To promote electronic commerce through improved access for consumers to electronic databases, including securities market information databases.
IN THE HOUSE OF REPRESENTATIVES
May 19, 1999
Mr. BLILEY (for himself, Mr. DINGELL, Mr. TAUZIN, Mr. MARKEY, Mr. OXLEY, and Mr. TOWNS) introduced the following bill; which was referred to the Committee on Commerce
To promote electronic commerce through improved access for consumers to electronic databases, including securities market information databases.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Consumer and Investor Access to Information Act of 1999'.
TITLE I--COMMERCE IN DUPLICATED DATABASES PROHIBITED
SEC. 101. DEFINITIONS.
As used in this title:
(1) DATABASE- The term `database' means a collection of discrete items of information that have been collected and organized in a single place, or in such a way as to be accessible through a single source, through the investment of substantial monetary or other resources, for the purpose of providing access to those discrete items of information by users of the database. However, a discrete section of a database that contains multiple discrete items of information may also be treated as a database.
(2) DUPLICATE OF A DATABASE- A database is `a duplicate' of any other database if the database is substantially the same as such other database, and was made by extracting information from such other database.
(3) INFORMATION- The term `information' means facts, data, or any other intangible material capable of being collected and organized in a systematic way, with the exception of works of authorship.
(4) COMMERCE- The term `commerce' means all commerce which may be lawfully regulated by the Congress.
(5) IN COMPETITION- The term `in competition with' when used with respect to the sale or distribution of a database to the public means that the database--
(A) displaces substantial sales or licenses of the database of which it is a duplicate; and
(B) significantly threatens the opportunity to recover a return on the investment in the collecting or organizing of the duplicated database.
(6) GOVERNMENT DATABASE- The term `government database' means a database that--
(A) has been collected or maintained by the United States of America, or any agency or instrumentality thereof; or
(B) is required by Federal statute or regulation to be collected or maintained, to the extent so required.
SEC. 102. PROHIBITION AGAINST DISTRIBUTION OF DUPLICATES.
It is unlawful for any person, by any means or instrumentality of interstate or foreign commerce or communications, to sell or distribute to the public a database that--
(1) is a duplicate of another database that was collected and organized by another person; and
(2) is sold or distributed in commerce in competition with that other database.
SEC. 103. PERMITTED ACTS.
(a) COLLECTING OR USE OF INFORMATION OBTAINED THROUGH OTHER MEANS- Nothing in this title shall restrict any person from selling or distributing to the public a database consisting of information obtained by means other than by extracting it from a database collected and organized by another person.
(b) NEWS REPORTING- Nothing in this title shall restrict any person from selling or distributing to the public a duplicate of a database for the sole purpose of news reporting, including news gathering and dissemination, or comment, unless the information duplicated is time sensitive and has been collected by a news reporting entity, and the sale or distribution is part of a consistent pattern engaged in for the purpose of direct competition.
(c) LAW ENFORCEMENT AND INTELLIGENCE ACTIVITIES- Nothing in this title shall prohibit an officer, agent, or employee of the United States, a State, or a political subdivision of a State, or a person acting under contract of such officers, agents or employees, from selling or distributing to the public a duplicate of a database as part of lawfully authorized investigative, protective, or intelligence activities.
(d) SCIENTIFIC, EDUCATIONAL, OR RESEARCH USES- No person or entity who for scientific, educational, or research purposes duplicates the same information that has been collected or generated by another person or entity shall incur liability under this title so long as such conduct is not part of a consistent pattern engaged in for the purpose of direct commercial competition with that other person.
SEC. 104. EXCLUSIONS.
(a) GOVERNMENT INFORMATION-
(1) EXCLUSION OF GOVERNMENT DATABASES- Protection under section 102 shall not extend to government databases.
(2) INCORPORATED NONGOVERNMENT PORTIONS PROTECTED- The incorporation of all or part of a government database into a non-government database does not preclude protection for the portions of the non-government database which came from a source other than the government database.
(3) AUTHORITY TO EXCLUDE ADDITIONAL GOVERNMENT-SUPPORTED DATABASES- Nothing in this title shall prevent the Federal Government or a State or local government from establishing by law or contract that a database, the creation or maintenance of which is substantially funded by such Federal, State, or local government, shall not be subject to the protection afforded under this title.
(b) DATABASES RELATED TO INTERNET COMMUNICATIONS- Protection under section 102 does not extend to a database incorporating information collected or organized--
(1) to perform the function of addressing, routing, forwarding, transmitting, or storing Internet communications; or
(2) to perform the function of providing or receiving connections for Internet communications.
(c) COMPUTER PROGRAMS-
(1) PROTECTION NOT EXTENDED- Subject to paragraph (2), protection under section 102 shall not extend to computer programs, including any computer program used in the manufacture, production, operation, or maintenance of a database, or any element of a computer program necessary to its operation.
(2) INCORPORATED DATABASES- A database that is otherwise subject to protection under section 102 is not disqualified from such protection solely because it resides in a computer program, so long as the database functions as a database within the meaning of this title and not as an element necessary to the operation of the computer program.
(d) NONPROTECTABLE SUBJECT MATTER- Protection for databases under section 102 does not extend to the sale or distribution to the public of a duplicate of any individual idea, fact, procedure, system, method of operation, concept, principle, or discovery.
(e) SUBSCRIBER LIST INFORMATION- Protection for databases under section 102 does not extend to subscriber list information within the meaning of section 222(f) of the Communications Act of 1934 (47 U.S.C. 222(f)). Nothing in this subsection shall affect the operation of section 222(e) of such Act, under which a telecommunications carrier provides, upon request, subscriber list information for the purposes of publishing directories in any format under nondiscriminatory and reasonable rates, terms, and conditions.
SEC. 105. RELATIONSHIP TO OTHER LAWS.
(a) OTHER RIGHTS NOT AFFECTED- Subject to subsection (b), nothing in this title shall affect rights, limitations, or remedies concerning copyright, or any other rights or obligations relating to information, including laws with respect to patent, trademark, design rights, antitrust, trade secrets, privacy, access to public documents, misuse, and the law of contract.
(b) PREEMPTION OF STATE LAW- On or after the effective date of this Act, no State law that prohibits or that otherwise regulates conduct that is subject to the prohibitions specified in section 102 shall be effective to the extent that such State law is inconsistent with section 102.
(c) LICENSING- Subject to the provisions on misuse in section 106(b), nothing in this title shall restrict the rights of parties freely to enter into licenses or any other contracts with respect to the use of information.
(d) COMMUNICATIONS ACT OF 1934- Nothing in this title shall affect the operation of the Communications Act of 1934 (47 U.S.C. 151 et seq.) or the authority of the Federal Communications Commission.
SEC. 106. LIMITATIONS ON LIABILITY.
(a) SERVICE PROVIDER LIABILITY- A provider of telecommunications services or information services (within the meaning of section 3 of the Communications Act of 1934 (47 U.S.C. 153)), or the operator of facilities therefor, shall not be liable for a violation of section 102 if such provider or operator did not initially place the database that is the subject of the violation on a system or network controlled by such provider or operator.
(b) MISUSE- A person shall not be liable for a violation of section 102 if the person benefiting from the protection afforded a database under section 102 misuses the protection. In determining whether a person has misused the protection afforded under this title, a court shall consider, among other factors--
(1) the extent to which the ability of persons to engage in the permitted acts under this title has been frustrated by contractual arrangements or technological measures;
(2) the extent to which information contained in a database that is the sole source of the information contained therein is made available through licensing or sale on reasonable terms and conditions;
(3) the extent to which the license or sale of information contained in a database protected under this title has been conditioned on the acquisition or license of any other product or service, or on the performance of any action, not directly related to the license or sale;
(4) the extent to which access to information necessary for research, competition, or innovation purposes has been prevented;
(5) the extent to which the manner of asserting rights granted under this title constitutes a barrier to entry into the relevant database market; and
(6) the extent to which the judicially developed doctrines of misuse in other areas of the law may appropriately be extended to the case or controversy.
SEC. 107. ENFORCEMENT.
(a) USE OF FEDERAL TRADE COMMISSION ACT AUTHORITY- The Federal Trade Commission shall have jurisdiction, under section 5 of the Federal Trade Commission Act (15 U.S.C. 45), to prevent violations of section 102 of this title.
(b) RULEMAKING AUTHORITY- The Federal Trade Commission may, pursuant to subparagraph (A) or (B) of section 18(a) of the Federal Trade Commission Act (15 U.S.C. 57a(a)), but without regard to the limitations contained in section 18(b)(3) of such Act, prescribe rules to implement this title.
(c) ENFORCEMENT- Any violation of any rule prescribed under subsection (b) shall be treated as a violation of a rule respecting unfair or deceptive acts or practices under section 5 of the Federal Trade Commission Act (15 U.S.C. 45). Notwithstanding section 5(a)(2) of such Act (15 U.S.C. 45(a)(2)), communications common carriers shall be subject to the jurisdiction of the Federal Trade Commission for purposes of this title.
(d) ACTIONS BY THE COMMISSION- The Federal Trade Commission shall prevent any person from violating section 102 or a rule of the Commission under subsection (b) of this section 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 title. Any person who violates section 102 or such rule shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act in the same manner, by the same means, and with the same jurisdiction, power, and duties as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated into and made a part of this title.
SEC. 108. REPORT TO CONGRESS.
Not later than 36 months after the date of enactment of this title, the Federal Trade Commission shall report to the Congress on the effect this title has had on electronic commerce and on the United States database industry and related parties, including--
(1) the availability of databases, search engines, and other tools for locating information necessary for electronic commerce;
(2) the extent of competition between database producers, including the concentration of market power within the database industry;
(3) the investment in the development and maintenance of databases, including changes in the number and size of databases;
(4) the availability of information to industries and researchers which rely upon such availability;
(5) whether in the period after enactment of this title database producers have faced unfair competition, particularly from publishers in the European Union; and
(6) the extent to which extraction of information from databases, to a degree insufficient to result in liability under section 102, is harming database producers' incentive to collect and organize databases.
SEC. 109. EFFECTIVE DATE.
This title shall take effect on the date of the enactment of this Act, and shall apply to the sale or distribution after that date of a database that was collected and organized after that date.
TITLE II--SECURITIES MARKET INFORMATION
SEC. 201. MISAPPROPRIATION OF REAL-TIME MARKET INFORMATION.
Section 11A of the Securities Exchange Act of 1934 (15 U.S.C. 78k-1) is amended by adding at the end the following new subsection:
`(e) MISAPPROPRIATION OF REAL-TIME MARKET INFORMATION-
`(1) PROHIBITION AGAINST MISAPPROPRIATION- Subject to paragraphs (3), (4), and (5), any person who--
`(A) obtains directly or indirectly from a market information processor real-time market information, and
`(B) directly or indirectly sells, distributes or redistributes, or otherwise disseminates such real-time market information, without the authorization of the market information processor,
shall be liable to that market information processor for the remedies set forth in paragraph (2).
`(2) CIVIL REMEDIES-
`(A) CIVIL ACTIONS- Any person who is injured by a violation of paragraph (1) may bring a civil action for such a violation in an appropriate United States district court, except that any action against a State governmental entity may be brought in any court that has jurisdiction over claims against such entity.
`(B) TEMPORARY AND PERMANENT INJUNCTIONS- Any court having jurisdiction of a civil action under this subsection shall have the power to grant temporary and permanent injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent a violation of paragraph (1).
`(C) MONETARY RELIEF- When a violation of paragraph (1) has been established in any civil action arising under this subsection, the plaintiff shall be entitled to recover any damages sustained by the plaintiff.
`(D) DISGORGEMENT- When a violation of paragraph (1) has been established, if the plaintiff is not able to prove recoverable damages to the full extent of the defendant's monetary gain directly attributable to the violation, the court, in its equitable discretion, may order the defendant to disgorge the amount of such monetary gain to the plaintiff.
`(3) PERMITTED ACTS-
`(A) GATHERING OR USE OF REAL-TIME MARKET INFORMATION INDEPENDENTLY OBTAINED- Nothing in this subsection shall restrict any person from independently gathering real-time market information, or from redistributing or disseminating such independently gathered information.
`(B) NEWS REPORTING- Nothing in this subsection shall restrict any news reporting entity from extracting real-time market information for the sole purpose of news reporting, including news gathering, dissemination, and comment, unless the extraction is part of a consistent pattern of competing with a market information processor in the distribution of real-time market information.
`(4) RELATIONSHIP TO OTHER LAWS-
`(A) PREEMPTION- Subject to subparagraphs (B), (C), and (D), on and after the date of enactment of this subsection, this section--
`(i) shall exclusively govern the unauthorized extraction, sale, distribution or redistribution, or other dissemination of real-time market information; and
`(ii) shall supersede any other Federal or State law (either statutory or common law) to the extent that such other Federal or State law is inconsistent with this section.
`(B) FEDERAL SECURITIES LAWS- Nothing in this subsection shall be construed--
`(i) to limit or otherwise affect the application of any provision of the securities laws (as defined in section 3(a)(47)), or the rules and regulations thereunder; or
`(ii) to impair or limit the authority of the Commission.
`(C) ANTITRUST- Nothing in this subsection shall limit in any way the constraints that are imposed by Federal and State antitrust laws on the manner in which products and services may be provided to the public, including those regarding single suppliers of products and services.
`(D) LICENSING- Nothing in this subsection shall restrict the rights of parties freely to enter into licenses or any other contracts with respect to the extraction, sale, distribution or redistribution, or other dissemination of real-time market information.
`(5) LIMITATIONS ON ACTIONS-
`(A) CIVIL ACTIONS- No civil action shall be maintained under this subsection unless it is commenced within one year after the cause of action arises or claim accrues.
`(B) ADDITIONAL LIMITATION- No civil action shall be maintained under this subsection for the extraction, sale, distribution or redistribution, or other dissemination of market information that is not real-time market information.
`(C) PERSONS SUBJECT TO CONTRACTUAL REMEDIES- No civil action shall be maintained under this subsection by a market information processor against any person to whom such processor provides real-time market information pursuant to a contract or agreement between such processor and such person with respect to any real-time market information or any rights or remedies provided pursuant to such contract or agreement.
`(6) DEFINITIONS- As used in this subsection:
`(A) MARKET INFORMATION- The term `market information' means information--
`(i) with respect to quotations and transactions in any security; and
`(ii) the collection, processing, distribution, and publication of which is subject to this title.
`(B) REAL-TIME MARKET INFORMATION- Taking into account the present state of technology, different types of market data, how market participants use market data, and other relevant factors, the Commission may, consistent with the protection of investors and the public interest, prescribe by rule the extent to which market information shall be considered to be real-time market information for purposes of this subsection.
`(C) MARKET INFORMATION PROCESSOR- The term `market information processor' with respect to any market information means the securities exchange, self-regulatory organization, securities information processor, or national market system plan administrator that is responsible under this title or the rules or regulations thereunder, for the collection, processing, distribution, and publication of, or preparing for distribution or publication, such market information.'.
SEC. 202. EFFECTIVE DATE.
(a) IN GENERAL- The amendment made by section 201 shall take effect on the date of the enactment of this Act, and shall apply to acts committed on or after that date.
(b) PRIOR ACTS NOT AFFECTED- No person shall be liable under section 11A(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78k-1(e)), as added by section 201 of this Act, for the extraction, sale, distribution or redistribution, or other dissemination of real-time market information prior to the date of enactment of this Act, by that person or by that person's predecessor in interest.