[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2710 Reported in Senate (RS)]
<DOC>
Calendar No. 275
117th CONGRESS
2d Session
S. 2710
To promote competition and reduce gatekeeper power in the app economy,
increase choice, improve quality, and reduce costs for consumers.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 11 (legislative day, August 10), 2021
Mr. Blumenthal (for himself, Mrs. Blackburn, Ms. Klobuchar, Mr. Rubio,
Ms. Lummis, Mr. Booker, Mr. Graham, Mr. Kennedy, Ms. Hirono, Mr.
Hawley, and Mr. Durbin) introduced the following bill; which was read
twice and referred to the Committee on the Judiciary
February 17, 2022
Reported by Mr. Durbin, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To promote competition and reduce gatekeeper power in the app economy,
increase choice, improve quality, and reduce costs for consumers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Open App Markets
Act''.</DELETED>
<DELETED>SEC. 2. DEFINITIONS.</DELETED>
<DELETED> In this Act:</DELETED>
<DELETED> (1) App.--The term ``App'' means a software
application or electronic service that may be run or directed
by a user on a computer, a mobile device, or any other general
purpose computing device.</DELETED>
<DELETED> (2) App store.--The term ``App Store'' means a
publicly available website, software application, or other
electronic service that distributes Apps from third-party
developers to users of a computer, a mobile device, or any
other general purpose computing device.</DELETED>
<DELETED> (3) Covered company.--The term ``Covered Company''
means any person that owns or controls an App Store for which
users in the United States exceed 50,000,000.</DELETED>
<DELETED> (4) Developer.--The term ``developer'' means a
person that owns or controls an App or an App Store.</DELETED>
<DELETED> (5) In-app payment system.--The term ``In-App
Payment System'' means an application, service, or user
interface to process the payments from users of an
App.</DELETED>
<DELETED> (6) Non-public business information.--The term
``non-public business information'' means non-public data that
is--</DELETED>
<DELETED> (A) derived from a developer or an App or
App Store owned or controlled by a developer, including
interactions between users and the App or App Store of
the developer; and</DELETED>
<DELETED> (B) collected by a Covered Company in the
course of operating an App Store or providing an
operating system.</DELETED>
<DELETED>SEC. 3. PROTECTING A COMPETITIVE APP MARKET.</DELETED>
<DELETED> (a) Exclusivity and Tying.--A Covered Company shall not--
</DELETED>
<DELETED> (1) require developers to use an In-App Payment
System owned or controlled by the Covered Company or any of its
business partners as a condition of being distributed on an App
Store or accessible on an operating system;</DELETED>
<DELETED> (2) require as a term of distribution on an App
Store that pricing terms or conditions of sale be equal to or
more favorable on its App Store than the terms or conditions
under another App Store; or</DELETED>
<DELETED> (3) take punitive action or otherwise impose less
favorable terms and conditions against a developer for using or
offering different pricing terms or conditions of sale through
another In-App Payment System or on another App
Store.</DELETED>
<DELETED> (b) Interference With Legitimate Business
Communications.--A Covered Company shall not impose restrictions on
communications of developers with the users of the App through an App
or direct outreach to a user concerning legitimate business offers,
such as pricing terms and product or service offerings.</DELETED>
<DELETED> (c) Non-Public Business Information.--A Covered Company
shall not use non-public business information derived from a third-
party App for the purpose of competing with that App.</DELETED>
<DELETED> (d) Interoperability.--A Covered Company that controls the
operating system or operating system configuration on which its App
Store operates shall allow and provide the readily accessible means for
users of that operating system to--</DELETED>
<DELETED> (1) choose third-party Apps or App Stores as
defaults for categories appropriate to the App or App
Store;</DELETED>
<DELETED> (2) install third-party Apps or App Stores through
means other than its App Store; and</DELETED>
<DELETED> (3) hide or delete Apps or App Stores provided or
preinstalled by the App Store owner or any of its business
partners.</DELETED>
<DELETED> (e) Self-Preferencing in Search.--</DELETED>
<DELETED> (1) In general.--A Covered Company shall not
provide unequal treatment of Apps in an App Store through
unreasonably preferencing or ranking the Apps of the Covered
Company or any of its business partners over those of other
Apps.</DELETED>
<DELETED> (2) Considerations.--Unreasonably preferencing--
</DELETED>
<DELETED> (A) includes applying ranking schemes or
algorithms that prioritize Apps based on a criterion of
ownership interest by the Covered Company or its
business partners; and</DELETED>
<DELETED> (B) does not include clearly disclosed
advertising.</DELETED>
<DELETED> (f) Open App Development.--Access to operating system
interfaces, development information, and hardware and software features
shall be provided to developers on a timely basis and on terms that are
equivalent or functionally-equivalent to the terms for access by
similar Apps or functions provided by the Covered Company or to its
business partners.</DELETED>
<DELETED>SEC. 4. PROTECTING THE SECURITY AND PRIVACY OF
USERS.</DELETED>
<DELETED> (a) In General.--Subject to section (b), a Covered Company
shall not be in violation of a subsection of section 3 for an action
that is--</DELETED>
<DELETED> (1) necessary to achieve user privacy, security,
or digital safety;</DELETED>
<DELETED> (2) taken to prevent spam or fraud; or</DELETED>
<DELETED> (3) taken to prevent a violation of, or comply
with, Federal or State law.</DELETED>
<DELETED> (b) Requirements.--Section (a) shall only apply if the
Covered Company establishes by clear and convincing evidence that the
action described is--</DELETED>
<DELETED> (1) applied on a demonstrably consistent basis to
Apps of the Covered Company or its business partners and to
other Apps;</DELETED>
<DELETED> (2) not used as a pretext to exclude, or impose
unnecessary or discriminatory terms on, third-party Apps, In-
App Payment Systems, or App Stores; and</DELETED>
<DELETED> (3) narrowly tailored and could not be achieved
through a less discriminatory and technically possible
means.</DELETED>
<DELETED>SEC. 5. ENFORCEMENT.</DELETED>
<DELETED> (a) Enforcement.--</DELETED>
<DELETED> (1) In general.--The Federal Trade Commission, the
Attorney General, and any attorney general of a State subject
to the requirements in paragraph (4) 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
and provisions of the Federal Trade Commission Act (15 U.S.C.
41 et seq.) or the Clayton Act (15 U.S.C. 12 et seq.), as
appropriate, were incorporated into and made a part of this
Act.</DELETED>
<DELETED> (2) Unfair methods of competition.--A violation of
this Act shall also constitute an unfair method of competition
under section 5 of the Federal Trade Commission Act (15 U.S.C.
5).</DELETED>
<DELETED> (3) Federal trade commission independent
litigation authority.--If the Federal Trade Commission has
reason to believe that a Covered Company violated this Act, the
Federal Trade 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 against the
covered platform operator.</DELETED>
<DELETED> (4) Parens patriae.--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, and may
secure any form of relief provided for in this
section.</DELETED>
<DELETED> (b) Suits by Developers Injured.--</DELETED>
<DELETED> (1) In general.--Any developer who shall be
injured by reason of anything forbidden in this Act may sue
therefor in any district court of the United States in the
district in which the defendant resides or is found or has an
agent, without respect to the amount in controversy, and shall
recover threefold the damages by him sustained, and the cost of
suit, including a reasonable attorney's fee. The court may
award under this subsection, pursuant to a motion by such
developer promptly made, simple interest on actual damages for
the period beginning on the date of service of such developer's
pleading setting forth a claim under this Act and ending on the
date of judgment, or for any shorter period therein, if the
court finds that the award of such interest for such period is
just in the circumstances. In determining whether an award of
interest under this subsection for any period is just in the
circumstances, the court shall consider only--</DELETED>
<DELETED> (A) whether such developer or the opposing
party, or either party's representative, made motions
or asserted claims or defenses so lacking in merit as
to show that such party or representative acted
intentionally for delay, or otherwise acted in bad
faith;</DELETED>
<DELETED> (B) whether, in the course of the action
involved, such developer or the opposing party, or
either party's representative, violated any applicable
rule, statute, or court order providing for sanctions
for dilatory behavior or otherwise providing for
expeditious proceedings; and</DELETED>
<DELETED> (C) whether such developer or the opposing
party, or either party's representative, engaged in
conduct primarily for the purpose of delaying the
litigation or increasing the cost thereof.</DELETED>
<DELETED> (2) Injunctive relief.--Any developer shall be
entitled to sue for and have injunctive relief, in any court of
the United States having jurisdiction over the parties, against
threatened loss or damage by a violation of this Act, when and
under the same conditions and principles as injunctive relief
against threatened conduct that will cause loss or damage is
granted by courts of equity, under the rules governing such
proceedings, and upon the execution of proper bond against
damages for an injunction improvidently granted and a showing
that the danger of irreparable loss or damage is immediate, a
preliminary injunction may issue. In any action under this
paragraph in which the plaintiff substantially prevails, the
court shall award the cost of suit, including a reasonable
attorney's fee, to such plaintiff.</DELETED>
<DELETED>SEC. 6. RULE OF CONSTRUCTION.</DELETED>
<DELETED> Nothing in this Act shall be construed to limit any
authority of the Attorney General or the Federal Trade Commission under
the antitrust laws (as defined in the first section of the Clayton Act
(15 U.S.C. 12)), the Federal Trade Commission Act (15 U.S.C. 41 et
seq.), or any other provision of law or to limit the application of any
law.</DELETED>
<DELETED>SEC. 7. SEVERABILITY.</DELETED>
<DELETED> If any provision of this Act, or the application of such a
provision to any person or circumstance, is held to be
unconstitutional, the remaining provisions of this Act, and the
application of the provision held to be unconstitutional to any other
person or circumstance, shall not be affected thereby.</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Open App Markets Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) App.--The term ``app'' means a software application or
electronic service that may be run or directed by a user on a
computer, a mobile device, or any other general purpose
computing device.
(2) App store.--The term ``app store'' means a publicly
available website, software application, or other electronic
service that distributes apps from third-party developers to
users of a computer, a mobile device, or any other general
purpose computing device.
(3) Covered company.--The term ``covered company'' means
any person that owns or controls an app store for which users
in the United States exceed 50,000,000.
(4) Developer.--The term ``developer'' means a person that
owns or controls an app or an app store.
(5) In-app payment system.--The term ``in-app payment
system'' means an application, service, or user interface to
manage billing or process the payments from users of an app.
(6) Nonpublic business information.--The term ``nonpublic
business information'' means nonpublic data that is--
(A) derived from a developer or an app or app store
owned or controlled by a developer, including
interactions between users and the app or app store of
the developer; and
(B) collected by a covered company in the course of
operating an app store or providing an operating
system.
SEC. 3. PROTECTING A COMPETITIVE APP MARKET.
(a) Exclusivity and Tying.--A covered company shall not--
(1) require developers to use or enable an in-app payment
system owned or controlled by the covered company or any of its
business partners as a condition of the distribution of an app
on an app store or accessible on an operating system;
(2) require as a term of distribution on an app store that
pricing terms or conditions of sale be equal to or more
favorable on its app store than the terms or conditions under
another app store; or
(3) take punitive action or otherwise impose less favorable
terms and conditions against a developer for using or offering
different pricing terms or conditions of sale through another
in-app payment system or on another app store.
(b) Interference With Legitimate Business Communications.--A
covered company shall not impose restrictions on communications of
developers with the users of an app of the developer through the app or
direct outreach to a user concerning legitimate business offers, such
as pricing terms and product or service offerings. Nothing in this
subsection shall prohibit a covered company from providing a user the
option to offer consent prior to the collection and sharing of the data
of the user by an app.
(c) Nonpublic Business Information.--A covered company shall not
use nonpublic business information derived from a third-party app for
the purpose of competing with that app.
(d) Interoperability.--A covered company that controls the
operating system or operating system configuration on which its app
store operates shall allow and provide readily accessible means for
users of that operating system to--
(1) choose third-party apps or app stores as defaults for
categories appropriate to the app or app store;
(2) install third-party apps or app stores through means
other than its app store; and
(3) hide or delete apps or app stores provided or
preinstalled by the app store owner or any of its business
partners.
(e) Self-preferencing in Search.--
(1) In general.--A covered company shall not provide
unequal treatment of apps in an app store through unreasonably
preferencing or ranking the apps of the covered company or any
of its business partners over those of other apps in organic
search results.
(2) Considerations.--Unreasonably preferencing--
(A) includes applying ranking schemes or algorithms
that prioritize apps based on a criterion of ownership
interest by the covered company or its business
partners; and
(B) does not include clearly disclosed advertising.
(f) Open App Development.--A covered company shall provide access
to operating system interfaces, development information, and hardware
and software features to developers on a timely basis and on terms that
are equivalent or functionally equivalent to the terms for access by
similar apps or functions provided by the covered company or to its
business partners.
SEC. 4. PROTECTING THE SECURITY AND PRIVACY OF USERS.
(a) In General.--
(1) No violation.--Subject to section (b), a covered
company shall not be in violation of section 3 for an action
that is--
(A) necessary to achieve user privacy, security, or
digital safety;
(B) taken to prevent spam or fraud;
(C) necessary to prevent unlawful infringement of
preexisting intellectual property; or
(D) taken to prevent a violation of, or comply
with, Federal or State law.
(2) Privacy and security protections.--In paragraph (1),
the term ``necessary to achieve user privacy, security, or
digital safety'' includes--
(A) allowing an end user to opt in, and providing
information regarding the reasonable risks, prior to
enabling installation of the third-party apps or app
stores;
(B) removing malicious or fraudulent apps or app
stores from an end user device;
(C) providing an end user with the technical means
to verify the authenticity and origin of third-party
apps or app stores; and
(D) providing an end user with option to limit the
collection sharing of the data of the user with third-
party apps or app stores.
(b) Requirements.--Subsection (a) shall only apply if the covered
company establishes by a preponderance of the evidence that the action
described in that subsection is--
(1) applied on a demonstrably consistent basis to--
(A) apps of the covered company or its business
partners; and
(B) other apps;
(2) not used as a pretext to exclude, or impose unnecessary
or discriminatory terms on, third-party apps, in-app payment
systems, or app stores; and
(3) narrowly tailored and could not be achieved through a
less discriminatory and technically possible means.
SEC. 5. ENFORCEMENT.
(a) Enforcement.--
(1) In general.--The Federal Trade Commission, the Attorney
General, and any attorney general of a State subject to the
requirements in paragraph (3) 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 and
provisions of the Federal Trade Commission Act (15 U.S.C. 41 et
seq.), the Sherman Act (15 U.S.C. 1 et seq.), the Clayton Act
(15 U.S.C. 12 et seq.), and Antitrust Civil Process Act (15
U.S.C. 1311 et seq.), as appropriate, were incorporated into
and made a part of this Act.
(2) Federal trade commission independent litigation
authority.--If the Federal Trade Commission has reason to
believe that a covered company violated this Act, the Federal
Trade 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 against the covered
company.
(3) Parens patriae.--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, and may secure any
form of relief provided for in this section.
(b) Suits by Developers Injured.--
(1) In general.--Except as provided in paragraph (3), any
developer injured by reason of anything forbidden in this Act
may sue therefor in any district court of the United States in
the district in which the defendant resides or is found or has
an agent, without respect to the amount in controversy, and
shall recover threefold the damages by the developer sustained
and the cost of suit, including a reasonable attorney's fee.
The court may award under this paragraph, pursuant to a motion
by such developer promptly made, simple interest on actual
damages for the period beginning on the date of service of the
pleading of the developer setting forth a claim under this Act
and ending on the date of judgment, or for any shorter period
therein, if the court finds that the award of such interest for
such period is just in the circumstances. In determining
whether an award of interest under this paragraph for any
period is just in the circumstances, the court shall consider
only--
(A) whether the developer or the opposing party, or
either party's representative, made motions or asserted
claims or defenses so lacking in merit as to show that
such party or representative acted intentionally for
delay or otherwise acted in bad faith;
(B) whether, in the course of the action involved,
the developer or the opposing party, or either party's
representative, violated any applicable rule, statute,
or court order providing for sanctions for dilatory
behavior or otherwise providing for expeditious
proceedings; and
(C) whether the developer or the opposing party, or
either party's representative, engaged in conduct
primarily for the purpose of delaying the litigation or
increasing the cost thereof.
(2) Injunctive relief.--Except as provided in paragraph
(3), any developer shall be entitled to sue for and have
injunctive relief, in any court of the United States having
jurisdiction over the parties, against threatened loss or
damage by a violation of this Act, when and under the same
conditions and principles as injunctive relief against
threatened conduct that will cause loss or damage is granted by
courts of equity, under the rules governing such proceedings,
and upon the execution of proper bond against damages for an
injunction improvidently granted and a showing that the danger
of irreparable loss or damage is immediate, a preliminary
injunction may issue. In any action under this paragraph in
which the plaintiff substantially prevails, the court shall
award the cost of suit, including a reasonable attorney's fee,
to such plaintiff.
(3) Foreign state-owned enterprises.--A developer of an app
that is owned by, or under the control of, a foreign state may
not bring an action under this subsection.
SEC. 6. REPORTING.
Not later than 3 years after the date of enactment of this Act, the
Federal Trade Commission, the Comptroller General of the United States,
and the Antitrust Division of the Department of Justice shall each
separately review and provide an in-depth analysis of the impact of
this Act on competition, innovation, barriers to entry, and
concentrations of market power or market share after the date of
enactment of this Act.
SEC. 7. RULE OF CONSTRUCTION.
Nothing in this Act may be construed--
(1) to limit--
(A) any authority of the Attorney General or the
Federal Trade Commission under the antitrust laws (as
defined in the first section of the Clayton Act (15
U.S.C. 12), the Federal Trade Commission Act (15 U.S.C.
41 et seq.), or any other provision of law; or
(B) the application of any law;
(2) to require--
(A) a covered company to provide service under a
hardware or software warranty for damage caused by
third-party apps or app stores installed through means
other than the app store of the covered company; or
(B) customer service for the installation or
operation of third-party apps or app stores described
in subparagraph (A);
(3) to prevent an action taken by a covered company 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 sections 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;
(4) to require a covered company to license any
intellectual property, including any trade secrets, owned by or
licensed to the covered company;
(5) to prevent a covered company from asserting preexisting
rights of the covered company under intellectual property law
to prevent the unlawful use of any intellectual property owned
by or duly licensed to the covered company; or
(6) to require a covered company to interoperate or share
data with persons or business users that--
(A) 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
(B) have been identified by the Federal Government
as national security, intelligence, or law enforcement
risks.
SEC. 8. SEVERABILITY.
If any provision of this Act, or the application of such a
provision to any person or circumstance, is held to be
unconstitutional, the remaining provisions of this Act, and the
application of such provisions to any person or circumstance shall not
be affected thereby.
SEC. 9. EFFECTIVE DATE.
This Act shall take effect on the date that is 180 days after the
date of enactment of this Act.
Calendar No. 275
117th CONGRESS
2d Session
S. 2710
_______________________________________________________________________
A BILL
To promote competition and reduce gatekeeper power in the app economy,
increase choice, improve quality, and reduce costs for consumers.
_______________________________________________________________________
February 17, 2022
Reported with an amendment