[House Report 117-655]
[From the U.S. Government Publishing Office]


117th Congress    }                                     {       Report
                         HOUSE OF REPRESENTATIVES
 2d Session       }                                     {      117-655

======================================================================



 
               AMERICAN INNOVATION AND CHOICE ONLINE ACT

                                _______
                                

 December 21, 2022.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Nadler, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3816]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 3816) to provide that certain discriminatory conduct 
by covered platforms shall be unlawful, and for other purposes, 
having considered the same, reports favorably thereon with 
amendments and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     7
Background and Need for the Legislation..........................     8
Hearings.........................................................    27
Committee Consideration..........................................    28
Committee Votes..................................................    29
Committee Oversight Findings.....................................    43
Committee Estimate of Budgetary Effects..........................    43
New Budget Authority and Congressional Budget Office Cost 
  Estimate.......................................................    43
Duplication of Federal Programs..................................    46
Performance Goals and Objectives.................................    46
Advisory on Earmarks.............................................    46
Section-by-Section Analysis of H.R. 3816 as Reported Out of 
  Committee......................................................    46
Section-by-Section Analysis of Senate Bill 2992..................    51
Minority Views...................................................    71

    The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

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.

                          Purpose and Summary

    H.R. 3816, the ``American Innovation and Choice Online 
Act,'' was introduced on June 11, 2021 by Representative David 
N. Cicilline (D-RI), the Chair of the Subcommittee on 
Antitrust, Commercial, and Administrative Law, with 
Representative Lance Gooden (R-TX), Judiciary Committee Chair 
Jerrold Nadler (D-NY), and Subcommittee Ranking Member Ken Buck 
(R-CO) as original cosponsors of the bill. H.R. 3816 clarifies 
prohibitions on various types of anticompetitive and 
exclusionary conduct by dominant online platform companies. The 
bill is supported by the U.S. Department of Justice (DOJ),\1\ 
the U.S. Department of Commerce,\2\ and a bipartisan group of 
32 state attorneys general.\3\ The bill proscribes conduct by a 
dominant online platform that advantages the platform's own 
products or services, disadvantages actual or potential 
competitors, or economically discriminates against other 
business users of the platform. The legislation also restricts 
other specific categories of abusive and anticompetitive 
conduct that the Committee uncovered during its bipartisan 
investigation into competition in digital markets, such as 
conditioning access to or preferred status on a covered 
platform on the purchase of other products or services, using 
non-public data from users of the covered platform to compete 
against those users, and giving favorable treatment to the 
covered platform's own products and services in search 
rankings. The legislation establishes that a violation of the 
Act is enforceable by the DOJ, the Federal Trade Commission 
(FTC or Commission), and state attorneys general, and it allows 
enforcers to seek significant penalties for violations of the 
Act. The legislation also creates a cause of action for 
individuals harmed or threatened with harm by a violation of 
the Act.
---------------------------------------------------------------------------
    \1\Letter from Peter Hyun, Acting Assistant Att'y Gen., Off. of 
Legis. Affs., U.S. Dep't of Justice, to Hon. Jerrold Nadler, Chair, H. 
Comm. on the Judiciary, Hon. Jim Jordan, Ranking Member, H. Comm. on 
the Judiciary, Hon. David Cicilline, Chair, Subcomm. on Antitrust, 
Com., & Admin. L. of the H. Comm. on the Judiciary, & Hon. Ken Buck, 
Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. of the H. 
Comm. on the Judiciary (Mar. 28, 2022), https://www.justice.gov/ola/
page/file/1488741/download.
    \2\Brian Fung, Major Tech Antitrust Bill Gets Backing of US 
Commerce Department, CNN Bus. (Apr. 27, 2022), https://www.cnn.com/
2022/04/27/tech/commerce-antitrust-bill/index.html.
    \3\Letter from Phil Weiser, Att'y Gen., Colorado, et al., to Hon. 
Nancy Pelosi, Speaker, H.R., et al. (Sept. 20, 2021), https://coag.gov/
app/uploads/2021/09/Antitrust-Package-Support-Letter-.pdf.
---------------------------------------------------------------------------

                Background and Need for the Legislation


           I. Investigation of Competition in Digital Markets


                              A. OVERVIEW

    The open internet has delivered significant benefits to 
Americans and the U.S. economy. Following the advent of the 
internet, the availability of online products and services has 
led to greater economic opportunity, capital investment, and 
access to information, commerce, communications, education, 
financial services, and arts and culture.
    Over the past decade, however, the digital economy has 
become highly concentrated and proven prone to monopolization. 
Several dominant platform companies have established control 
over key channels of the digital economy and now function as 
gatekeepers for online commerce and communications. These firms 
abuse their gatekeeper power to preference their own products 
and services and destroy competition, harming the competitive 
process, innovation, privacy, and consumers.
    In response to these trends, the House Judiciary Committee 
(Committee) announced a bipartisan investigation into 
competition in the digital marketplace in June 2019,\4\ which 
culminated in a 450-page report detailing the Committee's 
findings and recommendations, entitled ``Investigation of 
Competition in Digital Markets: Majority Staff Report and 
Recommendations'' (Digital Markets Report).\5\ Over the course 
of 16 months, the Committee conducted a top-to-bottom review of 
competition online, including an examination of the dominance 
and business practices of Amazon, Apple, Facebook, and 
Google.\6\ In total, the Subcommittee on Antitrust, Commercial, 
and Administrative Law (Subcommittee) held seven hearings 
during the 116th Congress to review competition in digital 
markets, including hearings on the free and diverse press, 
innovation, privacy, enforcement of the antitrust laws, conduct 
by dominant online platforms, harms to competition and 
consumers, and potential remedies.\7\ These hearings included 
testimony from market participants, antitrust enforcers, 
practitioners, consumer groups, and executives--including the 
chief executive officers--of Amazon, Apple, Facebook, and 
Google.
---------------------------------------------------------------------------
    \4\Press Release, H. Comm. on the Judiciary, House Judiciary 
Antitrust Subcommittee Announces Series of Hearings on Proposals to 
Curb the Dominance of Online Platforms and Modernize Antitrust Law 
(Feb. 18, 2021), https://judiciary.house.gov/news/
documentsingle.aspx?DocumentID=4379.
    \5\Staff of Subcomm. on Antitrust, Com., & Admin. L. of the H. 
Comm. on the Judiciary, 116th Cong., Investigation of Competition in 
Digital Markets: Majority Staff Report and Recommendations (originally 
released 2020), https://judiciary.house.gov/uploadedfiles/
competition_in_digital_markets.pdf. The Committee released the Report 
in October 2020 and, in April 2021, the Committee voted favorably to 
adopt and report it. See Markup of H.R. 1333; H.R. 1573; H.R. 40; H.R. 
2393; Report on Investigation of Competition in Digital Markets 
(Subcommittee on Antitrust, Commercial and Administrative Law) Before 
the H. Comm. on the Judiciary, 117th Cong. (2021), https://
www.congress.gov/event/117th-congress/house-event/111451. The Report 
was published in July 2022. Staff of Subcomm. on Antitrust, Com., & 
Admin. L. of the H. Comm. on the Judiciary, 116th & 117th Cong., 
Investigation of Competition in Digital Markets: Majority Staff Report 
and Recommendations (Comm. Print 2022) [hereinafter Digital Markets 
Report], https://www.govinfo.gov/content/pkg/CPRT-117HPRT47832/pdf/
CPRT-117HPRT47832.pdf. Citations in this Report to the Digital Markets 
Report reference the pagination of the July 2022 Committee Print 
version.
    \6\In 2015, Google reorganized under a new parent company, 
Alphabet, and in 2021, Facebook renamed itself Meta. Because this 
Report refers to conduct both predating and postdating the name 
changes, for consistency, the Report will refer to the relevant 
entities as Google and Facebook.
    \7\See Digital Markets Report at 21-23 (describing hearings). These 
hearings were: Online Platforms and Market Power, Part 1: The Free and 
Diverse Press: Hearing Before the Subcomm. on Antitrust, Com., & Admin. 
L. of the H. Comm. on the Judiciary, 116th Cong. (2019) [hereinafter 
Free and Diverse Press Hearing], https://www.govinfo.gov/content/pkg/
CHRG-116hhrg39839/pdf/CHRG-116hhrg39839.pdf; Online Platforms and 
Market Power, Part 2: Innovation and Entrepreneurship: Hearing Before 
the Subcomm. on Antitrust, Com., & Admin. L. of the H. Comm. on the 
Judiciary, 116th Cong. (2019), https://www.govinfo.gov/content/pkg/
CHRG-116hhrg39901/pdf/CHRG-116hhrg39901.pdf; Online Platforms and 
Market Power, Part 3: The of Role of Data and Privacy in Competition: 
Hearing Before the Subcomm. on Antitrust, Com., & Admin. L. of the H. 
Comm. on the Judiciary, 116th Cong. (2019) [hereinafter Data and 
Privacy Hearing], https://www.govinfo.gov/content/pkg/?CHRG-
116hhrg39840/pdf/CHRG-116hhrg39840.pdf; Online Platforms and Market 
Power, Part 4: Perspectives of the Antitrust Agencies: Hearing Before 
the Subcomm. on Antitrust, Com., & Admin. L. of the H. Comm. on the 
Judiciary, 116th Cong. (2019), https://www.govinfo.gov/content/pkg/
CHRG-116hhrg40787/pdf/CHRG-116hhrg40787.pdf; Online Platforms and 
Market Power, Part 5: Competitors in the Digital Economy: Hearing 
Before the Subcomm. on Antitrust, Com., & Admin. L. of the H. Comm. on 
the Judiciary, 116th Cong. (2020), https://www.govinfo.gov/content/pkg/
CHRG-116hhrg40788/pdf/CHRG-116hhrg40788.pdf; Online Platforms and 
Market Power, Part 6: Examining the Dominance of Amazon, Apple, 
Facebook, and Google: Hearing Before the Subcomm. on Antitrust, Com., & 
Admin. L. of the H. Comm. on the Judiciary, 116th Cong. (2020), https:/
/www.govinfo.gov/content/pkg/CHRG-116hhrg41317/pdf/CHRG-
116hhrg41317.pdf; and Proposals to Strengthen the Antitrust Laws and 
Restore Competition Online: Hearing Before the Subcomm. on Antitrust, 
Com., & Admin. L. of the H. Comm. on the Judiciary, 116th Cong. (2020) 
[hereinafter Remedies Hearing], https://www.govinfo.gov/content/pkg/
CHRG-116hhrg42250/pdf/CHRG-116hhrg42250.pdf.
---------------------------------------------------------------------------
    The Subcommittee also convened a series of 12 briefings for 
Members of the Subcommittee and staff. These briefings provided 
additional opportunities for oversight and engagement--with 
antitrust experts, former technology industry executives, civil 
society organizations, current and former antitrust enforcers, 
and market participants--on the state of competition and other 
issues in digital markets.\8\ Additionally, these briefings 
allowed representatives from the investigated companies to make 
presentations to Subcommittee staff, answer questions, and 
provide details regarding their companies' business practices, 
structures, and strategies in the marketplace.\9\
---------------------------------------------------------------------------
    \8\Digital Markets Report at 23-24.
    \9\Id. at 24.
---------------------------------------------------------------------------
    In September 2019, the Committee sent bipartisan requests 
for information (RFIs) to the four investigated firms.\10\ 
These requests sought comprehensive information about the 
products and services of these firms, as well as communications 
among high-level executives relating to various acquisitions 
and potentially anticompetitive conduct. The Committee also 
sent RFIs to more than 100 market participants; solicited input 
and analysis from dozens of leading antitrust scholars, 
experts, and practitioners; and conducted hundreds of 
interviews with market participants and other experts.\11\ The 
Committee also sent RFIs to the DOJ and FTC for documents 
relating to the agencies' decisions to open or close 
investigations into potential violations of the antitrust laws 
in digital markets, decisions to challenge mergers or conduct, 
and decisions to forgo litigation in favor of settlement 
agreements.\12\ Senior officials from the DOJ's Antitrust 
Division provided several briefings to Members of the 
Subcommittee and staff, which enabled Members to obtain 
information and updates about the current state of antitrust 
enforcement in digital markets.\13\
---------------------------------------------------------------------------
    \10\Letter from Hon. Jerrold Nadler, Chair, H. Comm. on the 
Judiciary, Hon. Doug Collins, Ranking Member, H. Comm. on the 
Judiciary, Hon. David N. Cicilline, Chair, Subcomm. on Antitrust, Com., 
& Admin. L. of the H. Comm. on the Judiciary, & Hon. F. James 
Sensenbrenner, Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. 
of the H. Comm. on the Judiciary, to Jeff Bezos, CEO, Amazon.com, Inc. 
(Sept. 13, 2019), https://judiciary.house.gov/sites/
democrats.judiciary.house.gov/files/documents/amazon%20rfi%20-
%20signed.pdf; Letter from Hon. Jerrold Nadler, Chair, H. Comm. on the 
Judiciary, Hon. Doug Collins, Ranking Member, H. Comm. on the 
Judiciary, Hon. David N. Cicilline, Chair, Subcomm. on Antitrust, Com., 
& Admin. L. of the H. Comm. on the Judiciary, & Hon. F. James 
Sensenbrenner, Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. 
of the H. Comm. on the Judiciary, to Tim Cook, CEO, Apple Inc. (Sept. 
13, 2019), https://judiciary.house.gov/sites/
democrats.judiciary.house.gov/files/documents/apple%20rfi%20-
%20signed.pdf; Letter from Hon. Jerrold Nadler, Chair, H. Comm. on the 
Judiciary, Hon. Doug Collins, Ranking Member, H. Comm. on the 
Judiciary, Hon. David N. Cicilline, Chair, Subcomm. on Antitrust, Com., 
& Admin. L. of the H. Comm. on the Judiciary, & Hon. F. James 
Sensenbrenner, Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. 
of the H. Comm. on the Judiciary, to Mark Zuckerberg, CEO, Facebook, 
Inc. (Sept. 13, 2019), https://judiciary.house.gov/sites/
democrats.judiciary.house.gov/files/documents/facebook%20rfi%20-
%20signed.pdf; Letter from Hon. Jerrold Nadler, Chair, H. Comm. on the 
Judiciary, Hon. Doug Collins, Ranking Member, H. Comm. on the 
Judiciary, Hon. David N. Cicilline, Chair, Subcomm. on Antitrust, Com., 
& Admin. L. of the H. Comm. on the Judiciary, & Hon. F. James 
Sensenbrenner, Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. 
of the H. Comm. on the Judiciary, to Larry Page, CEO, Alphabet Inc. 
(Sept. 13, 2019), https://judiciary.house.gov/sites/
democrats.judiciary.house.gov/files/documents/alphabet%20inc.%20rfi%20-
%20signed%20(003).pdf. See also Digital Markets Report at 14-18 
(describing requests for information).
    \11\Digital Markets Report at 18-20.
    \12\Id. at 20-21.
    \13\Id. at 21.
---------------------------------------------------------------------------
    In sum, the Committee's investigation compiled a 
considerable oversight and evidentiary record over the course 
of 16 months. This record included 1,287,997 documents and 
communications; testimony from 38 witnesses; a hearing record 
spanning more than 1,800 pages; 38 submissions from 60 
antitrust scholars, experts, and practitioners from across the 
political spectrum; and interviews with more than 240 market 
participants and technology experts.\14\
---------------------------------------------------------------------------
    \14\Id. at 3.
---------------------------------------------------------------------------

                              B. FINDINGS

1. Anticompetitive Practices in Digital Markets

    In October 2020, the Committee released the Digital Markets 
Report, marking the culmination of the Committee's 
investigation.\15\ The Report was adopted by a vote of the 
Committee in April 2021 and formally published on July 19, 
2022.\16\ As a result of the investigation, the Committee 
uncovered significant evidence that several dominant online 
platforms possess gatekeeper power over segments of the digital 
economy, as well as the incentive and ability to use that power 
to enter and dominate adjacent or vertically related markets. 
As explained in the Digital Markets Report, the dominant online 
platforms investigated by the Committee each possess 
significant and durable market power, as well as the incentive 
and ability to abuse this power.\17\ Moreover, these platforms 
operate as gatekeepers over key channels of distribution and 
communication.\18\ When a large swath of the economy depends on 
particular platforms ``to access users and markets,'' those 
platforms have ``gatekeeper power to dictate terms and extract 
concessions that third parties would not consent to in a 
competitive market.''\19\
---------------------------------------------------------------------------
    \15\Press Release, H. Comm. on the Judiciary, Judiciary Antitrust 
Subcommittee Investigation Reveals Digital Economy Highly Concentrated, 
Impacted by Monopoly Power (Oct. 6, 2020), https://judiciary.house.gov/
news/documentsingle.aspx?DocumentID=3429.
    \16\See Markup of H.R. 1333; H.R. 1573; H.R. 40; H.R. 2393; Report 
on Investigation of Competition in Digital Markets (Subcommittee on 
Antitrust, Commercial and Administrative Law) Before the H. Comm. on 
the Judiciary, 117th Cong. (2021), https://www.congress.gov/event/
117th-congress/house-event/111451; Digital Markets Report, https://
www.govinfo.gov/content/pkg/CPRT-117HPRT47832/pdf/CPRT-
117HPRT47832.pdf.
    \17\See, e.g., Digital Markets Report at 5-13 (summary of 
findings).
    \18\See, e.g., id. at 29-30 (summarizing the role of dominant 
online platforms as gatekeepers).
    \19\Id. at 29.
---------------------------------------------------------------------------
    The investigation also produced a detailed record of 
conduct by dominant platform companies that raised significant 
concerns about competition online,\20\ and demonstrated the 
need for legislation to confront these abuses.\21\ In the 
Digital Market Report, the Committee detailed its findings on 
four companies: Facebook, Google, Amazon, and Apple.
---------------------------------------------------------------------------
    \20\See, e.g., id. at 5-13 (summary of findings), 110-317 (findings 
concerning dominant online platforms). See also Hon. Ken Buck, Member, 
Subcomm. on Antitrust, Com., & Admin. L. of the H. Comm. on the 
Judiciary, et al., The Third Way 3-5 (2020) [hereinafter Third Way 
Report], https://buck.house.gov/sites/evo-subsites/buck-evo.house.gov/
files/wysiwyg_uploaded/Buck%20Report.pdf (discussing the Majority's 
findings).
    \21\Digital Markets Report at 13-14 (summary of recommendations), 
317-42 (recommendations).
---------------------------------------------------------------------------
    Facebook. The Committee found that, once Facebook became 
the dominant firm in the personal-social-networking market, it 
abused its monopoly power by, for example, identifying 
competitive threats and then copying, killing, or acquiring 
these threats.\22\ Facebook recognized that some social apps 
had become popular enough to compete with its family of 
products. Facebook's internal documents showed that the 
company's senior executives grew concerned as ``startups siphon 
our [social] graph and create awesome new experiences faster 
than we can.''\23\ Rather than competing vigorously to provide 
better products and services, Facebook's executives agreed that 
the company should be ``more aggressive and nimble in copying 
our competitors.''\24\
---------------------------------------------------------------------------
    \22\See id. at 124-41 (Facebook's relevant acquisitions and 
conduct).
    \23\Id. at 136.
    \24\Id. at 135.
---------------------------------------------------------------------------
    Alternatively, Facebook blocked the access of companies it 
viewed as competitive threats to its platform altogether.\25\ 
As Mike Vernal, Facebook's Vice President of Product and 
Engineer, explained:
---------------------------------------------------------------------------
    \25\Id. at 139.

    When we started Facebook Platform, we were small and wanted 
to make sure we were an essential part of the fabric of the 
Internet. We've done that--we're now the biggest service on 
earth. When we were small, apps helped drive our ubiquity. Now 
that we are big, (many) apps are looking to siphon off our 
users to competitive services. We need to be more thoughtful 
about what integrations we allow . . . .\26\
---------------------------------------------------------------------------
    \26\Id. at 138 (emphasis removed).

    Facebook's CEO, Mark Zuckerberg, agreed, saying that ``we 
want as much control here as we can get,'' and that the ``right 
solution here is just to be a lot stricter about enforcing our 
policies and identifying companies as competitors.''\27\
---------------------------------------------------------------------------
    \27\Id. at 139 (emphasis removed).
---------------------------------------------------------------------------
    Facebook also leveraged its power to destroy competitors to 
facilitate acquisitions of nascent rivals, such as 
Instagram.\28\ Prior to being acquired by Facebook, Instagram's 
internal documents showed that its co-founder, Kevin Systrom, 
expressed concern that Mr. Zuckerberg would ``go into destroy 
mode'' if Instagram did not agree to be acquired by 
Facebook.\29\ Indeed, Mr. Systrom said as much to Mr. 
Zuckerberg directly, telling him that he ``wouldn't feel nearly 
as strongly [about the acquisition] if independently you 
weren't building a mobile photos app that makes people choose 
which engine to use.''\30\
---------------------------------------------------------------------------
    \28\See id. at 135-37 (Facebook's strategy to acquire, copy, or 
kill competitors).
    \29\Id. at 136.
    \30\Id.
---------------------------------------------------------------------------
    In sum, Facebook recognized that some social apps had 
become popular enough to compete with Facebook's family of 
products. When this occurred with apps such as Vine, Ark, and 
MessageMe, Facebook cut off these apps' access to Facebook's 
social graph.\31\ In contrast, Facebook gave preferential 
treatment to firms, like Amazon, that purchased advertising and 
worked to integrate Facebook's services into other 
products.\32\ Facebook also leveraged its power to destroy 
competitors to facilitate acquisitions of nascent rivals, such 
as Instagram.\33\
---------------------------------------------------------------------------
    \31\See id. at 137-41 (Facebook's weaponizing access to its 
platform).
    \32\Id. at 140.
    \33\See id. at 135-37 (Facebook's strategy to acquire, copy, or 
kill competitors).
---------------------------------------------------------------------------
    As a result, the Committee concluded that the absence of 
competition in the personal-social-networking market has led to 
a deterioration of the quality of Facebook over time, 
``resulting in worse privacy protections for its users and a 
dramatic rise in misinformation on its platform.''\34\ One 
consequence of this deterioration of consumer privacy is that 
Facebook has repeatedly faced FTC enforcement actions stemming 
from the company's deceptive user privacy representations and 
practices, resulting in a record $5 billion civil penalty 
judicially approved in 2020.\35\
---------------------------------------------------------------------------
    \34\Id. at 8. See also Complaint at 8, para.8, New York v. 
Facebook, Inc., 549 F. Supp. 3d 6 (D.D.C. 2021) (No. 1:20-cv-3589), ECF 
No. 4, https://ag.ny.gov/sites/default/files/
state_of_new_york_et_al._v._facebook_inc._-
_filed_public_complaint_12.11.2020.pdf (``Users of personal social 
networking services have suffered and continue to suffer a variety of 
harms as a consequence of Facebook's illegal conduct, including 
degraded quality of users' experiences, less choice in personal social 
networks, suppressed innovation, and reduced investment in potentially 
competing services. Facebook's conduct deprives users of product 
improvements and, as a result, users have suffered, and continue to 
suffer, reductions in the quality and variety of privacy options and 
content available to them.'').
    \35\See Decision and Order, In re Facebook, Inc., No. C-4365 
(F.T.C. July 27, 2012), https://www.ftc.gov/sites/?default/files/
documents/cases/2012/08/120810facebookdo.pdf; Proposed Stipulated Order 
for Civil Penalty, Monetary Judgment, and Injunctive Relief at 3, 
United States v. Facebook, Inc., 456 F. Supp. 3d 115 (D.D.C. 2020) (No. 
1:19-cv-2184), ECF No. 2-1, https://www.ftc.gov/system/files/documents/
cases/182_3109_?facebook_order_filed_7-24-19.pdf (stipulated order 
proposed in July 2019 and issued by the court in April 2020).
---------------------------------------------------------------------------
    Google. The Committee found that Google, among other 
things, has abused its monopoly power in the market for general 
online search, in part by misappropriating data from rivals and 
preferencing its own products and services over those of 
rivals.\36\ For example, Google's internal documents 
demonstrate that it made changes to its search product to 
increase traffic to its other products and services, 
preferencing affiliated products over those of third parties, 
even when Google's offerings were not the best or most relevant 
for users.\37\
---------------------------------------------------------------------------
    \36\See Digital Markets Report at 151-63 (Google's leveraging of 
dominance in search through data misappropriation and self-
preferencing).
    \37\See id. at 155-60 (Google's self-preferencing).
---------------------------------------------------------------------------
    Google also uses its control over the Android mobile 
operating system to maintain and expand the dominance of online 
search and other apps on mobile devices. In exchange for 
licensing Android and Google's popular suite of apps, Google 
requires device manufacturers to pre-install and set Google's 
apps as defaults. It also leverages its control over Android to 
stop device manufacturers from giving prominent placement to 
rival apps or developing competing mobile operating systems, 
undermining competition in multiple markets.\38\
---------------------------------------------------------------------------
    \38\See id. at 177-81 (certain of Google's Android-related 
conduct).
---------------------------------------------------------------------------
    Amazon. The Committee found that Amazon functions as a 
gatekeeper for online commerce, and as a result, it has 
monopoly power over most-third party sellers and many of its 
suppliers.\39\ Amazon abuses its gatekeeper power through 
extensive anticompetitive conduct in its treatment of third-
party sellers on its platform. For example, Amazon abuses its 
power as an e-commerce marketplace to force third parties to 
accept contract terms and conditions unrelated to retail 
distribution and to undermine competition from other 
retailers.\40\
---------------------------------------------------------------------------
    \39\See id. at 215-19 (Amazon's market power, as concerning sellers 
and suppliers).
    \40\See id. at 224-29 (Amazon's bullying of third-party sellers and 
forced arbitration).
---------------------------------------------------------------------------
    Additionally, Amazon exploits its gatekeeper power to 
access third-party seller data to identify popular and 
profitable products, create a competing private-label product, 
and then engage in predatory pricing to drive the original 
vendors from the market.\41\ Amazon also uses its control over 
the marketplace and unmatched access to market data to 
preference its own products and services over third-parties' 
similar products and services.\42\ And it leverages its 
dominance in e-commerce to force third-party sellers to 
purchase Amazon's fulfillment services and advertising.\43\
---------------------------------------------------------------------------
    \41\See id. at 230-37 (Amazon's appropriation of third-party seller 
data).
    \42\See id. at 237-40 (Amazon's self-preferencing).
    \43\See id. at 240-45 (Amazon's tying and bundling).
---------------------------------------------------------------------------
    Apple. The Committee found that Apple has significant and 
durable market power in the mobile-operating-system market 
through its control over the mobile-software-applications 
market for more than 100 million iPhones and iPads in the 
United States.\44\ The Committee further found that Apple 
exploits its dominance to establish and enforce anticompetitive 
and self-preferencing rules for the marketplace, to preference 
its own software products and services, to exclude rivals, and 
to pick winners and losers.\45\
---------------------------------------------------------------------------
    \44\Id. at 10, 279.
    \45\See id. at 285-314 (Apple's relevant conduct).
---------------------------------------------------------------------------
    Apple's abusive practices are varied and include requiring 
app developers to use Apple's in-app payment system, charging 
large commissions for apps and in-app purchases, and 
prohibiting app developers from using alternative payment 
processing systems or communicating with customers about the 
availability of lower-cost payment options elsewhere.\46\ By 
contrast, Apple's apps enjoy a competitive advantage because 
they are not subject to the fees and commissions Apple charges 
rivals, such as Spotify or Proton Mail. Rivals must either 
increase prices on consumers or forgo investments in new 
services. App developers have repeatedly detailed how Apple 
threatened them with expulsion from the App Store if apps did 
not implement in-app payments that allow Apple to take a 
commission from transactions.\47\
---------------------------------------------------------------------------
    \46\See id. at 285-96 (Apple's App Store commissions and control of 
in-app purchases).
    \47\See id. at 293-96 (Apple's conduct regarding in-app purchases).
---------------------------------------------------------------------------
    Apple also uses its control over the iOS ecosystem to 
preference its own apps in App Store search rankings, device 
functionality, and access to application programming 
interfaces.\48\ Additionally, Apple exploits competitively 
sensitive information from third-party app developers to build 
competing apps and then incorporates these apps into iOS 
itself--often driving the third-party developer and other 
competitors out of the market entirely--a practice so pervasive 
it has a name: ``Sherlocking.''\49\
---------------------------------------------------------------------------
    \48\See id. at 296-305 (certain of Apple's self-preferencing 
conduct).
    \49\See id. at 305-07 (Apple's treatment of competitively sensitive 
information).
---------------------------------------------------------------------------
    * * *
    In response to the Committee's Report, Representative Ken 
Buck (R-CO), along with several other Republicans, released a 
separate report entitled ``The Third Way: Antitrust Enforcement 
in Big Tech'' (Third Way Report), which agreed that the Digital 
Markets Report ``offers a comprehensive review of the 
technology marketplace and accurately depicts the harmful 
effects of Big Tech's anticompetitive reign over the digital 
economy.''\50\ The Third Way Report described the Digital 
Markets Report's factual findings as ``undeniable'' and agreed 
that it ``accurately portrays how Apple, Amazon, Google, and 
Facebook have used their monopoly power to act as gatekeepers 
to the marketplace, undermine potential competition, . . . pick 
winners and losers,'' and aggressively pursue anticompetitive 
mergers to snuff out competitors and reinforce their 
dominance.\51\
---------------------------------------------------------------------------
    \50\Third Way Report at 3. See also id. at 6 (``These concerning 
behaviors are the fruit of Big Tech's poisonous and monopolistic 
tree.'').
    \51\Id. at 3.
---------------------------------------------------------------------------

2. Adequacy of Current Law

    As the Committee's investigation showed, several dominant 
online platforms have engaged in conduct that raises 
significant competition concerns, demonstrating the pressing 
need for legislation to address the rise, persistence, and 
abuse of market power online. In recent decades, however, the 
antitrust laws have been unduly narrowed by the courts. As a 
result, the Committee found that current laws can often be 
insufficient to address the abuse of gatekeeper power or 
barriers to entry that typify today's digital marketplace.\52\ 
Further, it can be unnecessarily difficult for antitrust 
enforcers--as well as private plaintiffs--to successfully 
challenge anticompetitive conduct and mergers through 
litigation.\53\ Leading antitrust scholars have observed that 
these trends ``reflect[] the now outdated learning of an 
earlier era of economic thought, and [the courts] appear in 
some respects inhospitable to new learning.''\54\
---------------------------------------------------------------------------
    \52\See Digital Markets Report at 330-37 (strengthening the 
antitrust laws).
    \53\See Jonathan Sallet, Competitive Edge: Protecting the 
``Competitive Process''--The Evolution of Antitrust Enforcement in the 
United States, Wash. Ctr. for Equitable Growth (Oct. 31, 2018), https:/
/equitablegrowth.org/competitive-edge-protecting-the-competitive-
process-the-evolution-of-antitrust-enforcement-in-the-united-states/. 
See also Third Way Report at 10 (``With its laser-like focus on price 
and output, modern antitrust appears to have missed the marketplace 
realities in Big Tech markets.'').
    \54\Chi. Booth Stigler Ctr. for the Study of Econ. & State, Stigler 
Committee on Digital Platforms: Final Report 85 (2019) [hereinafter 
Stigler Report], https://www.chicagobooth.edu/-/media/research/stigler/
?pdfs/digital-platforms---committee-report---stigler-center.pdf.
---------------------------------------------------------------------------
    Between 1890 and 1914, Congress enacted the Sherman 
Antitrust Act of 1890,\55\ the Clayton Antitrust Act of 
1914,\56\ and the Federal Trade Commission Act of 1914 (FTC 
Act)\57\ to preserve and promote competition by preventing 
cartelization, monopolization, and mergers or acquisitions that 
may substantially lessen competition or tend to create a 
monopoly. Over the past century, Congress has amended the 
antitrust laws in response to increased economic concentration 
or shortcomings in the law. These later-enacted statutes 
include the Robinson-Patman Act of 1936\58\ and the Celler-
Kefauver Act of 1950,\59\ which together evince particular 
concern with arresting trends toward concentration in their 
incipiency, as well as the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976,\60\ which further underscored the 
risks posed to competition from economic concentration due to 
mergers.
---------------------------------------------------------------------------
    \55\Ch.647, 26 Stat. 209 (codified as amended at 15 U.S.C. 
Sec. Sec. 1-7).
    \56\Pub. L. No. 63-212, ch.323, 38 Stat. 730 (codified as amended 
at 15 U.S.C. Sec. Sec. 12-27).
    \57\Pub. L. No. 63-203, ch.311, 38 Stat. 717 (codified as amended 
at 15 U.S.C. Sec. Sec. 41-58).
    \58\Pub. L. No. 74-692, ch.592, 49 Stat. 1526 (codified at 15 
U.S.C. Sec. 13).
    \59\Pub. L. No. 81-899, ch.1184, 64 Stat. 1125 (amending 15 U.S.C. 
Sec. 18).
    \60\Pub. L. No. 94-435, Sec. Sec. 201-202, 90 Stat. 1383, 1390-94 
(codified as amended at 15 U.S.C. Sec. 18a).
---------------------------------------------------------------------------
    Despite this legislation, over the past several decades, 
some courts have inappropriately narrowed the grounds for 
antitrust liability, particularly under section 2 of the 
Sherman Act, which broadly prohibits monopolization. For 
certain forms of exclusionary conduct--including predatory 
pricing, refusals to deal, tying, bundling, price squeezing, 
and monopoly leveraging--such decisions may require plaintiffs 
to meet high legal and evidentiary burdens that are 
inconsistent with the original purpose of the antitrust 
laws.\61\
---------------------------------------------------------------------------
    \61\See, e.g., Brooke Grp. v. Brown & Williamson Tobacco Corp., 509 
U.S. 209 (1993); Verizon Commc'ns Inc. v. Law Offices of Curtis V. 
Trinko, LLP, 540 U.S. 398 (2004); Pac. Bell Tel. Co. v. linkLine 
Commc'ns, Inc., 555 U.S. 438 (2009); Alaska Airlines, Inc. v. United 
Airlines, Inc., 948 F.2d 536 (9th Cir. 1991).
---------------------------------------------------------------------------
    Courts' recent treatment of the essential-facilities 
doctrine offers one example. That doctrine provides that, in 
certain circumstances, when a dominant firm operates as a 
bottleneck gatekeeper in the market for an essential input, the 
firm may not deny competitors access to that essential 
input.\62\ Enforcement of this doctrine could help restore 
competition in digital markets. As leading antitrust experts 
noted during the Committee's investigation, several dominant 
online platforms operate as de facto essential facilities. For 
example, as Professors Harry First and Eleanor Fox of the New 
York University School of Law explained in a submission to the 
Subcommittee: ``Many businesses, to do business, must use the 
platform. They have almost no choice. [Google, Amazon, 
Facebook, and Apple] compete with the businesses on their 
platforms.''\63\
---------------------------------------------------------------------------
    \62\Hecht v. Pro-Football, Inc., 570 F.2d 982, 992-93 (D.C. Cir. 
1977) (citing, among other cases, Otter Tail Power Co. v. United 
States, 410 U.S. 366 (1973), and United States v. Terminal R.R. Ass'n, 
224 U.S. 383 (1912)).
    \63\Submission from Harry First, Charles L. Denison Prof. of L., 
N.Y.U. Sch. of L., & Eleanor Fox, Walter J. Derenberg Prof. of Trade 
Reg., N.Y.U. Sch. of L., to H. Comm. on the Judiciary, 5 (Aug. 6, 
2020), https://judiciary.house.gov/uploadedfiles/
submission_from_harry_first_and_eleanor_fox.pdf. See also, e.g., 
Submission from Albert A. Foer, Founder & Senior Fellow, Am. Antitrust 
Inst., to H. Comm. on the Judiciary,1-2 (Apr. 14, 2020), https://
judiciary.house.gov/uploadedfiles/submission_from_bert_foer.pdf; 
Submission from Sally Hubbard, Dir. of Enf't Strategy, Open Mkts. 
Inst., et al., to H. Comm. on the Judiciary,5-7 (Apr. 17, 2020), 
https://judiciary.house.gov/uploadedfiles/
submission_from_sally_hubbard_and_antitrust_expert_coalition.pdf; 
Remedies Hearing at 100-01 (statement of K. Sabeel Rahman, President, 
Demos).
---------------------------------------------------------------------------
    But judicial decisions have inappropriately limited the 
essential-facilities doctrine as a tool to protect 
competition,\64\ by holding that dominant companies are ``under 
no obligation to provide rivals with a `sufficient' level of 
service.''\65\ As a result, a refusal by a monopolist to deal 
with rivals can operate to effectively cement that monopolist's 
dominance while also making it more difficult for potential 
competitors to enter the market, enhance competition, and 
ensure that consumers, trading partners, and workers have 
choices in the marketplace.\66\
---------------------------------------------------------------------------
    \64\See Nikolas Guggenberger, The Essential Facilities Doctrine in 
the Digital Economy: Dispelling Persistent Myths, 23 Yale J.L. & Tech. 
301, 307, 309-11 (2021); id. at 310 n.39 (citing Phillip Areeda, 
Essential Facilities: An Epithet in Need of Limiting Principles, 58 
Antitrust L.J. 841 (1989); Phillip Areeda, Monopolization, Mergers, and 
Markets: A Century Past and the Future, 75 Calif. L. Rev. 959, 965 
(1987); William E. Kovacic, The Chicago Obsession in the Interpretation 
of US Antitrust History, 87 U. Chi. L. Rev. 459, 485 n.122 (2020)).
    \65\Pac. Bell Tel. Co. v. linkLine Commc's, Inc., 555 U.S. 438, 444 
(2009) (describing holding of Verizon Commc'ns Inc. v. Law Offices of 
Curtis V. Trinko, LLP, 540 U.S. 398, 410 (2004)).
    \66\See, e.g., Nikolas Guggenberger, Essential Platforms, 24 Stan. 
Tech. L. Rev. 237, 253-55, 305 (2021).
---------------------------------------------------------------------------
    Another example is monopoly leveraging, a practice by which 
a dominant firm uses its monopoly power in one market to 
advantage its position in a second market--and one that the 
Committee's investigation revealed that dominant online 
platforms engage in. As with other types of exclusionary 
conduct, monopoly leveraging was previously a widely accepted 
theory of harm under the antitrust laws.\67\ However, in recent 
years, some courts have created undue barriers to the 
enforcement of monopoly-leveraging claims that defy Congress' 
intent. For instance, some courts now require that antitrust 
enforcers or private antitrust plaintiffs show that a firm's 
use of its monopoly power in one market results in, or 
seriously threatens to result in, the monopolization of a 
second market.\68\
---------------------------------------------------------------------------
    \67\See, e.g., United States v. Griffith, 334 U.S. 100, 107, 108 
(1948) (explaining that ``the use of monopoly power, however lawfully 
acquired, . . . to gain a competitive advantage . . . is unlawful,'' 
and further that,``[i]f monopoly power can be used to beget monopoly, 
the Act becomes a feeble instrument indeed''); SmithKline Corp. v. Eli 
Lilly & Co., 575 F.2d 1056, 1065 (3d Cir. 1978) (concluding that a drug 
company violated section 2 by linking rebates for products on which it 
faced no competition to a competitive product); Berkey Photo, Inc. v. 
Eastman Kodak Co., 603 F.2d 263, 275 (2d Cir. 1979) (holding that ``a 
firm violates Sec. 2 by using its monopoly power in one market to gain 
a competitive advantage in another, albeit without an attempt to 
monopolize the second market'').
    \68\See, e.g., Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 
458-59 (1993); Alaska Airlines, Inc. v. United Airlines, Inc., 948 F.2d 
536, 547-49 (9th Cir. 1991).
---------------------------------------------------------------------------
    In chipping away at the protections against monopolization 
afforded by section 2 of the Sherman Act, some courts have 
incorrectly focused on the costs of false positives (i.e., the 
costs of erroneous enforcement actions), demonstrating a strong 
preference for Type II errors (i.e., erroneous inaction) over 
Type I errors (i.e., erroneous action), effectively creating a 
judicial bias against antitrust enforcement.\69\ Professor 
Herbert Hovenkamp explained that ``[a]ntitrust today suffers 
from an antienforcement bias that is scientifically obsolete 
and produces too many false negatives.''\70\ And Michael Kades 
from the Washington Center for Equitable Growth testified 
before the Subcommittee that, ``[o]ver the past 40 years, . . . 
federal courts, showing an almost neurotic fear of 
overenforcement, have increased burdens on plaintiffs in 
antitrust cases and narrowed the scope of antitrust law.''\71\
---------------------------------------------------------------------------
    \69\See Jonathan B. Baker, Taking the Error Out of ``Error Cost'' 
Analysis: What's Wrong with Antitrust's Right, 80 Antitrust L.J.1, 5 
(2015).
    \70\Herbert Hovenkamp, Antitrust and Platform Monopoly, 130 Yale 
L.J. 1952, 2049 (2021).
    \71\Remedies Hearing at 29 (statement of Michael Kades, Dir., Mkts. 
& Competition Pol'y, Wash. Ctr. for Equitable Growth).
---------------------------------------------------------------------------
    As a result, these decisions have undermined the effective 
enforcement of antitrust law to curtail anticompetitive conduct 
in the digital marketplace. Indeed, as Chair Nadler and 
Subcommittee Chair Cicilline noted in a joint statement 
accompanying the release of the Digital Markets Report, the 
Committee's investigation demonstrated that ``there is a clear 
and compelling need for Congress and the antitrust enforcement 
agencies to take action that restores competition, improves 
innovation, and safeguards our democracy. This Report outlines 
a roadmap for achieving that goal.''\72\
---------------------------------------------------------------------------
    \72\Press Release, H. Comm. on the Judiciary, Judiciary Antitrust 
Subcommittee Investigation Reveals Digital Economy Highly Concentrated, 
Impacted by Monopoly Power (Oct. 6, 2020), https://judiciary.house.gov/
news/documentsingle.aspx?DocumentID=3429.
---------------------------------------------------------------------------

 II. PROPOSALS AND SUPPORT FOR MODERNIZING THE ANTITRUST LAWS FOR THE 
                            DIGITAL ECONOMY

    During the 117th Congress, the Subcommittee held further 
hearings, and reviewed additional reports and recommendations 
from experts and stakeholders, addressing the need to modernize 
the antitrust laws.
    In February 2021, the Subcommittee held a hearing on 
proposals to address gatekeeper power and lower barriers to 
entry online.\73\ Several witnesses testified in support of 
legislation to curb economic discrimination and other 
anticompetitive online conduct. For example, Charlotte Slaiman, 
Competition Policy Director at Public Knowledge, explained why 
Congress should adopt new legislation: ``In dealing with 
quickly changing technology, you need speed and flexibility. In 
dealing with markets prone to tipping, you need ongoing 
monitoring and enforcement.''\74\ Ms. Slaiman identified as a 
particular problem the fact that dominant online platforms' 
business models inevitably create conflicts of interest and 
give these firms the incentive and ability to discriminate 
against, and harm, potential rivals.\75\ She noted that 
dominant platforms can ``use their gatekeeper power to pick 
themselves as winners in a market while ensuring rivals and 
potential rivals remain losers,'' and Congress should enact 
legislation to ``remove the ability for platforms to self-
preference or anticompetitively discriminate.''\76\ In short, 
Ms. Slaiman stated, digital markets ``need a non-discrimination 
rule.''\77\
---------------------------------------------------------------------------
    \73\Reviving Competition, Part 1: Proposals to Address Gatekeeper 
Power and Lower Barriers to Entry Online: Hearing Before the Subcomm. 
on Antitrust, Com., & Admin. L. of the H. Comm. on the Judiciary, 117th 
Cong. 24 (2021) [hereinafter Lower Barriers to Entry Hearing], https://
www.govinfo.gov/content/pkg/CHRG-117hhrg47295/pdf/CHRG-
117hhrg47295.pdf.
    \74\Id. at 16 (statement of Charlotte Slaiman, Competition Pol'y 
Dir., Pub. Knowledge).
    \75\Id. at 20.
    \76\Id. at 21.
    \77\Id.
---------------------------------------------------------------------------
    Morgan Harper, Senior Advisor at the American Economic 
Liberties Project, similarly testified that ``[d]ominant firms 
should be banned from discriminating against other firms'' and 
``should give market players equal access to their platforms 
and not pick winners or losers.''\78\
---------------------------------------------------------------------------
    \78\Id. at 79 (statement of Morgan Harper, Senior Advisor, Am. 
Econ. Liberties Project).
---------------------------------------------------------------------------
    Hal Singer, Managing Director at Econ One, agreed in his 
testimony that American antitrust law could not currently 
address certain types of anticompetitive conduct that permeate 
the digital markets and stifle innovation. Dr. Singer advised: 
``Given this gap in protection, there is an urgent need to 
supplement antitrust enforcement with regulatory 
protections.''\79\ He explained that a variety of complementary 
approaches were warranted because, even if structural 
separations or line-of-business restrictions are imposed on 
dominant digital platforms, ``this approach must be bolstered 
with rules against control via contracting, such as bans on 
exclusive dealing.''\80\
---------------------------------------------------------------------------
    \79\Id. at 25 (statement of Hal Singer, Managing Dir., Econ One).
    \80\Id.
---------------------------------------------------------------------------
    In March 2021, the Subcommittee held a hearing with current 
and former competition-law enforcers on strengthening the 
antitrust laws to address monopoly power.\81\ Seventh Circuit 
Court of Appeals Judge Diane P. Wood, formerly a Deputy 
Assistant Attorney General of the DOJ's Antitrust Division, 
testified that, although ``[t]his is obviously hardly the first 
time Congress has considered legislative changes to the 
antitrust laws,'' ``this is a time where clarification of the 
intent of Congress is really called for.''\82\ Judge Wood 
observed that there was an ``under-enforcement of the law'' 
stemming from, among other things, the fact that ``courts have 
become so unfavorable,'' citing decisions like Verizon 
Communications Inc. v. Law Offices of Curtis V. Trinko, 
LLP,\83\ and noted that ``there is room for Congress'' to offer 
``reinforcement of the fact that . . . monopolistic practices 
are part of what the [antitrust] law covers.''\84\
---------------------------------------------------------------------------
    \81\Reviving Competition, Part 3: Strengthening the Laws to Address 
Monopoly Power: Hearing Before the Subcomm. on Antitrust, Com., & 
Admin. L. of the H. Comm. on the Judiciary, 117th Cong. (2021) 
[hereinafter Strengthening the Laws Hearing], https://www.govinfo.gov/
content/pkg/CHRG-117hhrg47296/pdf/CHRG-117hhrg47296.pdf.
    \82\Id. at 21 (statement of Hon. Diane P. Wood, Judge, U.S. Ct. of 
App. for the Seventh Cir.).
    \83\540 U.S. 398 (2004).
    \84\Strengthening the Laws Hearing at 21-22 (statement of Hon. 
Diane P. Wood, Judge, U.S. Ct. of App. for the Seventh Cir.).
---------------------------------------------------------------------------
    Colorado Attorney General Phil Weiser similarly testified 
that courts have ``rendered a number of decisions that imposed 
artificial hurdles to antitrust liability.''\85\ He stressed 
that, ``to enable effective antitrust enforcement, corrective 
legislative action is clearly warranted to address recent 
misguided Supreme Court decisions.''\86\
---------------------------------------------------------------------------
    \85\Id. at 46 (statement of Hon. Phil Weiser, Att'y Gen., Colorado) 
(citing Bill Baer et al., Wash. Ctr. for Equitable Growth, Restoring 
Competition in the United States 11 (2020), https://
equitablegrowth.org/wp-content/uploads/2020/11/111920-antitrust-
report.pdf; Carl Shapiro, Protecting Competition in the American 
Economy: Merger Control, Tech Titans, Labor Markets, 33 J. Econ. 
Persps. 69, 70 (2019), https://faculty.haas.berkeley.edu/shapiro/
protectingcompetition.pdf). See also Stigler Report at 85 (``there have 
been few antitrust challenges to exclusionary conduct since the 
government's 1998 case against Microsoft, and courts have in several 
instances been hostile to such cases and have imposed daunting proof 
requirements on plaintiffs'').
    \86\Strengthening the Laws Hearing at 48 (statement of Hon. Phil 
Weiser, Att'y Gen., Colorado).
---------------------------------------------------------------------------
    FTC Commissioner Rebecca Kelly Slaughter, then Acting FTC 
Chair, agreed with these observations in her testimony, 
explaining that ``[t]he antitrust statutes were drafted broadly 
and with the intent to cover evolving patterns of conduct or 
market structure in a variety of industries; however, 
especially in light of recent jurisprudence, the burden on 
plaintiffs to succeed in court is high.''\87\ She explained 
that the effect of this case law has ``led to an extremely 
limited application of the antitrust laws,'' harming consumers, 
workers, and entrepreneurs.\88\ Accordingly, she stated, 
``current market conditions, including the role of digital 
platforms, have caused nearly everyone to question whether our 
competition laws and enforcement approaches are adequate to 
protect consumers from anticompetitive conduct and 
mergers.''\89\
---------------------------------------------------------------------------
    \87\Id. at 19 (statement of Hon. Rebecca Kelly Slaughter, Acting 
Chair, Fed. Trade Comm'n).
    \88\Id. at 20 (citing Verizon Comm'cns Inc. v. Law Offices of 
Curtis V. Trinko LLP,, 540 U.S. 398 (2004); Brooke Grp. v. Brown & 
Williamson Tobacco Corp., 509 U.S. 209 (1993); Ohio v. Am. Express Co., 
138 S. Ct. 2274 (2018)).
    \89\Id. at 12.
---------------------------------------------------------------------------
    In addition, the Subcommittee reviewed letters and other 
materials demonstrating the pressing need for modernization of 
the antitrust laws. Among other things, these materials showed 
significant, bipartisan agreement among current and former 
antitrust enforcers that legislative changes are necessary 
because judicial decisions have constrained the application of 
the antitrust laws. Bill Baer, the former head of the DOJ's 
Antitrust Division, co-authored a report noting that courts 
``increasingly saddle plaintiffs with inappropriate burdens, 
making it unnecessarily difficult to prove meritorious cases 
and allowing anticompetitive conduct to escape 
condemnation.''\90\ In a submission to the Subcommittee, Utah 
Attorney General Sean Reyes wrote that ``judicial decisions 
over time have added requirements not found in the plain 
language of the federal antitrust laws which have created 
unworkable barriers to effective antitrust enforcement.''\91\ 
And a bipartisan group of 32 state attorneys general submitted 
a letter encouraging and applauding Congress' efforts ``to 
ensure that federal antitrust laws remain robust and keep pace 
with that of modern markets,'' particularly ``[g]iven changes 
in technology, decreased competition in important sectors, and 
undue judicial skepticism towards robust enforcement.''\92\
---------------------------------------------------------------------------
    \90\Bill Baer et al., Wash. Ctr. for Equitable Growth, Restoring 
Competition in the United States 11 (2020), https://
equitablegrowth.org/wp-content/ uploads/2020/11/111920-antitrust-
report.pdf.
    \91\Letter from Hon. Sean D. Reyes, Att'y Gen., Utah, to Hon. David 
N. Cicilline, Chair, Subcomm. on Antitrust, Com., & Admin. L. of the H. 
Comm. on the Judiciary, & Hon. Ken Buck, Ranking Member, Subcomm. on 
Antitrust, Com., & Admin. L. of the H. Comm. on the Judiciary,4 (Mar. 
25, 2021), https://docs.house.gov/meetings/JU/JU05/20210318/111350/
HHRG-117-JU05-20210318-SD005.pdf.
    \92\ Letter from Phil Weiser, Att'y Gen., Colorado, et al., to Hon. 
Nancy Pelosi, Speaker, H.R., et al.,1 (Sept. 20, 2021), https://
coag.gov/app/uploads/2021/09/Antitrust-Package-Support-Letter-.pdf.
---------------------------------------------------------------------------
    Public-interest organizations submitted similar 
correspondence in support of modernizing antitrust legislation. 
For example, George Slover, then the Senior Policy Counsel of 
Consumer Reports, advocated ``[i]mposing non-discrimination 
requirements to limit self-preferencing by dominant online 
platforms.''\93\
---------------------------------------------------------------------------
    \93\Letter from George P. Slover, Senior Pol'y Couns., Consumer 
Reps., & Sumit Sharma, Senior Researcher, Tech. Competition, Consumer 
Reps., to Hon. David N. Cicilline, Chair, Subcomm. on Antitrust, Com., 
& Admin. L. of the H. Comm. on the Judiciary, & Hon. Ken Buck, Ranking 
Member, Subcomm. on Antitrust, Com., & Admin. L. of the H. Comm. on the 
Judiciary, 4 (Mar. 18, 2021), https://docs.house.gov/meetings/JU/JU05/
20210318/111350/?HHRG-117-JU05-20210318-SD003.pdf.
---------------------------------------------------------------------------
    Rashad Robinson, President of Color of Change, wrote that 
``underenforcement of the antitrust laws forces Black 
consumers, workers, and small business owners to rely on 
extortive online marketplaces and racially biased search 
algorithms that disproportionately cut into their 
profits.''\94\ Color of Change, therefore, supported 
legislation that would ban dominant online platforms from, 
among other things, ``[s]ystematically disadvantaging those 
businesses through racially discriminatory algorithms in 
search, fees, access, or public reach'' and 
``[m]isappropriating data to copy products and services offered 
by those businesses.''\95\
---------------------------------------------------------------------------
    \94\ Letter from Rashad Robinson, President, Color of Change, to 
Hon. Jerrold Nadler, Chair, H. Comm. on the Judiciary, Hon. Jim Jordan, 
Ranking Member, H. Comm. on the Judiciary, Hon. David N. Cicilline, 
Chair, Subcomm. on Antitrust, Com., & Admin. L. of the H. Comm. on the 
Judiciary, & Hon. Ken Buck, Ranking Member, Subcomm. on Antitrust, 
Com., & Admin. L. of the H. Comm. on the Judiciary, 1 (Aug. 12, 2021) 
(on file with Comm.).
    \95\Id. at 8.
---------------------------------------------------------------------------

  III. SIMILAR DETERMINATIONS BY AUTHORITIES OUTSIDE THE UNITED STATES

    Internationally, several jurisdictions are developing 
measures that would prohibit self-preferencing and economic 
discrimination by dominant online platforms. For example, in 
December 2019, the European Commission proposed the Digital 
Markets Act to establish enhanced procompetitive obligations 
for the largest digital gatekeepers to prevent them from 
abusing their dominance to harm competitors or impede 
competition, and from expanding or entrenching their dominance 
by engaging in self-preferencing or monopoly leveraging.\96\ 
The European Parliament adopted the Digital Markets Act in July 
2022,\97\ and it went into force in November 2022.\98\
---------------------------------------------------------------------------
    \96\Proposal for a Regulation of the European Parliament and of the 
Council on Contestable and Fair Markets in the Digital Sector (Digital 
Markets Act), at 36-41, COM (2020) 842 final (Dec. 15, 2020), https://
eur-lex.europa.eu/?legal-content/EN/TXT/PDF/
?uri=CELEX:52020PC0842&from=en.
    \97\European Parliament Press Release 20220701IPR34364, Digital 
Services: Landmark Rules Adopted for a Safer, Open Online Environment 
(July 5, 2022), https://www.europarl.europa.eu/news/en/press-room/
20220701IPR34364/?digital-services-landmark-rules-adopted-for-a-safer-
open-online-environment.
    \98\European Commission Press Release IP/22/6423, Digital Markets 
Act: Rules for Digital Gatekeepers to Ensure Open Markets Enter into 
Force (Oct. 31, 2022), https://ec.europa.eu/commission/presscorner/
detail/en/ip_22_6423.
---------------------------------------------------------------------------
    In the United Kingdom, the Competition and Markets 
Authority (CMA) published a report finding that dominant online 
platforms can use their power to engage in self-preferencing, 
harmful discrimination, and monopoly leveraging, which harm 
competition and innovation.\99\ To address these concerns, the 
CMA recommended that the U.K. government establish a 
competition regime that would apply enhanced procompetitive 
rules to dominant online platforms.\100\ The CMA noted that 
these rules would prohibit ``practices by the firm[s] which 
could undermine fair competition,'' thereby preventing them 
``from taking advantage of their powerful positions'' and 
protecting ``consumers and businesses from being 
exploited.''\101\ In July 2021, the U.K. government sought 
public comment on a legislative proposal to launch the new 
regime; and in May 2022, it reported the outcome of that public 
consultation.\102\ In November 2022, the U.K. Chancellor 
confirmed that the U.K. government intended to introduce 
legislation giving the CMA ``new powers to challenge monopolies 
and increase the competitive pressure to innovate'' in digital 
markets.\103\
---------------------------------------------------------------------------
    \99\ U.K. Competition & Mkts. Auth., A New Pro-competition Regime 
for Digital Markets: Advice of the Digital Markets Taskforce 16-19 
(2020), https://assets.publishing.service.gov.uk/media/
5fce7567e90e07562f?98286c/Digital_Taskforce_-_Advice.pdf.
    \100\Id. at 26-28.
    \101\Id. at 34.
    \102\U.K. Competition & Mkts. Auth., Digital Markets Unit, GOV.UK 
(July 20, 2021), https://www.gov.uk/?government/collections/digital-
markets-unit; U.K. Dep't for Digit., Culture, Media & Sport & U.K. 
Dep't for Bus., Energy & Indus. Strategy, Consultation Outcome: A New 
Pro-Competition Regime for Digital Markets--Government Response to 
Consultation, GOV.UK (May 6, 2022), https://www.gov.uk/government/
consultations/ a-new-pro-competition-regime-for-digital-markets/
outcome/ a-new-pro-competition-regime-for-digital-markets-government-
response-to-consultation.
    \103\Jeremy Hunt, U.K. Chancellor of the Exchequer, Autumn 
Statement 2022 (Nov. 17, 2022), https://www.gov.uk/?government/
speeches/the-autumn-statement-2022-speech.
---------------------------------------------------------------------------
    International competition authorities have also identified 
the need for greater focus and specialization on the unique 
business models and competition challenges in the digital 
marketplace. For example, the United Kingdom has established a 
dedicated unit within its antitrust agency to focus on 
competition issues in the digital economy.\104\ The Australian 
Competition and Consumer Commission (ACCC) similarly 
recommended that the Australian government establish a new 
entity within the ACCC that would develop expertise on digital 
markets and algorithms, monitor and investigate anticompetitive 
conduct, enforce competition laws, and make recommendations to 
the government regarding harms to consumers and impediments to 
competition online.\105\
---------------------------------------------------------------------------
    \104\U.K. Competition & Mkts. Auth., Digital Markets Unit, GOV.UK 
(July 20, 2021), https://www.gov.uk/?government/collections/digital-
markets-unit.
    \105\Austl. Competition & Consumer Comm'n, Digital Platforms 
Inquiry Final Report 142 (2019), https://www.accc.gov.au/system/files/
Digital%20platforms% 20inquiry%20-%20final%20report.pdf. See also 
Digital Platforms, ACCC, https://www.accc.gov.au/focus-areas/digital-
platforms (last visited Dec. 9, 2022).
---------------------------------------------------------------------------

      IV. H.R. 3816, THE AMERICAN INNOVATION AND CHOICE ONLINE ACT

A. Restoring Competition in Digital Markets

    In response to concerns identified during the Committee's 
investigation and documented in the Digital Markets Report, 
Subcommittee Chair Cicilline introduced H.R. 3816, the 
``American Innovation and Choice Online Act,'' with 
Representative Gooden, Committee Chair Nadler, and Subcommittee 
Ranking Member Buck as original cosponsors of the bill. This 
legislation was introduced alongside a suite of bipartisan 
bills that would strengthen the antitrust laws and enforcement 
in the digital economy.\106\
---------------------------------------------------------------------------
    \106\In addition to H.R. 3816, this legislation included H.R. 3843, 
the Merger Filing Fee Modernization Act of 2021; H.R. 3460, the State 
Antitrust Enforcement Venue Act of 2021; H.R. 3849, the Augmenting 
Compatibility and Competition by Enabling Service Switching Act of 
2021; H.R. 3826, the Platform Competition and Opportunity Act of 2021; 
and H.R. 3825, the Ending Platform Monopolies Act. Together, this 
legislation was intended to promote competition in digital markets by 
increasing antitrust enforcement, to prohibit self-preferencing and 
discrimination by dominant platforms, to reduce switching costs for 
consumers, and to stop anticompetitive mergers. See Press Release, Rep. 
David N. Cicilline, House Lawmakers Release Anti-Monopoly Agenda for 
```Stronger Online Economy: Opportunity, Innovation, Choice'' (June 11, 
2021), https://cicilline.house.gov/press-release/house-lawmakers-
release-anti-monopoly-agenda-for-a-stronger-online-economy-opportunity-
innovation-choice (```A Stronger Online Economy: Opportunity, 
Innovation, Choice' consists of five bipartisan bills drafted by 
lawmakers on the Antitrust Subcommittee, which last year completed a 
16-month investigation into the state of competition in the digital 
marketplace and the unregulated power wielded by Amazon, Apple, 
Facebook, and Google.'').
---------------------------------------------------------------------------
    H.R. 3816 establishes clear rules for fair competition 
online by prohibiting various types of anticompetitive and 
exclusionary conduct by dominant online platform companies, 
such as favoring their own products or services, disadvantaging 
rivals, or discriminating among businesses that rely on their 
platforms for legitimate business activity. These rules are 
designed to prohibit the practices that the Committee's 
investigation revealed to be anticompetitive without any 
redeeming procompetitive benefit, such as misappropriating a 
business's data to clone its products or services or 
manipulating search results in favor of the dominant firm. The 
bill also includes strong protections for privacy and user 
safety to ensure that it addresses only anticompetitive conduct 
by gatekeeper platforms, rather than the platforms' legitimate 
efforts to curtail unlawful activity, protect privacy, or 
enforce broadly applicable policies to protect the safety of 
the platform or its users. Finally, the bill includes new tools 
to ensure that antitrust enforcers can effectively police and 
deter abusive conduct. These include new emergency-relief 
authority to halt abusive conduct in its incipiency before it 
causes harm to competition, as well as authority for enforcers 
to seek the forfeiture of executive compensation from corporate 
officers at companies that have repeatedly violated the bill.
    The conduct of dominant online platforms uncovered during 
the investigation underscores the urgent need for H.R. 3816. 
For example, during and after the investigation, credible 
reporting detailed how Amazon abused data collected from third-
party sellers on Amazon's platform to compete against those 
sellers.\107\ Reporting also showed that Amazon manipulated e-
commerce search results to favor its own private-label products 
over third-party sellers' products.\108\ Members expressed 
concern that Amazon may have lied in sworn testimony about 
these practices during the Committee's investigation, attempted 
to mislead the Committee to cover up its statements, and then 
attempted to stonewall the Committee's efforts to uncover the 
truth. The Committee therefore referred the matter to the 
Department of Justice to investigate whether Amazon or its 
executives obstructed Congress or violated other applicable 
federal laws.\109\ Despite Amazon's misrepresentations, the 
Committee was able to determine that Amazon and other dominant 
online platforms are undeterred by existing law from engaging 
in discriminatory and self-preferencing conduct. H.R. 3816 thus 
establishes clear prohibitions against those forms of conduct.
---------------------------------------------------------------------------
    \107\Dana Mattioli, Amazon Scooped Up Data from Its Own Sellers to 
Launch Competing Products, Wall St. J. (Apr. 23, 2020), https://
www.wsj.com/articles/amazon-scooped-up-data-from-its-own-sellers-to-
launch-competing-products-11587650015; Adita Kalra & Steve Stecklow, 
Amazon Copied Products and Rigged Search Results to Promote Its Own 
Brands, Documents Show, Reuters (Oct. 13, 2021), http://
www.reuters.com/investigates/special-report/amazon-india-rigging/.
    \108\Adrianne Jeffries & Leon Yin, Amazon Puts Its Own ``Brands'' 
First Above Better-Rated Products, Markup (Oct. 14, 2021), https://
www.themarkup.org/amazons-advantage/2021/10/14/amazon-puts-its-own-
brands-first-above-better-rated-products.
    \109\Letter from Hon. Jerrold Nadler, Chair, H. Comm. on the 
Judiciary, Hon. David N. Cicilline, Chair, Subcomm. on Antitrust, Com., 
& Admin. Law of the H. Comm. on the Judiciary, Hon. Ken Buck, Ranking 
Member, Subcomm. on Antitrust, Com., & Admin. Law of the H. Comm. on 
the Judiciary, Hon. Pramila Jayapal, Vice-Chair, Subcomm. on Antitrust, 
Com., & Admin. Law of the H. Comm. on the Judiciary, Hon. Matt Gaetz, 
Member, Subcomm. on Antitrust, Com., & Admin. Law of the H. Comm. on 
the Judiciary, to Hon. Merrick B. Garland, Att'y Gen., U.S. Dep't of 
Justice (Mar. 9, 2022), https://judiciary.house.gov/uploadedfiles/
hjc_referral_amazon.pdf.
---------------------------------------------------------------------------
    Recent monopolization litigation against dominant online 
platforms--raising allegations consistent with the Committee's 
findings--also demonstrates the need for H.R. 3816. In each of 
these cases, courts have failed to grasp the reality of 
competition in digital markets and created unjustified hurdles 
to the enforcement of the antitrust laws against 
anticompetitive conduct.
    In December 2020, the FTC filed a lawsuit against Facebook 
for anticompetitive conduct and unfair methods of competition 
in violation of section 2 of the Sherman Act and section 5(a) 
of the FTC Act.\110\ The FTC alleged that ``Facebook has 
maintained its monopoly position by buying up companies that 
present competitive threats and by imposing restrictive 
policies that unjustifiably hinder actual or potential rivals 
that Facebook does not or cannot acquire.''\111\ The U.S. 
District Court for the District of Columbia nevertheless 
dismissed the complaint.\112\ It found that the FTC had not 
sufficiently pleaded Facebook's monopoly power.\113\ The court 
also found that ``the conduct that [the FTC] alleges regarding 
Facebook's interoperability policies cannot form the basis for 
Section 2 liability'' under the Sherman Act.\114\
---------------------------------------------------------------------------
    \110\Complaint, Fed. Trade Comm'n v. Facebook, Inc., 560 F. Supp. 
3d 1 (D.D.C. 2021) (No. 20-3590), ECF No. 51, https://www.ftc.gov/
system/files/documents/cases/
051_2021.01.21_revised_partially_redacted_complaint.pdf.
    \111\Id. at 1, para.1.
    \112\Fed. Trade Comm'n v. Facebook, Inc., 560 F. Supp. 3d 1 (D.D.C. 
2021).
    \113\Id. at 4. See also id. at 15-21.
    \114\Id. at 5. See also id. at 24-30.
---------------------------------------------------------------------------
    H.R. 3816 would clarify that claims of the nature pleaded 
by the FTC against Facebook are cognizable under the law, 
providing a new legal basis for such claims and streamlining 
litigation. Instead of having to plead and prove monopoly 
power, enforcers would have to demonstrate only that the 
defendant operated a covered platform. And instead of having to 
establish a section 2 claim under the narrow interpretation 
adopted by some courts, an enforcer would need only demonstrate 
that the defendant violated one of H.R. 3816's specific 
prohibitions.
    Also in December 2020, a bipartisan coalition of 48 state 
attorneys general filed a lawsuit against Facebook, alleging 
that Facebook has a monopoly in the personal-social-networking 
market, and its anticompetitive and exclusionary conduct 
violates section 2 of the Sherman Act and section 7 of the 
Clayton Act.\115\ The D.C. District Court dismissed the states' 
case in its entirety.\116\ The court rejected the states' claim 
that Facebook's exclusionary conduct against rivals violated 
section 2 of the Sherman Act, in part because Facebook's 
actions had, as intended, already destroyed potential 
competition. The court stated that ``there is nothing the Court 
could order Facebook to do that would remedy that specific 
injury. . . . It cannot turn back the clock . . . and order 
Facebook to provide API access to Voxer, MessageMe, Path, or 
any other potential competitor (many of which are now defunct, 
per the Complaint), or somehow otherwise undo or ameliorate the 
destruction of competition.''\117\ Under the court's reading of 
the Sherman Act, a monopolist could escape any liability if its 
abusive conduct was so thoroughly devastating that it succeeded 
in destroying the competitive landscape before the filing of 
litigation challenging the exclusionary conduct. H.R. 3816, by 
contrast, would make clear that a covered platform must provide 
potential competitors with certain access to its platform and 
related features, and it would allow those potential 
competitors or a government enforcer to seek immediate, 
temporary relief against denial of that access.
---------------------------------------------------------------------------
    \115\ Complaint, New York v. Facebook, Inc., 549 F. Supp. 3d 6 
(D.D.C. 2021) (No. 1:20-cv-3589), ECF No. 4, https://ag.ny.gov/sites/
default/files/state_of_new_york_et_al._v._facebook_inc._-
_filed_public_complaint_12.11.2020.pdf.
    \116\New York v. Facebook, Inc., 549 F. Supp. 3d 6 (D.D.C. 2021).
    \117\Id. at 30.
---------------------------------------------------------------------------
    Litigation initiated by private parties also demonstrates 
the need for H.R. 3816. In August 2020, Epic sued Apple 
alleging violations of federal and state antitrust laws related 
to Apple's operation of the App Store.\118\ In a 185-page 
opinion, the U.S. District Court for the Northern District of 
California entered judgment against Epic on its antitrust 
claims.\119\ In so ruling, the court struggled to identify the 
relevant product market, rejecting the markets proposed by both 
parties and coming up with its own relevant product 
market.\120\ Among other things, the court rejected claims by 
Epic that the mobile-operating-system market is a foremarket 
and the App Store and Apple's in-app payment-processing service 
is an aftermarket.\121\ As the American Antitrust Institute 
explained in an amicus brief to the U.S. Court of Appeals for 
the Ninth Circuit, the District Court made numerous errors in 
defining the relevant markets, including making the fundamental 
error of ``assuming that the way markets currently operate 
reflects the way competitive markets would operate'' in its 
analysis of Apple's practice of bundling many features and 
services with the iPhone.\122\
---------------------------------------------------------------------------
    \118\Complaint, Epic Games, Inc. v. Apple Inc., 559 F. Supp. 3d 898 
(N.D. Cal. 2021) (No. 4:20-cv-5640), ECF No. 1; see Nick Statt, Epic 
Games Is Suing Apple, Verge (Aug. 13, 2020), https://www.theverge.com/
2020/8/13/?21367963/epic-fortnite-legal-complaint-apple-ios-app-store-
removal-injunctive-relief.
    \119\Epic Games, Inc. v. Apple Inc., No. 4:20-cv-5640, slip op. 
(N.D. Cal. Sept. 10, 2021), https://cand.uscourts.gov/?wp-content/
uploads/cases-of-interest/epic-games-v-apple/Epic-v.-Apple-20-cv-05640-
YGR-Dkt-812-Order.pdf.
    \120\See Epic Games, Inc. v. Apple Inc., 559 F. Supp. 3d 898, 921, 
954-87 (N.D. Cal. 2021).
    \121\See id. at 955, 971-72.
    \122\Brief of the American Antitrust Institute as Amicus Curiae in 
Support of Plaintiff, Counter-Defendant--Appellant at 15, Epic Games, 
Inc. v. Apple Inc., Nos. 21-16506 & 21-16695 (9th Cir. filed Jan. 27, 
2022), 21-16506 ECF No. 57, 21-16695 ECF No. 44, https://
www.antitrustinstitute.org/wp-content/uploads/2022/01/2022-1-27-AAI-
Amicus-Brief-Apple-v.-Epic-FILED.pdf.
---------------------------------------------------------------------------
    H.R. 3816 would respond to the problems plaguing this and 
other courts' product-market analyses by abrogating the need to 
define a relevant product market. H.R. 3816 specifies the 
persons governed by its prohibitions (covered platforms) and 
prohibits covered-platform operators from engaging in 
particular conduct. The bill thus would remove many of the 
current judicially imposed barriers to enforcement of the 
antitrust laws by providing clear legal principles for courts 
to follow.

B. Broad Public Support of H.R. 3816, the American Innovation and 
        Choice Online Act

    H.R. 3816 is supported by the DOJ,\123\ the U.S. Department 
of Commerce,\124\ and a bipartisan group of 32 state attorneys 
general.\125\
---------------------------------------------------------------------------
    \123\Letter from Peter Hyun, Acting Assistant Att'y Gen., Off. of 
Legis. Affs., U.S. Dep't of Justice, to Hon. Jerrold Nadler, Chair, H. 
Comm. on the Judiciary, Hon. Jim Jordan, Ranking Member, H. Comm. on 
the Judiciary, Hon. David Cicilline, Chair, Subcomm. on Antitrust, 
Com., & Admin. L. of the H. Comm. on the Judiciary, & Hon. Ken Buck, 
Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. of the H. 
Comm. on the Judiciary (Mar. 28, 2022), https://www.justice.gov/ola/
page/file/1488741/download.
    \124\Brian Fung, Major Tech Antitrust Bill Gets Backing of US 
Commerce Department, CNN Bus. (Apr. 27, 2022), https://www.cnn.com/
2022/04/27/tech/commerce-antitrust-bill/index.html.
    \125\Letter from Phil Weiser, Att'y Gen., Colorado, et al., to Hon. 
Nancy Pelosi, Speaker, H.R., et al. (Sept. 20, 2021), https://coag.gov/
app/uploads/2021/09/Antitrust-Package-Support-Letter-.pdf.
---------------------------------------------------------------------------
    In its letter of support, the Justice Department said that 
it ``views the rise of dominant platforms as presenting a 
threat to open markets and competition, with risks for 
consumers, businesses, innovation, resiliency, global 
competitiveness, and our democracy.''\126\ The Justice 
Department explained that dominant platforms have the power 
``to pick winners and losers across markets . . . , and given 
the increasing importance of these markets, the power of such 
platforms is likely to continue to grow unless checked.''\127\ 
Unchecked power of this nature ``contravenes the foundations of 
our capitalist system'' and ``puts at risk the nation's 
economic progress and prosperity, ultimately threatening the 
economic liberty that undergirds our democracy.''\128\ 
Importantly, the Justice Department noted that, by prohibiting 
behaviors that ``reduce incentives for smaller or newer firms 
to innovate and compete, the legislation would supplement the 
existing antitrust laws in preventing the largest digital 
companies from abusing and exploiting their dominant positions 
to the detriment of competition and the competitive 
process.\129\
---------------------------------------------------------------------------
    \126\Letter from Peter Hyun, Acting Assistant Att'y Gen., Off. of 
Legis. Affs., U.S. Dep't of Justice, to Hon. Jerrold Nadler, Chair, H. 
Comm. on the Judiciary, Hon. Jim Jordan, Ranking Member, H. Comm. on 
the Judiciary, Hon. David Cicilline, Chair, Subcomm. on Antitrust, 
Com., & Admin. L. of the H. Comm. on the Judiciary, & Hon. Ken Buck, 
Ranking Member, Subcomm. on Antitrust, Com., & Admin. L. of the H. 
Comm. on the Judiciary, 1 (Mar. 28, 2022), https://www.justice.gov/ola/
page/file/1488741/download.
    \127\Id.
    \128\Id.
    \129\Id. at 2.
---------------------------------------------------------------------------
    Similarly, in her testimony before the Senate Commerce 
Committee in April 2022, Secretary of Commerce Gina Raimondo 
explained: ``[I] clearly agree that we need to improve 
competition, which increases innovation,'' and ``the Department 
and I certainly support [] and concur with the aim of the 
legislation,'' along with the Justice Department's letter in 
support of H.R. 3816.\130\
---------------------------------------------------------------------------
    \130\Brian Fung, Major Tech Antitrust Bill Gets Backing of US 
Commerce Department, CNN Bus. (Apr. 27, 2022), https://www.cnn.com/
2022/04/27/tech/commerce-antitrust-bill/index.html.
---------------------------------------------------------------------------
    H.R. 3816 is also supported by a broad coalition of 
antitrust experts and public-interest organizations, including 
Public Knowledge, Open Markets Institute, the Electronic 
Frontier Foundation (EFF), AFL-CIO, Color of Change, the 
Institute for Local Self Reliance, and Small Business Rising.
    For instance, Professors Fiona Scott Morton of the Yale 
School of Management, Steven C. Salop of the Georgetown 
University Law Center, and David C. Dinielli of Yale Law School 
submitted a letter stating, ``[w]e believe the American 
Innovation and Choice Online Act . . . would improve 
competition in digital markets, prevent further enhancement of 
market power, increase innovation, and benefit consumers. It 
therefore should become law in the U.S.''\131\
---------------------------------------------------------------------------
    \131\Letter from Fiona M. Scott Morton, Theodore Nierenberg 
Professor of Econ., Yale Sch. of Mgmt., et al., to Hon. Amy Klobuchar, 
Chair, Subcomm. on Competition Pol'y, Antitrust, & Consumer Rts. of the 
S. Comm. on the Judiciary, & Hon. Chuck Grassley, Ranking Member, S. 
Comm. on the Judiciary, 1 (July 7, 2022), https://som.yale.edu/sites/
default/files/2022-07/AICOA-Final-revised.pdf.
---------------------------------------------------------------------------
    Bill Baer, the former Assistant Attorney General for DOJ's 
Antitrust Division, likewise wrote that ``[d]ominant platforms 
possess enormous economic power, with the ability and 
demonstrated willingness to impede competition in ways that 
damage both [competitors] and consumers.'' He continued: ``We 
need tools to challenge abuses of that power. The American 
Innovation and [Choice Online] Act does that.''\132\
---------------------------------------------------------------------------
    \132\Bill Baer, Why Amazon Is Wrong About the American Innovation 
and [Choice Online] Act, Brookings (June 14, 2022), https://
www.brookings.edu/blog/techtank/2022/06/14/why-amazon-is-wrong-about-
the-american-innovation-and-online-choice-act/.
---------------------------------------------------------------------------
    A coalition of 30 digital rights organizations, including 
Access Now, Athena Coalition, and Fight for the Future, noted 
that ``Big Tech owns the world's eyeballs, and with no 
competition to challenge and offer a way out from their abusive 
practices, they won't change their ways unless regulation ends 
their dominance.''\133\ ``This is why,'' the coalition 
explained, ``we support the American Innovation and Choice 
Online Act''--because it ``tackle[s] the dangerous dominance of 
Big Tech head-on.''\134\
---------------------------------------------------------------------------
    \133\Letter from Access Now et al., to Hon. Chuck Schumer, S. 
Majority Leader, et al., 1 (July 11, 2022), https://techoversight.org/
wp-content/uploads/2022/07/Access-Now-Letter.pdf.
    \134\Id.
---------------------------------------------------------------------------
    The Center for American Progress endorsed the legislation, 
explaining that, ``[b]y purposefully targeting the anti-
competitive practices of most concern,'' the American 
Innovation and Choice Online Act is one of the pending tech 
bills that ``offer the United States a means to materially 
improve consumer choice in the near term and create a more 
dynamic online economy in the long term.''\135\ It offers a 
``bipartisan pathway for the 117th Congress to address 
challenges to American competitiveness.''\136\
---------------------------------------------------------------------------
    \135\Adam Conner & Erin Simpson, Ctr. for Am. Progress, Evaluating 
2 Tech Antitrust Bills to Restore Competition Online 2 (2022), https://
americanprogress.org/wp-content/uploads/2022/06/OnlineCompetition-
report.pdf.
    \136\Id. at 3.
---------------------------------------------------------------------------
    Consumer Reports also endorsed the legislation and wrote 
that the bill ``narrowly targets policy intervention and 
proposes fair market rules which will enable more competition 
in online marketplaces and incentivize companies big and small 
to innovate to better meet consumer needs and increase 
choices.''\137\
---------------------------------------------------------------------------
    \137\Sumit Sharma, Consumer Reps., A Primer on the American 
Innovation and Choice Online Act (AICO)--Setting Fair Market Rules for 
Giant Online Platforms 5 (2022), https://advocacy.consumerreports.org/
wp-content/uploads/2022/06/AICO-Primer-June_2022.pdf.
---------------------------------------------------------------------------
    More than 40 Black entrepreneurs and small business owners 
wrote to leaders of the Judiciary Committee in support of H.R. 
3816, stating that ``[a]ntitrust enforcement is an 
indispensable tool to reduce racial economic inequalities. . . 
This legislation will be crucial in giving our businesses a 
chance to survive Big Tech's influence on the online 
marketplace.''\138\
---------------------------------------------------------------------------
    \138\Letter from 42 Black Small-Business Owners & Entrepreneurs, to 
Hon. Jerrold R. Nadler, Chair, H. Comm. on the Judiciary, & Hon. David 
N. Cicilline, Chair, Subcomm. on Antitrust, Com., & Admin. L. of the H. 
Comm. on the Judiciary, 1 (Mar. 28, 2022) (on file with Comm.).
---------------------------------------------------------------------------
    A coalition of small and independent business associations, 
including the American Booksellers Association, Small Business 
Rising, the American Independent Business Alliance, Main Street 
Alliance, and the Institute for Local Self-Reliance, wrote to 
Congressional leadership to ``express [their] support and 
underscore [the] urgency for Congress to advance legislation 
aiming to address Big Tech's monopoly power.''\139\
---------------------------------------------------------------------------
    \139\Letter from Small Bus. Rising et al., to Hon. Charles Schumer, 
S. Majority Leader, et al., 1 (Apr. 11, 2022), https://
static1.squarespace.com/static/5fd5323e3c1f6275809e64cd/t/
6272d34e1c5ae03fd14e989f/1651692366844/
SBR+Letter_Support+for+Big+Tech+Bills_04.2022_v.final.pdf. See also 
Letter from Small Bus. Rising et al., to Hon. Charles Schumer, S. 
Majority Leader, & Hon. Mitch McConnell, S. Minority Leader, 1 (July 
12, 2022), https://static1.squarespace.com/static/
5fd5323e3c1f6275809e64cd/t/62cd9140c772702a18e26b62/1657639232244/
SBR+Letter_Support+for+Big+Tech+Bills_07.2022_v.+FINAL.pdf 
(``Concentrated market power is the single biggest threat facing 
independent businesses, and the status quo in our digital markets is 
untenable. The bipartisan bills represent an unprecedented opportunity 
to start leveling the playing field for our small, independent 
businesses.'').
---------------------------------------------------------------------------
    And more than 40 technology firms, including Beeper, Neeva, 
Proton Technologies, Sonos, DuckDuckGo, and Y Combinator, wrote 
to the leadership of the Senate Judiciary Committee in favor of 
the American Innovation and Choice Online Act, highlighting 
that the legislation ``targets self-preferencing to help 
restore competition in the digital marketplace and remove 
barriers for consumers to choose the services they want.''\140\ 
They explained the legislation is crucial because ``[d]ominant 
technolog[y] companies'' ability to give their own products and 
services preferential placement, access, and data on online 
platforms and operating systems prevents companies like us from 
competing on the merits.''\141\
---------------------------------------------------------------------------
    \140\Letter from Andi Search et al., to Hon. Dick Durbin, Chair, S. 
Comm. on the Judiciary, & Hon. Chuck Grassley, Ranking Member, S. Comm. 
on the Judiciary (Jan. 18, 2022), https://wesupportsb2992.medium.com/
re-s-2992-the-american-innovation-and-choice-online-act-f49cc61abd87.
    \141\Id.
---------------------------------------------------------------------------
    Finally, polling demonstrates that there is broad public 
support for the American Innovation and Choice Online Act. A 
January 2022 nationwide survey by Data for Progress found that 
58% of likely voters support the American Innovation and Choice 
Online Act.\142\ June 2022 polling by Lake Research Partners of 
likely voters in Arizona, Georgia, New Hampshire, Nevada, North 
Carolina, Ohio, Pennsylvania, and Wisconsin found that 72% of 
likely voters support the legislation.\143\ Similarly, a May 
2022 survey by Hart Research Associates of voters in Arizona, 
Georgia, New Hampshire, and Nevada found that 76% of voters 
favor the American Innovation and Choice Online Act, and 71% of 
voters in those states want their senators to vote for the 
legislation.\144\
---------------------------------------------------------------------------
    \142\Data for Progress, AICO National Poll (2022), https://
techoversight.org/files/AICO-National-Poll.pdf.
    \143\OnMessage Public Strategies and Lake Research Partners, Key 
Findings--A Survey of Eight Key Political States (2022), https://
appfairness.org/wp-content/uploads/2022/06/202206-Key-Political-States-
Memo.pdf.
    \144\Hart Rsch. Assocs., Tech Oversight 4 State Study 3, 5 (2022), 
https://techoversight.org/wp-content/uploads/2022/05/FI14304-Tech-
Oversight-4-State-ns.pdf (answers to questions 5 and 10); see also 
Brian F. Schaffer, Public Demand for Regulating Big Tech: Findings from 
Recent Polling (2022), https://techoversight.org/wp-content/uploads/
2022/06/Schaffner-Big-Tech-Polling.pdf.
---------------------------------------------------------------------------

                                Hearings

    For the purposes of clause 3(c)(6)(A) of House rule XIII, 
the following hearings were used to develop H.R. 3816 during 
the 117th Congress:
    On February 25, 2021, the Subcommittee held a legislative 
hearing entitled, ``Reviving Competition, Part 1: Proposals to 
Address Gatekeeper Power and Lower Barriers to Entry Online,'' 
to examine gatekeeper power and barriers to entry in digital 
markets and to explore potential legislative reforms to address 
these concerns.\145\ The Majority witnesses were: (1) Eric 
Gundersen, Chief Executive Officer, Mapbox; (2) Morgan Harper, 
Senior Advisor, American Economic Liberties Project; (3) Hal 
Singer, Managing Director, Econ One; and (4) Charlotte Slaiman, 
Competition Policy Director, Public Knowledge. The Minority 
witnesses were: (1) Tad Lipsky, Director, Competition Advocacy 
Program, Global Antitrust Institute, George Mason University; 
and (2) John Thorne, Partner, Kellogg, Hansen, Todd, Figel & 
Frederick P.L.L.C.
---------------------------------------------------------------------------
    \145\Lower Barriers to Entry Hearing, https://www.congress.gov/
event/117th-congress/house-event/111247 (hearing page).
---------------------------------------------------------------------------
    On March 18, 2021, the Subcommittee held a legislative 
hearing entitled, ``Reviving Competition, Part 3: Strengthening 
the Laws to Address Monopoly Power,'' to address the rise and 
abuse of market power online and to strengthen and modernize 
the antitrust laws--in particular, the laws that are intended 
to combat monopolization and anticompetitive mergers.\146\ The 
Majority witnesses were: (1) the Honorable Rebecca Kelly 
Slaughter, Acting Chair, Federal Trade Commission; (2) Mike 
Walker, Chief Economic Advisor, United Kingdom Competition and 
Markets Authority; (3) the Honorable Philip Weiser, Attorney 
General, Colorado; and (4) the Honorable Diane P. Wood, Judge, 
U.S. Court of Appeals for the Seventh Circuit. The Minority 
witnesses were: (1) the Honorable Doug Peterson, Attorney 
General, Nebraska; and (2) the Honorable Noah Phillips, 
Commissioner, Federal Trade Commission.
---------------------------------------------------------------------------
    \146\Strengthening the Laws Hearing, https://www.congress.gov/
event/117th-congress/house-event/111350 (hearing page).
---------------------------------------------------------------------------
    In addition, the following related hearing was held:
    On March 12, 2021, the Subcommittee held a legislative 
hearing entitled ``Reviving Competition, Part 2: Saving the 
Free and Diverse Press'' to examine legislative reforms to 
address the effects of platform dominance on trustworthy 
sources of news online.\147\ The Majority witnesses were: (1) 
Emily Barr, President and Chief Executive Officer, Graham Media 
Group; (2) David Chavern, President and Chief Executive 
Officer, News Media Alliance; (3) Jonathan Schleuss, President, 
NewsGuild-Communications Workers of America; and (4) Brad 
Smith, President, Microsoft. The Minority witnesses were: (1) 
Glenn Greenwald, Journalist and Constitutional Lawyer; and (2) 
Clay Travis, Founder, OutKick Media.
---------------------------------------------------------------------------
    \147\Free and Diverse Press Hearing, https://www.congress.gov/
event/116th-congress/house-event/109616 (hearing page).
---------------------------------------------------------------------------
    As further background, in the 116th Congress the following 
hearing was held: On October 1, 2020, the Subcommittee held a 
legislative hearing entitled ``Proposals to Strengthen the 
Antitrust Laws and Restore Competition Online.''\148\ The 
Majority witnesses were: (1) William (Bill) Baer, Visiting 
Fellow at the Brookings Institution; (2) Sally Hubbard, 
Director of Enforcement Strategy, Open Markets Institute; (3) 
Michael Kades, Director of Markets and Competition Policy, 
Washington Center for Equitable Growth; (4) K. Sabeel Rahman, 
President, Demos; and (5) Zephyr Teachout, Associate Professor, 
Fordham University School of Law. The Minority witnesses were: 
(1) Rachel Bovard, Senior Director of Policy, Conservative 
Partnership Institute; (2) Tad Lipsky, Assistant Professor, 
Antonin Scalia Law School, George Mason University; and (3) 
Christopher Yoo, John H. Chestnut Professor of Law, 
Communication, and Computer and Information Science, University 
of Pennsylvania Carey Law School.
---------------------------------------------------------------------------
    \148\Remedies Hearing, https://www.congress.gov/event/116th-
congress/house-event/111072 (hearing page).
---------------------------------------------------------------------------
    In addition, as part of its investigation into competition 
in digital markets, the Subcommittee on Antitrust, Commercial, 
and Administrative Law held a series of six hearings covering 
``Online Platforms and Market Power,'' which are discussed in 
the Background and Need for Legislation section of this 
report.\149\
---------------------------------------------------------------------------
    \149\See Digital Markets Investigation, H. Comm. on the Judiciary, 
https://judiciary.house.gov/issues/issue/?IssueID=14921 (last visited 
Dec. 9, 2022) (Hearings).
---------------------------------------------------------------------------

                        Committee Consideration

    On June 23, 2021 and June 24, 2021, the Committee met in 
open session and ordered the bill, H.R. 3816, favorably 
reported with amendments, by a rollcall vote of 24 ayes to 20 
noes, a quorum being present.\150\
---------------------------------------------------------------------------
    \150\Markup of H.R. 3843, H.R. 3460, H.R. 3849, H.R. 3826, H.R. 
3816, and H.R. 3825 Before the H. Comm. on the Judiciary, 117th Cong. 
(2021), https://www.congress.gov/event/117th-congress/house-event/
112818.
---------------------------------------------------------------------------

                            Committee Votes

    In compliance with clause 3(b) of House rule XIII, the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 3816:
    1. An amendment offered by Rep. Jordan (R-OH) to add a 
private right of action was defeated by a rollcall vote of 18 
ayes to 24 noes. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    2. An amendment offered by Rep. Lofgren (D-CA) to add a 
rule of construction was defeated by a rollcall vote of 5 ayes 
to 36 noes. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    3. An amendment offered by Rep. Bentz (R-OR) to add an 
affirmative defense passed by a rollcall vote of 22 ayes to 21 
noes. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    4. An amendment offered by Reps. Fitzgerald (R-WI) and Issa 
(R-CA) to add an affirmative defense was defeated by a rollcall 
vote of 15 ayes to 26 noes. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    5. An additional amendment offered by Reps. Fitzgerald and 
Issa to add an affirmative defense was defeated by a rollcall 
vote of 20 ayes to 24 noes. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    6. An amendment offered by Rep. Fitzgerald to add an 
affirmative defense was defeated by a rollcall vote of 18 ayes 
to 25 noes and 1 present. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    7. A motion by Chair Nadler to order H.R. 3816, as amended, 
favorably reported to the House passed by a rollcall vote of 24 
ayes to 20 noes. The vote was as follows:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of House rule XIII, the 
Committee advises that the findings and recommendations of the 
Committee, based on oversight activities under clause 2(b)(1) 
of House rule X, are incorporated in the descriptive portions 
of this report.

                Committee Estimate of Budgetary Effects

    Pursuant to clause 3(d)(1) of House rule XIII, the 
Committee adopts as its own the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974.

   New Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(2) of House rule XIII and section 
308(a) of the Congressional Budget Act of 1974, and pursuant to 
clause (3)(c)(3) of House rule XIII and section 402 of the 
Congressional Budget Act of 1974, the Committee sets forth, 
with respect to the bill, H.R. 3816, the following analysis and 
estimate prepared by the Director of the Congressional Budget 
Office:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The bill would
           Prohibit large online platforms from 
        conferring an advantage on their own products and 
        services to the detriment of the products and services 
        of their business users, among other restrictions
           Require the Federal Trade Commission (FTC) 
        and Department of Justice (DOJ) to issue guidelines and 
        supervise and enforce violations
           Impose a private-sector mandate by 
        prohibiting large online platforms from engaging in 
        certain behavior, as defined by the bill
    Estimated budgetary effects would mainly stem from
           Spending subject to appropriation by the FTC 
        and DOJ to implement the bill's requirements
           Insignificant increases in revenues from 
        additional civil monetary penalty collections
    Bill summary: H.R. 3816 would restrict some types of 
business activities for large online platforms, specified in 
the bill, including discriminating against products offered by 
business users and preferentially boosting their own products. 
The new restrictions would apply to federally designated 
``covered platforms,'' which have at least 50 million active 
users each month or 100,000 active business users each month, 
are owned or controlled by a company with a market 
capitalization or annual sales exceeding $600 billion, and have 
the ability to impede business users from accessing the 
platform's customer base.
    Some of the behaviors the bill would prohibit for large 
online platforms include:
           Excluding or disadvantaging business users' 
        products or services in order to benefit the covered 
        platform's products or services;
           Restricting business users' access to 
        platforms, operating systems, hardware, or software 
        features that the covered platform uses for its own 
        products or services;
           Compelling business users to purchase 
        products or services to obtain access to or preferred 
        placement on the platform;
           Using nonpublic data generated from business 
        users' activity on the platform to advantage the 
        platform operator's products and services; and
           Treating the platform's products and 
        services more favorably than those of business users in 
        search or ranking functions.
    Under the bill, covered platforms would be designated by 
the Department of Justice (DOJ) or the Federal Trade Commission 
(FTC), and would be required to adhere to the bill's 
provisions. That designation as a covered platform would apply 
for 10 years or until removed by DOJ or the FTC. H.R. 3816 
would direct those agencies to issue enforcement guidelines, 
supervise and enforce violations, and collect civil monetary 
penalties from violators.
    Estimated federal cost: The costs of the legislation, 
detailed in Table 1, fall within budget function 370 (commerce 
and housing credit) and 750 (administration of justice).

               TABLE 1.--ESTIMATED INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 3816
----------------------------------------------------------------------------------------------------------------
                                                                   By Fiscal Year, Millions of Dollars--
                                                         -------------------------------------------------------
                                                            2023     2024     2025     2026     2027   2023-2027
----------------------------------------------------------------------------------------------------------------
Federal Trade Commission
    Estimated Authorization.............................       20       33       33       34       34       154
    Estimated Outlays...................................       16       30       33       34       34       147
Department of Justice
    Estimated Authorization.............................        5        5        5        6        6        27
    Estimated Outlays...................................        4        5        5        5        6        25
Total Changes
     Estimated Authorization............................       25       38       38       40       40       181
         Estimated Outlays..............................       20       35       38       39       40       172
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
3816 will be enacted near the end of calendar year 2022. Using 
information from the affected agencies, CBO estimates that 
implementing H.R. 3816 would cost $172 million over the 2023-
2027 period, assuming appropriation of the estimated amounts.

Spending subject to appropriation

    CBO estimates that it would cost the agencies $4 million 
over the 2023-2027 period to issue and update enforcement 
guidelines and another $2 million to establish new offices and 
hire staff. Designating and updating the status of covered 
platforms would cost the agencies about $8 million over the 
2023-2027 period; the designation process could take up to two 
years.
    In addition, CBO estimates that it would cost the agencies 
about $158 million to supervise and enforce violations of H.R. 
3816, mainly for employee salaries and overhead. CBO 
anticipates that DOJ and the FTC would begin hiring in 2023 and 
that the new enforcement offices and staff would be fully 
operational in 2024. Using information from the agencies about 
current salaries and overhead costs for antitrust staff, CBO 
estimates each new employee would cost about $200,000 annually, 
on average. The FTC would establish a bureau of digital markets 
with about 85 employees. DOJ currently has more than 30 
employees dedicated to antitrust efforts related to large 
technology companies. Using information provided by the agency 
about projected workload under the bill, CBO expects that the 
department would need 25 additional staff members to conduct 
enforcement.

Revenues

    Covered platforms found to violate the provisions of H.R. 
3816 would be subject to civil monetary penalties, which are 
generally remitted to the Treasury and recorded as revenues. 
The collection of most civil fines would depend on the level of 
appropriations provided in future appropriation acts. In 
addition, whether the FTC would pursue civil penalties or some 
other remedy for violations is unclear. In any event, CBO 
estimates that any increases in revenues from civil penalties 
would be insignificant.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The increases in revenues that are subject to those 
pay-as-you-go procedures would not be significant in each year 
or over the 2023-2032 period.
    Increase in Long-Term Deficits: None.
    Mandates: H.R. 3816 would impose private-sector mandates as 
defined in the Unfunded Mandates Reform Act (UMRA). CBO 
estimates that the aggregate cost of the mandates would exceed 
the threshold for private-sector mandates established in UMRA 
($184 million in 2022, adjusted annually for inflation).
    The bill would require the FTC to enforce new regulations 
prohibiting covered platforms from engaging in behavior that 
discriminates against products offered by business users and 
preferentially boosts their own products. The cost of the 
mandate would be any income lost as a consequence of the 
regulations.
    Because the FTC has not issued the regulations required by 
the bill, CBO cannot determine the exact cost of the mandates. 
However, the entities likely to be affected are large 
multinational companies with market capitalizations in the 
hundreds of billions of dollars. Using market research on the 
fees that some platforms charge developers of applications or 
for ``in-app'' purchases, CBO estimates that the aggregate cost 
of the mandate would greatly exceed the threshold established 
in UMRA for private-sector mandates.
    The bill contains no intergovernmental mandates as defined 
in UMRA.
    Estimate prepared by: Federal Costs: David Hughes (Federal 
Trade Commission); Jon Sperl (Department of Justice); Mandates: 
Fiona Forrester.
    Estimate reviewed by: Justin Humphrey, Chief, Finance, 
Housing, and Education Cost Estimates Unit; Kathleen 
FitzGerald, Chief, Public and Private Mandates Unit; H. Samuel 
Papenfuss, Deputy Director of Budget Analysis; Theresa Gullo, 
Director of Budget Analysis.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of House rule XIII, no provision 
of H.R. 3816 establishes or reauthorizes a program of the 
federal government known to be duplicative of another federal 
program.

                    Performance Goals and Obectives

    The Committee states that, pursuant to clause 3(c)(4) of 
House rule XIII, H.R. 3816 would provide antitrust enforcers 
with new tools to police anticompetitive conduct by dominant 
online platforms that may be difficult to address under current 
law. It would correct federal courts' undue weakening of the 
antitrust laws by defining specific prohibitions and broadening 
available remedies, thereby allowing meaningful enforcement 
against dominant online platforms. The legislation would also 
establish within the Commission a Bureau of Digital Markets for 
purposes of enforcement of this bill, and it would require that 
the Commission and the Antitrust Division jointly issue 
guidelines outlining their enforcement policies and practices.

                          Advisory on Earmarks

    In accordance with clause 9 of House rule XXI, H.R. 3816 
does not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits as defined in clause 9(d), 
9(e), or 9(f) of House rule XXI.

 Section-by-Section Analysis of H.R. 3816 As Reported Out of Committee

    Section 1. Short Title. Section 1 identifies the short 
title of the Act as the ``American Innovation and Choice Online 
Act.''
    Section 2. Unlawful Discriminatory Conduct. Section 2 sets 
forth the discriminatory conduct that shall constitute a 
violation of this Act.
    Section 2(a) establishes that it is unlawful for a covered 
platform operator to engage in conduct that: (1) advantages the 
covered platform's own products, services, or lines of business 
over those of another business; (2) excludes or disadvantages 
the products, services, or lines of business of another 
business relative to those of the covered platform; or (3) 
discriminates among similarly situated business users of the 
covered platform, including, but not limited to, those business 
users employed by businesses owned by women and minorities.
    Section 2(b) specifies additional prohibited forms of 
discriminatory conduct: (1) restricting or impeding 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 covered platform operator's 
own products, services, or lines of business; (2) conditioning 
access to the covered platform, or preferred status on the 
covered platform, on the purchase or use of another product or 
service offered by the covered platform operator; (3) using 
non-public data obtained from or generated on the platform by 
the activities of a business user to support the covered 
platform's own products or services; (4) restricting or 
impeding a business user from accessing data generated on the 
covered platform by the activities of the business user; (5) 
restricting or impeding covered platform users from un-
installing preinstalled software applications 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) restricting or impeding 
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, treating the covered platform 
operator's own products, services, or lines of business more 
favorably than those of another business user; (8) interfering 
with or restricting a business user's pricing of its products 
or services; (9) restricting or impeding a business user, or a 
business user's customers or users, from interoperating or 
connecting to any product or service; and (10) retaliating 
against any business user or covered platform that raises 
concerns with law enforcement about actual or potential 
violations of state or federal law or that initiates or 
participates in litigation to enforce this Act.
    Section 2(c) sets forth three affirmative defenses to 
otherwise unlawful conduct under the Act. It provides that the 
prohibitions in subsections (a) and (b) do not apply if the 
defendant proves a specified affirmative defense by clear and 
convincing evidence. The specified affirmative defenses are 
that the conduct (1) would not harm the competitive process by 
restricting the legitimate activity of a business user; (2) was 
narrowly tailored, could not be achieved through less 
discriminatory means, was nonpretextual, and was necessary 
either to prevent a violation of, or to comply with, state or 
federal law or to protect user privacy or other non-public 
data; or (3) increases consumer welfare. As later stated in 
section 7, whether any user conduct violates 18 U.S.C. 
Sec. 1030 is not dispositive of the establishment of an 
affirmative defense.
    Section 2(d) provides that the FTC or the DOJ will 
designate a covered platform, based on the criteria established 
in the Act, and issue the designation in writing to be 
published in the Federal Register. It further provides that the 
designation will apply for 10 years regardless of changes in 
ownership or control of the covered platform; however, the FTC 
or the DOJ may remove the designation per subsection (e).
    Section 2(e) establishes that the FTC or the DOJ may remove 
the covered-platform designation prior to the expiration of the 
10-year period set forth in section 2(e) if the operator files 
a request with one of the agencies that shows the online 
platform no longer meets the criteria for a covered platform 
under the Act. The FTC or the DOJ must determine whether to 
grant the request no later than 120 days after the filing of 
the request and must obtain the concurrence of the FTC or the 
DOJ, as appropriate, before granting the request.
    Section 2(f) sets forth the remedies for violations of the 
Act. This section authorizes the FTC and the DOJ to seek civil 
penalties for violations of the Act and renders an offending 
platform liable for up to the greater of 15 percent of its 
total U.S. revenue from the previous calendar year or 30 
percent of its U.S. revenue from the previous calendar year in 
any line of business affected by the unlawful conduct. 
Additionally, the agencies may seek court-ordered restitution, 
contract rescission and reformation, refunds, return of 
property, disgorgement of unjust enrichment, and injunctive 
relief. Further, if the factfinder determines that a violation 
of the Act arises from a conflict of interest, the court shall 
consider requiring a divestiture of the line of business that 
was the source of the conflict. Finally, if a covered platform 
operator repeatedly violates the Act, the court shall consider 
requiring its chief executive officer and any other corporate 
officer to forfeit any compensation received during the 12 
months preceding or following the filing of the complaint for 
an alleged violation of this Act.
    Section 2(g) sets forth the definitions of terms used in 
this Act, including ``covered platform,'' ``critical trading 
partner,'' ``data,'' and ``online platform.''
    This section defines a ``covered platform'' as one (A) that 
has been designated as a covered platform by the FTC or the DOJ 
or (B) that--(i) has at least 50 million United States-based 
monthly active users on the online platform or at least 100,000 
United States-based monthly active business users on the 
platform; (ii) is owned or controlled by a person with net 
annual sales of $600,000,000,000 adjusted for inflation based 
on the Consumer Price Index at the time of designation; 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.
    This section defines ``critical trading partner'' as 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.
    With respect to the term ``data,'' this section requires 
that, no later than six months after the enactment of this Act, 
the FTC shall adopt rules, in accordance with 5 U.S.C. 
Sec. 553, to define ``data'' for the purposes of implementing 
and enforcing this Act. It further provides that the term 
``data'' shall include information collected by or provided to 
a covered platform or business user that is reasonably linkable 
to a specific user or customer of the covered platform or user 
or customer of a business user.
    This section defines ``online platform'' as a website, 
online or mobile application, operating system, digital 
assistant, or online service that (A) enables users to generate 
or interact with content on the platform; (B) facilitates the 
offering, sale, purchase, payment, or shipping of products or 
services between and among third-party businesses or consumers; 
or (C) enables searches that access or display a large volume 
of information.
    Section 2(h) provides that the FTC shall enforce this Act 
in the same manner; by the same means; and with the same 
jurisdiction, powers, and duties as through the FTC Act. The 
DOJ shall enforce this Act in the same manner; by the same 
means; and with the same jurisdiction, powers, and duties as 
through the Sherman Act, the Clayton Act, and the Antitrust 
Civil Process Act. Any state attorney general shall enforce 
this Act in the same manner; by the same means; and with the 
same jurisdiction, powers, and duties, as through the Clayton 
Act. This section also establishes that a violation of this Act 
constitutes an unfair method of competition under section 5 of 
the FTC Act. It further grants the FTC independent litigation 
authority, and it grants any attorney general of a state the 
authority to bring a civil action as parens patriae on behalf 
of natural persons residing in that state.
    Section 2(i) provides that the FTC, the Assistant Attorney 
General of the DOJ's Antitrust Division, or any attorney 
general of a state may seek a temporary injunction against a 
covered platform operator for up to 120 days. The court shall 
grant such relief if there is a plausible claim that a covered 
platform operator violated this Act, and the challenged conduct 
impairs the ability of at least one business user to compete 
with the covered platform operator. The court shall terminate 
the relief early if the covered platform can prove that the 
FTC, the DOJ, or the attorney general of the state has not 
taken reasonable steps to investigate whether a violation has 
occurred.
    Section 2(j) provides that the statute of limitations for 
violations of this section is 6 years.
    Section 3. Judicial Review. Section 3 provides that any 
party that is subject to the covered-platform designation, a 
decision in response to a request to remove a covered-platform 
designation, a final order issued in district court under this 
Act, or a final order of the FTC issued in an administrative 
adjudicative proceeding under this Act, may petition for review 
of the decision by the U.S. Court of Appeals for the D.C. 
Circuit within 30 days of issuance of the designation, 
decision, or order. This section also provides that the 
reviewing court shall treat as conclusive the findings of the 
FTC or the DOJ as to the facts, if supported by evidence.
    Section 4. Bureau of Digital Markets. Section 4 sets forth 
the requirement that the FTC establish within the Commission a 
Bureau of Digital Markets for purposes of enforcing this Act. 
It provides that the head of the Bureau shall be a director who 
is appointed by, and reports directly to, the chair of the FTC. 
It requires the Bureau to retain or employ sufficient legal, 
technology, economic, and service staff. And it requires the 
Bureau, within one year of the enactment of this Act and on an 
annual basis thereafter, to publish and submit a report on its 
activities to the House Committee on the Judiciary and Senate 
Committee on the Judiciary.
    Section 5. Enforcement Guidelines. Section 5 provides that, 
no later than one year after the enactment of this Act, the FTC 
and the Assistant Attorney General of the DOJ's Antitrust 
Division shall jointly issue guidelines outlining policies and 
practices relating to the enforcement of this Act. It requires 
the agencies to update the guidelines as needed, but not less 
frequently than once every four years. This section 
additionally establishes that the guidelines neither confer 
rights nor are binding.
    Section 6. Suits by Persons Injured. Section 6 provides 
that any person injured in his business or property by a 
violation of this Act may file suit. The section states that a 
court may award simple interest on actual damages for the 
duration of the litigation up to the date of judgment, if just 
under the circumstances. It lists the exclusive considerations 
for the court to evaluate when determining whether the award of 
interest is just: (1) whether a party or its 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, during the course of the litigation, a party or its 
representative violated any applicable rule, statute, or court 
order providing for sanctions for dilatory behavior or 
otherwise providing for expeditious proceedings; and (3) 
whether a party or its representative engaged in conduct 
primarily for the purpose of delaying the litigation or 
increasing the cost thereof.
    This section prohibits any foreign state from recovering an 
amount in excess of actual damages, plus the cost of the suit 
including a reasonable attorney's fee, unless the foreign state 
meets the requirements of the provided exception. The 
limitation on a foreign state's recovery set forth in this 
subsection does not apply if the foreign state (1) would be 
denied immunity under 28 U.S.C. Sec. 1605(a)(2) if a claim 
based on the same subject matter were asserted against it; (2) 
waives all defenses based upon its status as a foreign state; 
(3) engages primarily in commercial activities; and (4) 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.
    This section provides that any person may sue for 
injunctive relief against threatened loss or damage caused by a 
violation of this Act. A person is entitled to such relief 
when, and under the same conditions and principles as, courts 
of equity would grant injunctive relief against threatened 
conduct that will cause loss or damage. It provides that a 
preliminary injunction may issue upon the execution of a proper 
bond against damages for an injunction improvidently granted 
and a showing that the danger of irreparable loss or damage is 
immediate. And it clarifies 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 of the U.S. Code.
    Finally, in any action under this section in which the 
plaintiff substantially prevails, this section requires the 
court to award the cost of suit, including a reasonable 
attorney's fee, to such plaintiff.
    Section 7. Rule of Construction. Section 7 provides that 
the existence vel non of a violation of the Computer Fraud and 
Abuse Act, 18 U.S.C. Sec. 1030, is not dispositive of whether 
the defendant has established an affirmative defense to a 
violation of this Act. This section also establishes that an 
action taken by a covered platform operator that is reasonably 
tailored to protect the rights of third parties under certain 
sections of the Copyright Act, 17 U.S.C. Sec. Sec. 106, 1101, 
1201, 1401, or sections 32 or 43 of the Lanham Act, 15 U.S.C. 
Sec. Sec. 1114, 1125, or corresponding state law, shall not be 
considered violations of section 2(a) or 2(b) of this Act. This 
section further states that nothing in this Act may be 
construed to limit the authority of the Attorney General or the 
FTC under the antitrust laws, the FTC Act, or any other 
provision of law.
    Section 8. Severability. Section 8 establishes that, if a 
provision of this Act is held to be unconstitutional, the 
remainder of the Act shall not be affected.

            Section-by-Section Analysis of Senate Bill 2992

    Following the passage of H.R. 3816 out of the Committee, 
Members of the Subcommittee worked closely with Members of the 
Senate Committee on the Judiciary and its Subcommittee on 
Competition Policy, Antitrust, and Consumer Rights to further 
refine the bill text. The product of that collaborative effort 
is S. 2992, an amended version of which was released by its 
sponsor, Senator Amy Klobuchar (D-MN), on May 25, 2022.\151\ 
What follows is a section-by-section analysis of the May 25, 
2022 version of the Senate Bill. Among other things, this 
analysis identifies and explains the Senate Bill's changes from 
the House Bill.
---------------------------------------------------------------------------
    \151\The May 25, 2022 version of S. 2992 (SIL22713) is available at 
https://www.klobuchar.senate.gov/public/_cache/files/b/9/b90b9806-cecf-
4796-89fb-561e5322531c/B1F51354E81BEFF3EB96956A7A5E1D6A.sil22713.pdf.
---------------------------------------------------------------------------
    Section 1. Short Title. Like the House Bill, section 1 of 
the Senate Bill identifies the short title of the Act as the 
``American Innovation and Choice Online Act.''
    Section 2. Definitions. Section 2 of the Senate Bill 
reflects a structural reorganization of the House Bill. It sets 
forth the definitions for certain terms used in the bill, 
serving the same function as section 2(g) of the House Bill.
    Section 2(a)(1) incorporates the definitions for 
``antitrust laws'' and ``person'' as used in subsection (a) of 
the first section of the Clayton Act (15 U.S.C. Sec. 12). The 
House Bill does the same in section 2(g)(1) and section 
2(g)(6).
    Section 2(a)(2) defines ``business user'' as 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. This definition 
makes several changes to the House Bill version, broadening the 
meaning of the term to include persons who use or are likely to 
use a covered platform for advertising, in addition to persons 
who use or are likely to use the platform for the sale or 
provision of products or services, as stated in the House Bill. 
The Senate Bill also adds a clarification, stating that those 
who operate, or are controlled by, a covered platform may 
qualify as business users.
    The Senate Bill adds a new exclusion from the definition of 
``business user'' to identify the entities that are not 
protected by the provisions of the Act. It excludes any person 
that is a clear national security risk or is controlled by the 
Government of the People's Republic of China or by the 
government of a foreign adversary.
    Section 2(a)(3) defines the term ``Commission'' to mean the 
Federal Trade Commission. The House version does the same.
    Section 2(a)(4) defines the term ``control.'' It makes a 
few stylistic changes to the definition in the House Bill, but 
the two bills share the same substantive definition for the 
term. A first person has control over a second person if the 
first person (1) holds 25 percent or more stock of the second 
person; (2) has the right to 25 percent or more of the profits 
of the second person; (3) in the event of dissolution of the 
second person, has the right to 25 percent or more of the 
assets of the second person; (4) if the second person is a 
corporation, has the power to designate 25 percent or more of 
the directors of the second person; (5) if the second person is 
a trust, has the power to designate 25 percent or more of the 
second person's trustees; or (6) otherwise exercises 
substantial control over the second person. The meaning of 
``control'' used in subpart (6) is the plain and ordinary 
meaning of the word.
    Section 2(a)(5) defines the term ``covered platform,'' 
which term identifies the types of businesses that are subject 
to the prohibitions and requirements of the Act. The term is 
defined in the Senate Bill in a manner similar to the House 
Bill, although the Senate Bill makes a few modifications. Both 
versions limit the definition to include only the very largest 
online platforms with gatekeeper power.
    Pursuant to section 2(a)(5), a covered platform must be an 
``online platform,'' as defined by the Act. An online platform 
qualifies as a covered platform in either of two ways:
    The first way--set forth in section 2(a)(5)(A)--is that the 
DOJ and the FTC (the federal enforcers) jointly designate the 
online platform as a covered platform pursuant to Section 3(d) 
of the Act. Section 3(d), which is discussed in greater detail 
below, provides that the federal enforcers may designate an 
online platform as a covered platform if, among other things, 
they find that the three criteria in section 2(a)(5)(B) are 
met. This provision is the same in the House Bill.
    The second way--set forth in section 2(a)(5)(B)--identifies 
the three necessary criteria for a covered platform. It applies 
when, for instance, a state attorney general files a complaint 
asserting a claim under this Act against an online platform 
that the federal enforcers have not yet designated as a covered 
platform. This provision is substantially similar to the House 
Bill, with the modifications identified below.
    Pursuant to section 2(a)(5)(B), an online platform 
qualifies as a covered platform if the person who owns or 
controls the online platform meets three requirements:
    First, the person must have a specified nexus to the United 
States. The nexus is described in terms of the number of U.S.-
based users of the online platform, owned or controlled by the 
person, for which qualification as a covered platform is being 
considered. The nexus exists if--at any point in the 12 months 
preceding either a designation under section 3(d) of this Act 
or the filing of a complaint for an alleged violation of this 
Act--the online platform has 50 million U.S.-based monthly 
active users or 100,000 U.S.-based monthly active business 
users. The phrase ``monthly active users'' has the meaning 
commonly understood in the online-services industry, and it 
likewise applies to the subset of users that are ``business 
users'' as defined by this Act. If the online platform at issue 
crosses this user threshold at any one point during the 
specified 12-month period, the person who owns or controls the 
online platform satisfies this first requirement. This 
requirement is the same in the House Bill.
    Second, the person must have a particular size or global 
reach. It may satisfy this requirement in either of two ways:
           The first is based on the person's size in 
        the two years preceding either a designation under 
        Section 3(d) of this Act or the filing of a complaint 
        for an alleged violation of this Act. The person 
        satisfies the requirement if, at any point during the 
        applicable two-year period, it has U.S. net annual 
        sales of greater than $550,000,000,000 ($550 billion), 
        adjusted for inflation on the basis of the Consumer 
        Price Index. Or, the person satisfies the requirement 
        if, for any 180-day period during the two-year period, 
        it has an average market capitalization greater than 
        $550,000,000,000 ($550 billion), adjusted for inflation 
        on the basis of the Consumer Price Index. Both options 
        appear in the House version as well, but the Senate 
        Bill lowers the threshold for both from $600 billion to 
        $550 billion.
           The second is described in terms of the 
        number of global users of the online platform, owned or 
        controlled by the person, for which qualification as a 
        covered platform is being considered. The threshold is 
        met if--at any point in the 12 months preceding either 
        a designation under Section 3(d) of this Act or the 
        filing of a complaint for an alleged violation of this 
        Act--the online platform has at least 1,000,000,000 
        (one billion) worldwide monthly active users. The 
        phrase ``monthly active users''' has the meaning 
        commonly understood in the online-services industry. If 
        the online platform at issue crosses this user 
        threshold at any one point during the specified 12-
        month period, the person who owns or controls the 
        online platform satisfies this requirement. This option 
        is new to the Senate Bill.
    Third, the person must act as an online gatekeeper. The 
person does so if it is a ``critical trading partner,'' as 
defined by the Act, for the sale or provision of any product or 
service offered on, or directly related to, the online platform 
at issue. This third requirement is identical in the Senate 
Bill and the House Bill.
    Section 2(a)(6) defines the term ``critical trading 
partner'' in a manner substantially similar to the definition 
in the House Bill. It states that the term ``critical trading 
partner'' means a person that has the ability to restrict or 
materially impede the access of a business user to the users or 
customers of the business user; or a business user to a tool or 
service that the business user needs to effectively serve the 
users or customers of the business user. Both the Senate and 
House versions of this definition describe a critical trading 
partner as a person that has the ability to restrict (i.e., 
block or limit by direct means) or impede (i.e., block or limit 
by indirect means) specified access of business users. The 
Senate Bill adds the word ``materially'' to modify ``impede,'' 
meaning that the person must have the ability to impede the 
specified access in a more than de minimis manner to violate 
this provision. Otherwise, the Senate Bill's changes to the 
definition are stylistic.
    Reading section 2(a)(6) together with section 
2(a)(5)(B)(iii), the critical-trading-partner criterion for a 
covered platform considers whether the online platform is a 
gatekeeper--that is, an important intermediary--for the sale or 
provision of products or services. It assesses the extent to 
which a business user's access to the online platform to sell 
or provide a product or service, on or directly related to the 
online platform, affects the business user's ability to sell or 
provide that product or service in general. It does so by 
requiring the factfinder to evaluate whether the person who 
owns or controls the online platform at issue--that is, a means 
by which a business user sells or provides a product or 
service, either on or directly related to the online platform--
has the ability to restrict or materially impede, with respect 
to that product or service, the business user's access to its 
users, customers, or a tool or service that the business user 
needs to effectively serve its users or customers. If ownership 
or control of the online platform confers that ability, the 
online platform is a gatekeeper, and the third criterion for a 
covered platform is satisfied.
    Section 2(a)(7) defines the term ``data'' to include 
information that is collected by or provided to a covered 
platform or business user that is linked, or reasonably 
linkable, to a specific user or customer of the covered 
platform, or to a specific user or customer of a business user. 
The Senate Bill definition makes a structural change to the 
House version of this definition. It moves, to the end of the 
definitions section, the direction to the federal enforcers to 
implement regulations further specifying the meaning of the 
term.
    Section 2(a)(8) is new to the Senate Bill and defines the 
term ``foreign adversary'' by reference to another statute. The 
term has the meaning given to it in 47 U.S.C. Sec. 1607(c).
    Section 2(a)(9) defines the term ``online platform.'' The 
Senate Bill modifies the definition from that in the House Bill 
to offer greater clarity as to which businesses are included 
and which are excluded. Both versions define an online platform 
as a website, online or mobile application, operating system, 
digital assistant, or online service that has any of three 
characteristics (although the precise characteristics required 
differ between the two):
    The first is that the website, online or mobile 
application, operating system, digital assistant, or online 
service 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 the platform. The Senate Bill adds the words ``or 
share'' before ``content'' to recognize that a popular feature 
of many online platforms is that they enable content sharing, 
in addition to content creation.
    The second is that the website, online or mobile 
application, operating system, digital assistant, or online 
service enables 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. The Senate Bill made a 
stylistic change to this language, changing ``facilitates''' to 
``enables.'' It added ``advertising'' to the list of covered 
services, recognizing that a common way that online platforms 
make money is through advertising--apart from the sale, 
purchase, or shipping of products or services. And it removed 
``payment'' from that list to clarify that the provision of 
online financial services alone does not make a business an 
online platform under this Act.
    The third is that the website, online or mobile 
application, operating system, digital assistant, or online 
service enables user searches or queries that access or display 
a volume of information. The Senate Bill removed the 
requirement that the volume of information accessed or 
displayed be ``large''; as a result, the quantum of information 
accessed or displayed by the platform is no longer an element 
of the definition.
    In addition, the Senate Bill contains a new exclusion from 
the definition of ``online platform.'' The term does not 
include an internet-access service, described as 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.
    Section 2(a)(10) defines the term ``state'' as a state, the 
District of Columbia, the Commonwealth of Puerto Rico, and any 
other territory or possession of the United States. This 
definition is identical to the one in the House Bill.
    Section 2(b) appears at the end of the definitions section 
of the Senate Bill and directs the federal enforcers to 
promulgate regulations to further define the term ``data'' for 
the purpose of implementing and enforcing this Act. The 
language is substantially the same as the equivalent provision 
in the House Bill, section 2(g)(7)(A), although section 2(b) of 
the Senate Bill makes express that the regulations should be a 
joint effort between the DOJ and the FTC. The federal enforcers 
are directed to promulgate the regulations in accordance with 5 
U.S.C. Sec. 553 no later than 180 days after the enactment of 
the Act.
    Section 3. Unlawful Conduct. Section 3 of the Senate Bill, 
which is the analog of substantial portions of section 2 of the 
House Bill, sets forth the conduct that is unlawful under the 
Act, the affirmative defenses to a claim for violation of the 
Act, the authority of federal and state enforcers under the 
Act, and the process for the federal enforcers to follow when 
designating a covered platform.
    Section 3(a) identifies the conduct by a person operating a 
covered platform that is unlawful. All such conduct must be in 
or affecting commerce to fall within the prohibitions set forth 
in section 3(a). Generally, the person operating the covered 
platform is the person that owns or controls the platform--even 
when the operator is separately organized or incorporated, so 
long as the operator is under the ownership or control of the 
person that owns or controls the platform. When the Act refers 
to the products, services, or lines of business of the covered 
platform operator, therefore, the Act is referring to those 
products, services, or lines of business that are owned or 
controlled by the person who owns or controls the covered 
platform.
    Section 3(a)(1) makes it unlawful for a covered-platform 
operator to 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. The Senate Bill makes some 
stylistic changes to the language used in section 2(a)(1) of 
the House Bill. It also clarifies that the operator's self-
preferencing must occur on the covered platform to be 
prohibited by this provision. And it adds a new requirement--
that the self-preferencing materially harm competition.
    Under this Act, there are no conduct-specific tests for 
harm to competition, such as those that exist in the case law 
for section 2 of the Sherman Act, 15 U.S.C. Sec. 2. Instead, 
this Act is intended to incorporate a more broadly applicable 
standard focused on the competitive process, as intended by 
Congress in the original enactment of the federal antitrust 
laws.\152\ The guiding principle is that the process of 
competition leads to the best outcomes, such that so-called 
efficiencies or other supposed economic benefits cannot excuse 
a loss of competition.\153\ Conduct by a dominant firm--under 
this Act, a covered-platform operator--harms competition if it 
``not only (1) tends to impair the opportunities of rivals, but 
also (2) either does not further competition on the merits or 
does so in an unnecessarily restrictive way.''\154\ Stated 
differently, conduct harms competition if it ``act[s] as a clog 
on competition'' and ``deprives rivals of a fair opportunity to 
compete.''\155\ Under this definition, conduct that impairs the 
competitive process on any part or side of the platform harms 
competition, such that the Act does not require consideration 
of harm to competition on the platform as a whole.\156\ Conduct 
harms competition ``materially'' if the harm is more than de 
minimis.
---------------------------------------------------------------------------
    \152\See, e.g., Digital Markets Report at 330-31 (noting that 
interpretations treating ```consumer welfare' as the sole goal of the 
antitrust laws'' limit ``the analysis of competitive harm to focus 
primarily on price and output rather than the competitive process--
contravening legislative history and legislative intent'' (footnotes 
omitted)).
    \153\Cf. Harry First & Spencer Weber Waller, Antitrust's Democracy 
Deficit, 81 Fordham L. Rev. 2543, 2545 (2013) (``the imbalance between 
democratic control and technocratic control has put antitrust on a thin 
diet of efficiency, one that has weakened antitrust's ability to 
control corporate power'').
    \154\Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 
585, 605 n.32 (1985) (quoting 3 Phillip Areeda & Donald Turner, 
Antitrust Law 78 (1978)).
    \155\Brown Shoe Co. v. United States, 370 U.S. 294, 324 (1962) 
(brackets, ellipsis, and quotation marks removed; citations omitted).
    \156\Therefore, the two-sided market-definition principles 
propounded in Ohio v. American Express Co., 138 S. Ct. 2274 (2018), do 
not apply to cases brought under this Act.
---------------------------------------------------------------------------
    Section 3(a)(2) makes it unlawful for a covered-platform 
operator to 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. The Senate Bill refines the 
language used in section 2(a)(2) of the House Bill to clarify 
that the prohibition is intended to protect fair and open 
competition on the covered platform between the covered-
platform operator's products, services, and lines of business, 
and those of other businesses. It adds the requirement that the 
conduct must materially harm competition to fall within the 
prohibition. The meaning of ``materially harm competition'' is 
the same as that described above in section 3(a)(1).
    Section 3(a)(3) makes it unlawful for a covered-platform 
operator to 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. It is designed to prevent the covered-platform 
operator from, for example, burying successful nascent 
competitors in search results or downgrading service for a 
business user that declines to purchase the covered-platform 
operator's other products or services. The bill prohibits 
anticompetitive discrimination against users or potential 
users, whether or not they have a prior course of using the 
platform or the platform has a demonstrably exclusionary 
purpose.
    The Senate Bill narrows the prohibition that appeared in 
section 2(a)(3) of the House Bill by limiting the relevant 
discrimination among similarly situated business users to 
discrimination in the application or enforcement of the covered 
platform's terms of service. This change clarifies that the 
target of the prohibition is unequal treatment under the rules 
of the road that the covered-platform operator has established. 
The Senate Bill does not include language from the House Bill 
that specified that similarly situated business users include, 
but are not limited to, those business users employed by 
businesses owned by women and minorities. This change is not 
substantive; the term ``business users'' in this provision 
includes those that are owned by women and minorities. The 
Senate Bill adds the requirement that the conduct materially 
harm competition to be prohibited by this provision. The 
meaning of ``materially harm competition'' is the same as that 
described above in section 3(a)(1). In short, the covered-
platform operator may not materially harm competition by 
applying and enforcing its terms of service in a manner that 
discriminates among similarly situated business users.
    Section 3(a)(4) makes it unlawful for a covered-platform 
operator to 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 significant cybersecurity risk.
    This is the Senate Bill's version of section 2(b)(1) in the 
House Bill. Both the Senate Bill and the House Bill prohibit a 
covered-platform operator from engaging in certain conduct 
related to its business users' capacity to access or 
interoperate with its platform, operating system, or hardware 
or software features. In both versions, the prohibition is 
triggered when a covered-platform operator makes its platform, 
operating system, or hardware or software features available to 
its other products, services, or lines of business. But the 
Senate Bill narrows the triggering condition to apply only when 
the covered-platform operator makes its platform, operating 
system, or hardware or software features available to certain 
of its other products, services, or lines of business--
specifically, those that compete or would compete with products 
or services offered by business users on the covered platform. 
The Senate Bill thus focuses the provision on the competition 
between the covered-platform operator and its business users on 
the covered platform.
    The Senate Bill revises the House Bill's language 
concerning the prohibited conduct as well. The Senate Bill 
makes it unlawful for a covered-platform operator to 
``unreasonably delay'' a business user's access or 
interoperability--in addition to the prohibition against the 
covered-platform operator acting to restrict or impede such 
access or interoperability as provided in the House Bill. The 
Senate Bill also adds the requirement that the listed actions 
be material--that is, more than de minimis--to fall under this 
provision. In other words, if the covered-platform platform 
offers materially similar access and interoperability to 
business users that it offers its own products or services, the 
operator does not violate this provision.
    In addition, the Senate Bill includes a new exception to 
the prohibition. The prohibition does not apply when a business 
user's access to the platform, operating system, or hardware or 
software features would lead to significant cybersecurity risk. 
This exception should be interpreted under ``the general rule 
of statutory construction that the burden of proving 
justification or exemption under a special exception to the 
prohibitions of a statute generally rests on one who claims its 
benefits.''\157\ An enforcer need not plead the absence of the 
exception in the complaint or prove its absence to establish a 
prima facie case. Instead, the defendant bears the burden of 
pleading and proving that its conduct falls within this 
exception and therefore is not in violation of section 
3(a)(4)'s prohibition.
---------------------------------------------------------------------------
    \157\Fed. Trade Comm'n v. Morton Salt Co., 334 U.S. 37, 44-45 
(1948).
---------------------------------------------------------------------------
    Section 3(a)(5) makes it unlawful for a covered-platform 
operator to 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. This provision is substantially similar 
to section 2(b)(2) in the House Bill, although the Senate Bill 
narrows the prohibition by requiring that the other products or 
services not be part of or intrinsic to the covered platform. 
In other words, if the other products or services described in 
this provision are part of or intrinsic to the covered 
platform, there is no unlawful conduct under this provision. 
This language adopts a functional approach for determining 
whether the other products or services are separate from the 
covered platform, rejecting the demand-based approach adopted 
by some courts to evaluate the separate-products requirement 
for tying claims. The designation process established in 
section 3(d) gives discretion to the FTC and the DOJ to define 
the scope of which products or services are separate from the 
covered platform with respect to specific platforms or 
companies.
    Section 3(a)(6) makes it unlawful for a covered-platform 
operator to make certain use of 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. The covered-platform operator may not use that 
data 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.
    This provision reflects a restructuring of section 2(b)(3) 
of the House Bill, with some additional modifications. Whereas 
the House Bill prohibited the offering, or support of the 
offering, of (any of) the covered-platform operator's products, 
services, or lines of business, the Senate Bill narrows the 
prohibition to bar the offering, or support of the offering, of 
the covered-platform operator's products or services that 
compete or would compete with products or services offered by 
business users on the covered platform. Like several of the 
other changes in the Senate Bill, this modification focuses the 
provision on the competition between the covered-platform 
operator and its business users on the covered platform.
    Section 3(a)(7) makes it unlawful for a covered-platform 
operator to 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. This provision is substantially similar to section 
2(b)(4) in the House Bill. Aside from stylistic revisions, the 
Senate Bill adds the requirement that the covered-platform 
operator ``materially'' restrict or impede a business user. 
This change clarifies that the restriction or impediment must 
be more than de minimis to fall within the prohibition.
    Section 3(a)(8) makes it unlawful for a covered-platform 
operator to 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. 
There are two exceptions to this prohibition. The first is that 
the restriction or impediment is necessary for the security or 
functioning of the covered platform. The second is that the 
restriction or impediment is necessary 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.
    This provision, like the others in section 3(a), applies to 
the conduct of a covered-platform operator only. It does not 
apply to the conduct of smaller, independent competitors and 
thus does not limit their ability to control their own 
products. It also does not limit their ability to enter into 
agreements with covered platforms in relation to their own 
products, so long as the agreement did not materially restrict 
or impede users from uninstalling software applications or from 
changing default software settings.
    The prohibition is the analog to section 2(b)(5) of the 
House Bill. The Senate Bill adds the requirement that the 
covered-platform operator ``materially'' restrict or impede a 
business user. This change requires that the restriction or 
impediment must be more than de minimis to fall within the 
prohibition.
    The Senate Bill also adds two exceptions to the prohibition 
designed to ensure that covered-platform operators are 
encouraged to continue to protect the security and functioning 
of the covered platform, as well as national security. Like for 
the exception in section 3(a)(4), an enforcer need not plead 
the absence of these exceptions in the complaint to state a 
claim or prove their absence to establish a prima facie case. 
Instead, the defendant bears the burden of pleading and proving 
that its conduct falls within this exception and therefore is 
not in violation of section 3(a)(8)'s prohibition. The covered-
platform operator seeking to avoid liability under section 
3(a)(8) bears the burden of pleading and proving that the 
restriction or impediment is necessary for the security or 
functioning of the covered platform, or it is necessary 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.\158\
---------------------------------------------------------------------------
    \158\See, e.g., Fed. Trade Comm'n v. Morton Salt Co., 334 U.S. 37, 
44-45 (1948).
---------------------------------------------------------------------------
    Section 3(a)(9) makes it unlawful for a covered-platform 
operator--in connection with any covered-platform user 
interface, including search or ranking functionality offered by 
the covered platform--to 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.
    This provision addresses a covered-platform operator's 
conduct on the platform's user interfaces, where the operator 
often functions in two roles--both selecting what information 
to display and being the source of some of that information. 
For instance, a covered-platform operator could act as both the 
operator of an online marketplace and as a seller on that 
marketplace. As a marketplace operator, it could allow 
customers to search for products available on the marketplace. 
And as a marketplace seller, it could offer some of the 
products that are displayed in the search results. Section 
3(a)(9) would prohibit that covered-platform operator from 
self-preferencing by unfairly rigging the search results in 
favor of its own products.
    This provision of the Senate Bill makes stylistic changes 
to the language in section 2(b)(7) of the House Bill. It also 
adds the requirement that, to fall within the prohibition set 
forth in this provision, the covered-platform operator must 
self-preference in a manner that is inconsistent with the 
neutral, fair, and nondiscriminatory treatment of all business 
users. This addition clarifies that the principle underlying 
this provision is fair competition on the merits: A covered-
platform operator is free to display its own products and 
services first in search results if those products and services 
have earned the top ranking under a neutral, fair, and 
nondiscriminatory algorithm, for example. If, on the other 
hand, the covered-platform operator favors its own products or 
services in search results or rankings, it violates this 
provision.
    Section 3(a)(10) makes it unlawful for a covered-platform 
operator to 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. This language is similar to that in section 
2(b)(10) of the House Bill, with modifications. The Senate Bill 
narrows the provision, changing the prohibition from 
retaliation against any person to retaliation against the 
covered platform's users and business users. It adds the 
requirement that the concerns raised to law enforcement must be 
``good-faith'' concerns. And it clarifies that the concerns 
must involve conduct occurring on the covered platform or 
conduct by the covered-platform operator (on or off the 
platform). If a user raises concerns to law enforcement in bad 
faith--or raises concerns of potential violations of the law 
neither occurring on the covered platform nor perpetrated by 
the covered-platform operator--this provision does not apply.
    Neither Section 3(a) nor any other provision of the Senate 
Bill contains provisions equivalent to section 2(b)(6), 
2(b)(8), or 2(b)(9) of the House Bill.
    Section 3(b) of the Senate Bill describes the affirmative 
defenses to a claimed violation of section 3(a). The 
affirmative-defenses section appears in section 2(c) of the 
House Bill. Both bills impose a vigorous burden on covered-
platform operators to prove that an affirmative defense 
applies. An enforcer need not plead the absence of any 
affirmative defense in the complaint or prove its absence to 
establish a prima facie case. The Senate Bill modifies the 
House Bill in several ways, as explained below.
    There are two types of affirmative defenses in the Senate 
Bill. The first appears in section 3(b)(1). To prove an 
affirmative defense under this provision, the defendant must 
prove that the challenged conduct was reasonably tailored and 
reasonably necessary to at least one of the values listed in 
section 3(b)(1)(A)-(C), such that there are not materially less 
discriminatory means to achieve that value.
    The means-end test for this affirmative defense is 
different from the test set forth in section 2(c) of the House 
Bill, which required that the conduct be narrowly tailored, 
nonpretextual, necessary, and the least discriminatory means to 
achieve the listed value. The Senate version no longer requires 
that the defendant prove that its affirmative defense is 
nonpretextual, instead limiting the inquiry to an objective 
analysis. The Senate Bill also modifies the House version by no 
longer requiring that the conduct be the least discriminatory 
means of achieving the listed value. Instead, the Senate Bill 
adopts a standard of reasonableness.
    There are three permissible values listed for the first 
type of affirmative defense, any one of which suffices to 
support such a defense. The first is to prevent a violation of, 
or comply with, federal or state law--language that is 
identical to the House Bill. The second is to protect safety, 
user privacy, the security of nonpublic data, or the security 
of the covered platform--which incorporates the language from 
the House Bill (protect user privacy or other non-public data) 
and adds to it (protect safety or security of the covered 
platform, as well). The third is to maintain or substantially 
enhance the core functionality of the covered platform. This is 
different from the House Bill, which sets forth, as the third 
value, increasing consumer welfare.
    The second type of affirmative defense appears in section 
3(b)(2). It applies only to claims alleging violations of 
paragraph (4), (5), (6), (7), (8), (9), or (10) of section 
3(a). A defendant proves this second type of affirmative 
defense by establishing that the challenged conduct has not 
resulted in and would not result in material harm to 
competition. The Senate Bill makes two changes to the House 
Bill's version of this affirmative defense.
    First, whereas the House Bill's version was applicable to 
all claims under the Act, the Senate Bill's version is 
permitted only for a subset of claims--those alleging a 
violation of the paragraphs of section 3(a) that do not require 
that the challenged conduct materially harm competition to 
constitute a violation. It thus is inapplicable to claims 
alleging violations of paragraphs (1), (2), or (3) of section 
3(a). This change was necessary to accommodate the Senate's 
inclusion of a material-harm-to-competition requirement in the 
prohibitions set forth in those three paragraphs.
    Second, the Senate Bill modifies the language to describe 
the affirmative defense, changing the language from ``would not 
result in harm to the competitive process by restricting or 
impeding legitimate activity by business users'' to ``has not 
resulted in and would not result in material harm to 
competition.'' The change is not intended to be substantive. 
Harm to the competitive process by restricting or impeding 
legitimate activity by business users is harm to competition. 
And that harm is material so long as it is more than de 
minimis. Accordingly, the phrase ``material harm to 
competition'' has the same meaning as ``materially harm 
competition'' as described above in section 3(a)(1).
    Section 3(b)(3) provides that, notwithstanding any other 
provision of law, whether user conduct would constitute a 
violation of 18 U.S.C. Sec. 1030--which prohibits fraudulent, 
unauthorized, and other uses of a computer--shall have no 
effect on whether the defendant has established an affirmative 
defense under this Act. This text incorporates language from 
section 7(a) of the House Bill and clarifies that, not only 
will a user's potential violation of 18 U.S.C. Sec. 1030 not 
determine the question of whether the defendant has established 
an affirmative defense, but it also will have no effect 
whatsoever on the question.
    Section 3(b)(4) identifies the burden of proof applicable 
to the affirmative defenses. The defendant has the burden of 
proving an affirmative defense set forth in the Act by a 
preponderance of the evidence. The Senate Bill therefore lowers 
the burden from House Bill section 2(c), which had required 
proof by clear-and-convincing evidence. This change equalizes 
the defendant's burden to prove an affirmative defense with the 
enforcers' burden to prove a violation.
    Section 3(c) sets forth enforcement authority under the 
Act. Section 3(c)(1) is the equivalent of section 2(h)(1) in 
the House Bill and states that--except as otherwise provided in 
the Act--the FTC shall enforce the Act as it does the Federal 
Trade Commission Act; the DOJ shall enforce the Act as it does 
Sherman Act, the Clayton Act, and the Antitrust Civil Process 
Act; and state attorneys general shall enforce the Act as they 
do the Sherman Act and the Clayton Act. The Senate version is 
identical to the House version, except that the Senate version 
changes the ``Attorney General'' to the ``Department of 
Justice.'' This change was made to use a single term to refer 
to the DOJ throughout the Act, in a manner equivalent to 
references to the FTC.
    Section 3(c)(2) is identical to section 2(h)(3) in the 
House Bill. Both the Senate Bill and the House Bill confer 
independent litigating authority on the FTC to enforce the Act 
in a civil action, to recover a civil penalty, and to seek 
other appropriate relief in a district court of the United 
States.
    Section 3(c)(3) is substantively the same as section 
2(h)(4) of the House Bill, with stylistic revisions. The Senate 
Bill provides that 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.
    Section 3(c)(4) states that the FTC, the DOJ, 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. This provision is new to the Senate Bill. It 
limits enforcement of the Act to civil actions in U.S. district 
courts, foreclosing administrative or state-court 
adjudications.
    Section 3(c)(5) is new to the Senate Bill and expressly 
adopts the default civil burden of proof for actions to enforce 
the Act. It states that the DOJ, the FTC, or the attorney 
general of a state shall establish a violation of the Act by a 
preponderance of the evidence.
    Section 3(c)(6) sets forth the remedies available under the 
Act. A similar provision appears in the House Bill as section 
2(f).
    Section 3(c)(6)(A) is substantively the same as the first 
sentence of section 2(f)(2) of the House Bill. It states that 
the remedies provided in this paragraph are in addition to, and 
not in lieu of, any other remedy available under federal or 
state law.
    Section 3(c)(6)(B), which is similar to section 2(f)(1) of 
the House Bill, provides that 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 U.S. revenue of 
the person for the period of time the violation occurred. The 
Senate Bill adds a clarification that deterrence is the 
principle that should determine the civil penalty imposed for 
violations of this Act. The Senate Bill also narrows and lowers 
the maximum penalty that may be imposed.
    Section 3(c)(6)(C) establishes that equitable relief is 
available under the Act. Section 3(c)(6)(C)(i) sets forth the 
general availability of such relief, stating that the DOJ, the 
FTC, 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. This provision is 
identical to Section 2(f)(2)(C) of the House Bill, except that 
the Senate Bill changes ``Assistant Attorney General of the 
Antitrust Division'' to ``Department of Justice.'' This change 
was made to use a single term to refer to the DOJ throughout 
the Act, in a manner equivalent to references to the FTC.
    Section 3(c)(6)(C)(ii) sets forth the substantive and 
procedural requirements for temporary injunctive relief under 
the Act. It is analogous to section 2(i) of the House Bill. 
Subclause (I) states that the FTC, the DOJ, 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. Subclause (II) states that the 
court may grant a temporary injunction under this clause if the 
FTC, the DOJ, or the attorney general of a state, as 
applicable, demonstrates three things:
    First, the enforcer must demonstrate that there is a 
plausible claim, consistent with the House version. The Senate 
Bill adds to this first element by requiring that the enforcer 
satisfy a portion of what some courts have called the serious-
questions test for preliminary relief. Specifically, the 
enforcer must demonstrate that its plausible claim is 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.
    Second, the enforcer must demonstrate that the conduct 
alleged to violate this Act materially impairs the ability of 
business users to compete with the covered-platform operator. 
The Senate Bill modifies the House version of this element by 
requiring that the impairment be material (that is, not de 
minimis). It also changes the subject of the impairment from 
``at least 1 business user,'' as in the House version, to 
``business users.'' Accordingly, an enforcer satisfies this 
requirement if the enforcer demonstrates that the alleged 
violation impairs, to a greater than de minimis extent, the 
ability of some or all business users to compete with the 
covered-platform operator.
    Third, the enforcer must demonstrate that a temporary 
injunction would be in the public interest. This element is new 
to the Senate Bill and incorporates the public-interest inquiry 
common to judicial analyses of requests for preliminary 
injunctions. Through this element, courts should consider the 
broader public consequences of granting or not granting the 
requested temporary relief, as demonstrated in, for example, 
Parler LLC v. Amazon Web Services, Inc.\159\
---------------------------------------------------------------------------
    \159\514 F. Supp. 3d 1261, 1270 (W.D. Wash. 2021).
---------------------------------------------------------------------------
    Subclause (III) of section 3(c)(6)(C)(ii) specifies that a 
temporary injunction under this clause shall expire not later 
than 120 days after the date on which a complaint under this 
subsection is filed. Subclause (IV) then identifies the 
circumstances under which a court must terminate the temporary 
injunction before that time. The court must do so if the 
covered-platform operator demonstrates that either (a) the FTC, 
the DOJ, 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 (b) allowing 
the temporary injunction to continue would harm the public 
interest. The first option is substantively the same as section 
2(i)(3) of the House Bill. A showing of this nature should be 
based on information known to the covered-platform operator or 
that can be obtained through the normal course of litigation; 
this provision is not designed to undermine the presumption of 
regularity owed to the Executive Branch, open the door into the 
enforcer's investigation process, or abrogate any privileges. 
The second option is new to the Senate Bill and allows the 
covered-platform operator to come forward with evidence, which 
may include evidence of changed circumstances, demonstrating 
that continuation of the injunction is harming the public 
interest.
    Subclause (V), like section 2(i)(4) of the House Bill, 
states that nothing in section 3(c)(6)(C)(ii) of the Senate 
Bill shall prevent or limit the FTC, the DOJ, or any attorney 
general of any state from seeking other equitable relief, 
including the relief provided in section 3(6). In other words, 
the availability of a temporary injunction requiring the 
covered platform operator to take or stop taking any action 
does not foreclose an enforcer from seeking other forms of 
temporary relief, or permanent equitable relief of any kind.
    Section 3(c)(6)(D), which is similar to section 2(f)(3) of 
the House Bill, authorizes forfeiture for repeat offenders. 
Several features appear in both the Senate and House versions 
of this provision. The potential for forfeiture arises when a 
person has engaged in repeated violations of this Act. If this 
condition is satisfied, 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 a specified 12-month 
period. Like for the civil-penalty provision, the principle 
underlying this forfeiture provision is deterrence.
    The Senate Bill narrows the specified 12-month period to 
the 12 months preceding the filing of a complaint for an 
alleged violation of this Act. The House Bill had allowed that 
the period could be the 12 months preceding or following the 
filing of such a complaint.
    The Senate Bill also adds a new clause describing the 
process required for forfeiture. Before a court may order 
forfeiture, it must provide the relevant chief executive 
officer or corporate officer with reasonable notice that the 
court is considering ordering forfeiture 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.
    Neither section 3(c)(6) nor any other provision of the 
Senate Bill contains provisions equivalent to section 
2(f)(2)(A), 2(f)(2)(B), or 2(f)(2)(D) of the House Bill. The 
remedies described in those sections of the House Bill are not 
foreclosed by the Senate Bill; they simply are not expressly 
provided for by the bill text.
    Section 3(c)(7) sets forth the Act's statute of 
limitations. It is identical to section 2(j) of the House Bill. 
It provides that a proceeding for a violation of this section 
may be commenced not later than six years after such violation 
occurs.
    Section 3(c)(8) sets forth the rules of construction 
limiting the Act's prohibitions. For these rules of 
construction, to the extent that they identify a condition that 
would allow a covered-platform operator to avoid liability, 
they function as an exception to the statutory prohibitions. 
Accordingly, the covered-platform operator bears the burden of 
pleading and proving that the condition exists.\160\
---------------------------------------------------------------------------
    \160\See, e.g., Fed. Trade Comm'n v. Morton Salt Co., 334 U.S. 37, 
44-45 (1948).
---------------------------------------------------------------------------
    Section 3(c)(8)(a) is new to the Senate Bill and is 
designed to clarify expressly that certain conduct is not 
prohibited by the Act. There are six rules of construction:
    The first two rules clarify that the Act does not disturb 
intellectual-property rights. Clause (i) states that nothing in 
section 3(a) shall be construed 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. Clause (ii) states 
that nothing in section 3(a) shall be construed 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.
    Clause (iii) states that nothing in section 3(a) shall be 
construed 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. This rule clarifies that a covered-platform 
operator's refusal to provide this interoperability or data 
sharing is excluded from section 3(a)'s prohibitions. This rule 
is designed to complement and reinforce other exclusions within 
section 3(a), such as the final clause of section 3(a)(4), 
which exempts access that would lead to a significant 
cybersecurity threat from section 3(a)(4)'s prohibition against 
the restriction, impediment, or delay of certain access to or 
interoperability with the covered platform, among other things.
    Clause (iv) states that nothing in section 3(a) shall be 
construed 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. Personally identifiable information 
means information that can be used to distinguish or trace a 
specific individual, either alone or when combined with other 
information that is linked or linkable to a specific 
individual. Pursuant to this rule, a covered-platform operator 
does not violate the Act merely for giving users the option to 
opt in or opt out of usage tracking across the platform, for 
example. This rule does not, however, excuse consent requests 
that are discriminatory or self-preferencing--such as if a 
covered platform were to request consent only for third-party 
services, but not the covered-platform operator's own services.
    Clause (v) states that nothing in section 3(a) shall be 
construed 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. This rule is designed 
to ensure that the prohibitions in section 3(a) are not 
interpreted in a manner that would harm national security.
    The sixth and final rule of construction in this provision, 
clause (vi), states that nothing in section 3(a) shall be 
construed to impose liability on a covered-platform operator 
solely for offering full end-to-end encrypted messaging or full 
end-to-end encrypted communication products or services, or a 
fee-for-service subscription that provides benefits to covered 
platform users on the covered platform. This exclusion covers 
the offerings themselves, but it does not extend to other 
conduct involving or related to those offerings.
    Section 3(8)(c)(B) is a rule of construction that is 
substantively identical to section 7(b) of the House Bill. It 
is another provision that clarifies that the Act does not 
disturb intellectual-property rights. It provides that an 
action taken by a covered platform operator that is reasonably 
tailored to protect the rights of third parties under 17 U.S.C. 
Sec. Sec. 106, 1101, 1201, or 1401; 15 U.S.C. Sec. Sec. 1114 or 
1125; or corollary state law, shall not be considered unlawful 
conduct under section 3(a).
    Section 3(d) sets forth the process and requirements 
relating to the designation of a covered platform. Section 
3(d)(1), which is analogous to section 2(d) of the House Bill, 
describes the initial designation. It states that the FTC and 
the DOJ may jointly, with the concurrence of the other, 
designate an online platform as a covered platform for the 
purpose of implementing and enforcing the Act. This language 
makes two changes to the House version. First, it makes the 
designation permissive (``may . . . designate'') rather than 
mandatory (``shall designate''), as the House Bill does. This 
change is designed to clarify that the agencies making the 
designation decision will determine whether a designation is 
appropriate under the Act, subject to judicial review. Second, 
the Senate Bill states that, if a designation is made, it must 
be joint by both the FTC and the DOJ, whereas the House Bill 
allows a designation by either agency acting alone.
    The Senate Bill and the House Bill both include three 
requirements for any covered-platform designation by the 
federal enforcers:
    First, section 3(d)(1)(A) of the Senate Bill states that a 
covered-platform designation must be based on a finding that 
the criteria set forth in section 2(a)(5)(B) are met. Those 
criteria are discussed above in the analysis of section 
2(a)(5)(B) of the Senate Bill. This first requirement matches 
the first requirement in the House Bill.
    Second, section 3(d)(1)(B) states that a covered-platform 
designation must be issued in writing and published in the 
Federal Register. This second requirement appears identically 
in the House Bill. It is designed to facilitate both the 
transparency of agency decision-making and the creation of a 
record for judicial review.
    Third, section 3(d)(1)(C) states that, except as provided 
in section 3(d)(2), a covered-platform designation shall apply 
for a seven-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. This third 
requirement makes stylistic changes to the language in the 
House Bill and lowers the default designation period from ten 
years to seven years.
    Section 3(d)(2) is analogous to section 2(e) of the House 
Bill and describes under what circumstances, and through what 
process, a federal enforcer must remove a covered-platform 
designation.
    Section 3(d)(2)(A) sets forth the triggering condition for 
a federal enforcer to consider the removal of a designation of 
a covered platform under section 3(d)(1) prior to the 
expiration of the seven-year period. It requires the FTC or the 
DOJ, as applicable, to consider such removal if the covered 
platform operator files a request with the FTC or the DOJ that 
shows that the online platform no longer meets the criteria set 
forth in section 2(a)(5)(B). This provision is substantially 
the same as the House version, although it reflects the 
Senate's lowering of the default designation period from ten 
years to seven years.
    Section 3(d)(2)(B) sets forth the deadline for the federal 
enforcer's administrative process to consider designation 
removal. It requires that one of the federal enforcers must 
determine whether to grant a request submitted under section 
3(d)(2)(A) not later than 120 days after the date on which the 
request is filed. This is the same deadline provided by the 
House Bill.
    Section 3(d)(2)(C) establishes that granting a request for 
designation removal may occur only if both federal enforcers 
agree to the removal. It states that the FTC or the DOJ must 
obtain the concurrence of the DOJ or the FTC, as appropriate, 
before granting a request submitted under section 3(d)(2)(A). 
The House Bill contains the same requirement.
    Section 3(d)(2)(D) is new to the Senate Bill. It requires 
the FTC or the DOJ, as applicable, to publish any decision to 
grant or deny the removal of a covered platform designation in 
the Federal Register. This requirement matches the similar 
publication requirement for an initial designation and is 
likewise designed to facilitate both the transparency of agency 
decision-making and the creation of a record for judicial 
review.
    Section 3(d)(3) sets forth the judicial-review mechanism 
for decisions involving covered-platform designations. It is 
analogous to section 3(a) of the House Bill, but it describes 
with greater particularity the persons that may seek judicial 
review of such decisions. It states that any person operating 
an online platform that has been designated as a covered 
platform under section 3(d)(1), or whose request for the 
removal of such a designation under section 3(d)(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 U.S. Court of Appeals for the D.C. Circuit. The Senate 
version of this provision, unlike the House version, does not 
specify an applicable standard of judicial view. This omission 
means that the D.C. Circuit should apply the deferential 
standards it usually applies as an appellate court reviewing 
agency decisions.\161\
---------------------------------------------------------------------------
    \161\See 5 U.S.C. Sec. 706.
---------------------------------------------------------------------------
    Section 4. Enforcement Guidelines. Section 4 of the Senate 
Bill, like section 5 of the House Bill, requires the federal 
enforcers to jointly issue agency enforcement guidelines 
outlining policies and practices under the Act. These 
guidelines should function similarly to, for example, the 
agencies' jointly issued Horizontal Merger Guidelines.\162\
---------------------------------------------------------------------------
    \162\E.g., U.S. Dep't of Justice & Fed. Trade Comm'n, Horizontal 
Merger Guidelines (2010); see also United States v. Anthem, Inc., 855 
F.3d 345, 349 (D.C. Cir. 2017) (describing the Horizontal Merger 
Guidelines as a ``helpful tool'' for ``analyzing proposed mergers'').
---------------------------------------------------------------------------
    Section 4(a) sets forth the general requirements for the 
enforcement guidelines. It states that, not later than 270 days 
after the date of enactment of this Act, the FTC and the DOJ, 
in consultation with other relevant federal agencies and state 
attorneys general, shall jointly issue the agency enforcement 
guidelines. The Senate Bill makes several changes to the 
equivalent text of the House Bill. It shortens the deadline 
from the one year provided in the House version to 270 days. 
This change ensures that the guidelines are in place before the 
effective date for section 3(a) of the Act, as set forth in 
section 7(b) of the Act. The Senate version changes ``Assistant 
Attorney General of the Antitrust Division'' to ``Department of 
Justice;'' this edit was made to use a single term to refer to 
the DOJ throughout the Act, in a manner equivalent to 
references to the FTC. The Senate version also requires the 
federal enforcers to consult with other relevant federal 
agencies and state attorneys general when developing the 
guidelines. This consultation requirement is designed to ensure 
that the federal enforcers consider stakeholder interests 
across the federal government, as well as the views of the 
state attorneys general, who also are empowered to enforce this 
Act.
    In addition, section 4(a) specifies, in greater detail than 
the House version, what the guidelines must contain. The 
guidelines must outline 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). 
These specifications are a floor for the matters covered by the 
guidelines, not a ceiling. The underlying goals of the 
guidelines are to be, as set forth in this provision, promoting 
transparency, deterring violations, fostering innovation and 
procompetitive conduct, and imposing sanctions proportionate to 
the gravity of individual violations.
    Section 4(b) provides that the FTC and the DOJ shall update 
the joint guidelines issued under section 4(a) as needed to 
reflect current agency policies and practices, but not less 
frequently than once every four years beginning on the date of 
enactment of this Act. The House version of this provision 
contains the same requirement.
    Section 4(c) is new to the Senate version of the Bill and 
requires that the federal enforcers provide an opportunity for 
public notice and comment on draft guidelines and updates. It 
states that, before issuing guidelines, or updates to those 
guidelines, the FTC and the DOJ shall publish proposed 
guidelines in draft form and provide public notice and 
opportunity for comment for not less than 60 days after the 
date on which the draft guidelines are published. This addition 
promotes transparency and public participation in the 
formulation of the guidelines and updates to those guidelines.
    Section 4(d) clarifies that the joint guidelines are just 
that: guidelines. They do not confer any rights upon any 
person, state, or locality; and they do not operate to bind the 
FTC, the DOJ, or any person, state, or locality to the approach 
recommended in the guidelines. This clarification appears in 
the House Bill as well.
    Section 5. Rule of Construction. Section 5, which is 
substantively the same as section 7(c) of the House Bill, sets 
forth a general rule of construction for the Act as a whole. It 
clarifies that, although the Act is designed to complement the 
federal antitrust laws, it does not modify, supersede, repeal, 
abrogate, or limit those or other laws. It states that nothing 
in the Act may be construed to limit any authority of the DOJ 
or the FTC under the antitrust laws, section 5 of the Federal 
Trade Commission Act (15 U.S.C. 45), or any other provision of 
law; and nothing in the Act may be construed to limit the 
application of any law. Other still-applicable laws are too 
numerous to list here, but they include, as an example, section 
230(c) of the Communications Decency Act,\163\ as well as, of 
course, all the protections afforded by the U.S. Constitution. 
Laws, such as section 230(c) of the Communications Decency Act, 
that bar liability by certain persons and/or for certain 
conduct, typically function as affirmative defenses to 
liability under this Act.\164\
---------------------------------------------------------------------------
    \163\47 U.S.C. Sec. 230(c). As Chair Cicilline has explained in 
detail, section 230(c), along with other laws and practical and 
procedural protections, ensure that platforms will be able to continue 
to enforce their content-moderation policies. See Letter from Hon. 
David N. Cicilline, Chair, Subcommittee on Antitrust, Com., & Admin. L. 
of the H. Comm. on the Judiciary, to Hon. Brian Schatz, Sen., Hon. Ben 
Ray Lujan, Sen., Hon. Ron Wyden, Sen., & Hon. Tammy Baldwin, Sen. (June 
15, 2022), https://cicilline.house.gov/sites/evo-subsites/
cicilline.house.gov/files/evo-media-document/2022-0615-cicilline-
letter-to-senators-re-content-moderation.pdf.
    \164\See, e.g., Marshall's Locksmith Serv. Inc. v. Google, LLC, 925 
F.3d 1263 (D.C. Cir. 2019) (affirming dismissal of multiple claims, 
including Sherman Act sections 1 and 2 claims, under 47 U.S.C. 
Sec. 230(c)(1)).
---------------------------------------------------------------------------
    Section 6. Severability. Section 6 sets forth the Act's 
savings clause, and it is the analog of section 8 of the House 
Bill. The Senate version streamlines the language in the House 
Bill and provides that, 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.
    Section 7. Effective Date. Section 7 is new to the Senate 
Bill and specifies the effective date for the Act. Section 7(a) 
states that, except as provided in section 7(b), the Act shall 
take effect on the date of enactment of the Act. Section 7(b) 
states that section 3(a) shall take effect one year after the 
date of enactment of the Act. And section 7(c) clarifies that 
the exception in section 7(b) to the effective date of the Act 
shall not limit the authority of the FTC or the DOJ to 
implement other sections of the Act. Taken as a whole, this 
section enables the federal enforcers to begin promulgating the 
joint guidelines, required by section 4, immediately upon 
enactment of the Act. These joint guidelines will then be in 
place in advance of the effective date of section 3(a) of the 
Act, which sets forth the conduct that violates the Act. In 
short, implementation of the Act begins immediately upon 
enactment, and enforcement of the Act beings one year after 
enactment.
    The Senate Bill does not contain any provisions equivalent 
to section 4 or 6 of the House Bill.

                             MINORITY VIEWS

    H.R. 3816 is part of a Democrat-led package of so-called 
antitrust bills designed to fuse Big Tech and Big Government in 
ways that will lead to more censorship. The radical package of 
bills will create a new and expansive regulatory framework that 
empowers the Biden Administration to micromanage many types of 
business decisions. By putting additional pressure on regulated 
entities to please their federal regulators, this Democrat-led 
package will lead to more--not less--censorship of online 
speech.
    As Republicans emphasized time and time again during the 
Committee's consideration of H.R. 3816, the Democrats' efforts 
will not solve the paramount problem with Big Tech: politically 
biased censorship. We know that Big Tech companies censor 
conservatives.\1\ This bill will only make that problem worse 
by joining tech companies and Democrat-led agencies at the 
hip--giving large companies every reason to appease and placate 
woke regulators in the Biden Administration. Democrats rejected 
a Republican amendment to ban wrongful censorship and to create 
a private cause of action--just as Democrats repeatedly 
rejected other Republican-offered amendments that would have 
improved the legislation.
---------------------------------------------------------------------------
    \1\Republican Staff of H.R. Comm. on the Judiciary, 116th Cong., 
Reining in Big Tech's Censorship of Conservatives 5-26 (2020).
---------------------------------------------------------------------------
    There should be no mistake: this bill would give the Biden 
Administration much more leverage to lean on companies to do 
its bidding, including partisan censorship online. Federal 
bureaucrats, including antitrust regulators, wield enormous 
direct and indirect influence over the industries and firms 
they regulate. The Federal Trade Commission (FTC) monitors 
businesses for anticompetitive conduct, reviews planned 
mergers, and challenges business decisions as it sees fit. 
Challenging an FTC order or investigation can be costly, both 
to a business's finances and its finite resources. If the FTC 
sues, these expenses can multiply--creating significant 
pressure on a private business to settle and otherwise comply 
with the FTC's demands. For these reasons, regulated parties 
are incentivized to heed the agency's threats and suggestions 
even without a finding of wrongdoing. H.R. 3816 radically 
strengthens this existing dynamic, and the unelected 
bureaucrats in the Biden Administration will exploit their new 
power. Under the bill, companies facing potential regulation or 
liability will have every reason to work hand in glove with 
federal bureaucrats before making all manner of decisions, 
which makes censorship more likely.
    The bill effectively lets federal bureaucrats decide which 
companies to regulate--enabling the government to pick winners 
and losers,\2\ and entrenching those decisions by largely 
insulating them from judicial review. The bill uses broad 
language that gives the FTC and the Department of Justice 
discretion to designate firms for regulation.\3\ Accordingly, 
firms that curry political favor in Washington may escape 
unscathed, while others will be targeted.\4\ There is no true 
independent check on those decisions, either, because the bill 
requires courts to defer to agency findings about which 
companies to regulate.\5\ Under this framework, private 
companies will have every incentive to please bureaucrats and 
to follow their lead at every turn--undermining the rule of law 
and fundamental fairness that should characterize the American 
legal system.
---------------------------------------------------------------------------
    \2\H.R. 3816, 117th Cong. Sec. 2(d), (g)(4) (2021); see also 
Rebecca Kern, Apple Can't Block Pre-Installed App Removal Under Bill, 
Bloomberg (June 16, 2021), https://www.bloomberg.com/news/articles/
2021-06-16/apple-pre-installed-apps-would-be-banned-under-antitrust-
package.
    \3\H.R. 3816, 117th Cong. Sec. 2(d), (g)(4) (2021).
    \4\Cf. Thomas Catenacci, Whistleblower Document Appears To Show 
Microsoft Helped Write Big Tech Bills, Daily Caller (June 23, 2021), 
https://dailycaller.com/2021/06/23/microsoft-house-judiciary-committee-
thomas-massie/.
    \5\H.R. 3816, 117th Cong. Sec. 3(b) (2021).
---------------------------------------------------------------------------
    After the agencies choose which companies to regulate, the 
bill empowers the regulators to shape companies' behavior--
creating additional business uncertainty, and making companies 
even more susceptible to regulation by raised eyebrow,\6\ 
including jawboning over censorship. For example, Section 2(a) 
of the bill bans certain conduct and permits other practices. 
But the language is high-level, leaving companies in the dark 
about what conduct will lead to liability. As Representative 
Bishop explained during the bill's markup, ``[y]ou can't tell 
what it is that [the language] bans . . . . [I]t's [not] 
understandable,'' and this language ``empower[s] regulators . . 
. .'' Similarly, Representative Spartz described aspects of the 
bill as ``very broad.'' Because companies will not know exactly 
what is prohibited, and will want to avoid major penalties,\7\ 
they will check with enforcers before making decisions. The 
bill leaves companies almost entirely beholden to federal 
regulators. Representative Roy offered an amendment that would 
have reduced regulators' discretion, better aligned the bill 
with the incentives of traditional antitrust enforcement, and 
``take[n] the heavy hand of government out of the process.'' 
Committee Democrats rejected Mr. Roy's approach.
---------------------------------------------------------------------------
    \6\A former Obama FTC official and Biden White House official 
responsible for competition policy has even argued that agency threats 
can be ``attractive'' and useful. See Tim Wu, Essay, Agency Threats, 60 
Duke L.J. 1841, 1848-54 (2011).
    \7\See H.R. 3816, 117th Cong. Sec. 2(f)(1) (2021).
---------------------------------------------------------------------------
    The bill also creates a regulatory environment in which 
companies are guilty until proven innocent--even when their 
underlying behavior is beneficial. As drafted, the bill 
prohibits certain conduct, even if the conduct is not 
anticompetitive and even if it benefits consumers and 
customers. During discussion of this issue in Committee, 
Democrats rejected an amendment that would have prohibited only 
conduct that actually harms the competitive process. Instead of 
targeting only harmful conduct, the bill assumes conduct is 
harmful and then burdens regulated parties with proving it is 
not--for example, requiring them to prove that their conduct 
does not harm ``the competitive process.''\8\ In other words, 
the bill makes the company guilty until it can prove itself 
innocent,\9\ which departs from fundamental tenets of American 
law and puts significant pressure on regulated parties. That 
pressure gives the Biden Administration more leverage to lean 
on private companies to carry out its censorship agenda.
---------------------------------------------------------------------------
    \8\Id. Sec. 2(c)(1); see also id. Sec. 2(c)(3).
    \9\See id. Sec. 2(c) (defense must be shown with ``clear and 
convincing evidence'').
---------------------------------------------------------------------------
    Beyond giving the federal government the ability to pick 
which companies to regulate and what conduct to prohibit, H.R. 
3816 will fuel FTC rulemaking and needlessly grow the 
administrative state. Conduct the bill prohibits is also an 
``unfair method of competition'' under Section 5 of the FTC 
Act.\10\ The Biden FTC's Chair, Lina Khan, strongly supports 
aggressive agency regulations and has taken the position that 
the FTC has wide rulemaking authority under Section 5.\11\ In 
light of the bill's broad language, the FTC would likely use 
this bill to issue new regulations under Section 5--ignoring 
the Constitution's mandate that Congress make federal law and 
thus undermining the separation of powers.
---------------------------------------------------------------------------
    \10\Id. Sec. (2)(h)(2).
    \11\See, e.g., Lina M. Khan & Rohit Chopra, The Case for ``Unfair 
Methods of Competition'' Rulemaking, 87 U. Chi. L. Rev. 357, 369-71 
(2020).
---------------------------------------------------------------------------
    H.R. 3816 also creates a new and unnecessary Bureau of 
Digital Markets at the FTC and authorizes more hiring.\12\ The 
Trump Administration already created a tech-focused enforcement 
division, appropriately placed in the FTC's existing Bureau of 
Competition.\13\ Creating a new bureau with expansive hiring 
authority is duplicative and wastes federal resources.
---------------------------------------------------------------------------
    \12\H.R. 3816, 117th Cong. Sec. 4 (2021).
    \13\Technology Enforcement Division, FTC, https://www.ftc.gov/
about-ftc/bureaus-offices/bureau-competition/inside-bureau-competition/
technology-enforcement-division (last visited Dec. 13, 2022).
---------------------------------------------------------------------------
    Like the rest of the Democrats' antitrust package, H.R. 
3816 was rushed to markup. The bill's development and 
deliberation were inadequate. Those failures are apparent. 
Instead of solving legitimate concerns with tech companies, the 
bill puts private-sector companies under Big Government's thumb 
and drastically empowers Biden regulators in ways that empower 
censorship. For these and other reasons, an overwhelming 
majority of Republicans opposed this bill in Committee. We 
believed that the Committee should instead focus on legislative 
reforms that will protect the freedom of speech online and 
benefit the American people.
                                                Jim Jordan,
                                                    Ranking Member.

                                  [all]