Thursday, April 25

Biden issues executive order to restrict sales of personal data to China and Russia

President Biden issued an executive order Wednesday to restrict the sale of sensitive U.S. data to China, Russia and four other countries, a first-of-its-kind attempt to prevent personally identifiable information from being obtained by blackmail, fraud or other harm.

The president asked the Justice Department to write rules restricting the sale of information about Americans’ location, health and genetics to China, Russia, Iran, North Korea, to Cuba and Venezuela, as well as to any entity linked to these countries. The restrictions would also cover financial information, biometric data and other types of information that could identify individuals and sensitive government-related information.

The White House said this type of sensitive data could be used for blackmail purposes, “particularly against members of the military or national security community,” as well as against dissidents, journalists and academics.

The new restrictions would constitute the first blanket ban on the sale of digital data to individual countries in the United States, at a time when companies known as data brokers were gathering enormous amounts of information about people, ranging from favorite pastimes to household income and health status. then usually sell it to marketers who target them with ads.

A senior administration official said on a call with reporters that countries like China and Russia buy this type of data from brokers, as well as through other business relationships. Officials said countries were using their access to data for blackmail and surveillance and could use artificial intelligence to improve their use of information. The White House made the officials available on condition of anonymity.

The decree also constitutes the latest escalation in a digital cold war between Washington and Beijing. The United States has cut off essential supplies from Chinese hardware makers and tried to force the sale of TikTok, which is owned by Chinese internet company ByteDance. In August, Mr. Biden put in place restrictions to make it more difficult for American investors to invest in the development of sensitive technologies, such as artificial intelligence and quantum computing, in China.

China also imposes restrictions on American technology companies that operate within its borders and blocks access to sites like Facebook and Google. Meanwhile, Chinese companies holding sensitive data have attracted Washington’s attention. The government forced a Chinese company to sell the dating app Grindr and has previously raised concerns about a Chinese genetics company, BGI.

Mr. Biden’s order is part of a trend in which countries are increasingly trying to control data for their protection and economic benefit.

European governments have asked companies to store their citizens’ data within their national borders in a bid to pursue what they call “digital sovereignty.” Russia has followed China’s lead in building infrastructure that allows the government to completely block the Internet.

The United States has long taken a lighter approach to regulating the flow of information on the Internet, beginning with President Bill Clinton’s declaration of a “global free trade zone” in 1997.

Government officials who spoke to reporters Tuesday tried to dispel the notion that the executive order was a sign of a slowing down of the approach. They said the United States remained committed to the free flow of data around the world and that the rules would exempt the flow of data needed by multinational companies to conduct normal activities like running payroll.

Mr. Biden’s order will launch a process within the Justice Department to write the rules, during which the public and businesses can provide feedback on how they should be structured.

Beyond banning the sale of sensitive individual data to brokers who might send it to China or other countries, the administration is considering strictly banning the sale of genomic data. It also plans to prevent companies from providing sensitive data in other circumstances, for example as part of an investment deal. Companies could get around these restrictions if they took steps to protect Americans’ privacy, such as encrypting data.

The rules have been in the works for years. Mr. Biden issues the executive order about a week before he is scheduled to deliver his State of the Union address to Congress on March 7.

It’s still possible that restricted countries could access Americans’ data without purchasing it. FBI Director Christopher A. Wray said in 2020 that if you “are an American adult, it is more likely than not that China has stolen your personal data.” He linked the Chinese military to the 2017 breach of Equifax, the credit-scoring service, which exposed the personal information of 150 million Americans.