Algorithmic Fairness Act of 2020

II 116TH CONGRESS 2D SESSION S. 5052 To increase fairness and transparency in algorithmic eligibility determinations. IN THE SENATE OF THE UNITED STATES DECEMBER 17, 2020 Mr. COONS introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To increase fairness and transparency in algorithmic eligibility determinations. 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; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Algorithmic Fairness Act of 2020’’. 5 (b) TABLE OF CONTENTS.—The table of contents of 6 this Act is as follows: 7 Sec. 1. Short title; table of contents. Sec. 2. Definitions. Sec. 3. FTC study and report on ways companies are developing and imple- menting algorithmic eligibility determinations. Sec. 4. Substantive fairness. Sec. 5. Procedural fairness. Sec. 6. Enforcement. Sec. 7. Research grants for the study of fair and transparent data analytics. VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 2 •S 5052 IS Sec. 8. Leadership program. Sec. 9. Avoiding duplication. SEC. 2. DEFINITIONS. 1 In this Act: 2 (1) ALGORITHMIC ELIGIBILITY DETERMINA- 3 TION.—The term ‘‘algorithmic eligibility determina- 4 tion’’ means a determination based in whole or in 5 significant part on an algorithmic process that uti- 6 lizes methods of machine learning, advanced statis- 7 tical techniques, artificial intelligence, or similar 8 techniques to determine the eligibility for, the denial 9 of access to, the receipt of information about, the 10 cost of acquiring, the opportunity to access, or the 11 revocation of important opportunities including, but 12 not limited to, education, employment, credit, health 13 care insurance, and housing. 14 (2) COMMISSION.—The term ‘‘Commission’’ 15 means the Federal Trade Commission. 16 (3) COVERED ENTITY.—The term ‘‘covered en- 17 tity’’ means an entity that— 18 (A) makes an algorithmic eligibility deter- 19 mination; and 20 (B) is— 21 (i) a person over which the Commis- 22 sion has authority pursuant to section 23 5(a)(2) of the Federal Trade Commission 24 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 3 •S 5052 IS Act (15 U.S.C. 45(a)(2)), but including 1 banks, savings and loan institutions, and 2 Federal credit unions that are otherwise 3 excluded under such section; 4 (ii) a common carrier subject to the 5 Communications Act of 1934 (47 U.S.C. 6 151 et seq.), notwithstanding the definition 7 of the term ‘‘Acts to regulate commerce’’ 8 in section 4 of the Federal Trade Commis- 9 sion Act (15 U.S.C. 44) and the exception 10 provided by section 5(a)(2) of the Federal 11 Trade Commission Act (15 U.S.C. 12 45(a)(2)) for such carriers; or 13 (iii) a nonprofit organization, includ- 14 ing any organization described in section 15 501(c) of the Internal Revenue Code of 16 1986 that is exempt from taxation under 17 section 501(a) of such Code, notwith- 18 standing the definition of the term ‘‘Acts 19 to regulate commerce’’ in section 4 of the 20 Federal Trade Commission Act (15 U.S.C. 21 44) and the exception provided by section 22 5(a)(2) of the Federal Trade Commission 23 Act (15 U.S.C. 45(a)(2)) for such organi- 24 zations. 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 4 •S 5052 IS (4) ONLINE ADVERTISEMENT.—The term ‘‘on- 1 line advertisement’’ means an algorithmic eligibility 2 determination that determines whether an individual 3 receives promotional information from a covered en- 4 tity through the use of paid internet or paid digital 5 communication. 6 (5) SEARCH RESULT.—The term ‘‘search re- 7 sult’’ means an algorithmic eligibility determination 8 that determines the information an individual is pre- 9 sented after querying an internet search engine. 10 SEC. 3. FTC STUDY AND REPORT ON WAYS COMPANIES ARE 11 DEVELOPING AND IMPLEMENTING ALGO- 12 RITHMIC ELIGIBILITY DETERMINATIONS. 13 (a) STUDY.—The Commission shall conduct a study 14 on the ways covered entities are developing and imple- 15 menting algorithmic eligibility determinations. Such study 16 shall include an analysis of— 17 (1) the industries that most commonly utilize 18 algorithmic eligibility determinations; 19 (2) the types of algorithmic eligibility deter- 20 minations that covered entities make; 21 (3) the data, data sources, pre-processing strat- 22 egies and other practices, data collection tech- 23 nologies, and methodologies that covered entities use 24 to make such determinations; 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 5 •S 5052 IS (4) the transparency of algorithmic eligibility 1 determinations, including the types of explanations 2 that covered entities disclose to— 3 (A) individuals or entities that are the sub- 4 ject of an algorithmic eligibility determination; 5 (B) regulators; and 6 (C) the general public; 7 (5) whether and how human decision makers 8 are involved in rendering algorithmic eligibility de- 9 terminations; 10 (6) whether covered entities have a mechanism 11 to receive complaints about algorithmic eligibility de- 12 terminations, and the number and nature of such 13 complaints received from individuals regarding such 14 determinations; 15 (7) whether covered entities have accountability 16 procedures in place should an algorithmic eligibility 17 determination be questioned or challenged, a de- 18 scription of such accountability procedures, and 19 what remedial steps covered entities have taken, if 20 any; 21 (8) what information a covered entity could rea- 22 sonably be required to disclose such that an indi- 23 vidual could understand, question, or challenge an 24 algorithmic eligibility determination; 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 6 •S 5052 IS (9) whether covered entities perform algo- 1 rithmic audits to understand whether algorithmic eli- 2 gibility determinations are fair, how covered entities 3 define fairness for this purpose, and whether any 4 such audit techniques and outcomes of audits are 5 available to individuals or groups challenging an al- 6 gorithmic eligibility determination; 7 (10) the extent to which, if any, algorithmic eli- 8 gibility determinations consider factors such as geo- 9 graphic information, income, ethnicity, race, religion, 10 national origin, age, sex, sexual orientation, dis- 11 ability information, pregnancy, marital status, phys- 12 ical or mental health status, criminal history status, 13 or proxies for such factors; 14 (11) the extent to which algorithmic eligibility 15 determinations could result in negative or differen- 16 tial treatment of individuals based on the factors de- 17 scribed in paragraph (10); and 18 (12) the best way to address intellectual prop- 19 erty concerns of covered entities, like trade secret 20 protections, that may arise if the Federal Govern- 21 ment requires companies to share information re- 22 lated to their algorithmic eligibility determination 23 processes. 24 (b) REPORTS.— 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 7 •S 5052 IS (1) INITIAL REPORT.—Not later than 1 year 1 after the date of the enactment of this Act, and once 2 every 3 years thereafter (until a total of 4 reports 3 have been submitted), the Commission shall submit 4 to Congress a report on the study conducted under 5 subsection (a), together with recommendations for 6 such additional legislation and administrative action 7 as the Commission determines appropriate. 8 (2) SPECIAL RULE.—In the final report sub- 9 mitted in accordance with paragraph (1), the Com- 10 mission shall include a recommendation as to wheth- 11 er to continue conducting the study under subsection 12 (a) (and submitting corresponding reports under this 13 subsection). 14 (c) CONSULTATION.—In conducting the study under 15 subsection (a) and preparing the reports under subsection 16 (b), the Commission shall consult with— 17 (1) the National Institute of Standards and 18 Technology; 19 (2) the Department of Homeland Security; 20 (3) the Consumer Financial Protection Bureau; 21 (4) the Department of Housing and Urban De- 22 velopment; 23 (5) the Department of Health and Human 24 Services; 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 8 •S 5052 IS (6) the Department of Veterans Affairs; 1 (7) the Department of Education; 2 (8) the Federal Communications Commission; 3 (9) the Equal Employment Opportunity Com- 4 mission; and 5 (10) the Civil Rights Division of the Depart- 6 ment of Justice. 7 SEC. 4. SUBSTANTIVE FAIRNESS. 8 (a) IN GENERAL.—A covered entity shall not act on 9 an unfair algorithmic eligibility determination in or affect- 10 ing commerce. 11 (b) CONSIDERATIONS.—In determining whether a 12 particular algorithmic eligibility determination is unfair, 13 the Commission— 14 (1) shall consider the factors specified in sec- 15 tion 5(n) of the Federal Trade Commission Act (15 16 U.S.C. 45(n)); and 17 (2) may consider— 18 (A) established public policies; 19 (B) emotional distress, bias on the basis of 20 protected class status, and other noneconomic 21 injuries, and may conclude that these injuries 22 contribute to substantial injury to consumers 23 for the purposes of section 5(n) of the Federal 24 Trade Commission Act (15 U.S.C. 45(n)); and 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 9 •S 5052 IS (C) any code of conduct developed by in- 1 dustry sectors, civil rights groups, consumer 2 protection groups, or academics, as long as the 3 Commission has first published such code of 4 conduct in the Federal Register and provided 5 for a period of public comment in accordance 6 with section 553 of title 5, United States Code. 7 SEC. 5. PROCEDURAL FAIRNESS. 8 (a) IN GENERAL.—Beginning 1 year after the date 9 of the enactment of this Act, each covered entity shall, 10 for each algorithmic eligibility determination— 11 (1) retain for at least 5 years an audit trail 12 that records— 13 (A) the data used by the algorithm, as it 14 existed at the time the algorithm was deployed 15 and rendered the algorithmic eligibility deter- 16 mination; 17 (B) the source of pre-processing tech- 18 niques, or any other technique used to produce 19 any such data described in subparagraph (A); 20 (C) the methodology used by the entity to 21 develop the algorithm; 22 (D) the version of the design of the algo- 23 rithm utilized to make the determination; 24 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 10 •S 5052 IS (E) any data or sets of data used to train 1 the algorithm; 2 (F) any testing for model performance for 3 discriminatory effects across different sub- 4 groups and the results of such testing; 5 (G) the methodology used to render the de- 6 termination; and 7 (H) the ultimate determination rendered; 8 (2) notify the individual that they have been the 9 subject of an algorithmic eligibility determination; 10 and 11 (3) upon request, provide the individual with 12 the opportunity to— 13 (A) access the data pertaining to that indi- 14 vidual that the covered entity employed to make 15 the determination, in a human-readable format 16 that a reasonable individual can understand; 17 (B) submit corrections to the data per- 18 taining to that individual that the covered enti- 19 ty used in the algorithmic eligibility determina- 20 tion; and 21 (C) request that the covered entity conduct 22 a reevaluation of the relevant algorithmic eligi- 23 bility determination based on the corrected 24 data. 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 11 •S 5052 IS (b) REVIEW.—Upon the request of the Commission, 1 a covered entity shall make available to the Commission 2 the full audit trail described in subsection (a)(1). The 3 Commission shall establish a secure and confidential proc- 4 ess for reviewing the materials created and retained under 5 such subsection. 6 (c) REQUEST TO THE COMMISSION.—An individual 7 who has been the subject of an algorithmic eligibility de- 8 termination may request that the Commission conduct a 9 review (and the Commission may conduct such a review) 10 of— 11 (1) the algorithmic eligibility determination to 12 determine if it was unfair (determined pursuant to 13 section (4)); and 14 (2) a covered entity’s reevaluation of an algo- 15 rithmic eligibility determination where an individual 16 has submitted corrected data. 17 (d) RULE OF CONSTRUCTION.—Nothing in this sec- 18 tion shall be construed to require a covered entity to pro- 19 vide an individual with the algorithm or model used to 20 make the eligibility determination, or otherwise divulge le- 21 gally protected trade secrets. 22 (e) SCOPE.—Notwithstanding any of the preceding 23 provisions of this section, subsection (a)(2) shall not apply 24 to— 25 VerDate Sep 11 2014 03:58 Jan 09, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S5052.IS S5052 kjohnson on DSK79L0C42PROD with BILLS 12 •S 5052 IS (1) online advertisements; 1 (2) search results; or 2 (3) any other use case for which the Commis- 3 sion determines, by rulemaking in accordance with 4 section 553 of title 5, United States Code, that the 5 requirements of subsection (a)(2) would impose an 6 undue burden on or prove to be infeasible for that 7 general class of use case. 8 SEC. 6. ENFORCEMENT. 9 (a) ENFORCEMENT BY THE FEDERAL TRADE COM- 10 MISSION.— 11 (1) UNFAIR ACT OR PRACTICE.—Any covered 12 entity that violates section 4 or section 5 shall be 13 deemed to have committed an unfair act or practice 14 under section 5(a)(1) of the Federal Trade Commis- 15 sion Act (15 U.S.C. 45(a)(1)). 16 (2) POWERS OF THE COMMISSION.— 17 (A) IN GENERAL.—The Commission shall 18 enforce sections 4 and 5 in the same manner, 19 by the same means, and with the same jurisdic- 20 tion, pow [Text truncated for display. Full text available on Congress.gov.]