Biden acts to stop personal data sales to China, Russia
Blackmailers may use information, officials warn
WASHINGTON — President Biden issued an executive order Wednesday seeking to restrict the sale of sensitive American data to China, Russia, and four more countries, a first-of-its-kind attempt to keep personally identifying information from being obtained for blackmail, scams, or other harm.
The president asked the Justice Department to write rules restricting the sale of information about Americans’ locations, health, and genetics to China, Russia, Iran, North Korea, Cuba, and Venezuela, as well as any entities linked to those countries. The restrictions would also cover financial information, biometric data, and other types of information that could identify individuals and sensitive information related to the government.
The White House said this kind of sensitive data could be used for blackmail, “especially for those in the military or national security community,” and against dissidents, journalists, and academics.
The new restrictions would be the United States’ first-ever broad prohibition on the sale of digital data to individual countries in an era when companies known as data brokers assemble huge amounts of information on people, from favorite hobbies to household income and health conditions, and then typically sell it to marketers that target them with ads.
A senior administration official said during a call with reporters that countries like China and Russia were buying that kind of data from brokers, as well as obtaining it through other corporate relationships. The officials said the countries were using their access to the data for blackmail and surveillance and could employ artificial intelligence to enhance their use of the information. The White House made the officials available on the condition of anonymity.
The executive order is the latest escalation of a digital cold war between Washington and Beijing. The United States has cut Chinese hardware manufacturers off from crucial supplies and tried to force the sale of TikTok, which is owned by Chinese internet company ByteDance. In August, Biden enacted restrictions to make it harder for American investors to put money into the development of sensitive technology, including AI and quantum computing, inside China.
China also places restrictions on American tech companies that operate within its borders and blocks access to such sites as Facebook and Google.
Meanwhile, Chinese companies holding sensitive data have attracted scrutiny in Washington. The government forced a Chinese company to sell the dating app Grindr and has worried in the past about a Chinese genetics firm, BGI.
Biden’s order is part of a trend in which countries are increasingly trying to control data for their protection and economic benefit.
Governments in Europe have required companies to store data from their citizens inside their national borders as they seek what they call “digital sovereignty.” Russia has followed China’s lead, building infrastructure that allows the government to block the internet entirely.
The United States has long taken a lighter approach to regulating the flow of information over the internet, starting with
President Clinton declaring it a “global free-trade zone” in 1997.
Government officials who spoke to reporters Tuesday tried to dispel the idea that the executive order was a sign that approach was flagging. 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 for multinational companies to conduct normal activities like handling payrolls.
Biden’s order will kick off a process at the Justice Department to write the rules, during which the public and companies can offer feedback on how they should be structured.
Beyond forbidding the sale of sensitive individual data to brokers that could send it to China or other countries, the administration is considering a tight ban on the sale of genomics data. It is also weighing restricting companies from providing sensitive data under other circumstances such as through an investment deal. Companies could bypass those restrictions if they took steps to protect Americans’ privacy, like encrypting the data.
The rules have been in the works for years. Biden issued the executive order about a week before he is scheduled to deliver the State of the Union address to Congress on March 7.
It is still possible that the restricted countries could gain access to data from Americans without buying it. FBI Director Christopher 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 rating service, which exposed the personal data of 150 million Americans.