H.R. 2889 — Online Consumer Protection Act

This section requires social media platforms and online marketplaces to establish, maintain, and publicly disclose at all times in plain, concise language and machine-readable format terms of service covering terms of use (e.g., payment methods, content ownership and sharing, disclaimers), platform and user policies, and a consumer protection policy. For social media platforms, the consumer protection policy must describe permitted and prohibited content and user behavior; grounds and processes for blocking, removing, or modifying content or terminating user service (including user requests, notifications, appeals, and outcomes); and tools for cyber harassment victims. For online marketplaces, the policy must describe permitted products, descriptions, and marketing; grounds and processes for blocking, removing, or modifying them or terminating user service; recall and danger notifications; user reporting of fraud, deception, or violations (with notifications, appeals, and remedies such as refunds); and seller notifications, contests, appeals, and remedies. This section directs the Federal Trade Commission (FTC) to complete within 180 days of enactment a study on effective short-form statements or graphic icons communicating these practices, to report results to specified congressional committees and publicly online, and to finalize regulations within one year requiring their use (plus any other information the FTC deems appropriate).

This section requires each social media platform and online marketplace to establish and implement a consumer protection program with policies, practices, and procedures for consumer protection and content moderation. The program must (1) ensure compliance with applicable federal, state, and local consumer protection laws and the terms of service required by section 2; (2) develop, implement, and enforce content and user behavior policies; (3) mitigate risks to consumer safety, well-being, and reasonable expectations, including cyber harassment; (4) include reasonable safeguards, employee training, and other Federal Trade Commission (FTC) requirements; and (5) consider the entity's size, user activities, and implementation costs. As part of the program, each entity must also (1) establish processes to monitor, manage, enforce the program, and demonstrate compliance with consumer protection laws; (2) assess and mitigate risks from amplification of noncompliant content or products; (3) periodically review and update the program; (4) appoint a consumer protection officer reporting directly to the chief executive officer; and (5) implement controls to monitor and mitigate risks from hosting content or products. This section further requires social media platforms and online marketplaces with annual revenue exceeding $250,000 or more than 10,000 average monthly active users in the prior year to submit annual filings to the FTC detailing compliance with section 2 and this section, the consumer protection officer's contact information, and material changes to the program or terms of service. The entity's principal executive officer and consumer protection officer must certify the filing's accuracy and completeness, including the officer's responsibility for safeguards and controls; the FTC must make filings publicly available online, withholding information only if necessary and explaining any withholdings.

This section establishes enforcement mechanisms for violations of the Act. Specifically, it (1) treats such violations as a violation of an FTC rule under section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(a)(1)(B))—which authorizes FTC substantive rules defining unfair or deceptive acts or practices—and grants the FTC all enforcement powers, jurisdiction, penalties, privileges, and immunities under the FTC Act (15 U.S.C. 41 et seq.); (2) directs the FTC to promulgate implementing regulations under APA notice-and-comment procedures (5 U.S.C. §553); (3) creates a private right of action for individuals in state or federal court to recover actual damages, reasonable attorney's fees and costs, and equitable or declaratory relief, while invalidating pre-dispute arbitration agreements and joint-action waivers for disputes under the Act (with courts, not arbitrators, determining applicability); and (4) authorizes state attorneys general to bring civil actions for injunctive relief, compliance, civil penalties, and damages or restitution on behalf of state residents (with prior notice to the FTC except where infeasible, FTC rights to intervene and appeal, a bar on state actions during pending FTC suits against the same defendant for the same violations, and allowance for concurrent state-law claims).

This section specifies the relationship of this Act to other laws by (1) providing that Section 230 of the Communications Act of 1934 (47 U.S.C. 230)—which immunizes providers and users of interactive computer services from civil liability for third-party content and good faith blocking of offensive material—does not apply to violations of this Act; (2) stating that this Act and its regulations do not preempt or affect any state or local law; and (3) including a standard severability provision to preserve the remainder of the Act if any part is invalidated.

This section amends Section 230(e) of the Communications Act of 1934 by adding a new paragraph providing that nothing in Section 230 impairs the Federal Trade Commission's enforcement of any law it enforces. The amendment applies to any action or proceeding commenced on or after the date of enactment.

This section defines terms used in the Act, including (1) “Commission” as the Federal Trade Commission; (2) “consumer product” as defined in section 3(a) of the Consumer Product Safety Act (15 U.S.C. 2052(a)) (i.e., any article, or component part thereof, produced or distributed for sale to a consumer for personal use, consumption, or enjoyment, excluding certain items such as tobacco products, motor vehicles, pesticides, and firearms); (3) “cyber harassment” as electronic communication that harasses, torments, threatens, or terrorizes a target; (4) “online marketplace” as a website or web application that facilitates third-party sales of consumer products in the U.S.; (5) “seller” as a person or entity that sells, offers to sell, or contracts to sell a consumer product through an online marketplace; (6) “social media platform” as a website or mobile application permitting users to create, share, and interact with user-generated content and delivering ads; and (7) “user” as any person or entity using a social media platform or online marketplace.