Overview
Title
To require covered entities to issue a short-form terms of service summary statement, and for other purposes.
ELI5 AI
H.R. 2019 wants companies to make a simple summary of their rules for users, so everyone knows how they use and share personal data, and if they had any data problems before. This law also wants companies to use pictures to explain how they handle information, and if they don't follow the rules, they could get in trouble.
Summary AI
H.R. 2019, known as the “Terms-of-service Labeling, Design, and Readability Act” or the “TLDR Act,” requires companies that operate commercial websites or online services to provide a clear and concise summary of their terms of service. This summary must be easily accessible, non-misleading, and include key information such as the types of sensitive data they handle, legal obligations for users, and past data breaches. It also mandates the use of visual tools like data flow diagrams to show how user data is shared, and requires terms of service to be available in an interactive data format. The Federal Trade Commission will enforce these rules, and state attorneys general can also bring actions in cases affecting residents' interests.
Published
Keywords AI
Sources
Bill Statistics
Size
Language
Complexity
AnalysisAI
General Summary of the Bill
The Terms-of-service Labeling, Design, and Readability Act, commonly referred to as the "TLDR Act," aims to make the terms of service provided by websites more understandable and accessible to users. Introduced in the House of Representatives, the bill mandates that the Federal Trade Commission (FTC) issue rules requiring websites owned by larger businesses to create and display a concise, clear summary of their terms of service. This summary must be easy to understand, particularly for individuals with low literacy levels and disabilities, and must include a graphic data flow diagram and provide full terms in an interactive data format. The Act seeks to improve transparency in how sensitive personal information is handled and shared.
Summary of Significant Issues
One significant issue with the bill is the exclusion of small businesses from its requirements, potentially leaving consumers using smaller services without the same level of clarity or protection. The broad definition of "sensitive information," which includes a wide range of personal data types, could pose compliance challenges for businesses, requiring them to adopt stringent measures to protect such information.
Additionally, the requirement for a graphic data flow diagram may be operationally challenging and costly for companies as it involves detailing complex data sharing processes in an understandable visual format. Another issue is the broad discretionary power granted to the FTC, which can result in unpredictable regulatory changes without legislative oversight, creating uncertainty for businesses striving to comply.
The enforcement structure, which provides significant authority to both the FTC and state attorneys general, could lead to complex legal challenges for companies through parallel or overlapping enforcement actions. Moreover, the low threshold for state intervention – where the interest of merely 1,000 state residents could trigger action – might lead to excessive litigations. Lastly, the 360-day deadline for implementing these requirements is potentially too tight for the FTC, risking the issuance of suboptimal regulations.
Impact on the Public
Broadly, this bill is designed to empower consumers by making the often-dense legalese of terms of service documents much more understandable, thus allowing consumers to make more informed decisions about the services they use and the data they share online. By being aware of what exact data is being collected or shared, consumers can better control their digital footprints and maintain privacy.
Impact on Specific Stakeholders
Consumers: If implemented smoothly, the TLDR Act can significantly benefit consumers by providing clear and concise information on how their sensitive information is being handled. This understanding can help them make more informed decisions about which services to trust and use.
Large Businesses: They may face increased costs and operational challenges due to the requirements to develop these new formats and summaries. This could include needing to redesign their terms of service pages or train personnel to manage compliance issues, particularly the creation of graphic data flow diagrams.
Small Businesses: Although small businesses are exempt, there may eventually be pressure to offer similar transparency voluntarily to retain consumer trust. This could indirectly lead to competitive disadvantages to some small businesses that lack resources to provide such clarity without being mandated by law.
Regulatory Bodies: The FTC will have substantial responsibilities in drafting, implementing, and enforcing the new rules, alongside state attorneys general. Collaboration between these bodies will be crucial to effectively manage enforcement without creating unnecessary burdens on businesses.
In conclusion, while the TLDR Act aims to boost transparency and protect consumer privacy, its success hinges on careful and clear implementation to prevent creating undue burdens on businesses while still achieving its consumer protection goals.
Issues
The exclusion of small business concerns from the definition of ‘covered entity’ in Section 2 may limit consumer protections, potentially leaving users of small business services less protected compared to those using services from larger businesses, which could disproportionately affect service quality and data security expectations.
The definition of 'sensitive information' in Section 2 is broad, encompassing a wide array of data types, which might create regulatory challenges for businesses in terms of compliance, and also raises privacy concerns about the extent of data classification and necessary protections.
The requirement for a ‘truthful and non-misleading graphic data flow diagram’ in Section 2 could be operationally challenging for businesses to implement due to the complexity involved in accurately mapping and visually representing data flows, potentially resulting in significant compliance costs.
The provision in Section 2 allowing the Federal Trade Commission (FTC) to impose 'any other information' requirements in the summary statement introduces potential regulatory uncertainty. Businesses might face unpredictable compliance burdens if requirements change without new legislative oversight.
The enforcement structure in Section 2 grants broad powers both to the FTC and state attorneys general, which could lead to parallel or conflicting enforcement actions, increasing the complexity and potential legal risks for businesses involved.
The threshold allowing states to intervene when an interest of at least 1,000 residents is at stake (Section 2) might be considered low, potentially leading to significant litigation and enforcement actions that could challenge businesses’ operational stability.
The deadline of 360 days in Section 2 for implementing guidelines and regulations may pressure the FTC to expedite processes, risking incomplete, unclear, or poorly-implemented regulations that might not effectively address the legislative intent.
The requirement in Section 2 for summary statements to be accessible to low literacy individuals and individuals with disabilities mandates the creation and maintenance of diversified content formats, which might further challenge entities with resource constraints, especially those with smaller market sizes.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the act provides its official name, which is the “Terms-of-service Labeling, Design, and Readability Act,” often referred to as the “TLDR Act.”
2. Standard terms of service summary statement Read Opens in new tab
Summary AI
The bill mandates that, within 360 days of its enactment, the Federal Trade Commission (FTC) create rules requiring commercial websites to add a clear summary of their terms of service, a visual data-sharing diagram, and make the full terms accessible in an interactive format. This summary should highlight sensitive data handling, legal obligations, and changes to the terms and must be easy to understand and accessible for those with disabilities or low literacy.