American Innovation and Choice Online Act

IB Union Calendar No. 475 117TH CONGRESS 2D SESSION H. R. 3816 [Report No. 117–655] To provide that certain discriminatory conduct by covered platforms shall be unlawful, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 11, 2021 Mr. CICILLINE (for himself, Mr. GOODEN of Texas, Mr. NADLER, and Mr. BUCK) introduced the following bill; which was referred to the Committee on the Judiciary DECEMBER 21, 2022 Additional sponsors: Mr. JONES, Mr. JOHNSON of Georgia, Mr. RASKIN, Ms. JAYAPAL, Ms. SCANLON, Mr. NEGUSE, Mrs. MCBATH, Mrs. TRAHAN, Mr. CAWTHORN, Mr. DONALDS, Mr. GOSAR, Mr. GARCI´A of Illinois, Mr. LEVIN of Michigan, Ms. TLAIB, Mr. ESPAILLAT, Mr. BABIN, Mr. MAST, Mrs. MILLER-MEEKS, Ms. NEWMAN, Ms. PORTER, Ms. PINGREE, Mr. HICE of Georgia, Mr. JEFFRIES, Ms. OMAR, Ms. LEE of California, Mr. MFUME, Mrs. BUSTOS, Mrs. DEMINGS, Ms. DEAN, Ms. ESCOBAR, Ms. SCHAKOWSKY, Ms. HOULAHAN, Mrs. CHERFILUS-MCCORMICK, Ms. CAS- TOR of Florida, Ms. CRAIG, Mrs. LAWRENCE, Ms. WILD, Mr. PERL- MUTTER, Mr. MORELLE, Mr. PAYNE, Mrs. WATSON COLEMAN, Ms. CHU, Mr. DESAULNIER, and Mr. DEFAZIO DECEMBER 21, 2022 Reported with amendments, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on June 11, 2021] VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •HR 3816 RH A BILL To provide that certain discriminatory conduct by covered platforms shall be unlawful, and for other purposes. VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •HR 3816 RH 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 ‘‘American Innovation 4 and Choice Online Act’’. 5 SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT. 6 (a) VIOLATION.—It shall be unlawful for a person op- 7 erating a covered platform, in or affecting commerce, to en- 8 gage in any conduct in connection with the operation of 9 the covered platform that— 10 (1) advantages the covered platform operator’s 11 own products, services, or lines of business over those 12 of another business user; 13 (2) excludes or disadvantages the products, serv- 14 ices, or lines of business of another business user rel- 15 ative to the covered platform operator’s own products, 16 services, or lines of business; or 17 (3) discriminates among similarly situated busi- 18 ness users, including, but not limited to, those busi- 19 ness users employed by businesses owned by women 20 and minorities. 21 (b) OTHER DISCRIMINATORY CONDUCT.—It shall be 22 unlawful for a person operating a covered platform, in or 23 affecting commerce, to— 24 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •HR 3816 RH (1) restrict or impede the capacity of a business 1 user to access or interoperate with the same platform, 2 operating system, hardware or software features that 3 are available to the covered platform operator’s own 4 products, services, or lines of business; 5 (2) condition access to the covered platform or 6 preferred status or placement on the covered platform 7 on the purchase or use of other products or services 8 offered by the covered platform operator; 9 (3) use non-public data to offer, or support the 10 offering of, the covered platform operator’s own prod- 11 ucts, services, or lines of business that are obtained 12 from or generated on the covered platform— 13 (A) by the activities of a business user; or 14 (B) through an interaction of a covered 15 platform user with the products or services of a 16 business user; 17 (4) restrict or impede a business user from ac- 18 cessing data generated on the covered platform by the 19 activities of the business user, or through an inter- 20 action of a covered platform user with the business 21 user’s products or services, such as by establishing 22 contractual or technical restrictions that prevent the 23 portability of such data by the business user to other 24 systems or applications; 25 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •HR 3816 RH (5) restrict or impede covered platform users 1 from un-installing software applications that have 2 been preinstalled on the covered platform or changing 3 default settings that direct or steer covered platform 4 users to products or services offered by the covered 5 platform operator; 6 (6) restrict or impede businesses users from com- 7 municating information or providing hyperlinks on 8 the covered platform to covered platform users to fa- 9 cilitate business transactions; 10 (7) in connection with any user interface, in- 11 cluding search or ranking functionality offered by the 12 covered platform, treat the covered platform operator’s 13 own products, services, or lines of business more fa- 14 vorably than those of another business user; 15 (8) interfere with or restrict a business user’s 16 pricing of its products or services; 17 (9) restrict or impede a business user, or a busi- 18 ness user’s customers or users, from interoperating or 19 connecting to any product or service; or 20 (10) retaliate against any person that raises con- 21 cerns with any law enforcement authority about ac- 22 tual or potential violations of State or Federal law or 23 that initiates or participates in litigation to enforce 24 this Act. 25 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 6 •HR 3816 RH (c) AFFIRMATIVE DEFENSE.—Subsections (a) and (b) 1 shall not apply if the defendant establishes by clear and 2 convincing evidence that the conduct described in sub- 3 sections (a) or (b)— 4 (1) would not result in harm to the competitive 5 process by restricting or impeding legitimate activity 6 by business users; or 7 (2) was narrowly tailored, could not be achieved 8 through less discriminatory means, was 9 nonpretextual, and was necessary to— 10 (A) prevent a violation of, or comply with, 11 Federal or State law; or 12 (B) protect user privacy or other non-public 13 data; or 14 (3) increases consumer welfare. 15 (d) COVERED PLATFORM DESIGNATION.—The Federal 16 Trade Commission or Department of Justice shall designate 17 a covered platform for the purpose of implementing and en- 18 forcing this Act. Such designation shall— 19 (1) be based on a finding that the criteria set 20 forth in subsection (g)(4)(i)–(iii) are met; 21 (2) be issued in writing and published in the 22 Federal Register; and 23 (3) apply for 10 years from its issuance regard- 24 less of whether there is a change in control or owner- 25 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 7 •HR 3816 RH ship over the covered platform unless the Commission 1 or the Department of Justice removes the designation 2 under subsection (e). 3 (e) REMOVAL OF COVERED PLATFORM DESIGNA- 4 TION.—The Commission or the Department of Justice 5 shall— 6 (1) consider whether its designation of a covered 7 platform under subsection (d) should be removed prior 8 to the expiration of the ten-year period if the covered 9 platform operator files a request with the Commission 10 or the Department of Justice, which shows that the 11 online platform no longer meets the criteria set forth 12 in subsection (g)(4)(i)–(iii); 13 (2) determine whether to grant a request sub- 14 mitted under paragraph 1 not later than 120 days 15 after the date of the filing of such request; and 16 (3) obtain the concurrence of the Commission or 17 the Department of Justice, as appropriate, before 18 granting a request submitted under paragraph (1). 19 (f) REMEDIES.— 20 (1) CIVIL PENALTY.—Any covered platform oper- 21 ator who is found to have violated subsections (a) or 22 (b) shall be liable to the United States or the Commis- 23 sion for a civil penalty, which shall accrue to the 24 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 8 •HR 3816 RH United States Treasury, in an amount not more than 1 the greater of— 2 (A) 15 percent of the total United States 3 revenue of the person for the previous calendar 4 year; or 5 (B) 30 percent of the United States revenue 6 of the person in any line of business affected or 7 targeted by the unlawful conduct during the pe- 8 riod of the unlawful conduct. This civil penalty 9 may be recovered in a civil action brought by the 10 United States or the Commission. 11 (2) REMEDIES IN ADDITION.—Remedies provided 12 in this subsection are in addition to, and not in lieu 13 of, any other remedy available under Federal or State 14 law. 15 (A) RESTITUTION; CONTRACT RESCISSION 16 AND REFORMATION; REFUNDS; RETURN OF PROP- 17 ERTY.—The Assistant Attorney General of the 18 Antitrust Division, the Commission, or the attor- 19 ney general of any State may seek, and the court 20 may order, with respect to a violation that gives 21 rise to the suit, restitution for losses, rescission 22 or reformation of contracts, refund of money, or 23 return of property. 24 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 9 •HR 3816 RH (B) DISGORGEMENT.—The Assistant Attor- 1 ney General of the Antitrust Division, the Com- 2 mission, or the attorney general of any State 3 may seek, and the court may order, disgorgement 4 of any unjust enrichment that a covered platform 5 operator obtained as a result of the violation that 6 gives rise to the suit. 7 (C) INJUNCTIONS.—The Assistant Attorney 8 General of the Antitrust Division, the Commis- 9 sion, or the attorney general of any State may 10 seek, and the court may order, relief in equity as 11 necessary to prevent, restrain, or prohibit viola- 12 tions of this Act. 13 (D) CONFLICT OF INTEREST.— 14 (i) If the fact finder determines that a 15 violation of this Act arises from a conflict 16 of interest related to the covered platform 17 operator’s ownership or control of multiple 18 lines of business, the court shall consider re- 19 quiring, and may order, divestiture of the 20 line or lines of business that give rise to 21 such conflict. 22 (ii) For purposes of this section, the 23 term ‘‘conflict of interest’’ includes the con- 24 flict of interest that arises when— 25 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 10 •HR 3816 RH (I) a covered platform operator 1 owns or controls a line of business, 2 other than the covered platform; and 3 (II) the covered platform opera- 4 tor’s ownership or control of that line 5 of business creates the incentive and 6 ability for the covered platform oper- 7 ator to— 8 (aa) advantage the covered 9 platform operator’s own products, 10 services, or lines of business on the 11 covered platform over those of a 12 competing business or a business 13 that constitutes nascent or poten- 14 tial competition to the covered 15 platform operator; or 16 (bb) exclude from, or dis- 17 advantage, the products, services, 18 or lines of business on the covered 19 platform of a competing business 20 or a business that constitutes nas- 21 cent or potential competition to 22 the covered platform operator. 23 (3) REPEAT OFFENDERS.—If the fact finder de- 24 termines that a covered platform operator has en- 25 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 11 •HR 3816 RH gaged in a pattern or practice of violating this Act, 1 the court shall consider requiring, and may order, 2 that the Chief Executive Officer, and any other cor- 3 porate officer as appropriate to deter violations of 4 this Act, forfeit to the United States Treasury any 5 compensation received by that person during the 12 6 months preceding or following the filing of a com- 7 plaint for an alleged violation of this Act. 8 (g) DEFINITIONS.—In this section: 9 (1) ANTITRUST LAWS.—The term ‘‘antitrust 10 laws’’ has the meaning given the term in subsection 11 (a) of section 1 of the Clayton Act (15 U.S.C. 12). 12 (2) BUSINESS USER.—The term ‘‘Business User’’ 13 means a person that utilizes or plans to utilize the 14 covered platform for the sale or provision of products 15 or services. 16 (3) COMMISSION.—The term ‘‘Commission’’ 17 means the Federal Trade Commission. 18 (4) COVERED PLATFORM.—The term ‘‘covered 19 platform’’ means an online platform— 20 (A) that has been designated as a ‘‘covered 21 platform’’ under section 2(d); or 22 (B) that— 23 (i) at any point during the 12 months 24 preceding a designation under section 2(d) 25 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 12 •HR 3816 RH or at any point during the 12 months pre- 1 ceding the filing of a complaint for an al- 2 leged violation of this Act— 3 (I) has at least 50,000,000 United 4 States-based monthly active users on 5 the online platform; or 6 (II) has at least 100,000 United 7 States-based monthly active business 8 users on the online platform; 9 (ii) at any point during the 2 years 10 preceding a designation under section 2(d) 11 or at any point during the 2 years pre- 12 ceding the filing of a complaint for an al- 13 leged violation of this Act, is owned or con- 14 trolled by a person with United States net 15 annual sales or a market capitalization 16 greater than $600,000,000,000, adjusted for 17 inflation on the basis of the Consumer Price 18 Index; and 19 (iii) is a critical trading partner for 20 the sale or provision of any product or serv- 21 ice offered on or directly related to the on- 22 line platform. 23 VerDate Sep 11 2014 20:32 Dec 21, 2022 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6203 E:\BILLS\H3816.RH H3816 pbinns on DSKJLVW7X2PROD with $$_JOB 13 •HR 3816 RH (5) CRITICAL TRADING PARTNER.—The term 1 ‘‘critical trading partner’’ means an entity that has 2 the ability to restrict or impede the access of— 3 (A) a business user to its users or cus- 4 tomers; or 5 (B) a business us [Text truncated for display. 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