Big Tech’s Terms of Service Scrutinized Under Democrat’s Plan

  • Schakowsky’s draft bill aims to improve online consumer protection
  • Would enable consumer lawsuits, FTC enforcement for violations

Draft legislation from a key House Democrat would hold technology companies such as Facebook and Alphabet Inc.’s Google accountable for violations of their own terms of service in an effort to better protect consumers online.

A discussion draft from Rep. Jan Schakowsky (D-Ill.), the chairwoman of the House Energy and Commerce Consumer Protection and Commerce Subcommittee, seeks to make violations of tech companies’ online terms of service enforceable by the Federal Trade Commission and allow consumers to file lawsuits, according to text provided to Bloomberg Government by the lawmaker’s staff.

The draft bill comes as the Trump administration and Congress mount pressure on the tech companies over content moderation on their platforms. Republicans claim the companies censor conservative content and Democrats complain about hate speech and terrorism content remaining on the platforms.

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Schakowsky’s proposal would require social media companies and online marketplaces to each create a consumer protection policy that defines whether content can be blocked, removed, and modified on the platform. The policy would also need to describe how a user will be notified if the content is being removed and how to appeal a removal.

The goal of the measure is “making sure social media platforms and online marketplaces have some responsibility,” Schakowsky said in a phone interview.

The bill would clarify the FTC has authority to enforce terms of services agreements under the “unfair and deceptive acts or practices provision” of the FTC Act, she said. The measure would allow consumers to bring a civil lawsuit for damages if the terms of service are violated by a tech company. Terms of service are the legal agreements between a service provider and a user of that service.

Companies would be required to create consumer protection programs that would ensure the terms are in compliance with applicable consumer protection laws. They’d also be required to create a consumer protection officer role in the company.

The draft would require certain tech companies that earn more than a specified annual revenue to report annually to the FTC on their consumer protection program. The amount of annual revenue is still under discussion.

Republicans previously opposed legislation including a private right of action, or allowing individual lawsuits, which could be a hurdle to getting bipartisan support.

Schakowsky said her office is circulating the draft among stakeholders to solicit feedback by Oct. 12. Rep. Kathy Castor (D-Fla.) is listed as a cosponsor, but Schakowsky is still seeking bipartisan support and doesn’t have a timeline for introduction.

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bgov.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Giuseppe Macri at gmacri@bgov.com

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