S2033-118

1. Short title This Act may be cited as the American Innovation and Choice Online Act.

3. Unlawful conduct It shall be unlawful for a person operating a covered platform in or affecting commerce 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; 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; 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; materially restrict, impede, or unreasonably delay the capacity of a business user to access or interoperate with the same platform, operating system, or hardware or software features that are available to the products, services, or lines of business of the covered platform operator that compete or would compete with products or services offered by business users on the covered platform, except where such access would lead to a significant cybersecurity risk; 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; use nonpublic data that are obtained from or generated on the covered platform by the activities of a business user or by the interaction of a covered platform user with the products or services of a business user to offer, or support the offering of, the products or services of the covered platform operator that compete or would compete with products or services offered by business users on the covered platform; 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; materially restrict or impede covered platform users from uninstalling software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator, unless necessary— for the security or functioning of the covered platform; or 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; in connection with any covered platform user interface, including search or ranking functionality offered by the covered platform, treat the products, services, or lines of business of the covered platform operator more favorably relative to those of another business user and in a manner that is inconsistent with the neutral, fair, and nondiscriminatory treatment of all business users; or 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. It shall be an affirmative defense to an action under subsection (a) if the defendant establishes that the conduct was reasonably tailored and reasonably necessary, such that the conduct could not be achieved through materially less discriminatory means, to— prevent a violation of, or comply with, Federal or State law; protect safety, user privacy, the security of nonpublic data, or the security of the covered platform; or maintain or substantially enhance the core functionality of the covered platform. It shall be an affirmative defense to an action under paragraph (4), (5), (6), (7), (8), or (9) of subsection (a) if the defendant establishes that the conduct has not resulted in and would not result in material harm to competition. Notwithstanding any other provision of law, whether user conduct would constitute a violation of section 1030 of title 18, United States Code, shall have no effect on whether the defendant has established an affirmative defense under this Act. The defendant has the burden of proving an affirmative defense under this subsection by a preponderance of the evidence. Except as otherwise provided in this Act— 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; the Department of Justice shall enforce this Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms of the Sherman Act (15 U.S.C. 1 et seq.), Clayton Act (15 U.S.C. 12 et seq.), and Antitrust Civil Process Act (15 U.S.C. 1311 et seq.) were incorporated into and made a part of this Act; and 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. 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. 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. The Commission, Department of Justice, or any attorney general of a State shall only be able to enforce this Act through a civil action brought before a district court of the United States. The Department of Justice, the Commission, or the attorney general of a State shall establish a violation of this section by a preponderance of the evidence. The remedies provided in this paragraph are in addition to, and not in lieu of, any other remedy available under Federal or State law. Any person who violates this Act shall forfeit and pay to the United States a civil penalty in an amount that is sufficient to deter violations of this Act, but not greater than 10 percent of the total United States revenue of the person for the period of time the violation occurred. The Department of Justice, the Commission, or the attorney general of any State may seek, and the court may order, relief in equity as necessary to prevent, restrain, or prohibit violations of this Act. The Commission, Department of Justice, or any attorney general of a State may seek a temporary injunction requiring the covered platform operator to take or stop taking any action for not more than 120 days. The court may grant a temporary injunction under this clause if the Commission, the Department of Justice, or the attorney general of a State, as applicable, demonstrates— there is a plausible claim, supported by substantial evidence raising sufficiently serious questions going to the merits to make them fair ground for litigation, that a covered platform operator violated this Act; that the conduct alleged to violate this Act materially impairs the ability of business users to compete with the covered platform operator; and a temporary injunction would be in the public interest. A temporary injunction under this clause shall expire not later than the date that is 120 days after the date on which a complaint under this subsection is filed. The court shall terminate a temporary injunction under this clause if the covered platform operator demonstrates that— the Commission, the Department of Justice, or the attorney general of the State seeking relief under this subsection has not taken reasonable steps to investigate whether a violation has occurred; or allowing the temporary injunction to continue would harm the public interest. Nothing in this clause shall prevent or limit the Commission, the Department of Justice, or any attorney general of any State from seeking other equitable relief, including the relief provided in this paragraph. If a person has engaged in a pattern or practice of violating this Act, the court shall consider requiring, and may order, that the chief executive officer of the person, and any other corporate officer of the person as appropriate to deter violations of this Act, forfeit to the United States Treasury any compensation received by that chief executive officer or corporate officer during the 12 months preceding the filing of a complaint for an alleged violation of this Act. Prior to ordering any chief executive officer or corporate officer to forfeit compensation under clause (i), the court shall provide such chief executive officer or corporate officer with reasonable notice that the court is considering ordering forfeiture under this subparagraph and provide an opportunity for such chief executive officer or corporate officer to appear and be heard before the court at a hearing on such potential forfeiture. A proceeding for a violation of this section may be commenced not later than 6 years after such violation occurs. Nothing in subsection (a) may 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; 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; 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— are identified as limited or prohibited from engaging in economic transactions as part of United States sanctions or export-control regimes; or have been identified as national security, intelligence, or law enforcement risks; 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; in a manner that would likely result in data on the covered platform or data from another business user being transferred to the Government of the People’s Republic of China or the government of a foreign adversary; or 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. An action taken by a covered platform operator that is reasonably tailored to protect the rights of third parties under section 106, 1101, 1201, or 1401 of title 17, United States Code, or rights actionable under section 32 or 43 of the Act entitled An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes, approved July 5, 1946 (commonly known as the Lanham Act or the Trademark Act of 1946) (15 U.S.C. 1114, 1125), or corollary State law, shall not be considered unlawful conduct under subsection (a). The Commission and the Department of Justice may jointly, with concurrence of the other, designate an online platform as a covered platform for the purpose of implementing and enforcing this Act, which shall— be based on a finding that the criteria set forth in section 2(a)(5)(B) are met; be issued in writing and published in the Federal Register; and except as provided in paragraph (2), apply for a 7-year period beginning on the date on which the designation is issued, regardless of whether there is a change in control or ownership over the covered platform. The Commission or the Department of Justice shall— consider whether a designation of a covered platform under paragraph (1) should be removed prior to the expiration of the 7-year period if the covered platform operator files a request with the Commission or the Department of Justice that shows that the online platform no longer meets the criteria set forth in section 2(a)(5)(B); determine whether to grant a request submitted under subparagraph (A) not later than 120 days after the date on which the request is filed; obtain the concurrence of the Commission or the Department of Justice, as appropriate, before granting a request submitted under subparagraph (A); and publish any decision to grant or deny removal of a covered platform designation in the Federal Register. Any person operating an online platform that has been designated as a covered platform under paragraph (1) or whose request for removal of such a designation under paragraph (2) is denied may, within 30 days of the issuance of such designation or decision, petition for review of such designation or decision in the United States Court of Appeals for the District of Columbia Circuit.

4. Enforcement guidelines Not later than 270 days after the date of enactment of this Act, the Commission and the Department of Justice, in consultation with other relevant Federal agencies and State attorneys general, shall jointly issue agency enforcement guidelines outlining policies and practices relating to conduct that may materially harm competition under section 3(a), agency interpretations of the affirmative defenses under section 3(b), and policies for determining the appropriate amount of a civil penalty to be sought under section 3(c), with the goal of promoting transparency, deterring violations, fostering innovation and procompetitive conduct, and imposing sanctions proportionate to the gravity of individual violations. The Commission and the Department of Justice shall update the joint guidelines issued under subsection (a) as needed to reflect current agency policies and practices, but not less frequently than once every 4 years beginning on the date of enactment of this Act. Before issuing guidelines, or updates to those guidelines, under this section, the Commission and the Department of Justice 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. The joint guidelines issued under this section do not— confer any rights upon any person, State, or locality; or operate to bind the Commission, Department of Justice, or any person, State, or locality to the approach recommended in the guidelines.

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

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

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