House Bill Mandating User Data Portability and Platform Interoperability Could Impact Digital Companies of All Sizes

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On June 24, 2021, H.R. 3849, the Augmenting Compatibility and Competition by Enabling Service Switching Act ("ACCESS Act"),1 was amended by the Committee on the Judiciary and ordered to be reported to the House of Representatives by a 25 to 19 vote. The ACCESS Act was part of a package of six bipartisan bills reported by the Committee, targeting competition in digital markets and aimed in particular at regulating conduct of large online platforms.2 Under the ACCESS Act, as amended, online platforms with a threshold number of users and annual sales deemed by the Department of Justice (DOJ) or the Federal Trade Commission (FTC) to be "covered platforms"3 are required to maintain their interfaces in a manner that is interoperable with competing businesses4 and that enables user data to be portable.5

Potential Impact of the ACCESS Act

While on its face the ACCESS Act applies to companies with net annual sales or market capitalization exceeding $600 billion, the legislation has possibly broad implications for companies of all sizes seeking to compete in the digital market space. Smaller digital companies with the potential to compete against, partner with, or be acquired by covered platforms will need to consider creating and updating their interfaces in accordance with the standards for interoperability, data portability, data security and data privacy that the ACCESS Act, if enacted, would require the FTC to establish.6 Compliance with to-be-determined standards is likely to increase both costs and uncertainty in the near term. The eventuality that developments in the digital market will outpace the FTC's standard-setting could have further unintended consequences for innovation by digital companies impacted by the Act.

Future of the ACCESS Act

The ACCESS Act responds to the House Judiciary Antitrust Subcommittee's October 2020 report on competition in digital markets, which "recommend[ed] that Congress consider data interoperability and portability to encourage competition by lowering entry barriers for competitors and switching costs for consumers."7 The Act, which has bipartisan support, passed through the House Committee on the Judiciary in under two weeks.8 However, the bill faces greater resistance in the full House.9 The bill will also require significant Republican support to pass in the Senate, where similar legislation was introduced in 2019 but no action was taken on the bill.10 White & Case is tracking these legislative developments closely.

The authors would like to thank Lucee Laursen (Summer Associate, White & Case, Chicago) for her contributions to this article.

1 H.R. 3849, 117th Cong. (2021).
2 The six bills were drafted by lawmakers on the House Judiciary Antitrust Subcommittee. See “Chairman Nadler Applauds Committee Passage of Bipartisan Tech Antitrust Legislation”. For H.R. 3849 the Committee agreed to an amendment in the nature of a substitute by voice vote. The amended bill was then further amended five more times. The amendments and votes can be found here. The text of the reported bill as amended is not yet available.
3 The Department of Justice or the Federal Trade Commission may designate a company as a "covered platform" if it is an online platform that (1) has at least 50,000,000 monthly United States-based active users or 100,000 United States-based monthly active business users; (2) is owned or controlled by a person with United States net annual sales or a market capitalization greater than $600,000,000,000 (adjusted for inflation based on the CPI); and (3) is a critical trading partner for the sale or provision of any product or service offered on or directly related to the platform. H.R. 3849 § 5(6) (as amended).
4 H.R. 3849 § 4 (as amended).
5 Id § 3.
6 Id § 6.
7 SUBCOMMITTEE ON ANTITRUST, COMMERCIAL AND ADMINISTRATIVE LAW OF THE COMMITTEE ON THE JUDICIARY, Investigation of Competition in Digital Markets (2020) at 384.
8 See "Chairman Nadler Applauds Committee Passage of Bipartisan Tech Antitrust Legislation".
9 House Majority Leader Steny Hoyer (D-MD), responsible for setting the House floor schedule, indicated that the package of antitrust bills is not ready for a vote in the House and may not have broad enough support to pass. See Antitrust Bills Not Ready for House Floor Vote, Hoyer Says, BLOOMBERG (June 29, 2021). California lawmakers on both sides of the aisle have expressed concerns about the proposed antitrust bills. See Big Tech Antitrust Bills Pass First Major Hurdle in House Even as Opposition Grows, WASHINGTON POST (June 24, 2021).
10 S. 2658, 116th Cong. (2019)

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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