American Innovation and Choice Online Act
- Sponsor
- Sen. Grassley, Chuck [R-IA]
- Committees
- Judiciary Committee (primary)
- Last action
- Jun 10, 2026
Bottom line
The bill aims to curb the market power of dominant online platforms by outlawing specific anti-competitive behaviors, fostering a more level playing field for smaller businesses and increasing user choice.
What it actually does
This bill prohibits large online platforms, defined as 'systemically important platforms,' from engaging in specific discriminatory practices against business users. These practices include self-preferencing their own products or services, restricting interoperability with business users, tying access to the platform to other services, using nonpublic business user data to compete, impeding user changes to default settings, and retaliating against users who report legal concerns. It establishes enforcement mechanisms for federal and state authorities, including significant civil penalties.
Proponents argue
Supporters argue that dominant online platforms currently engage in practices that stifle competition, harm smaller businesses, and limit consumer choice. This bill would restore fair competition, prevent monopolistic abuses, and promote innovation by ensuring that platform operators cannot unfairly disadvantage competitors or leverage their market power to the detriment of the broader digital economy. It is seen as a necessary step to modernize antitrust enforcement for the digital age.
Opponents contend
Opponents might contend that the bill's prohibitions are overly broad and could hinder platform innovation, compromise security, or force platforms to share proprietary data, ultimately harming consumers by degrading service quality and user experience. They may also argue that existing antitrust laws are sufficient to address anti-competitive behavior and that this bill introduces unnecessary and potentially damaging regulatory burdens.
The bill is moderately complex due to its legal definitions and detailed prohibitions, requiring careful reading to understand its full implications for both platforms and business users.
Section 2(a)(15)
Definition of 'Systemically Important Platform'
This provision establishes the criteria for an online platform to be designated 'systemically important.' It requires a platform to be controlled by a person with average annual gross revenues of not less than $175 billion (adjusted annually) and to have a substantial user base in the United States, specifically not less than 34% of the population over 12 or 34% of U.S. households, for a sustained period. The definition includes rules for aggregating user counts across similar platforms controlled by the same entity.
Supporters argue
Supporters argue this definition precisely targets only the largest, most dominant platforms whose market power necessitates specific regulation, thereby avoiding undue burden on smaller, growing companies and focusing enforcement where it is most needed to restore competition.
Critics contend
Critics might argue that the specific thresholds are arbitrary or could capture platforms not truly dominant in all relevant markets, leading to over-regulation, or conversely, that they are too high and miss platforms with significant market power that still engage in anti-competitive behavior.
Tradeoffs
The provision balances the need to regulate dominant platforms effectively with the desire to avoid stifling innovation or imposing excessive regulatory burdens on smaller, emerging entities in the dynamic digital economy.
Section 3(a)(1)
Prohibition on Self-Preferencing and Discrimination
This section makes it unlawful for a systemically important platform to preference its own products, services, or lines of business over those of another business user in a way that would materially harm competition. It also prohibits limiting the ability of business users to compete on the platform relative to the platform operator's own offerings, and from applying or enforcing terms of service in a discriminatory manner among similarly situated business users, if such actions materially harm competition.
Section 3(a)(2)
Prohibition on Restricting Access to Platform Features
This provision makes it unlawful for a systemically important platform to restrict, impede, or unreasonably delay the capacity of a business user to access or interoperate with the same platform, operating system, or hardware or software features that are available to the platform operator's own products, services, or lines of business that compete with business users' offerings. This ensures equal access to core functionalities.
Section 3(a)(3)
Prohibition on Tying Arrangements
This provision makes it unlawful for a systemically important platform to condition access to its platform, any part of it, or preferred status or placement on the platform, on the purchase or use of other products or services offered by the platform operator that are not part of or intrinsic to the systemically important platform. This prevents platforms from bundling unrelated services coercively.
Section 3(a)(4)
Prohibition on Access to Platform Data
This provision makes it unlawful for a systemically important platform to use nonpublic data obtained from or generated on the platform by the activities of a business user, or by user interaction with a business user's products, to offer or support its own competing products or services. It also restricts platforms from impeding a business user's access to or portability of data generated by their own activities or user interactions, preventing contractual or technical restrictions on data portability.
Section 3(a)(5)
Prohibition on User Lock-in via Default Settings
This provision makes it unlawful for a systemically important platform to restrict or impede users from changing default settings or selecting an alternative default product or service, if the default directs or steers users to products or services offered by the platform operator. Exceptions are allowed only if necessary for the security or functioning of the platform, or to prevent data transfer to foreign adversaries.
Section 3(a)(7)
Prohibition on Retaliation
This provision makes it unlawful for a systemically important platform to retaliate against any user or business user who raises concerns with any law enforcement authority about actual or potential violations of State or Federal law. This is intended to protect whistleblowers and encourage reporting of illegal conduct.
This provision establishes an affirmative defense for systemically important platform operators, allowing them to argue that their conduct, even if it falls under certain prohibitions (specifically 3(a)(2) through (6)), has not materially harmed and would not materially harm competition. The defendant must establish this by a preponderance of the evidence.
Section 3(b)(2)
Why it matters:This is standard legislative practice to define the scope and limitations of liability, providing a mechanism for defendants to demonstrate that their actions, despite appearing to violate a rule, do not actually undermine the bill's core objective of fostering competition.
Case for: Proponents of this defense argue it provides necessary flexibility, ensuring platforms are not penalized for actions that, while potentially falling under a prohibition, genuinely do not harm competition. It allows for a more nuanced application of the law, akin to a 'rule of reason' approach for specific behaviors.
Case against: Critics might argue that placing the burden on the defendant to prove 'no harm' is still a high bar and that the focus should remain on the inherent anti-competitive nature of the prohibited conduct, rather than allowing for exceptions based on a lack of demonstrable harm, which can be difficult to prove or disprove.
Estimated impact: This defense could significantly influence the outcome of enforcement actions by providing a pathway for platforms to defend their conduct, potentially reducing the scope of successful prosecutions for certain types of violations if platforms can demonstrate a lack of material harm to competition.
This provision imposes a 'contemporaneous records requirement' for defendants relying on the affirmative defense under paragraph (1) (which covers compliance with law, protection of safety, privacy, security, and prevention of fraud). To use this defense, defendants must produce records, created at or before the time the challenged conduct was undertaken, that describe the specific purpose for the conduct and identify the material risks or harms it was intended to address.
Section 3(b)(4)
Why it matters:This is standard legislative practice to define evidentiary requirements for defenses, ensuring that claims of legitimate purpose are supported by internal documentation rather than being asserted retrospectively. It aims to prevent pretextual defenses.
Case for: Proponents argue this ensures that platforms genuinely undertake actions for legitimate reasons (security, privacy, etc.) and don't use these as pretexts to exclude or disadvantage competitors. It promotes accountability and good record-keeping within large organizations.
Case against: Opponents might argue it creates an onerous burden on platforms, requiring them to document every decision in a specific way, potentially stifling agile development or rapid response to security threats. It could be seen as an impractical requirement for fast-moving tech companies.
Estimated impact: This requirement could significantly impact a platform's ability to successfully use the primary affirmative defense if they do not have robust, pre-existing documentation processes that meet the specified criteria, potentially increasing their liability.
This sub-clause explicitly excludes any person that 'is a clear national security risk' or 'is organized under the laws of or controlled by the Government of the People's Republic of China or the government of another foreign adversary' from the definition of a 'business user.' This means such entities would not receive the protections and benefits afforded to other business users under the Act.
Section 2(a)(3)(B)
Why it matters:Often, national security exclusions are placed in definitions or exceptions to limit the scope of a bill's application without making it a central, standalone prohibition. This is a common legislative technique for addressing specific geopolitical concerns.
Case for: Proponents argue this is a critical national security measure, preventing foreign adversaries from leveraging the Act's protections to gain access to sensitive platform features or data, or to benefit from a more open competitive environment in the U.S. It aligns with broader efforts to counter foreign influence.
Case against: Critics might argue that while the intent is valid, the broad exclusion could inadvertently harm legitimate businesses with indirect ties to these regions or create complex compliance challenges for platforms trying to accurately determine 'control' by a foreign government or 'national security risk.'
Estimated impact: This exclusion prevents certain foreign entities from benefiting from the Act's protections, potentially limiting their market access or competitive standing on U.S. platforms, and reinforcing U.S. national security interests in the digital sphere.