TERMS Act
- Sponsor
- Sen. Cruz, Ted [R-TX]
- Committees
- Commerce, Science, and Transportation Committee (primary)
- Last action
- Jun 10, 2025
Bottom line
The TERMS Act aims to increase transparency and due process in online content moderation by requiring platforms to disclose policies, provide advance notice before account restrictions, and publish annual enforcement reports, with Federal Trade Commission oversight.
What it actually does
This bill, known as the TERMS Act, mandates that online service providers publicly disclose their acceptable use policies in clear language, detailing prohibited acts, enforcement methods, and appeal processes. It also requires providers to give users at least seven days' advance written notice before restricting their accounts for policy violations, with exceptions for court orders or imminent harm. Furthermore, the bill compels online service providers to publish annual reports detailing their enforcement actions, including the number of alerts received and actions taken, categorized by policy provision and alert source.
Proponents argue
Proponents argue that this legislation is essential to ensure consumers, businesses, and organizations have sufficient information regarding online service providers' commercial business standards, processes, and policies. They contend that greater transparency will allow users to make informed choices about the services they use, prevent arbitrary account terminations, and promote a more competitive marketplace by holding platforms accountable for their content moderation practices.
Opponents contend
Opponents might argue that the bill imposes significant new regulatory burdens on online service providers, potentially hindering their ability to quickly and effectively moderate harmful content such such as hate speech, misinformation, or illegal activities due to the mandatory advance notice period. They may also raise concerns that the broad definition of 'online service provider' and the detailed reporting requirements could disproportionately impact smaller platforms and nonprofit organizations, stifling innovation and increasing operational costs.
The bill is relatively short and clearly structured, making it accessible for an informed reader to understand its core provisions within a reasonable timeframe.
Section 4
Disclosure of Acceptable Use Policies
This section requires online service providers to publicly disclose an acceptable use policy within 180 days of the Act's enactment. This policy must clearly explain prohibited acts, how the provider enforces the policy (including any third parties involved), the process for users to appeal restrictions (or a statement if no appeal is permitted), and whether off-platform conduct can lead to restrictions. Any material changes to the policy must be communicated to users in advance.
Supporters argue
Supporters argue this provision empowers users with necessary information to understand platform rules and make informed choices, fostering a more transparent and competitive online environment by holding platforms accountable for their stated policies.
Critics contend
Opponents might argue that mandating such detailed disclosures could be overly burdensome for smaller platforms or could inadvertently provide a roadmap for bad actors to circumvent policies by understanding their specific enforcement mechanisms.
Tradeoffs
This provision balances the need for user transparency and platform accountability against potential compliance costs for online service providers and the challenge of detailing complex moderation practices without revealing sensitive operational details.
Section 5
Advance Written Notice Prior to Termination or Suspension
This section mandates that online service providers provide users with at least seven days' advance written notice before restricting their account due to a violation of the acceptable use policy. The notice must specify the exact violation, how it breached the policy, any available appeal options, and an option for the user to publicly disclose the notice. Exceptions to the advance notice requirement exist for restrictions made to comply with court orders, federal law, or to protect against an imminent risk of death, serious physical injury, or serious health risk, in which case notice must be provided simultaneously or as soon as practicable.
Section 6
Annual Transparency Reports on Enforcement
This section requires online service providers to publish annual reports detailing actions taken to enforce their acceptable use policies. These reports must be open license, human-readable, machine-readable, and easily accessible on their public website. The reports must include the total number of instances a potential policy violation was alerted by various sources (e.g., user complaints, employees, government entities, nonprofits), the number of instances a user was restricted (categorized by type of restriction and the specific policy violated), and data on appeals and reversals.
Section 7
Federal Trade Commission Enforcement and Guidance
This section designates violations of the Act as unfair or deceptive acts or practices under the Federal Trade Commission Act, granting the FTC enforcement authority. Notably, it extends the FTC's jurisdiction to include nonprofit organizations for the purposes of this Act, overriding typical exemptions. The FTC is also required to issue guidance within 180 days of enactment to assist online service providers in complying with the Act, including best practices and examples.
The definition of 'online service provider' is exceptionally broad, encompassing any public-facing website, online service, or application that requires a unique account, provides an internet-based product or service, and is engaged in interstate or foreign commerce. Crucially, it explicitly includes entities regardless of whether offering the product/service is their sole source of income, principal business, or if they earn a profit.
Section 3(3)
Why it matters:Defining terms at the beginning of a bill is standard legislative practice. However, the breadth of this specific definition is a significant policy choice that might not be immediately apparent without careful reading.
Case for: Proponents argue this broad definition ensures comprehensive coverage, preventing platforms from evading the Act's requirements by structuring themselves in particular ways (e.g., as non-profits or as secondary services). This ensures consistent user protections across the online ecosystem.
Case against: Opponents might argue that such a broad definition could inadvertently sweep in a wide array of smaller entities, community forums, or non-profits that lack the resources to comply with the new regulatory burdens, potentially stifling innovation or community-driven online initiatives.
Estimated impact: Significantly expands the scope of entities subject to the Act beyond major social media companies to potentially include a vast array of online forums, niche communities, and other services, regardless of their commercial scale or intent.
This subsection explicitly grants the Federal Trade Commission (FTC) enforcement authority over nonprofit organizations for violations of this Act. This is a specific carve-out from existing law, as the Federal Trade Commission Act typically limits the FTC's jurisdiction over entities 'not organized to carry on business for their own profit or that of their members'.
Section 7(a)(2)(C)
Why it matters:This is a specific carve-out from existing law, which is often placed in technical enforcement sections. While standard legislative drafting, its impact on nonprofits is substantial.
Case for: Proponents argue this ensures that nonprofit online service providers are held to the same transparency and due process standards as for-profit entities, preventing loopholes and ensuring consistent user protections across the online ecosystem, regardless of an entity's tax status.
Case against: Opponents might contend that extending FTC jurisdiction to nonprofits is an overreach, potentially burdening organizations that operate differently from commercial enterprises and may not have the resources or expertise to comply with complex federal commercial regulations.
Estimated impact: Significantly expands the regulatory reach of the FTC and imposes new compliance obligations on a category of organizations traditionally exempt from certain federal commercial regulations, potentially affecting a wide array of online community groups and charitable organizations.