TERMS Act

The Transparency in Enforcement, Restricting, and Monitoring of Services (TERMS) Act aims to enhance transparency for consumers, businesses, and organizations using online services. Its primary purpose is to ensure users have sufficient information about an online service provider's standards, processes, and policies regarding the unilateral termination, suspension, or cancellation of user accounts. This increased transparency is intended to allow consumers to make informed choices and foster a more competitive marketplace. The Act mandates that online service providers publicly disclose a clear and concise acceptable use policy within 180 days of enactment. This policy must explain specific prohibited acts, the methods of enforcement (including third-party involvement), and whether off-platform conduct can lead to restrictions. It also requires disclosure of any appeal processes for restriction decisions or a statement if no appeal is permitted, and providers must give advance notice of material changes to these policies. Before restricting a user, online service providers must provide advance written notice at least seven days prior, detailing the specific act or practice that led to the decision and how it violated the acceptable use policy. This notice must also inform the user of any appeal options and offer the choice for public disclosure of the notice. Exceptions to advance notice apply only for lawful court orders or to prevent imminent risks of death, serious physical injury, or serious health risks, in which case notice is given concurrently or as soon as practicable. Annually, online service providers must publish a report detailing enforcement actions , including the total number of potential violations alerted by various sources like user complaints or government entities. The report must also specify the types of actions taken, such as terminations, suspensions, or warnings, categorized by the exact policy provision violated and the source of the alert. The Federal Trade Commission (FTC) is tasked with enforcing the Act, treating violations as unfair or deceptive acts or practices, and will issue guidance to assist providers with compliance.