Ending Platform Monopolies Act

I 117TH CONGRESS 1ST SESSION H. R. 3825 To promote competition and economic opportunity in digital markets by eliminating the conflicts of interest that arise from dominant online platforms’ concurrent ownership or control of an online platform and certain other businesses. IN THE HOUSE OF REPRESENTATIVES JUNE 11, 2021 Ms. JAYAPAL (for herself, Mr. GOODEN of Texas, Mr. CICILLINE, Mr. BUCK, and Mr. NADLER) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To promote competition and economic opportunity in digital markets by eliminating the conflicts of interest that arise from dominant online platforms’ concurrent ownership or control of an online platform and certain other busi- nesses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Ending Platform Mo- 4 nopolies Act’’. 5 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 3825 IH SEC. 2. UNLAWFUL CONFLICTS OF INTEREST. 1 (a) VIOLATION.—As of the date an online platform 2 is designated as a covered platform under subsection 6(a), 3 it shall be unlawful for a covered platform operator to 4 own, control, or have a beneficial interest in a line of busi- 5 ness other than the covered platform that— 6 (1) utilizes the covered platform for the sale or 7 provision of products or services; 8 (2) offers a product or service that the covered 9 platform requires a business user to purchase or uti- 10 lize as a condition for access to the covered plat- 11 form, or as a condition for preferred status or place- 12 ment of a business user’s product or services on the 13 covered platform; or 14 (3) gives rise to a conflict of interest. 15 (b) CONFLICT OF INTEREST.—For purposes of this 16 section, the term ‘‘conflict of interest’’ includes the conflict 17 of interest that arises when— 18 (1) a covered platform operator owns or con- 19 trols a line of business, other than the covered plat- 20 form; and 21 (2) the covered platform’s ownership or control 22 of that line of business creates the incentive and 23 ability for the covered platform to— 24 (A) advantage the covered platform opera- 25 tor’s own products, services, or lines of business 26 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 3825 IH on the covered platform over those of a com- 1 peting business or a business that constitutes 2 nascent or potential competition to the covered 3 platform operator; or 4 (B) exclude from, or disadvantage, the 5 products, services, or lines of business on the 6 covered platform of a competing business or a 7 business that constitutes nascent or potential 8 competition to the covered platform operator. 9 SEC. 3. ENFORCEMENT. 10 (a) IN GENERAL.—The Commission and the Depart- 11 ment of Justice shall enforce this Act in the same manner, 12 by the same means, and with the same jurisdiction, pow- 13 ers, and duties as though all applicable terms and provi- 14 sions of the Federal Trade Commission Act (15 U.S.C. 15 41 et seq.) or the Clayton Act (15 U.S.C. 12 et seq.), as 16 appropriate, were incorporated into and made a part of 17 this Act. 18 (b) UNFAIR METHODS OF COMPETITION.—A viola- 19 tion of this Act shall also constitute an unfair method of 20 competition under section 5 of the Federal Trade Commis- 21 sion Act (15 U.S.C. 5). 22 (c) CIVIL PENALTIES.—Any person, or any individual 23 who is an officer, director, partner, or employee of a per- 24 son, who fails to comply with any provision of this Act 25 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 3825 IH within two years of the Commission or Department of Jus- 1 tice designating a covered platform under section 6(a), 2 shall be liable to the United States for a civil penalty in 3 an amount not more than the greater of— 4 (1) 15 percent of the total average daily United 5 States revenue of the person for the previous cal- 6 endar year; or 7 (2) 30 percent of the total average daily United 8 States revenue of the person in any line of business 9 affected or targeted by the unlawful conduct during 10 the period of the unlawful conduct. 11 (d) COMMISSION INDEPENDENT LITIGATION AU- 12 THORITY.—If the Commission has reason to believe that 13 a covered platform violated this Act, the Commission may 14 commence a civil action, in its own name by any of its 15 attorneys designated by it for such purpose, to recover a 16 civil penalty and seek other appropriate relief in a district 17 court of the United States against the covered platform 18 operator. 19 SEC. 4. LIMITATIONS ON BOARD MEMBERSHIP AND OTHER 20 SERVICE. 21 (a) IN GENERAL.—An individual who is an officer, 22 director, employee, including an agent, representative, or 23 contractor, of a covered platform or who has control over 24 the covered platform may not serve at the same time as 25 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 3825 IH an officer, director, employee, or other institution-affili- 1 ated party, including as an agent, representative, or con- 2 tractor, of a formerly affiliated person. 3 (b) TERMINATION OF SERVICE.—Any individual 4 whose service violates subsection (a) as of the date an on- 5 line platform is designated as a covered platform under 6 subsection 6(a), shall terminate such service as soon as 7 is practicable and in no event, later than the end of the 8 60-day period beginning on the date the online platform 9 is designated as a covered platform. 10 SEC. 5. DEFINITIONS. 11 For purposes of this Act: 12 (1) ANTITRUST LAWS.—The term ‘‘antitrust 13 laws’’ has the meaning given the term in subsection 14 (a) of the first section of the Clayton Act (15 U.S.C. 15 12). 16 (2) BENEFICIAL INTEREST.—The term ‘‘Bene- 17 ficial Interest’’ means with respect to a person, hav- 18 ing access to competitively sensitive information or 19 the ability to affect the person’s strategic decisions. 20 (3) COMMISSION.—The term ‘‘Commission’’ 21 means the Federal Trade Commission. 22 (4) CONTROL.—The term ‘‘control’’ with re- 23 spect to a person means— 24 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 3825 IH (A) holding 25 percent or more of the 1 stock of the person; 2 (B) having the right to 25 percent or more 3 of the profits of the person; 4 (C) having the right to 25 percent or more 5 of the assets of the person, in the event of the 6 person’s dissolution; 7 (D) if the person is a corporation, having 8 the power to designate 25 percent or more of 9 the directors of the person; 10 (E) if the person is a trust, having the 11 power to designate 25 percent or more of the 12 trustees; or 13 (F) otherwise exercises substantial control 14 over the person. 15 (5) COVERED PLATFORM.—The term ‘‘covered 16 platform’’ means an online platform— 17 (A) that has been designated as a ‘‘covered 18 platform’’ under section 6(a); or 19 (B) that— 20 (i) at the time of the Commission’s or 21 the Department of Justice’s designation 22 under section 6(a), or any of the twelve 23 months preceding that time, or in any of 24 the 12 months preceding the filing of a 25 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 3825 IH complaint for an alleged violation of this 1 Act— 2 (I) has at least 50,000,000 3 United States-based monthly active 4 users on the online platform; or 5 (II) has at least 100,000 United 6 States-based monthly active business 7 users on the platform; 8 (ii) is owned or controlled by a person 9 with net annual sales, or a market capital- 10 ization greater than $600,000,000,000 at, 11 adjusted for inflation on the basis of the 12 Consumer Price Index, the time of the 13 Commission’s or the Department of Jus- 14 tice’s designation under section 6(a) or any 15 of the two years preceding that time, or at 16 any time in the 2 years preceding the filing 17 of a complaint for an alleged violation of 18 this Act; and 19 (iii) is a critical trading partner for 20 the sale or provision of any product or 21 service offered on or directly related to the 22 online platform. 23 (6) COVERED PLATFORM OPERATOR.—The 24 term ‘‘covered platform operator’’ means a person 25 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 3825 IH that, directly or indirectly, owns or controls a cov- 1 ered platform. 2 (7) CRITICAL TRADING PARTNER.—The term 3 ‘‘critical trading partner’’ means an entity that has 4 the ability to restrict or impede— 5 (A) the access of a business user to its 6 users or customers; or 7 (B) the access of a business user to a tool 8 or service that it needs to effectively serve its 9 users or customers. 10 (8) BUSINESS USER.—The term ‘‘business 11 user’’ means a person that utilizes or plans to utilize 12 the covered platform for the sale or provision of 13 products or services. 14 (9) FORMERLY AFFILIATED PERSON.—The 15 term ‘‘formerly affiliated person’’ means a person 16 that was owned or controlled by a covered platform 17 prior to termination of the affiliation described in 18 section 3. 19 (10) ONLINE PLATFORM.—The term ‘‘online 20 platform’’ means a website, online or mobile applica- 21 tion, operating system, digital assistant, or online 22 service that— 23 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 3825 IH (A) enables a user to generate content that 1 can be viewed by other users on the platform or 2 to interact with other content on the platform; 3 (B) facilitates the offering, sale, purchase, 4 payment, or shipping of goods or services, in- 5 cluding software applications, between and 6 among consumers or businesses not controlled 7 by the platform; or 8 (C) enables user searches or queries that 9 access or display a large volume of information. 10 (11) PERSON.—The term ‘‘person’’ has the 11 meaning given the term in subsection (a) of section 12 1 of the Clayton Act (15 U.S.C. 12). 13 SEC. 6. IMPLEMENTATION. 14 (a) COVERED PLATFORM DESIGNATION.— 15 (1) The Commission or Department of Justice 16 shall designate whether an entity is a covered plat- 17 form for the purpose of implementing and enforcing 18 this Act. Such designation shall— 19 (A) be based on a finding that the criteria 20 set forth in paragraph (5)(B)(i)–(iii) of section 21 5 are met; 22 (B) be issued in writing and published in 23 the Federal Register; and 24 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 3825 IH (C) will apply for years from its issuance 1 regardless of whether there is a change in con- 2 trol or ownership over the covered platform un- 3 less the Commission or the Department of Jus- 4 tice removes the designation pursuant to sub- 5 section (b). 6 (b) REMOVAL OF COVERED PLATFORM DESIGNA- 7 TION.—The Commission or the Department of Justice 8 shall— 9 (1) consider whether its designation of a cov- 10 ered platform pursuant to subsection (a) should be 11 removed prior to the expiration of the 10-year period 12 if the covered platform operator files a request with 13 the Commission or the Department of Justice, which 14 shows that the online platform is no longer a critical 15 trading partner; 16 (2) determine whether to grant a request sub- 17 mitted under paragraph (1) not later than 120 days 18 after the date of the filing of such request; and 19 (3) obtain the concurrence of the Commission 20 or the Department of Justice, as appropriate, before 21 granting a request submitted under paragraph (1). 22 SEC. 7. JUDICIAL REVIEW. 23 (a) IN GENERAL.—Any party that is subject to a cov- 24 ered platform designation under section 6(a) of this Act, 25 VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 3825 IH a final order issued in any district court of the United 1 States, or a final order of the Commission issued in an 2 administrative adjudicative proceeding may within 30 days 3 of the issuance of such designation or order, petition for 4 review of such designation or order in the United States 5 Court of Appeals for the District of Columbia Circuit. 6 (b) TREATMENT OF FINDINGS.—In a proceeding for 7 judicial review of a covered platform designation under 8 section 6(a) of this Act or a final order of the Commission, 9 the findings of the Commission or the Department of Jus- 10 tice as to the facts, if supported by evidence, shall be con- 11 clusive. 12 SEC. 8. RULES OF CONSTRUCTION. 13 Nothing in this Act shall be construed to limit any 14 authority of the Attorney General or the Federal Trade 15 Commission under the antitrust laws, the Federal Trade 16 Commission Act (15 U.S.C. 45), or any other provision 17 of law or to limit the application of any law. 18 SEC. 9. SEVERABILITY. 19 If any provision of this Act, or the application of such 20 provision to any person or circumstance, is held to be un- 21 constitutional, the remainder of this Act, and the applica- 22 tion of the remaining provisions of this Act to any person 23 or circumstance shall not be affected. 24 Æ VerDate Sep 11 2014 03:22 Jun 12, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H3825.IH H3825 pbinns on DSKJLVW7X2PROD with BILLS