[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.
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