chief Executive Officer, and any other corporate officer as 
        appropriate to deter violations of this Act, forfeit to the 
        United States Treasury any compensation received by that person 
        during the 12 months preceding or following the filing of a 
        complaint for an alleged violation of this Act.
    (h) Definitions.--In this section:
            (1) Antitrust laws.--The term ``antitrust laws'' has the 
        meaning given the term in subsection (a) of section 1 of the 
        Clayton Act (15 U.S.C. 12).
            (2) Business user.--The term ``Business User'' means a 
        person that utilizes or is likely to utilize the covered 
        platform for the sale or provision of products or services, 
        including such persons that are operating a covered platform or 
        are controlled by a covered platform operator.
            (3) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (4) Covered platform.--The term ``covered platform'' means 
        an online platform--
                    (A) that has been designated as a covered platform 
                under section 2(e); or
                    (B) that--
                            (i) at any point during the 12 months 
                        preceding a designation under section 2(e) or 
                        at any point during the 12 months preceding the 
                        filing of a complaint for an alleged violation 
                        of this Act--
                                    (I) has at least 50,000,000 United 
                                States-based monthly active users on 
                                the online platform; or
                                    (II) has at least 100,000 United 
                                States-based monthly active business 
                                users on the online platform;
                            (ii) at any point during the 2 years 
                        preceding a designation under section 2(e) or 
                        at any point during the 2 years preceding the 
                        filing of a complaint for an alleged violation 
                        of this Act, is owned or controlled by a person 
                        with United States net annual sales or a market 
                        capitalization greater than $550,000,000,000, 
                        adjusted for inflation on the basis of the 
                        Consumer Price Index; and
                            (iii) is a critical trading partner for the 
                        sale or provision of any product or service 
                        offered on or directly related to the online 
                        platform.
            (5) Critical trading partner.--The term ``critical trading 
        partner'' means a person that has the ability to restrict or 
        materially impede the access of--
                    (A) a business user to its users or customers; or
                    (B) a business user to a tool or service that it 
                needs to effectively serve its users or customers.
            (6) Person.--The term ``person'' has the meaning given the 
        term in subsection (a) of section 1 of the Clayton Act (15 
        U.S.C. 12).
            (7) Data.--
                    (A) In general.--Not later than 6 months after the 
                date of enactment of this Act, the Commission shall 
                adopt rules in accordance with section 553 of title 5, 
                United States Code, to define the term ``data'' for the 
                purpose of implementing and enforcing this Act.
                    (B) Data.--The term ``data'' shall include 
                information that is collected by or provided to a 
                covered platform or business user that is linked, or 
                reasonably linkable, to a specific--
                            (i) user or customer of the covered 
                        platform; or
                            (ii) user or customer of a business user.
            (8) Online platform.--The term ``online platform'' means a 
        website, online or mobile application, operating system, 
        digital assistant, or online service that--
                    (A) enables a user to generate content that can be 
                viewed by other users on the platform or to interact 
                with other content on the platform;
                    (B) facilitates the offering, sale, purchase, 
                payment, or shipping of products or services, including 
                software applications, between and among consumers or 
                businesses not controlled by the platform operator; or
                    (C) enables user searches or queries that access or 
                display a large volume of information.
            (9) Control.--The term ``control'' with respect to a person 
        means--
                    (A) holding 25 percent or more of the stock of the 
                person;
                    (B) having the right to 25 percent or more of the 
                profits of the person;
                    (C) having the right to 25 percent or more of the 
                assets of the person, in the event of the person's 
                dissolution;
                    (D) if the person is a corporation, having the 
                power to designate 25 percent or more of the directors 
                of the person;
                    (E) if the person is a trust, having the power to 
                designate 25 percent or more of the trustees; or
                    (F) otherwise exercises substantial control over 
                the person.
            (10) State.--The term ``State'' means a State, the District 
        of Columbia, the Commonwealth of Puerto Rico, and any other 
        territory or possession of the United States.
    (i) Enforcement.--
            (1) In general.--Except as otherwise provided in this Act--
                    (A) 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 of the Federal Trade Commission Act 
                (15 U.S.C. 41 et seq.) were incorporated into and made 
                a part of this Act;
                    (B) the Attorney General 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 of the Sherman Act (15 U.S.C. 1 et 
                seq.), Clayton Act (15 U.S.C. 12 et seq.), and 
                Antitrust Civil Process Act (15 U.S.C. 1311 et seq.) 
                were incorporated into and made a part of this Act; and
                    (C) any attorney general of a State 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 of the Sherman Act (15 U.S.C. 1 et 
                seq.) and the Clayton Act (15 U.S.C. 12 et seq.) 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. 45).
            (3) Commission independent litigation authority.--If the 
        Commission has reason to believe that a person violated this 
        Act, the 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.
            (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.
    (j) Emergency Relief.--
            (1) In general.--The Commission, Assistant Attorney General 
        of the Antitrust Division, or any attorney general of a State 
        may seek a temporary injunction requiring the covered platform 
        operator to take or stop taking any action for not more than 
        120 days and the court may grant such relief if the Commission, 
        the United States, or the attorney general of a State proves--
                    (A) there is a claim that a covered platform 
                operator took an action that would violate this Act; 
                and
                    (B) that action impairs the ability of business 
                users to compete with the covered platform operator.
            (2) Emergency relief.--The emergency relief shall not last 
        more than 120 days from the filing of the complaint.
            (3) Termination.--The court shall terminate the emergency 
        relief at any time that the covered platform operator proves 
        that the Commission, the United States, or the attorney general 
        of the State seeking relief under this section has not taken 
        reasonable steps to investigate whether a violation has 
        occurred.
            (4) Other equitable relief.--Nothing in this subsection 
        prevents or limits the Commission, the United States, or any 
        attorney general of any State from seeking other equitable 
        relief as provided in subsection (g) of this section.
    (k) Statute of Limitations.--A proceeding for a violation of this 
section may be commenced not later than 6 years after such violation 
occurs.

SEC. 3. JUDICIAL REVIEW.

    (a) In General.--Any party that is subject to a covered platform 
designation under section 2(e) of this Act, a decision in response to a 
request to remove a covered platform designation under section 2(f) of 
this Act, a final order issued in any district court of the United 
States under this Act, or a final order of the Commission issued in an 
administrative adjudicative proceeding under this Act may within 30 
days of the issuance of such designation, decision, or order, petition 
for review of such designation, decision, or order in the United States 
Court of Appeals for the District of Columbia Circuit.
    (b) Treatment of Findings.--In a proceeding for judicial review of 
a covered platform designation under section 2(e) of this Act, a 
decision in response to a request to remove a covered platform 
designation under section 2(f) of this Act, or a final order of the 
Commission issued in an administrative adjudicative proceeding under 
this Act, the findings of the Commission or the Assistant Attorney 
General as to the facts, if supported by evidence, shall be conclusive.

SEC. 4. ENFORCEMENT GUIDELINES.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Commission and the Assistant Attorney General of the 
Antitrust Division shall jointly issue guidelines outlining policies 
and practices, relating to agency enforcement of this Act, including 
policies for determining the appropriate amount of a civil penalty to 
be sought under section 2(g)(1) of this Act, with the goal of promoting 
transparency, deterring violations, and imposing sanctions 
proportionate to the gravity of individual violations.
    (b) Updates.--The Commission and the Assistant Attorney General of 
the Antitrust Division shall update the joint guidelines issued under 
subsection (a), as needed to reflect current agency policies and 
practices, but not less frequently than once every 4 years beginning on 
the date of enactment of this Act.
    (c) Operation.--The Joint Guidelines issued under this section do 
not confer any rights upon any person, State, or locality, nor shall 
they operate to bind the Commission, Department of Justice, or any 
person, State, or locality to the approach recommended in such 
Guidelines.

SEC. 5. RULE OF CONSTRUCTION.

    (a) Notwithstanding any other provision of law, whether user 
conduct would constitute a violation of section 1030 of title 18 of the 
United States Code is not dispositive of whether the defendant has 
established an affirmative defense under this Act.
    (b) An action taken by a covered platform operator that is 
reasonably tailored to protect the rights of third parties under 
sections 106, 1101, 1201, or 1401 of title 17 of the United States Code 
or rights actionable under sections 32 or 43 of the Lanham Act (15 
U.S.C. 1114, 1125), or corollary state law, shall not be considered 
unlawful conduct under subsection 2(a) or (b) of this Act.
    (c) Nothing in this Act shall be construed to limit any authority 
of the Attorney General or the Commission under the antitrust laws, the 
Federal Trade Commission Act (15 U.S.C. 45), or any other provision of 
law or to limit the application of any law.

SEC. 6. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act 
and of the amendments made by this Act, and the application of the 
remaining provisions of this Act and amendments to any person or 
circumstance shall not be affected.
                                 <all>