Prohibition on digital advertising-related fraud

(a) In general It shall be unlawful for an online platform to display a fraudulent or deceptive commercial advertisement on such platform if the online platform— (1) accepted payment to display such advertisement; and (2) failed to take reasonable steps (as described in subsection (b)) to prevent the fraudulent or deceptive commercial advertisement from being made available. (b) Additional requirements for online platforms (1) Required procedures An online platform that accepts payment, or any other form of compensation, to display an advertisement shall establish and implement procedures to require the following: (A) Procedures to verify the identity of each advertiser prior to the placement of a paid advertisement, including— (i) verification of the legal name and physical location of the advertiser; (ii) verification of a valid and current government-issued identification of the advertiser, or, in the case of a business entity, documentation establishing the legal existence of the entity and the relation of the purchaser to the entity; (iii) collection of contact information for the advertiser sufficient to allow follow up by the online platform or the Commission; and (iv) reasonable measures to prevent circumvention of such verification requirements through the use of any false, stolen, or synthetic identity. (B) An active impersonation detection and mitigation program. (C) Automated and manual fraudulent and deceptive commercial advertisement detection systems. (D) A clear and conspicuous tool for users to report suspected fraudulent or deceptive commercial advertisements. (2) Investigation of fraudulent or deceptive commercial advertisements (A) In general If a person (including a government entity) reports a fraudulent or deceptive commercial advertisement or the detection system of an online platform identifies a fraudulent or deceptive commercial advertisement, the online platform shall— (i) not later than 72 hours after the submission of such report or receiving such identification, conduct an investigation of such advertisement; and (ii) not later than 24 hours after concluding the investigation, if applicable, notify the person of the outcome of such investigation. (B) Removal (i) After investigation If, after conducting an investigation under subparagraph (A), an online platform determines that an advertisement violates the requirements of this Act, such online platform shall, not later than 24 hours after making such determination, remove the advertisement from the platform. (ii) During investigation Nothing in this subparagraph shall preclude an online platform from removing an advertisement prior to the conclusion of an investigation under subparagraph (A), as determined appropriate by the online platform. (3) Presumed compliance (A) In general For purposes of subsection (a), an online platform shall be presumed to have taken reasonable steps to prevent a fraudulent or deceptive commercial advertisement from being made available if the online platform— (i) submits to the Commission a fraudulent and deceptive commercial advertisement detection program that incorporates the procedures described in paragraph (1), and the Commission approves such program; and (ii) demonstrates compliance with, and active enforcement of, the program described in clause (i), including by demonstrating that the online platform provides adequate resources for the program. (B) Rule of construction Nothing in this paragraph shall be construed to create a presumption of compliance in any individual enforcement action in which the Commission determines or establishes that the online platform did not comply with its fraudulent and deceptive commercial advertisement detection program. (c) Regulations (1) In general Not later than 1 year after the date of enactment of this section, the Commission shall promulgate regulations in accordance with section 553 of title 5, United States Code, to implement this section. (2) Updates The Commission shall review the regulations promulgated under paragraph (1) on an annual basis and revise such regulations as appropriate. (d) Enforcement by the Commission (1) Unfair or deceptive acts or practices A violation of this Act or a regulation promulgated under this Act shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)). (2) Powers of the Commission (A) In general The Commission shall enforce this Act and any regulation promulgated under this Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act. (B) Privileges and immunities Any person who violates this Act or any regulation promulgated under this Act shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act (15 U.S.C. 41 et seq.). (C) Authority preserved Nothing in this Act shall be construed to limit the authority of the Commission under any other provision of law. (e) Enforcement by States (1) Authorization In any case in which the attorney general of a State has reason to believe that an interest of the residents of the State has been or is threatened or adversely affected by the engagement of any person in an act or practice that violates subsection (a) or (b), the attorney general of the State may, as parens patriae, bring a civil action on behalf of the residents of the State in a district court of the United States of appropriate jurisdiction to— (A) enjoin such act or practice; (B) enforce compliance with subsection (a) or (b); (C) obtain damages, restitution, or other compensation on behalf of residents of the State; or (D) obtain such other relief as the court may consider to be appropriate. (2) Rights of the Commission (A) Notice to the Commission (i) In general Except as provided in clause (iii), before initiating a civil action under paragraph (1), the attorney general of a State shall notify the Commission in writing that the attorney general intends to bring such civil action. (ii) Contents The notification required by clause (i) shall include a copy of the complaint to be filed to initiate the civil action. (iii) Exception If it is not feasible for the attorney general of a State to provide the notification required by clause (i) before initiating a civil action under paragraph (1), the attorney general shall notify the Commission immediately upon instituting the civil action. (B) Intervention by the Commission Upon receiving the notice required by subparagraph (A)(i), the Commission may intervene in the civil action and, upon intervening— (i) be heard on all matters arising in the civil action; and (ii) file petitions for appeal of a decision in the civil action. (3) Investigatory powers Nothing in this subsection may be construed to prevent the attorney general of a State from exercising the powers conferred on the attorney general by the laws of the State to conduct investigations, to administer oaths or affirmations, or to compel the attendance of witnesses or the production of documentary or other evidence. (4) Preemptive action by the Commission If the Commission has instituted a civil action for a violation of subsection (a) or (b), no State officer may bring an action under paragraph (1) during the pendency of that action against any defendant named in the complaint of the Commission for any violation of subsection (a) or (b) alleged in the complaint. (5) Venue; service of process (A) Venue Any action brought under paragraph (1) may be brought in the district court of the United States that meets applicable requirements relating to venue under section 1391 of title 28, United States Code. (B) Service of process In an action brought under paragraph (1), process may be served in any district in which the defendant— (i) is an inhabitant; or (ii) may be found. (f) Private right of action (1) In general A person who has been injured by another person in violation of subsection (a) or (b) may bring a civil action against such person in an appropriate district court of the United States— (A) seeking injunctive relief; (B) subject to paragraph (2), to obtain actual damages; and (C) to obtain, for each violation, any other restitution, penalties, and other legal or equitable relief as the court may deem just and proper. (2) Willful or knowing violations If the court finds that the defendant acted willfully or knowingly in committing a violation described in paragraph (1), the court may, in its discretion, increase the amount of the award to an amount equal to not more than 3 times the amount available under paragraph (1)(B). (3) Costs and attorney’s fees The court shall award to a prevailing plaintiff in an action under this subsection the litigation costs of such action and reasonable attorney’s fees, as determined by the court. (4) Limitation An action may be commenced under this subsection not later than 5 years after the date on which the person first discovered or had a reasonable opportunity to discover the violation. (5) Nonexclusive remedy Bringing a civil action under this subsection shall be in addition to any other remedy available to the person bringing such civil action. (g) Relationship to other laws (1) Effect of other laws (A) Application of section 230(c)(1) Section 230(c)(1) of the Communications Act of 1934 (47 U.S.C. 230(c)(1)) shall not apply to any violation of this section. (B) Application of section 230(c)(2) Nothing in this Act shall be construed to limit or affect the civil liability protections under section 230(c)(2) of the Communications Act of 1934 (47 U.S.C. 230(c)(2)). (2) Effect on State laws Nothing in this section or any regulation promulgated under this section shall preempt or otherwise affect any State or local law. (3) Severability If any provision of this section, or the application thereof to any person or circumstance, is held invalid, the remainder of this section and the application of such provision to other persons not similarly situated or to other circumstances shall not be affected by the invalidation.