H.R. 3875 — TERMS Act

This section states the purpose of the Act, which is to ensure consumers, businesses, and organizations receive sufficient information on an online service provider's standards, processes, and policies for unilateral termination, suspension, or cancellation of user accounts or access to products or services, thereby enabling informed choices and promoting competition.

This section defines five terms for purposes of the Act: (1) Commission, meaning the Federal Trade Commission; (2) nonprofit organization, having the meaning given in 35 U.S.C. §201(i); (3) online service provider, meaning a provider of a public-facing website, online service, or application directed to consumers or organizations that requires account creation, offers internet-based products or services, and is engaged in interstate or foreign commerce (including regardless of profit status or whether such offerings are the entity's principal business); (4) restrict, meaning an online service provider's termination, suspension, or limitation of a user's account or profile based on violation of the provider's acceptable use policy; and (5) user, meaning a person who registers an account or creates a profile on the provider's platform.

This section requires an online service provider to publicly disclose, not later than 180 days after enactment of this Act, an acceptable use policy in an easily accessible manner (e.g., within terms of service on its website). The policy must concisely and accurately describe, in clear language, the provider's standards, processes, and policies for restricting a user, including (1) prohibited acts or practices that could lead to restriction; (2) enforcement methods, including any third-party assistance; (3) appeal processes, or a statement if no appeal is permitted; (4) whether off-platform acts or practices (e.g., social media posts or public statements) may serve as a basis for restriction; and (5) standards for notices under section 5. This section further requires advance notice to users for any material change to the policy that affects such information, taking available technology into account.

This section requires an online service provider to provide advance written notice to a user at least 7 days prior to restricting the user for violating the provider's acceptable use policy. The notice must specify the violating act or practice, explain the policy violation, describe any appeal process, and offer the user an option for the provider to publicly disclose the notice on its website (which the provider must do if elected). Exceptions apply for restrictions to comply with a court order or to protect against imminent risk of death, serious physical injury, or serious health risk, in which case the provider must supply the required notice information and publicly disclose it at the time of restriction or as soon as practicable thereafter. The requirements take effect 180 days after enactment.

This section establishes annual reporting requirements for online service providers regarding enforcement of their acceptable use policies. Not later than one year after enactment and annually thereafter, each provider must publish the report on its public website in human-readable and machine-readable formats under an open license. The report must include, for the applicable reporting period: (1) total instances of alerts of potential violations, by source (user complaints, provider employees or contractors, internal automated tools, government entities specifying the office, nonprofits, or others); (2) instances of user restrictions, categorized by type (account/profile terminations or permanent limits, suspensions, access limits, or other actions such as warnings), exact policy provision violated, and alert source; (3) user appeals of decisions; and (4) appeals resulting in reversals.

This section establishes Federal Trade Commission (FTC) enforcement of the Act by (1) treating violations as unfair or deceptive acts or practices under section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(a)(1)(B)); (2) applying the jurisdiction, powers, duties, penalties, privileges, and immunities of the FTC Act (15 U.S.C. 41 et seq.) to online service providers; and (3) extending enforcement to nonprofit organizations notwithstanding sections 4, 5(a)(2), and 6 of the FTC Act (15 U.S.C. 44, 45(a)(2), 46) (which generally limit FTC jurisdiction to for-profit entities). (4) It preserves the FTC's authority under other laws. This section further directs the FTC to issue non-binding guidance within 180 days of enactment to assist online service providers in complying with the Act, including best practices and examples. In enforcement actions under the Act, the guidance (1) does not confer rights or bind the FTC or any person; (2) requires the FTC to allege specific violations of the Act; (3) prohibits basing enforcement or consent orders on inconsistency with the guidance unless the practices also violate the Act; and (4) permits compliance with the guidance as evidence of compliance with the Act.