H.R. 3875: Transparency in Enforcement, Restricting, and Monitoring of Services Act

This bill, known as the Transparency in Enforcement, Restricting, and Monitoring of Services Act (TERMS Act), aims to enhance transparency and user rights regarding the policies of online service providers when it comes to account restrictions and terminations. Here are the key provisions of the bill:

1. Purpose

The bill seeks to provide consumers, businesses, and organizations with clear and sufficient information about the acceptable use policies of online service providers. This information will assist users in making informed choices about their utilization of these services and ultimately foster a competitive marketplace.

2. Definitions

• Online service provider: Any entity offering a website, service, or application that requires users to create an account and provides access to an internet-based product or service.
• User: Any person registered with the online service provider.
• Restrict: Actions taken by the provider to suspend or terminate a user’s account due to policy violations.

3. Disclosure of Acceptable Use Policies

Online service providers must disclose their acceptable use policies within 180 days of the enactment. This disclosure should include:

• Details on prohibited actions.
• Explanations of how the policy is enforced and whether third parties are involved.
• Information on the appeal process for user restrictions.
• A clarification of whether actions outside the platform can lead to user restrictions.

4. Advance Written Notice

The bill requires that online service providers give advance written notice to users before terminating or suspending their accounts. This notice must detail:

• The specific violation leading to the restriction.
• A description of how this violation breaches the acceptable use policy.
• Any options available to appeal the decision, if applicable.
• An option for users to have this notice publicly disclosed.

Exceptions to this notice requirement exist for situations tied to court orders or imminent risks (e.g., threats to health or safety).

5. Reporting Requirements

Online service providers must produce an annual report detailing how they enforce their acceptable use policies. This report should include:

• The total instances of potential policy violations reported.
• The number of user restrictions taken and the types of actions taken (e.g., terminations, suspensions).
• The number of appeals filed by users and the outcomes.

6. Enforcement

The Federal Trade Commission (FTC) is designated to enforce this bill's provisions, classifying violations as unfair or deceptive acts—similar to existing rules under the Federal Trade Commission Act. The FTC will also issue guidance to help service providers comply within 180 days of the bill's enactment.

Relevant Companies

• AMZN - Amazon: Likely to adapt their user policies and enforcement protocols to comply with new disclosure and notice requirements.
• GOOGL - Alphabet (Google): May need to revise their acceptable use policies and reporting practices for services like Google Ads and YouTube.
• META - Meta Platforms: Will require adjustments in policy disclosures for Facebook and Instagram regarding user restrictions and appeals.