HR-10433-119
Referred to the House Committee on Energy and Commerce.
Sponsored by Valerie Foushee (D-NC)
What it does
This bill would prohibit large online platforms (100,000+ monthly users or $25 million+ annual revenue) from materially contributing to fraudulent content aimed at consumers. It would require platforms to build fraud-reporting and counter-notice systems, set privacy-protective default settings, verify advertiser identities (with enhanced checks for high-risk categories like finance, health, and gambling), and take steps to prevent repeat offenders and fake-account networks. The Federal Trade Commission would enforce the law and write implementing regulations, and the bill also creates state attorney general enforcement and a private right of action with statutory damages.
Who benefits
Consumers who encounter scams or fraudulent ads on major platforms, particularly older adults and less tech-savvy users targeted by financial and health scams; individuals whose accounts or content are misidentified as fraudulent (via counter-notice rights); privacy-conscious users benefiting from protective default settings; and plaintiffs' attorneys and state attorneys general who gain new enforcement tools.
Who is hurt
Large platforms and advertising networks (social media companies, marketplaces, review sites) that must build new compliance infrastructure, verification systems, and reporting mechanisms at significant cost; smaller platforms near the revenue/user threshold that may face compliance burdens as they grow; advertisers, especially in high-risk categories like cryptocurrency, health, and gambling, who face added verification steps and potential delays; and platforms facing litigation exposure from the new private right of action and statutory damages provisions.
Supporters argue
Supporters argue that online fraud costs American consumers billions of dollars annually and that platforms often profit from algorithmically promoting scam ads and fake reviews without accountability. They contend that requiring identity verification for advertisers, privacy-protective defaults, and accessible reporting mechanisms directly targets known fraud vectors while preserving a safe harbor for platforms that act reasonably, and that state and private enforcement backstops are necessary given limited FTC resources.
Opponents argue
Opponents argue that the bill's vague "materially contribute" standard, tied to content curation and recommendation algorithms, could expose platforms to liability for editorial and ranking decisions long treated as protected speech, chilling legitimate content moderation. They contend the compliance costs of universal advertiser verification and default-setting overhauls could burden mid-sized platforms disproportionately, and that the combination of FTC rulemaking, state suits, and private statutory damages creates overlapping, unpredictable liability exposure.
Constitutional context
The bill's regulation of platform curation and recommendation of content implicates First Amendment protections for editorial discretion recognized in Moody v. NetChoice (2024), which could be tested if "materially contribute" is read to cover algorithmic ranking decisions rather than only affirmative fraud facilitation; Congress's authority to regulate interstate commerce and advertising also grounds the bill under the Commerce Clause.
Checks and balances
Congress delegates significant rulemaking authority to the FTC to define material contribution, reasonable steps, and accessibility standards, with courts reviewing those rules independently post-Loper Bright, while state attorneys general and private plaintiffs provide parallel, non-executive enforcement checks.
Historical precedent
Similar platform-accountability efforts, such as the proposed EARN IT Act and various state-level social media liability laws, have targeted platform responsibility for harmful content but faced First Amendment and Section 230 challenges without being enacted in comparable form.