President Biden is set to issue an executive order on Wednesday aimed at limiting the sale of sensitive American data to China, Russia, and four other countries. This unprecedented move is intended to prevent personally identifiable information from being obtained for malicious purposes such as blackmail, scams, or other harmful activities.
The order will task the Justice Department with establishing rules that restrict the sale of data concerning Americans’ locations, health, genetics, and other sensitive information to China, Russia, Iran, North Korea, Cuba, and Venezuela, as well as any entities associated with these countries. The restrictions will also cover financial details, biometric data, and other information that could be used to identify individuals, as well as sensitive government-related information.
The White House expressed concerns that this type of sensitive data could be exploited for blackmail, particularly targeting those in the military or national security sectors, as well as dissidents, journalists, and academics.
These new restrictions mark the first broad prohibition by the United States on the sale of digital data to specific countries, at a time when data brokers compile vast amounts of information on individuals, ranging from hobbies to income and health status, and then sell it to advertisers for targeted marketing.
A senior administration official, speaking to reporters, revealed that countries like China and Russia have been acquiring such data from brokers and through other corporate channels. These countries are reportedly using the data for purposes like blackmail and surveillance, potentially leveraging artificial intelligence to enhance their utilization of the information. The White House officials provided this information on the condition of anonymity.
The executive order represents the latest escalation in the digital rivalry between Washington and Beijing. The U.S. has previously restricted Chinese hardware manufacturers from key supplies and sought to compel the sale of TikTok, owned by ByteDance. In August, Biden imposed restrictions to hinder American investments in sensitive technologies like AI and quantum computing in China.
China, in turn, imposes restrictions on American tech firms operating within its borders and blocks access to platforms like Facebook and Google. Meanwhile, Chinese companies holding sensitive data have come under scrutiny in the U.S., with instances like the forced sale of Grindr and concerns over a Chinese genetics firm, BGI.
Biden’s order reflects a global trend where countries are increasingly asserting control over data for security and economic reasons.
In Europe, governments mandate that companies store their citizens’ data within national borders to achieve “digital sovereignty.” Russia has followed China’s lead by developing infrastructure that enables total internet censorship.
Historically, the U.S. has adopted a more lenient approach to regulating internet data flow, dating back to President Clinton’s 1997 declaration of the internet as a “global free-trade zone.”
Officials speaking to reporters emphasized that the executive order does not signal a departure from this approach. They affirmed the U.S.’ commitment to the free movement of data globally, with exemptions for essential data flows required by multinational corporations for normal operations like payroll processing.
The order will initiate a rule-making process at the Justice Department, allowing public and corporate input on the rule structure.
In addition to banning the sale of sensitive individual data to brokers who may transfer it to restricted countries, the administration is considering a strict prohibition on genomics data sales. There are also discussions on restricting the provision of sensitive data in other scenarios, such as through investment deals. Companies could potentially bypass these restrictions by implementing measures to safeguard Americans’ privacy, like data encryption.
These rules have been in development for years, with Biden issuing the executive order shortly before his scheduled State of the Union address on March 7.
Despite the restrictions, there is still a risk that restricted countries could access American data without purchasing it. FBI Director Christopher A. Wray stated in 2020 that it is likely China has obtained personal data of American adults. He linked the Chinese military to the 2017 Equifax breach, exposing personal information of 150 million Americans.
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