Short title

This Act may be cited as the

American Innovation and Choice Online Act

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)

Average annual gross revenues

The term average annual gross revenues means, with respect to a person, the average of the total gross revenues or net sales of the person and all entities controlled by the person for the 2 most recently completed fiscal years, as reflected in the consolidated financial statements of the person prepared in the ordinary course of business.(3)

Business user

The term business user—(A)means a person that uses or is likely to use a systemically important platform to advertise, sell, provide products or services, or access users and customers, including such persons that are operating a systemically important platform or are controlled by a systemically important 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 another foreign adversary.(4)

Commission

The term Commission means the Federal Trade Commission.(5)

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.(6)

Data

The term data means information that is collected by or provided to a systemically important platform or business user that is linked, or reasonably linkable, to a specific—(A)user or customer of the systemically important platform; or(B)user or customer of a business user.(7)

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)).(8)

Materially harms competition

The term materially harms competition means any actual or reasonable risk of lessening of competition or impairing the competitive process that is more than a de minimis amount.(9)

Monthly active user

The term monthly active user means a unique person in the United States who, during a calendar month, initiates an interaction with the online platform, regardless of whether the user logs in or otherwise authenticates themselves.(10)

Online platform

The term online platform—(A)means a website, online or mobile application, operating system, digital assistant, or online service that—(i)enables a user to generate or share content that can be viewed by other users on the platform or to interact with other content on or through the platform;(ii)facilitates the offering, advertising, sale, purchase, payment, or shipping of products or services, including software applications, between and among consumers or businesses not controlled by the systemically important platform operator; or(iii)enables user searches or queries that access or display a large 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.(11)

Publicly traded company

The term publicly traded company—(A)means a company that has a principal class of shares registered under subsection (b) or (g) of section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l); and(B)includes a subsidiary of a company described in subparagraph (A).(12)

Similar platform

The term similar platform means an online platform controlled by the same person that offers substantially similar functionality or serves substantially similar use cases to users or business users.(13)

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.(14)

Subscriber household

The term subscriber household means a household in the United States in which at least 1 member pays for access to the online platform during a calendar month.(15)

Systemically important platform

(A)

In general

The term systemically important platform means an online platform that—(i)is controlled by a person with average annual gross revenues of not less than $175,000,000,000, as adjusted under subsection (c); and(ii)(I)during a period of not fewer than 3 consecutive calendar months in each of the 2 consecutive 12-month periods preceding the filing of an action under this Act, has monthly active users in the United States equal to not less than 34 percent of the population of the United States over the age of 12, as determined by the most recent decennial census of population conducted by the Bureau of the Census; or(II)during a period of not fewer than 3 consecutive calendar months in each of the 2 consecutive 12-month periods preceding the filing of an action under this Act, has subscriber households in the United States equal to not less than 34 percent of households in the United States, as determined by the most recent decennial census of population conducted by the Bureau of the Census.(B)

Counting rules; aggregation

In determining the number of monthly active users and subscriber households under this paragraph, the platform shall—(i)exclude non-human, automated, or test accounts to the extent identified in the ordinary course of business;(ii)use reasonable ordinary-course methods to avoid double-counting the same individual or household across multiple accounts;(iii)the monthly active users and subscriber households of similar platforms controlled by the same person shall be aggregated; and(iv)if such aggregation causes the threshold described in subclause (I) or (II) of subparagraph (A)(ii) to be met, each such similar platform shall be treated as satisfying the applicable threshold.(16)

Systemically important platform operator

The term systemically important platform operator means a person that owns, controls, or operates a systemically important platform.(b)

Regulations

Not later than 180 days after the date of enactment of this Act, the Commission 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.(c)

Annual adjustment of revenue threshold

(1)

In general

Beginning with the first calendar year that begins after the date that is 1 year after the date of enactment of this Act, and annually thereafter, the Commission shall revise the dollar amount set forth in subsection (a)(15)(A)(i) to reflect the percentage change in gross national product, as most recently published by the Department of Commerce.(2)

Publication

The Commission shall publish any revised dollar amount under paragraph (1) in the Federal Register.(3)

Rounding

Any revised dollar amount under paragraph (1) shall be rounded to the nearest $1,000,000,000.(4)

Applicability

Any revised dollar amount published under paragraph (2) shall apply to any action filed on or after the effective date specified in the notice published by the Commission.

Unlawful conduct

(a)

Prohibitions

(1)

Prohibition on preferencing, limiting, and discrimination

It shall be unlawful for a person operating a systemically important platform in or affecting commerce to—(A)preference the products, services, or lines of business of the systemically important platform over those of another business user in a manner that would materially harm competition;(B)limit the ability of the products, services, or lines of business of another business user to compete on the systemically important platform relative to the products, services, or lines of business of the systemically important platform operator in a manner that would materially harm competition; or(C)apply or enforce the terms of service of the systemically important platform among similarly situated business users in a discriminatory manner that would materially harm competition.(2)

Prohibition on access to platform features

It shall be unlawful for a person operating a systemically important platform in or affecting commerce to 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 systemically important platform operator that compete or would compete with products or services offered by business users on the systemically important platform.(3)

Prohibition on tying

It shall be unlawful for a person operating a systemically important platform in or affecting commerce to condition access to the systemically important platform, any part of the systemically important platform, or preferred status or placement on the systemically important platform on the purchase or use of other products or services offered by the systemically important platform operator that are not part of or intrinsic to the systemically important platform.(4)

Prohibition on access to platform data

It shall be unlawful for a person operating a systemically important platform in or affecting commerce to—(A)use nonpublic data that are obtained from or generated on the systemically important platform by the activities of a business user or by the interaction of a platform user with the products or services of a business user to offer, or support the offering of, the products or services of the systemically important platform operator that compete or would compete with products or services offered by business users on the platform; or(B)restrict or impede a business user from accessing data generated on the systemically important platform by the activities of the business user, or through an interaction of a 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.(5)

Prohibition on user lock-in

It shall be unlawful for a person operating a systemically important platform in or affecting commerce to restrict or impede users from changing default settings or selecting an alternative default product or service, if the default directs or steers users to products or services offered by the systemically important platform operator, unless necessary—(A)for the security or functioning of the platform; or(B)to prevent data from the systemically important platform operator or another business user from being transferred to the Government of the People’s Republic of China or the government of another foreign adversary.(6)

Prohibition on ranking and presentation

It shall be unlawful for a person operating a systemically important platform in or affecting commerce to treat the products, services, or lines of business of the systemically important platform operator more favorably relative to those of another business user in connection with any user interface, including search or ranking functionality offered by the platform, except pursuant to standards that are neutral, nondiscriminatory, and fairly applied to all similarly situated business users.(7)

Prohibition on retaliation

It shall be unlawful for a person operating a systemically important platform in or affecting commerce to retaliate against any user or business user that raises concerns with any law enforcement authority about actual or potential violations of State or Federal law.(b)

Affirmative defenses

(1)

Compliance with law; protection of safety, privacy, and security; prevention of fraud

It shall be an affirmative defense to an action under this section if the defendant establishes by clear and convincing evidence that the conduct at issue was—(A)necessary to—(i)comply with Federal or State law; or(ii)protect safety, user privacy, the security of nonpublic data or of the platform, or any other significant cybersecurity risk, or to prevent fraud or spam; and(B)(i)applied on a consistent basis;(ii)not used as a pretext to exclude or disadvantage competitors;(iii)narrowly tailored in scope; and(iv)could not be achieved through less anticompetitive means.(2)

No harm to competition

It shall be an affirmative defense to an action under paragraphs (2) through (6) of subsection (a) if the defendant establishes by a preponderance of the evidence that the conduct has not materially harmed and would not materially harm 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)

Contemporaneous records requirement

(A)

In general

A defendant may not rely on the affirmative defense under paragraph (1) unless the defendant produces records, created in the ordinary course of business at or before the time the challenged conduct was undertaken, that—(i)describe the specific purpose for which the conduct was undertaken; and(ii)identify the material risks or harms the conduct was intended to address.(B)

Rule of construction

Nothing in this paragraph may be construed to require a defendant to create records that were not otherwise created in the ordinary course of business.(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 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.) were incorporated into and made a part of this Act; and(C)any attorney general of a State may bring a civil action in the name of such State, or as parens patriae on behalf of natural persons residing in such State, for a violation 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 under paragraph (4), and seek other appropriate relief, including any form of relief provided for in paragraph (4), in a district court of the United States. Except as otherwise provided in section 16(a)(3) of the Federal Trade Commission Act (15 U.S.C. 56(a)(3)), the Commission shall have exclusive authority to commence or defend, and supervise the litigation of, any civil action under this paragraph and any appeal of such action in its own name by any of its attorneys designated by it for such purpose, unless the Commission authorizes the Attorney General to do so. The Commission shall inform the Attorney General of the exercise of such authority, and such exercise shall not preclude the Attorney General from intervening on behalf of the United States in such action and any appeal of such action as may be otherwise provided by law. (3)

Enforcement in Federal district court

The Commission, the Attorney General, or any attorney general of a State may enforce this Act only through a civil action brought before a district court of the United States. (4)

Remedies

(A)

Civil penalties

In an action brought by the Commission, the Attorney General, or a State attorney general under this Act, the court may impose a civil penalty on a person that violates this Act.(B)

Civil penalty amount

Any person who violates this Act shall be liable to the United States for a civil penalty, to be deposited in the Treasury of the United States, in an amount not greater than 10 percent, and not less than 1 percent, of the total United States revenue of the person for the period during which the violation occurred.(C)

Injunctive and other equitable relief

(i)

In general

The Attorney General, the Commission, or the attorney general of any State may seek, and the court may order, equitable relief as necessary to prevent, restrain, or prohibit violations of this Act.(ii)

Temporary injunctions

(I)

In general

The Commission, the Attorney General, or any attorney general of a State may seek a temporary injunction requiring the systemically important 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 Attorney General, or the attorney general of a State, as applicable, proves—(aa)there is a plausible claim, supported by evidence, that the defendant is a systemically important platform operator;(bb)the defendant took an action that would violate this Act;(cc)that action materially impairs the ability of business users to compete with the systemically important platform operator; and(dd)a temporary injunction would be in the public interest.(III)

Termination

The court shall terminate a temporary injunction under this clause if the systemically important platform operator proves that—(aa)the Commission, the Attorney General, 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.(IV)

Other equitable relief

Nothing in this clause shall prevent or limit the Commission, the Attorney General, or the attorney general of any State from seeking, or a court from granting, other equitable relief.(D)

Forfeiture for repeat offenders

(i)

In general

In addition to any other remedy provided in this Act, if a court finds that a person engaged in a pattern or practice of conduct that violates this Act, the court shall consider requiring, and may order, the forfeiture by the chief executive officer, and any other corporate officer as appropriate to deter violations of this Act, of any compensation received during the 12-month period preceding or following the filing of a complaint for an alleged violation of this Act.(ii)

Procedure

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 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.(5)

Statute of limitations

An action under this Act shall be barred unless commenced not later than 6 years after the date on which the cause of action accrues.(6)

Rules of construction

(A)

In general

Nothing in subsection (a) may be construed—(i)to require a systemically important 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 systemically important platform operator;(ii)to prevent a systemically important 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 systemically important platform operator;(iii)to require a systemically important 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 are identified as limited or prohibited from engaging in economic transactions as part of United States sanctions or export control regimes, or have been identified as national security, intelligence, or law enforcement risks;(iv)to prohibit a systemically important platform operator from promptly requesting and obtaining the consent of a user prior to providing access to the nonpublic, personally identifiable information of the user to another user;(v)in a manner that would likely result in data on the systemically important platform or data from another business user being transferred to the Government of the People’s Republic of China or the government of another foreign adversary; or(vi)to impose liability on a systemically important platform operator solely for offering—(I)full end-to-end encrypted messaging or communication products or services; or(II)a fee-for-service subscription that provides benefits to users on the platform.(B)

An action taken by a systemically important 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).

Expedited antitrust proceedings for systemically important platforms

(a)

Assignment and priority docketing

(1)

In general

Upon the filing of a civil action by the United States or the Commission against a systemically important platform under this Act or any of the antitrust laws, the chief judge of the district court in which the action is filed shall assign the matter for expedited consideration consistent with this section.(2)

Priority

Any such action shall be advanced on the docket and expedited to the greatest extent practicable. The court shall give the matter priority over all other civil actions, except matters of the same character given equal precedence by statute.(3)

Final judgment

The district court shall endeavor to issue final judgment not later than 1 year after the date on which the complaint is filed.(4)

Appeal

An appeal from a final judgment under this section shall be taken to the court of appeals for the circuit in which the action was filed, which shall expedite such appeal to the greatest extent practicable. If the Supreme Court of the United States grants a writ of certiorari, the Supreme Court shall advance the appeal on the docket and expedite the appeal to the greatest extent practicable.(b)

Use of investigative materials

(1)

In general

Any documentary material, interrogatory response, deposition, testimony, or data obtained by the United States pursuant to a civil investigative demand or other compulsory process under this Act or the Antitrust Civil Process Act (15 U.S.C. 1311 et seq.) shall not be required to be produced to a party during discovery if that party provided the material to the United States or obtained the material during the course of the investigation of the United States, unless—(A)the United States uses the material to support its claims against that party; or(B)the court orders production of the material for good cause shown.(2)

No duplicative discovery

The district court shall not permit duplicative discovery of materials referenced in paragraph (1) absent a showing of good cause.(c)

Expedited enforcement of civil investigative demands

(1)

In general

In any proceeding brought by the United States or the Commission to enforce compliance with a civil investigative demand issued in an investigation relating to a violation of this Act, the chief judge of the district court in which the demand is sought to be enforced shall assign the matter for expedited consideration.(2)

Advancement

Any such action shall be advanced on the docket and expedited to the greatest extent practicable, and absent extraordinary circumstances, the court shall endeavor to issue a ruling not later than 30 days after the date on which the petition is filed.

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;(2)any right guaranteed by the Constitution of the United States, including under the First Amendment; or(3)the application of any law.

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 provisions of this Act to any person or circumstance, shall not be affected.

Effective date

This Act shall take effect 1 year after the date of enactment.