S. 2010 — TERMS Act

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

This section defines terms used in the Act as follows: (1) "Commission" as the Federal Trade Commission; (2) "nonprofit organization" as having the meaning given the term in section 201(i) of title 35, United States Code; (3) "online service provider" as the provider of a public-facing website, online service, or online application directed to a consumer or organization that requires account creation, provides an internet-based product or service, and is engaged in interstate or foreign commerce (including any such entity regardless of whether such offerings are its sole business or profitable); (4) "restrict," with respect to a user, as an online service provider's termination or suspension of the user's account or profile, or limitation of the user's access thereto, based on a determination that the user violated the provider's acceptable use policy; and (5) "user" as a person who registers an account or creates a profile on the online service provider's website, online service, or online application.

This section requires each online service provider, not later than 180 days after enactment, to publicly disclose in an easily accessible manner (e.g., within terms of service on its website) an acceptable use policy that concisely and accurately describes, in clear language, its standards, processes, and policies for restricting a user. The policy must include (1) prohibited acts or practices that could lead to restriction; (2) enforcement methods, including any third-party assistance; (3) appeal procedures, if any, or a statement that restrictions are not appealable; (4) whether off-platform acts or practices (e.g., social media posts or public statements) may justify 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 these elements, 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, including specifics on the violation, an explanation of the policy breach, any appeal process, and an option for the user to elect public disclosure of the notice on the provider's website. A good faith effort to notify suffices, such as via the user's last provided contact information or a prominent notice upon next account access. Exceptions apply without advance notice for compliance with a court order or federal law, or to address imminent risk of death, serious physical injury, or serious health risk, provided the required notice information is given at restriction or soon after and publicly disclosed if elected. This section takes effect 180 days after enactment.

This section requires each online service provider to publish an annual report, beginning one year after enactment of this Act, detailing actions taken to enforce its acceptable use policy. The report, issued under an open license in both human-readable and machine-readable formats on a prominent location of the provider's public website, must include (1) the total number of alerts of potential violations, categorized by source (i.e., user complaints, employees or contractors, internal automated tools, government entities specifying the office, nonprofits, or others); (2) the number of user restrictions imposed, categorized by the specific acceptable use policy provision violated and alert source, and broken out by type (i.e., account terminations or permanent limits, suspensions, access limits, or other actions such as warnings); (3) the number of user appeals; and (4) the number of appeals resulting in reversal of the provider's decision.

This section establishes Federal Trade Commission (FTC) enforcement of the Act by 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)) and directing the FTC to enforce it with the same jurisdiction, powers, and duties as under the FTC Act (15 U.S.C. 41 et seq.). (As background, the FTC Act generally excludes nonprofit organizations from the definition of "corporation" subject to FTC jurisdiction [15 U.S.C. 44].) It subjects online service providers to FTC Act penalties, privileges, and immunities; extends enforcement to nonprofit organizations notwithstanding FTC Act jurisdictional limits in sections 4, 5(a)(2), and 6 (15 U.S.C. 44, 45(a)(2), 46); and preserves the FTC's other statutory authorities. This section further directs the FTC to issue non-binding compliance guidance, including best practices and examples, within 180 days of enactment; prohibits basing enforcement actions solely on inconsistency with such guidance; and permits compliance with the guidance as evidence of Act compliance.