American Innovation and Choice Online Act

This bill makes certain discriminatory conduct by large online platforms unlawful. It defines a 'covered platform' as a very large online platform designated by the Federal Trade Commission and the Department of Justice, and prohibits operators of such platforms from favoring their own products, limiting competitors, discriminating among business users, restricting access to data, and other anticompetitive practices, with certain affirmative defenses. Enforcement is by the FTC, DOJ, and state attorneys general, with civil penalties up to 10% of U.S. revenue and possible forfeiture of executive compensation for repeat offenders.

Sec. 2, Definitions: Defines key terms including 'business user' (a person using the platform for commerce, excluding national security risks and entities tied to China or foreign adversaries), 'covered platform' (an online platform with at least 50 million U.S. monthly active users or 100,000 U.S. business users, owned by a person with over $550 billion in U.S. sales or market cap, or 1 billion worldwide users, and that is a critical trading partner), 'critical trading partner' (a person able to restrict a business user's access to its customers or necessary tools), 'data' (information linked to a specific user or customer), and 'control' (holding 25% or more of stock, profits, assets, or director/trustee power). The FTC, with DOJ concurrence, must issue regulations defining 'data' within 180 days.

Sec. 3, Unlawful conduct: Makes it unlawful for a covered platform operator to (1) preference its own products over those of other business users in a way that materially harms competition; (2) limit competitors' ability to compete; (3) discriminate in applying terms of service; (4) restrict business users' access to platform features, except for cybersecurity; (5) condition access on buying other products; (6) use nonpublic data from business users to compete with them; (7) restrict business users from accessing their own data; (8) prevent users from uninstalling preinstalled apps or changing default settings, unless for security or to prevent data transfer to China or a foreign adversary; (9) treat its own products more favorably in search or ranking; or (10) retaliate against users who report violations. Affirmative defenses include that the conduct was necessary to comply with law, protect safety or privacy, or maintain core functionality, or that it did not materially harm competition. Enforcement is by the FTC, DOJ, or state attorneys general in federal court, with a preponderance of the evidence standard. Remedies include civil penalties up to 10% of U.S. revenue, injunctions (including temporary injunctions up to 120 days), and forfeiture of executive compensation for repeat offenders. Statute of limitations is 6 years. The section does not require disclosure of intellectual property, prevent asserting IP rights, require data sharing with sanctioned entities, or impose liability for offering end-to-end encryption or fee-for-service subscriptions. Copyright and trademark enforcement actions are not unlawful. The FTC and DOJ may jointly designate an online platform as a covered platform for 7-year periods, with a process for removal if criteria are no longer met, and judicial review in the D.C. Circuit.

Sec. 4, Enforcement guidelines: Within 270 days, the FTC and DOJ, consulting other agencies and state attorneys general, must issue joint guidelines on policies for conduct that materially harms competition, affirmative defenses, and civil penalty amounts, updated at least every 4 years, with public notice and comment. The guidelines do not confer rights or bind anyone.

Sec. 5, Rule of construction: Does not limit any authority of the DOJ or FTC under antitrust laws or other law.

Sec. 6, Severability: If any provision is held unconstitutional, the rest of the Act remains in effect.

Sec. 7, Effective date: The Act takes effect on enactment, except that the unlawful conduct provisions (Sec. 3(a)) take effect 1 year after enactment.