[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2033 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  1st Session
                                S. 2033

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 15, 2023

 Ms. Klobuchar (for herself, Mr. Grassley, Mr. Durbin, Mr. Graham, Mr. 
    Blumenthal, Mr. Hawley, Ms. Hirono, Mr. Warner, and Mr. Booker) 
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. DEFINITIONS.

    (a) In General.--In this Act:
            (1) Antitrust laws; person.--The terms ``antitrust laws'' 
        and ``person'' have the meanings given the terms in subsection 
        (a) of the first section of the Clayton Act (15 U.S.C. 12).
            (2) Business user.--The term ``business user''--
                    (A) means a person that uses or is likely to use a 
                covered platform for the advertising, sale, or 
                provision of products or services, including such 
                persons that are operating a covered platform or are 
                controlled by a covered platform operator; and
                    (B) does not include a person that--
                            (i) is a clear national security risk; or
                            (ii) is organized under the laws of or 
                        controlled by the Government of the People's 
                        Republic of China or the government of a 
                        foreign adversary.
            (3) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (4) Control.--The term ``control'' means, with respect to a 
        person--
                    (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) in the event of the dissolution of the person, 
                having the right to 25 percent or more of the assets of 
                the person;
                    (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 exercising substantial control over 
                the person.
            (5) Covered platform.--The term ``covered platform'' means 
        an online platform that--
                    (A) has been designated as a covered platform under 
                section 3(d); or
                    (B) is owned or controlled by a person that--
                            (i) at any point during the 12 months 
                        preceding a designation under section 3(d) or 
                        the 12 months preceding the filing of a 
                        complaint for an alleged violation of this Act 
                        has at least--
                                    (I) 50,000,000 United States-based 
                                monthly active users on the online 
                                platform; or
                                    (II) 100,000 United States-based 
                                monthly active business users on the 
                                online platform;
                            (ii) during--
                                    (I) the 2 years preceding a 
                                designation under section 3(d), or the 
                                2 years preceding the filing of a 
                                complaint for an alleged violation of 
                                this Act--
                                            (aa) at any point, is owned 
                                        or controlled by a person with 
                                        United States net annual sales 
                                        of greater than 
                                        $550,000,000,000, adjusted for 
                                        inflation on the basis of the 
                                        Consumer Price Index; or
                                            (bb) during any 180-day 
                                        period during the 2-year 
                                        period, has an average market 
                                        capitalization greater than 
                                        $550,000,000,000, adjusted for 
                                        inflation on the basis of the 
                                        Consumer Price Index; or
                                    (II) the 12 months preceding a 
                                designation under section 3(d), or at 
                                any point during the 12 months 
                                preceding the filing of a complaint for 
                                an alleged violation of this Act, has 
                                at least 1,000,000,000 worldwide 
                                monthly active users on the online 
                                platform; 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.
            (6) 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 the users or customers of 
                the business user; or
                    (B) a business user to a tool or service that the 
                business user needs to effectively serve the users or 
                customers of the business user.
            (7) Data.--The term ``data'' includes information that is 
        collected by or provided to a covered platform or business user 
        that is linked, or reasonably linkable, to a specific--
                    (A) user or customer of the covered platform; or
                    (B) user or customer of a business user.
            (8) Foreign adversary.--The term ``foreign adversary'' has 
        the meaning given the term in section 8(c) of the Secure and 
        Trusted Communications Networks Act of 2019 (47 U.S.C. 
        1607(c)).
            (9) Online platform.--The term ``online platform''--
                    (A) means a website, online or mobile application, 
                operating system, digital assistant, or online service 
                that enables--
                            (i) a user to generate or share content 
                        that can be viewed by other users on the 
                        platform or to interact with other content on 
                        the platform;
                            (ii) the offering, advertising, sale, 
                        purchase, or shipping of products or services, 
                        including software applications, between and 
                        among consumers or businesses not controlled by 
                        the platform operator; or
                            (iii) user searches or queries that access 
                        or display a volume of information; and
                    (B) does not include a service by wire or radio 
                that provides the capability to transmit data to and 
                receive data from all or substantially all internet 
                endpoints, including any capabilities that are 
                incidental to and enable the operation of the 
                communications service.
            (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.
    (b) Regulations.--Not later than 180 days after the date of 
enactment of this Act, the Commission, with the concurrence of the 
Department of Justice, shall promulgate regulations 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.

SEC. 3. UNLAWFUL CONDUCT.

    (a) In General.--It shall be unlawful for a person operating a 
covered platform in or affecting commerce to--
            (1) preference the products, services, or lines of business 
        of the covered platform operator over those of another business 
        user on the covered platform in a manner that would materially 
        harm competition;
            (2) limit the ability of the products, services, or lines 
        of business of another business user to compete on the covered 
        platform relative to the products, services, or lines of 
        business of the covered platform operator in a manner that 
        would materially harm competition;
            (3) discriminate in the application or enforcement of the 
        terms of service of the covered platform among similarly 
        situated business users in a manner that would materially harm 
        competition;
            (4) materially restrict, impede, or unreasonably delay the 
        capacity of a business user to access or interoperate with the 
        same platform, operating system, or hardware or software 
        features that are available to the products, services, or lines 
        of business of the covered platform operator that compete or 
        would compete with products or services offered by business 
        users on the covered platform, except where such access would 
        lead to a significant cybersecurity risk;
            (5) 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;
            (6) use nonpublic 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 products or services of the covered platform 
        operator that compete or would compete with products or 
        services offered by business users on the covered platform;
            (7) 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 products or services of the 
        business user, such as by establishing contractual or technical 
        restrictions that prevent the portability by the business user 
        to other systems or applications of the data of the business 
        user;
            (8) materially restrict or impede covered platform users 
        from uninstalling 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, 
        unless necessary--
                    (A) for the security or functioning of the covered 
                platform; or
                    (B) to prevent data from the covered platform 
                operator or another business user from being 
                transferred to the Government of the People's Republic 
                of China or the government of a foreign adversary;
            (9) in connection with any covered platform user interface, 
        including search or ranking functionality offered by the 
        covered platform, treat the products, services, or lines of 
        business of the covered platform operator more favorably 
        relative to those of another business user and in a manner that 
        is inconsistent with the neutral, fair, and nondiscriminatory 
        treatment of all business users; or
            (10) retaliate against any business user or covered 
        platform user that raises good-faith concerns with any law 
        enforcement authority about actual or potential violations of 
        State or Federal law on the covered platform or by the covered 
        platform operator.
    (b) Affirmative Defenses.--
            (1) In general.--It shall be an affirmative defense to an 
        action under subsection (a) if the defendant establishes that 
        the conduct was reasonably tailored and reasonably necessary, 
        such that the conduct could not be achieved through materially 
        less discriminatory means, to--
                    (A) prevent a violation of, or comply with, Federal 
                or State law;
                    (B) protect safety, user privacy, the security of 
                nonpublic data, or the security of the covered 
                platform; or
                    (C) maintain or substantially enhance the core 
                functionality of the covered platform.
            (2) Additional affirmative defenses.--It shall be an 
        affirmative defense to an action under paragraph (4), (5), (6), 
        (7), (8), or (9) of subsection (a) if the defendant establishes 
        that the conduct has not resulted in and would not result in 
        material harm to competition.
            (3) Effect of other laws.--Notwithstanding any other 
        provision of law, whether user conduct would constitute a 
        violation of section 1030 of title 18, United States Code, 
        shall have no effect on whether the defendant has established 
        an affirmative defense under this Act.
            (4) Burden of proof.--The defendant has the burden of 
        proving an affirmative defense under this subsection by a 
        preponderance of the evidence.
    (c) 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 Department of Justice 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) 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.
            (3) Parens patriae.--Any attorney general of a State may 
        bring a civil action in the name of such State for a violation 
        of this Act as parens patriae on behalf of natural persons 
        residing in such State, in any district court of the United 
        States having jurisdiction of the defendant for any form of 
        relief provided for in this section.
            (4) Enforcement in federal district court.--The Commission, 
        Department of Justice, or any attorney general of a State shall 
        only be able to enforce this Act through a civil action brought 
        before a district court of the United States.
            (5) Preponderance of the evidence.--The Department of 
        Justice, the Commission, or the attorney general of a State 
        shall establish a violation of this section by a preponderance 
        of the evidence.
            (6) Remedies.--
                    (A) In general.--The remedies provided in this 
                paragraph are in addition to, and not in lieu of, any 
                other remedy available under Federal or State law.
                    (B) Civil penalty.--Any person who violates this 
                Act shall forfeit and pay to the United States a civil 
                penalty in an amount that is sufficient to deter 
                violations of this Act, but not greater than 10 percent 
                of the total United States revenue of the person for 
                the period of time the violation occurred.
                    (C) Injunctions.--
                            (i) In general.--The Department of Justice, 
                        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.
                            (ii) Temporary injunctions.--
                                    (I) In general.--The Commission, 
                                Department of Justice, 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.
                                    (II) Grant.--The court may grant a 
                                temporary injunction under this clause 
                                if the Commission, the Department of 
                                Justice, or the attorney general of a 
                                State, as applicable, demonstrates--
                                            (aa) there is a plausible 
                                        claim, supported by substantial 
                                        evidence raising sufficiently 
                                        serious questions going to the 
                                        merits to make them fair ground 
                                        for litigation, that a covered 
                                        platform operator violated this 
                                        Act;
                                            (bb) that the conduct 
                                        alleged to violate this Act 
                                        materially impairs the ability 
                                        of business users to compete 
                                        with the covered platform 
                                        operator; and
                                            (cc) a temporary injunction 
                                        would be in the public 
                                        interest.
                                    (III) Duration.--A temporary 
                                injunction under this clause shall 
                                expire not later than the date that is 
                                120 days after the date on which a 
                                complaint under this subsection is 
                                filed.
                                    (IV) Termination.--The court shall 
                                terminate a temporary injunction under 
                                this clause if the covered platform 
                                operator demonstrates that--
                                            (aa) the Commission, the 
                                        Department of Justice, or the 
                                        attorney general of the State 
                                        seeking relief under this 
                                        subsection has not taken 
                                        reasonable steps to investigate 
                                        whether a violation has 
                                        occurred; or
                                            (bb) allowing the temporary 
                                        injunction to continue would 
                                        harm the public interest.
                                    (V) Other equitable relief.--
                                Nothing in this clause shall prevent or 
                                limit the Commission, the Department of 
                                Justice, or any attorney general of any 
                                State from seeking other equitable 
                                relief, including the relief provided 
                                in this paragraph.
                    (D) Forfeiture for repeat offenders.--
                            (i) In general.--If 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 of the 
                        person, and any other corporate officer of the 
                        person as appropriate to deter violations of 
                        this Act, forfeit to the United States Treasury 
                        any compensation received by that chief 
                        executive officer or corporate officer during 
                        the 12 months preceding the filing of a 
                        complaint for an alleged violation of this Act.
                            (ii) Forfeiture process.--Prior to ordering 
                        any chief executive officer or corporate 
                        officer to forfeit compensation under clause 
                        (i), the court shall provide such chief 
                        executive officer or corporate officer with 
                        reasonable notice that the court is considering 
                        ordering forfeiture under this subparagraph and 
                        provide an opportunity for such chief executive 
                        officer or corporate officer to appear and be 
                        heard before the court at a hearing on such 
                        potential forfeiture.
            (7) Statute of limitations.--A proceeding for a violation 
        of this section may be commenced not later than 6 years after 
        such violation occurs.
            (8) Rules of construction.--
                    (A) In general.--Nothing in subsection (a) may be 
                construed--
                            (i) to require a covered platform operator 
                        to divulge or license any intellectual 
                        property, including any trade secrets, business 
                        secrets, or other confidential proprietary 
                        business processes, owned by or licensed to the 
                        covered platform operator;
                            (ii) to prevent a covered platform operator 
                        from asserting its preexisting rights under 
                        intellectual property law to prevent the 
                        unauthorized use of any intellectual property 
                        owned by or duly licensed to the covered 
                        platform operator;
                            (iii) to require a covered platform 
                        operator to interoperate or share data with 
                        persons or business users that are on any list 
                        maintained by the Federal Government by which 
                        entities--
                                    (I) are identified as limited or 
                                prohibited from engaging in economic 
                                transactions as part of United States 
                                sanctions or export-control regimes; or
                                    (II) have been identified as 
                                national security, intelligence, or law 
                                enforcement risks;
                            (iv) to prohibit a covered platform 
                        operator from promptly requesting and obtaining 
                        the consent of a covered platform user prior to 
                        providing access to the nonpublic, personally 
                        identifiable information of the user to a 
                        covered platform user under that subsection;
                            (v) in a manner that would likely result in 
                        data on the covered platform or data from 
                        another business user being transferred to the 
                        Government of the People's Republic of China or 
                        the government of a foreign adversary; or
                            (vi) to impose liability on a covered 
                        platform operator solely for offering--
                                    (I) full end-to-end encrypted 
                                messaging or full end-to-end encrypted 
                                communication products or services; or
                                    (II) a fee-for-service subscription 
                                that provides benefits to covered 
                                platform users on the covered platform.
                    (B) Copyright and trademark violations.--An action 
                taken by a covered platform operator that is reasonably 
                tailored to protect the rights of third parties under 
                section 106, 1101, 1201, or 1401 of title 17, United 
                States Code, or rights actionable under section 32 or 
                43 of the Act entitled ``An Act to provide for the 
                registration and protection of trademarks used in 
                commerce, to carry out the provisions of certain 
                international conventions, and for other purposes'', 
                approved July 5, 1946 (commonly known as the ``Lanham 
                Act'' or the ``Trademark Act of 1946'') (15 U.S.C. 
                1114, 1125), or corollary State law, shall not be 
                considered unlawful conduct under subsection (a).
    (d) Covered Platform Designation.--
            (1) In general.--The Commission and the Department of 
        Justice may jointly, with concurrence of the other, designate 
        an online platform as a covered platform for the purpose of 
        implementing and enforcing this Act, which shall--
                    (A) be based on a finding that the criteria set 
                forth in section 2(a)(5)(B) are met;
                    (B) be issued in writing and published in the 
                Federal Register; and
                    (C) except as provided in paragraph (2), apply for 
                a 7-year period beginning on the date on which the 
                designation is issued, regardless of whether there is a 
                change in control or ownership over the covered 
                platform.
            (2) Removal of covered platform designation.--The 
        Commission or the Department of Justice shall--
                    (A) consider whether a designation of a covered 
                platform under paragraph (1) 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 that shows that the online 
                platform no longer meets the criteria set forth in 
                section 2(a)(5)(B);
                    (B) determine whether to grant a request submitted 
                under subparagraph (A) not later than 120 days after 
                the date on which the request is filed;
                    (C) obtain the concurrence of the Commission or the 
                Department of Justice, as appropriate, before granting 
                a request submitted under subparagraph (A); and
                    (D) publish any decision to grant or deny removal 
                of a covered platform designation in the Federal 
                Register.
            (3) Judicial review.--Any person operating an online 
        platform that has been designated as a covered platform under 
        paragraph (1) or whose request for removal of such a 
        designation under paragraph (2) is denied may, within 30 days 
        of the issuance of such designation or decision, petition for 
        review of such designation or decision in the United States 
        Court of Appeals for the District of Columbia Circuit.

SEC. 4. ENFORCEMENT GUIDELINES.

    (a) In General.--Not later than 270 days after the date of 
enactment of this Act, the Commission and the Department of Justice, in 
consultation with other relevant Federal agencies and State attorneys 
general, shall jointly issue agency enforcement guidelines outlining 
policies and practices relating to conduct that may materially harm 
competition under section 3(a), agency interpretations of the 
affirmative defenses under section 3(b), and policies for determining 
the appropriate amount of a civil penalty to be sought under section 
3(c), with the goal of promoting transparency, deterring violations, 
fostering innovation and procompetitive conduct, and imposing sanctions 
proportionate to the gravity of individual violations.
    (b) Updates.--The Commission and the Department of Justice 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) Public Notice and Comment.--Before issuing guidelines, or 
updates to those guidelines, under this section, the Commission and the 
Department of Justice shall--
            (1) publish proposed guidelines in draft form; and
            (2) provide public notice and opportunity for comment for 
        not less than 60 days after the date on which the draft 
        guidelines are published.
    (d) Operation.--The joint guidelines issued under this section do 
not--
            (1) confer any rights upon any person, State, or locality; 
        or
            (2) operate to bind the Commission, Department of Justice, 
        or any person, State, or locality to the approach recommended 
        in the guidelines.

SEC. 5. RULE OF CONSTRUCTION.

    Nothing in this Act may be construed to limit--
            (1) any authority of the Department of Justice or the 
        Commission under the antitrust laws, section 5 of the Federal 
        Trade Commission Act (15 U.S.C. 45), or any other provision of 
        law; or
            (2) the application of any law.

SEC. 6. SEVERABILITY.

    If any provision of this Act, or the application of such provision 
to any person or circumstance, is held to be unconstitutional, the 
remainder of this Act, and the application of the remaining provisions 
of this Act, to any person or circumstance, shall not be affected.

SEC. 7. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this Act 
shall take effect on the date of enactment of this Act.
    (b) Exception.--Section 3(a) shall take effect on the date that is 
1 year after the date of enactment of this Act.
    (c) Authority.--The exception in subsection (b) shall not limit the 
authority of the Commission or Department of Justice to implement other 
sections of this Act.
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