[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3816 Reported in House (RH)]

<DOC>





                                                 Union Calendar No. 475
117th CONGRESS
  2d Session
                                H. R. 3816

                          [Report No. 117-655]

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 11, 2021

 Mr. Cicilline (for himself, Mr. Gooden of Texas, Mr. Nadler, and Mr. 
    Buck) introduced the following bill; which was referred to the 
                       Committee on the Judiciary

                           December 21, 2022

Additional sponsors: Mr. Jones, Mr. Johnson of Georgia, Mr. Raskin, Ms. 
    Jayapal, Ms. Scanlon, Mr. Neguse, Mrs. McBath, Mrs. Trahan, Mr. 
Cawthorn, Mr. Donalds, Mr. Gosar, Mr. Garcia of Illinois, Mr. Levin of 
 Michigan, Ms. Tlaib, Mr. Espaillat, Mr. Babin, Mr. Mast, Mrs. Miller-
 Meeks, Ms. Newman, Ms. Porter, Ms. Pingree, Mr. Hice of Georgia, Mr. 
Jeffries, Ms. Omar, Ms. Lee of California, Mr. Mfume, Mrs. Bustos, Mrs. 
  Demings, Ms. Dean, Ms. Escobar, Ms. Schakowsky, Ms. Houlahan, Mrs. 
 Cherfilus-McCormick, Ms. Castor of Florida, Ms. Craig, Mrs. Lawrence, 
Ms. Wild, Mr. Perlmutter, Mr. Morelle, Mr. Payne, Mrs. Watson Coleman, 
                Ms. Chu, Mr. DeSaulnier, and Mr. DeFazio

                           December 21, 2022

Reported with amendments, committed to the Committee of the Whole House 
          on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on June 
                               11, 2021]


_______________________________________________________________________

                                 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 DISCRIMINATORY CONDUCT.

    (a) Violation.--It shall be unlawful for a person operating a 
covered platform, in or affecting commerce, to engage in any conduct in 
connection with the operation of the covered platform that--
            (1) advantages the covered platform operator's own 
        products, services, or lines of business over those of another 
        business user;
            (2) excludes or disadvantages the products, services, or 
        lines of business of another business user relative to the 
        covered platform operator's own products, services, or lines of 
        business; or
            (3) discriminates among similarly situated business users, 
        including, but not limited to, those business users employed by 
        businesses owned by women and minorities.
    (b) Other Discriminatory Conduct.--It shall be unlawful for a 
person operating a covered platform, in or affecting commerce, to--
            (1) 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;
            (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;
            (3) use non-public data to offer, or support the offering 
        of, the covered platform operator's own products, services, or 
        lines of business that are obtained from or generated on the 
        covered platform--
                    (A) by the activities of a business user; or
                    (B) through an interaction of a covered platform 
                user with the products or services of a business user;
            (4) 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 such data by the business user to other 
        systems or applications;
            (5) 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) restrict or impede businesses users from communicating 
        information or providing hyperlinks on the covered platform to 
        covered platform users to facilitate business transactions;
            (7) in connection with any 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 than those of another business 
        user;
            (8) interfere with or restrict a business user's pricing of 
        its products or services;
            (9) restrict or impede a business user, or a business 
        user's customers or users, from interoperating or connecting to 
        any product or service; or
            (10) retaliate against any person that raises concerns with 
        any law enforcement authority about actual or potential 
        violations of State or Federal law or that initiates or 
        participates in litigation to enforce this Act.
    (c) Affirmative Defense.--Subsections (a) and (b) shall not apply 
if the defendant establishes by clear and convincing evidence that the 
conduct described in subsections (a) or (b)--
            (1) would not result in harm to the competitive process by 
        restricting or impeding legitimate activity by business users; 
        or
            (2) was narrowly tailored, could not be achieved through 
        less discriminatory means, was nonpretextual, and was necessary 
        to--
                    (A) prevent a violation of, or comply with, Federal 
                or State law; or
                    (B) protect user privacy or other non-public data; 
                or
            (3) increases consumer welfare.
    (d) Covered Platform Designation.--The Federal Trade Commission or 
Department of Justice shall 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 
        subsection (g)(4)(i)-(iii) are met;
            (2) be issued in writing and published in the Federal 
        Register; and
            (3) apply for 10 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 (e).
    (e) Removal of Covered Platform Designation.--The Commission or the 
Department of Justice shall--
            (1) consider whether its designation of a covered platform 
        under subsection (d) should be removed prior to the expiration 
        of the ten-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 subsection (g)(4)(i)-(iii);
            (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).
    (f) Remedies.--
            (1) Civil penalty.--Any covered platform operator 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 the greater of--
                    (A) 15 percent of the total United States revenue 
                of the person for the previous calendar year; or
                    (B) 30 percent of the United States revenue of the 
                person in any line of business affected or targeted by 
                the unlawful conduct during the period of the unlawful 
                conduct. This civil penalty may be recovered in a civil 
                action brought by the United States or the Commission.
            (2) Remedies in addition.--Remedies provided in this 
        subsection are in addition to, and not in lieu of, any other 
        remedy available under Federal or State law.
                    (A) Restitution; contract rescission and 
                reformation; refunds; return of property.--The 
                Assistant Attorney General of the Antitrust Division, 
                the Commission, or the attorney general of any State 
                may seek, and the court may order, with respect to a 
                violation that gives rise to the suit, restitution for 
                losses, rescission or reformation of contracts, refund 
                of money, or return of property.
                    (B) Disgorgement.--The Assistant Attorney General 
                of the Antitrust Division, the Commission, or the 
                attorney general of any State may seek, and the court 
                may order, disgorgement of any unjust enrichment that a 
                covered platform operator obtained as a result of the 
                violation that gives rise to the suit.
                    (C) 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.
                    (D) Conflict of interest.--
                            (i) If the fact finder determines that a 
                        violation of this Act arises from a conflict of 
                        interest related to the covered platform 
                        operator's ownership or control of multiple 
                        lines of business, the court shall consider 
                        requiring, and may order, divestiture of the 
                        line or lines of business that give rise to 
                        such conflict.
                            (ii) For purposes of this section, the term 
                        ``conflict of interest'' includes the conflict 
                        of interest that arises when--
                                    (I) a covered platform operator 
                                owns or controls a line of business, 
                                other than the covered platform; and
                                    (II) the covered platform 
                                operator's ownership or control of that 
                                line of business creates the incentive 
                                and ability for the covered platform 
                                operator to--
                                            (aa) advantage the covered 
                                        platform operator's own 
                                        products, services, or lines of 
                                        business on the covered 
                                        platform over those of a 
                                        competing business or a 
                                        business that constitutes 
                                        nascent or potential 
                                        competition to the covered 
                                        platform operator; or
                                            (bb) exclude from, or 
                                        disadvantage, the products, 
                                        services, or lines of business 
                                        on the covered platform of a 
                                        competing business or a 
                                        business that constitutes 
                                        nascent or potential 
                                        competition to the covered 
                                        platform operator.
            (3) Repeat offenders.--If the fact finder determines that a 
        covered platform operator 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.
    (g) 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 plans to utilize the covered platform 
        for the sale or provision of products or services.
            (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(d); or
                    (B) that--
                            (i) at any point during the 12 months 
                        preceding a designation under section 2(d) 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(d) 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 $600,000,000,000, 
                        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 an entity that has the ability to restrict or 
        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.
    (h) 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.
    (i) Emergency Relief.--
            (1) 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 shall grant such relief if the Commission, the 
        United States, or the attorney general of a State proves--
                    (A) there is a plausible claim that a covered 
                platform operator took an action that violates this 
                Act; and
                    (B) that action impairs the ability of at least 1 
                business user to compete with the covered platform 
                operator.
            (2) The emergency relief shall not last more than 120 days 
        from the filing of the complaint.
            (3) 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) 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 (f) of this section.
    (j) 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(d) of this Act, a decision in response to a 
request to remove a covered platform designation under section 2(e) 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(d) of this Act, a 
decision in response to a request to remove a covered platform 
designation under section 2(e) 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. BUREAU OF DIGITAL MARKETS.

    (a) Establishment of Bureau.--As soon as practicable, but not later 
than 180 days after the date of enactment of this Act, the Commission 
shall establish within the Commission a bureau of digital markets for 
purposes of enforcement of this Act.
    (b) Leadership.--The head of the Bureau of Digital Markets shall be 
the Director of the Bureau of Digital Markets, who shall--
            (1) report directly to the Chair of the Commission; and
            (2) be appointed by the Chair of the Commission.
    (c) Bureau Staff.--The Bureau of Digital Markets shall retain or 
employ legal, technology, economic, research, and service staff 
sufficient to carry out the functions, powers, and duties of the 
Bureau.
    (d) Reporting Requirement.--Not later than 1 year after the date of 
enactment of this Act, the Bureau of Digital Markets shall on an annual 
basis publish and submit a report to the Committee on the Judiciary of 
the House of Representatives and the Committee on the Judiciary of the 
Senate describing the Bureau's enforcement activities during the 
previous 12-month period.

SEC. 5. 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, with the 
goal of promoting transparency and deterring 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. 6. SUITS BY PERSONS INJURED.

    (a) In General.--Except as provided in subsection (b), any person 
who shall be injured in his business or property 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 section, pursuant to a motion by such person promptly made, 
simple interest on actual damages for the period beginning on the date 
of service of such person'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 section for any period is just in the 
circumstances, the court shall consider only--
            (1) whether such person 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;
            (2) whether, in the course of the action involved, such 
        person 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
            (3) whether such person 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.
    (b) Amount of Damages Payable to Foreign States and 
Instrumentalities of Foreign States.--
            (1) Except as provided in paragraph (2), any person who is 
        a foreign state may not recover under subsection (a) an amount 
        in excess of the actual damages sustained by it and the cost of 
        suit, including a reasonable attorney's fee.
            (2) Paragraph (1) shall not apply to a foreign state if--
                    (A) such foreign state would be denied, under 
                section 1605(a)(2) of title 28, immunity in a case in 
                which the action is based upon a commercial activity, 
                or an act, that is the subject matter of its claim 
                under this section;
                    (B) such foreign state waives all defenses based 
                upon or arising out of its status as a foreign state, 
                to any claims brought against it in the same action;
                    (C) such foreign state engages primarily in 
                commercial activities; and
                    (D) such foreign state does not function, with 
                respect to the commercial activity, or the act, that is 
                the subject matter of its claim under this section as a 
                procurement entity for itself or for another foreign 
                state.
    (c) Injunctive Relief.--Any person 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: Provided, That nothing herein 
contained shall be construed to entitle any person, except the United 
States, to bring suit for injunctive relief against any common carrier 
subject to the jurisdiction of the Surface Transportation Board under 
subtitle IV of title 49. In any action under this section in which the 
plaintiff substantially prevails, the court shall award the cost of 
suit, including a reasonable attorney's fee, to such plaintiff.

SEC. 7. 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. Sec. Sec.  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. 8. 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.
            Amend the title so as to read: ``A bill to provide that 
        certain discriminatory conduct by a covered platform operator 
        shall be unlawful, and for other purposes.''.
                                                 Union Calendar No. 475

117th CONGRESS

  2d Session

                               H. R. 3816

                          [Report No. 117-655]

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                           December 21, 2022

Reported with amendments, committed to the Committee of the Whole House 
          on the State of the Union, and ordered to be printed