United States of America: Introduction of American Innovation and Choice Online Act (S.2992) to the U.S. Senate

The American Innovation and Choice Online Act (S.2992) is introduced to the Senate on 18 October 2021. The Act represents the Senate companion of the American Choice and Innovation Online Act (H.R. 3816) introduced to the U.S. House on 11 June 2021. The bill was introduced by Senators Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa), among ten others. The bill is aiming to prohibit dominant platforms from abusing their power and favouring their own products, services, and lines of business over those of other businesses. Besides self-preferencing, the bill would also prohibit the disadvantaging of other businesses as well as the discrimination through terms of service. Furthermore, the relationship between the platforms in question and business users is also regulated. Platforms are thereunder not allowed to restrict business users from accessing the platform, bundle access with other products or use non-public data of the business users, among others. An example being, the obligation for developers to use a specific payment system and pricing structure if they want to offer their applications on the app store. There are, however, narrowly held exculpatory defences possible for the aforementioned behaviours. The platforms covered under this bill would be designated by the Federal Trade Commission or the Department of Justice. As a general rule, designations are valid for 7 years but can be revoked at any point in time. Criteria for the designation include platforms with more than 50 million US-based users, more than 100'000 US-based business users, a market capitalization of more than USD 550 billion or a critical trading partner for any good sold via its platform. Platforms found in violation may be fined up to 15% of their US revenue during the period of time when the violation occurred. Finally, injunctions and increased penalties for repeat offenders are provided.