ACCESS Act Would Give Access To Covered Companies’ Intellectual Property
A lot has been written about the antitrust proposals that were introduced and marked up by the House Judiciary Committee in June. Upon closer examination, a myriad of new unintended consequences appear with these proposals. In particular, H.R. 3849, the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act of 2021, written about previously on DisCo, is one bill that would have decidedly bad consequences for users and the handful of leading technology companies that have to comply with it. One of the unintended consequences associated with this proposal is that, if enacted, H.R. 3849 would appear to be inconsistent with how the U.S. has handled intellectual property (IP) in the past, and ultimately may weaken U.S. IP at home and abroad. Indeed, the proposal is aptly named because it gives “access” to any company that desires to use the covered companies’ data, even if the data is protected IP.
In the past, U.S. stakeholders have filed comments to the Office of the United States Trade Representative (USTR) regarding its National Trade Estimate Report on Foreign Trade Barriers (NTE), an annual report that surveys significant barriers to U.S. companies seeking to export abroad. Similarly, U.S. stakeholders have filed comments to USTR’s annual “Special 301” Report, an annual review of the global state of IP protection and enforcement.
U.S. stakeholders have provided comments to both instruments on other countries’ lack of respect for U.S. IP, forced data and IP transfers, misappropriated IP and theft of “know-how”, trade secrets, or other sensitive data and information. In response, the U.S. government provides a report on the protection and enforcement measures it undertakes to safeguard U.S. IP and trade interests abroad. Surprisingly, the very violations the U.S. government has complained about other countries engaging in, e.g., forced IP transfers and localization, are the same things that the U.S. government would now require for only a handful of U.S. technology companies.
H.R. 3849 would require leading U.S. technology companies to “interoperate” with competing services, including foreign entities. One of the main problems with the proposal is that it fails to define much of the operative language used. Rather than providing clarity and enforcement, it weakens U.S. competition, innovation, and potentially gives away data that is protected by IP. Covered companies are not given the prerogative to license their IP to those who wish to interoperate; instead, the proposal forces a handful of companies to give it away.
As discussed below, H.R. 3849 uses the terms “competing,” “potentially competing,” “competing businesses” and “interoperability” but neither these terms nor the data or the use case for data referred to in the proposal are defined. The ambiguity in this proposal could lead to a slew of lawsuits and the oversharing of IP-protected data, and ultimately could harm consumers and digital services.
So who can consumers, U.S. technology companies, and other interested U.S. stakeholders call upon for help when their own government potentially forces them to give away their IP, without the consent of the companies or their ability to issue a license for use? Indeed, the U.S. government complains about other countries in its NTE and Special 301 reports, but who can domestic technology companies avail themselves to keep the U.S. government from giving away their IP? Surely if the U.S. government is willing to give away the IP of its most successful U.S. technology companies, other countries would be more than happy to take advantage of this situation.
Section 4 of the proposal provides that all a “competing” or “potentially competing business” needs to do is take steps “to reasonably secure any user data it acquires, processes, or transmits, and shall take reasonable steps to avoid introducing security risks to user data or the covered platform’s information systems”. The proposal however does not define “competing” or “potentially competing business,” so these terms can include all businesses. The proposal further lacks robust safeguards to prevent a company wishing to acquire user data for its own purposes, unrelated to interoperability, from simply representing that it intends to compete in the future in order to obtain sensitive user data. And while the proposal directs the Federal Trade Commission to exclude proprietary, non-user data, it fails to define “proprietary,” making it unlikely that the protection of IP falls within its ambit.
H.R. 3849 has the absurd result of giving away a handful of U.S. companies’ IP under a misguided sense of “competition.” This proposal would leave little recourse for these U.S. companies vis-à-vis their own government, and its mandated interoperability would only hurt consumers and U.S. companies, weakening them competitively at home and abroad.