draft proposal v0.0.4 - updated to The Platform Integrity and Structural Separation Act of 2025

(The Fair Competition in Platform Markets Act 2024 is underneath it)

The Platform Integrity and Structural Separation Act of 2025

Section 1: Short Title

This Act may be cited as the “Platform Integrity and Structural Separation Act of 2025.”

Section 2: Core Principle and Purpose

(a) Principle: This Act is founded on the principle that an entity controlling a critical market platform shall not be permitted to compete with businesses and individuals who rely on that platform for market access. The inherent conflict of interest is irreconcilable with the principles of fair competition and open markets.

(b) Purpose: The purpose of this Act is not to manage anti-competitive behavior, but to prevent it entirely by mandating a clear structural separation between platform operation and platform participation for the largest and most influential market platforms.

Section 3: Definitions

1. “Designated Platform”: A digital or physical market platform is automatically designated under this Act if the entity that owns or controls it meets any two of the following criteria in the preceding two fiscal years:
   • (i) Has more than $20 billion in total annual revenue in the United States.
   • (ii) Has a market capitalization of more than $500 billion.
   • (iii) Has more than 50 million monthly active individual users or 100,000 monthly active business users on any single platform it operates.
2. “Controlling Entity”: The person or entity that owns or exercises control over a Designated Platform.
3. “Platform Participant”: Any third-party person or entity that offers or seeks to offer goods, services, or software on a Designated Platform.

Section 4: Absolute Prohibition of Dual-Mode Operation

(a) General Prohibition: It shall be unlawful for a Controlling Entity of a Designated Platform to offer for sale, or otherwise have a direct or indirect financial interest in, any product, service, or software that uses the Designated Platform to reach end-users.

(b) Scope of Prohibition: This prohibition is absolute and applies regardless of whether the product or service competes with any specific Platform Participant. It includes, but is not limited to: * For e-commerce sites: The sale of store-branded or private-label products. * For app stores: The offering of any applications, in-app payment systems, or subscription services by the Controlling Entity. * For operating systems: The pre-installation of any non-essential applications developed by the Controlling Entity that could reasonably be offered by a third party. “Essential” is strictly limited to software required for the initial boot-up and basic hardware functionality (e.g., settings menus, diagnostic tools). * For hardware ecosystems: The sale of accessories or peripherals (e.g., headphones, chargers, cases) that connect to the primary device.

(c) No Exception for “Absence of Alternatives”: The Controlling Entity may not use the argument that no feasible alternative exists as a defense. If no alternative exists, the market is open for a Platform Participant to create one.

Section 5: Enforcement by Structural Mandate, Not Regulatory Discretion

(a) Compliance and Divestiture:

1. Any entity that meets the criteria for a Controlling Entity shall have 180 days from the enactment of this Act, or from the date they meet the criteria, to submit a compliance plan to the Department of Justice (DOJ).
2. The compliance plan must detail the complete divestiture, spin-off, or shutdown of all business units that violate Section 4. The entity must choose to be either a platform operator or a product/service provider, not both.
3. The full divestiture must be completed within one year of the submission of the compliance plan.

(b) Penalties for Non-Compliance:

1. Failure to submit a compliant plan will result in a fine of 2% of global daily revenue for each day of delay.
2. Failure to execute the divestiture plan within the one-year timeframe will result in a fine of up to 15% of the entity’s total global revenue and may trigger forced dissolution of the non-compliant business units by the DOJ.

Section 6: Empowering Direct Action and Eliminating Delays

(a) Private Right of Action:

1. Any Platform Participant or potential Platform Participant who believes a Controlling Entity is in violation of Section 4 of this Act may bring a civil action in any federal district court.
2. Courts are empowered to grant immediate injunctive relief to halt the prohibited activity.
3. If the suit is successful, the plaintiff is entitled to recover treble damages, court costs, and attorney’s fees.

(b) Presumption of Illegality and Burden of Proof:

1. In any legal proceeding, if an entity meets the definition of a Controlling Entity under Section 3, its participation as a seller on its own platform shall be presumed illegal.
2. The burden of proof is entirely on the Controlling Entity to demonstrate that it does not meet the clear, objective criteria laid out in Section 3. No other defense shall be admissible.

Section 7: Prohibiting Malicious Compliance and Circumvention

(a) Spirit and Intent: This Act shall be interpreted to fulfill its stated purpose of structural separation. Any scheme, design, or artifice to circumvent the prohibitions of this Act while adhering to its literal text shall be treated as a direct violation.

(b) Examples of Prohibited Circumvention:

1. Establishing complex subsidiary structures or holding companies to obscure ownership of a competing business.
2. Entering into exclusive marketing or distribution agreements with a “preferred” partner that is a de facto proxy for the Controlling Entity.
3. Designing platform features or APIs in a way that only a specific, notionally separate company can realistically use, thereby recreating the prohibited self-preferencing.

(c) Severe Penalties for Circumvention: A finding of malicious compliance or circumvention shall subject the Controlling Entity to the maximum penalties allowable under this Act and may result in a temporary (up to one year) suspension of the entity’s right to operate any Designated Platform in the United States.

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draft proposal v0.0.3

Fair Competition in Platform Markets Act 2024

Section 1: Short Title

This Act may be cited as the “Fair Competition in Platform Markets Act of 2024.”

Section 2: Findings and Purpose

(a) Findings:

The Congress finds that:

1. The dominance of certain entities in controlling market platforms while also competing within these platforms undermines fair competition.
2. Such practices can lead to monopolistic behavior, stifling innovation, and disadvantaging smaller competitors.

(b) Purpose:

The purpose of this Act is to establish regulations that ensure fair competition on market platforms controlled by a single entity.

Section 3: Definitions

In this Act:

1. “Market Platform”: Refers to any physical or digital venue, device, or ecosystem, including but not limited to app stores, e-commerce sites, physical retail spaces, electronic devices, and software ecosystems, where goods or services are offered or accessed. This includes platforms where a controlling entity and/or multiple third-party entities offer or sell goods or services, and platforms or devices where a controlling entity may offer exclusive goods, services, or functionalities.
2. “Controlling Entity”: Refers to any person or entity that has control over a Market Platform.
3. “Competitor”: Refers to any person or entity other than the controlling entity that offers or seeks to offer goods or services on the Market Platform.
4. “Open Access”: Refers to the principle of allowing all entities, including competitors, to access and utilize a Market Platform without undue barriers or discriminatory practices. This principle does not inherently include the full range of competitive restrictions imposed by this act, such as the prohibition of competing on the same platform. Instead, Open Access focuses on ensuring that the platform is accessible and usable by third parties in a fair and non-discriminatory manner, especially during a transitional period before full compliance with the act is required.

Section 4: Prohibition of Unfair Competitive Practices

(a) General Prohibition:

It shall be unlawful for a Controlling Entity of a Market Platform to:

1. Compete directly with other entities within its own Market Platform, except in the following situations:
   • Integral Software and Hardware for Basic Operation: Software and hardware that are integral to the basic operation of the device, subject to the following conditions:
     • Limited Scope for Software: The software must provide only basic functionalities necessary for the operation of the hardware, without advanced features that might compete with third-party apps.
     • Basic Hardware Inclusion: Hardware included with the device must be essential for its immediate functionality (e.g., basic headphones with an MP3 player, stock tires on a car, a standard controller with a gaming console). This does not extend to advanced or premium versions of these hardware items that directly compete with third-party products.
     • No Unfair Promotion: The controlling entity must not unfairly promote or prioritize their software or hardware over third-party alternatives.
     • Equal Access to System Resources: Software should not have exclusive access to system resources or capabilities that are not equally available to third-party apps.
   • Absence of Feasible Alternatives: Situations where no feasible alternative exists. This includes:
     • For Digital Platforms: Prohibit the controlling entity’s products or services if alternatives are available from third parties, except when no feasible alternative exists.
     • For Physical Retail Spaces: Prohibit store-branded or owned products or services if alternatives are available, except when no feasible alternative exists.
     • For Hardware Devices: Limit pre-installed software and included hardware to functionalities and items for which no feasible alternative exists and are necessary for the device’s operation.
2. Engage in any practice that unfairly disadvantages competitors on its platform. This includes but is not limited to:
   • Exclusionary Practices: Implementing policies or actions that exclude or limit the presence of competitor products or services when alternatives to the controlling entity’s offerings exist.
   • Manipulation of Platform Features: Unfairly leveraging platform features or resources to benefit the controlling entity’s products or services at the expense of competitors.

(b) Special Provisions for Emerging Markets and Technologies:

1. Initial Development Phase: A temporary special period will be granted to the Controlling Entity that develops a new market platform, during which they will allowed to compete on that market platform, like an electric vehicle charging network, when no reasonable alternatives exist.
2. Proactive Transition to Competitive Market: The temporary special period will end based on market maturity, the controlling entity’s market share, and other factors; not solely on the emergence of direct competitors on the market platform or other market platforms. This includes:
   • Market Maturity Assessment: The appropriate regulatory body (e.g., Federal Trade Commission) shall periodically assess the market’s maturity, considering factors like the controlling entity’s market share, the potential for competition, and technological advancements.
   • Mandatory Measures for Market Opening: Depending on the assessment, the Controlling Entity may be required to:
     • Implement measures to facilitate market entry for new competitors, such as providing access to essential patents under fair, reasonable, and non-discriminatory (FRAND) terms.
     • Prepare for the potential divestiture of the relevant division if it’s determined that the entity’s control over the market hinders the development of a competitive landscape.

(c) Special Provisions for Proprietary Technologies and Infrastructure:

1. Exclusive Use vs. Market Platform:
   • If a Controlling Entity uses its proprietary technology or infrastructure (e.g., a charging network) exclusively for its own products or services, and does not allow for any third-party access, it will not be considered a market platform. It may still however be considered a monopoly if it gains excessive market dominance, subjecting it to antitrust regulations, however that falls outside the scope of this Act.
   • If the Controlling Entity opens its proprietary technology or infrastructure to third parties, it becomes a market platform and must comply with the provisions of this Act.
2. Incentivizing the Opening of Proprietary Systems:
   • Exclusive Control Period: During an initial period, entities that have developed proprietary systems may maintain control of their platforms. While they can operate exclusively, they are expected to gradually implement Open Access principles, providing fair and non-discriminatory access to the platform for potential competitors.
   • Transition to Full Compliance with the Act: After the exclusive control period, the Controlling Entity must fully comply with all provisions of this act. This includes ceasing to compete directly with other entities on their Market Platform, where exceptions do not apply. The transition from Open Access to full compliance should be overseen by the appropriate regulatory body to ensure a fair and systematic shift towards a fully competitive market environment.

(d) Balancing Innovation and Competition:

1. Encouraging Infrastructure Development: Recognizing the importance of innovation and infrastructure development, this Act aims to balance the need for entities to recoup their investment and incentivize new technologies, while ensuring that these developments do not hinder the growth of competitive markets.
2. Regulatory Oversight: The appropriate regulatory body shall have the authority to assess whether a technology or infrastructure has moved beyond the scope of a traditional monopoly and requires the implementation of fair market platform practices.

(e) Provisions for Technological Neutrality in Market Platforms:

1. Non-Restrictive Technology Policies: A Controlling Entity of a digital market platform, particularly one with significant market share, is prohibited from imposing policies that unfairly limit or restrict the use of third-party technologies, software engines, or services. This includes:
   • Technology and Engine Flexibility: The act prohibits restrictive practices that mandate the exclusive use of the controlling entity’s proprietary technologies or engines across different categories, such as web browsers, app development tools, or digital services.
   • Equitable Access to Platform Features: All third-party products and services must be granted fair and non-discriminatory access to the platform’s capabilities and features. This ensures that the controlling entity does not use its platform to unduly favor its proprietary technologies or services.
2. Transparent and Fair Management of Third-Party Offerings: The controlling entity must maintain a transparent, consistent, and fair process for the management, approval, and treatment of third-party offerings on its platform. This includes ensuring that the approval process and operational policies are applied uniformly and do not disadvantage third-party products or services in favor of those offered by the controlling entity.

Section 5: Enforcement and Penalties

(a) Enforcement:

The Federal Trade Commission (FTC) shall enforce the provisions of this Act.

(b) Penalties:

Violation of any provision of this Act shall subject the Controlling Entity to:

1. Civil penalties, including fines determined by the severity of the violation. The fines shall not exceed $100 million per violation.
2. In cases of severe or repeated violations, fines may amount to up to 5% of the company’s gross annual earnings.
3. Mandatory divestiture of parts of their business if necessary to restore fair competition.
4. Injunctions or other equitable relief as deemed appropriate by the court.

Section 6: Exceptions and Exemptions

(a) Exceptions:

1. Essential Operations Exception:
   • Basic Functionality Inclusion: Products or services provided by the Controlling Entity that are required to use the device in its most basic intended form at the time of purchase. This includes core system applications like a basic camera to make use of a built-in camera, or components like a bluetooth game controller for a game console. However, these inclusion should not possess exclusive access to system capabilities that are not equally available to third-party apps or devices.
   • Competitive Alternatives: This exception does not extend to additional, non-essential products or services where competitive alternatives are feasible and practical. For instance, while including a standard game controller or basic headphones is permissible, offering enhanced versions of these accessories that directly compete with third-party products would not be allowed.
   • Application Availability: This exception does not cover applications or services that makes use of the Internet, where competitive alternatives providing similar functionalities are reasonably accessible at time of use. This includes, but is not limited to, cloud storage services, web browsers, and messaging apps that make use of Internet access.
   • User Choice and Default Settings: Pre-installed applications should not be given undue advantage in terms of system integration or permissions that are not equally accessible to third-party applications, including as being specified as the default app for services.
2. Public Interest Exception: Entities or services deemed essential for national security, public safety, or other critical public interests.

(b) General Guidelines for Fair Platform Practices:

1. Equal Access and Non-Discrimination: Controlling Entities must provide equal access and non-discriminatory treatment to all competitors on their platforms. This includes fair access to services, resources, and opportunities essential for competition.
2. Transparency in Operations: Clear and accessible information must be provided regarding the criteria and policies that govern the operation of the platform, including how products or services are featured, prioritized, or restricted.
3. Fairness in Competition: Controlling Entities are prohibited from leveraging their platform control to give undue advantage to their own products or services. This encompasses practices like preferential listing, exclusionary tactics, or manipulation of search results or recommendations.

Section 7: Implementation and Review

(a) Implementation:

The provisions of this Act shall be implemented within 180 days of its enactment.

(b) Regular Review:

The Federal Trade Commission (FTC) shall conduct a review every two years to assess the effectiveness of this Act and recommend any necessary amendments.