Senator Michael K. McKell proposes the following substitute bill:


1     
ELECTRONIC FREE SPEECH AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Michael K. McKell

5     
House Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill enacts provisions with respect to the regulation of social media corporations.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     requires social media corporations to, for Utah account holders, provide:
14               •     clear information about the social media corporation's moderation practices; and
15               •     notice to the account holder when the social media corporation uses a
16     moderation practice with respect to a Utah account holder's account or post;
17          ▸     provides, if a social media corporation violates its terms of use with respect to
18     moderation practices:
19               •     a mechanism for a Utah account holder to make a complaint to the Division of
20     Consumer Protection (division) and the attorney general;
21               •     a mechanism for the division to investigate alleged violations; and
22               •     an enforcement and penalty mechanism for the attorney general if the division
23     refers a violation to the attorney general;
24          ▸     creates a restricted account in which to deposit penalties and provides for
25     distributions from the account; and

26          ▸     provides for severability if a provision is found to be invalid.
27     Money Appropriated in this Bill:
28          None
29     Other Special Clauses:
30          This bill provides a special effective date.
31     Utah Code Sections Affected:
32     AMENDS:
33          13-2-1, as last amended by Laws of Utah 2021, Chapter 266
34     ENACTS:
35          13-61-101, Utah Code Annotated 1953
36          13-61-201, Utah Code Annotated 1953
37          13-61-202, Utah Code Annotated 1953
38          13-61-203, Utah Code Annotated 1953
39          13-61-301, Utah Code Annotated 1953
40          13-61-302, Utah Code Annotated 1953
41          13-61-303, Utah Code Annotated 1953
42          13-61-304, Utah Code Annotated 1953
43          13-61-401, Utah Code Annotated 1953
44     

45     Be it enacted by the Legislature of the state of Utah:
46          Section 1. Section 13-2-1 is amended to read:
47          13-2-1. Consumer protection division established -- Functions.
48          (1) There is established within the Department of Commerce the Division of Consumer
49     Protection.
50          (2) The division shall administer and enforce the following:
51          (a) Chapter 5, Unfair Practices Act;
52          (b) Chapter 10a, Music Licensing Practices Act;
53          (c) Chapter 11, Utah Consumer Sales Practices Act;
54          (d) Chapter 15, Business Opportunity Disclosure Act;
55          (e) Chapter 20, New Motor Vehicle Warranties Act;
56          (f) Chapter 21, Credit Services Organizations Act;

57          (g) Chapter 22, Charitable Solicitations Act;
58          (h) Chapter 23, Health Spa Services Protection Act;
59          (i) Chapter 25a, Telephone and Facsimile Solicitation Act;
60          (j) Chapter 26, Telephone Fraud Prevention Act;
61          (k) Chapter 28, Prize Notices Regulation Act;
62          (l) Chapter 32a, Pawnshop and Secondhand Merchandise Transaction Information Act;
63          (m) Chapter 34, Utah Postsecondary Proprietary School Act;
64          (n) Chapter 34a, Utah Postsecondary School State Authorization Act;
65          (o) Chapter 41, Price Controls During Emergencies Act;
66          (p) Chapter 42, Uniform Debt-Management Services Act;
67          (q) Chapter 49, Immigration Consultants Registration Act;
68          (r) Chapter 51, Transportation Network Company Registration Act;
69          (s) Chapter 52, Residential Solar Energy Disclosure Act;
70          (t) Chapter 53, Residential, Vocational and Life Skills Program Act;
71          (u) Chapter 54, Ticket Website Sales Act;
72          (v) Chapter 56, Ticket Transferability Act; [and]
73          (w) Chapter 57, Maintenance Funding Practices Act[.]; and
74          (x) Chapter 61, Internet Speech Moderation Act.
75          Section 2. Section 13-61-101 is enacted to read:
76     
CHAPTER 61. INTERNET SPEECH MODERATION ACT

77     
Part 1. General Provisions

78          13-61-101. Definitions.
79          In this chapter:
80          (1) "Account holder" means a person who has or opens an account to use a social
81     media corporation's platform.
82          (2) "Director" means the director of the division.
83          (3) "Division" means the Division of Consumer Protection in the Department of
84     Commerce established in Section 13-2-1.
85          (4) "Flag" means the act of a social media corporation in singling out a post because of
86     the post's content.
87          (5) (a) "Interactive computer service" means any information service, system, or access

88     software provider that:
89          (i) provides or enables computer access by multiple users to a computer server; and
90          (ii) provides access to the Internet.
91          (b) "Interactive computer service" includes:
92          (i) a web service;
93          (ii) a web system;
94          (iii) a website;
95          (iv) a web application; or
96          (v) a web portal.
97          (6) (a) "Moderation practice" means a method a social media corporation employs to
98     regulate a post.
99          (b) "Moderation practice" includes:
100          (i) flagging a post;
101          (ii) removing a post;
102          (iii) suspending an account holder's account; or
103          (iv) revoking an account holder's access to a platform.
104          (7) (a) "Platform" means an internet-based forum that enables an account holder to:
105          (i) create a profile;
106          (ii) upload posts;
107          (iii) view the posts of other account holders; and
108          (iv) interact with other account holders or users.
109          (b) "Platform" does not include:
110          (i) electronic mail;
111          (ii) an online service, website, or application on which:
112          (A) the majority of the content that is posted or created is posted or created by the
113     provider of the online service, website, or application; and
114          (B) the ability to chat, comment, or interact with other users is directly related to the
115     provider's content; and
116          (iii) an online service, website, or application whose primary purpose is related to
117     academic or scholarly research.
118          (8) "Post" means content that an account holder makes available on the account

119     holder's account for other account holders or users to view.
120          (9) (a) "Social media corporation" means any domestic corporation or foreign
121     corporation that:
122          (i) provides a platform;
123          (ii) is an interactive computer service; and
124          (iii) has at least 1,000,000 account holders.
125          (b) "Social media corporation" does not include an Internet service provider as that
126     term is defined in Section 76-10-1230.
127          (10) "Terms of use" means the terms to which an account holder must agree before an
128     account holder can open or continue to use an account on a platform.
129          (11) (a) "User" means an individual who has access to view a post of an account
130     holder.
131          (b) "User" includes an account holder.
132          (12) "Utah account holder" means a person that accesses the account in Utah.
133          (13) "Violation" means a social media corporation's application of a moderation
134     practice in a manner that:
135          (a) violates the social media corporation's terms of use; and
136          (b) is repeatedly used against the same Utah account holder.
137          Section 3. Section 13-61-201 is enacted to read:
138     
Part 2. Notice Requirements

139          13-61-201. Communication of moderation practices.
140          (1) Beginning on July 1, 2023, and once every year following July 1, 2023, a social
141     media corporation shall clearly communicate to Utah account holders the social media
142     corporation's moderation practices before the Utah account holder continues to engage with the
143     social media corporation's platform.
144          (2) A social media corporation shall ensure that the social media corporation's
145     communication of moderation practices:
146          (a) provides a summary of potential moderation practices to a Utah account holder;
147          (b) informs a Utah account holder about the social media corporation's terms of use
148     regarding content that the social media corporation allows on the platform;
149          (c) summarizes the steps the social media corporation takes to ensure a post or account

150     complies with the social media corporation's terms of use; and
151          (d) explains the methods users can use to notify the social media corporation of content
152     that may violate the social media corporation's terms of use.
153          (3) A social media corporation is not required to communicate information about the
154     social media corporation's moderation practices that the social media corporation reasonably
155     believes would permit a user to evade the social media corporation's moderation practices.
156          Section 4. Section 13-61-202 is enacted to read:
157          13-61-202. Prohibited moderation practices.
158          A social media corporation may not communicate the information described in Section
159     13-61-201 in a method that includes any information not specifically related to the information
160     described in Section 13-61-201.
161          Section 5. Section 13-61-203 is enacted to read:
162          13-61-203. Notice requirement.
163          (1) A social media corporation shall implement a system to provide notice to a Utah
164     account holder no more than 24 hours after moderating the Utah account holder's post or
165     account.
166          (2) The notice described in Subsection (1) shall include:
167          (a) a description of the post or account moderated; and
168          (b) a citation to the terms of use that the moderated post or account violated.
169          Section 6. Section 13-61-301 is enacted to read:
170     
Part 3. Role of the Division and the Attorney General

171          13-61-301. Investigative powers of the division.
172          (1) The division shall establish and administer a system to receive consumer
173     complaints regarding whether a social media corporation has committed a violation.
174          (2) (a) The division may investigate a consumer complaint to determine whether the
175     social media corporation has committed a violation.
176          (b) If the results of the division's investigation give the director reasonable cause to
177     believe that substantial evidence exists that a social media corporation identified in a consumer
178     complaint has committed a violation, the director shall refer the matter to the attorney general.
179          (c) Upon request, the division shall provide consultation and assistance to the attorney
180     general in enforcing this chapter.

181          (3) The division shall administer the system described in Subsection (1) within existing
182     appropriations.
183          Section 7. Section 13-61-302 is enacted to read:
184          13-61-302. Enforcement powers of the attorney general.
185          (1) Except as otherwise provided in this chapter, the attorney general has the exclusive
186     authority to enforce this chapter.
187          (2) Nothing in this chapter creates a private right of action.
188          (3) Upon referral from the division, the attorney general may initiate an enforcement
189     action against a social media corporation that commits a violation.
190          (4) (a) At least 30 days before the day on which the attorney general initiates an
191     enforcement action against a social media corporation, the attorney general shall provide the
192     social media corporation:
193          (i) written notice identifying each alleged violation; and
194          (ii) an explanation of the basis for each allegation.
195          (b) The attorney general may not initiate an action if the social media corporation:
196          (i) cures the noticed violation within 30 days after the day on which the social media
197     corporation receives the written notice described in Subsection (4)(a); and
198          (ii) provides the attorney general an express written statement that the social media
199     corporation cured the violation.
200          (c) The attorney general may initiate a civil action against a social media corporation
201     that fails to cure a violation after receiving the notice described in Subsection (4)(a).
202          (d) In an action described in Subsection (4)(c), the attorney general may recover:
203          (i) actual damages to the consumer; and
204          (ii) for each violation, a civil penalty not to exceed $1,000 per Utah account holder
205     affected by the violation.
206          (5) The attorney general shall bring an action under this chapter in:
207          (a) the district court located in Salt Lake City; or
208          (b) the district court for the district in which resides a Utah account holder who is
209     affected by the violation.
210          (6) All civil penalties received from an action under this chapter shall be deposited into
211     the Protecting Internet Speech Restricted Account established in Section 13-61-303.

212          Section 8. Section 13-61-303 is enacted to read:
213          13-61-303. Protecting Internet Speech Restricted Account.
214          (1) There is created within the General Fund a restricted account known as the
215     "Protecting Internet Speech Restricted Account."
216          (2) The account shall be funded by money received through civil enforcement actions
217     under this chapter.
218          (3) Upon appropriation, the division or the attorney general may use money deposited
219     into the account for:
220          (a) investigation and administrative costs the division incurs in investigating consumer
221     complaints alleging violations of this chapter;
222          (b) recovery of costs and attorney fees the attorney general accrues in enforcing this
223     chapter; and
224          (c) providing consumer and business education regarding:
225          (i) consumer rights under this chapter; and
226          (ii) compliance with the provisions of this chapter for social media corporations.
227          (4) If the balance of the account exceeds $1,000,000 at the close of any fiscal year, the
228     Division of Finance shall transfer the amount that exceeds $1,000,000 into the General Fund.
229          Section 9. Section 13-61-304 is enacted to read:
230          13-61-304. Attorney general report.
231          (1) The attorney general and the division shall compile a report:
232          (a) evaluating the liability and enforcement provisions of this chapter, including:
233          (i) the effectiveness of the attorney general's and the division's efforts to enforce this
234     chapter; and
235          (ii) any recommendations for changes to this chapter; and
236          (b) summarizing the moderation practices engaged in by social media corporations,
237     including a list of alleged violations the attorney general and the division have received.
238          (2) The attorney general and the division may update the report as new information
239     becomes available.
240          (3) The attorney general and the division shall submit the report to the Business and
241     Labor Interim Committee before July 1, 2025.
242          Section 10. Section 13-61-401 is enacted to read:

243     
Part 4. Severability

244          13-61-401. Severability.
245          If any provision of this chapter or the application of any provision to any person is held
246     invalid by a final decision of a court of competent jurisdiction, the remainder of this chapter
247     shall be given effect without the invalid provision or application.
248          Section 11. Effective date.
249          This bill takes effect on July 1, 2023.