President Biden issued an executive order on Wednesday seeking to limit the sale of sensitive US data to China, Russia and four other countries, a first-of-its-kind effort to keep personal information from being obtained for extortion, fraud or other harm.
The president asked the Justice Department to write rules to limit the sale of information about the locations, health and genetics of Americans to China, Russia, Iran, North Korea, Cuba and Venezuela, as well as to any entity associated with these countries. The restrictions will 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 kind of sensitive data could be used for blackmail, “especially against those in the military or national security community” and against dissidents, journalists and academics.
The new restrictions would be the United States’ first broad ban on the sale of digital data to individual countries at a time when companies known as data brokers are gathering vast amounts of information about people, from favorite hobbies to household income and health conditions . and then usually sell it to marketers who target them with ads.
A senior administration official said during a call with reporters that countries such as China and Russia were buying such data from brokers, as well as acquiring it through other partnerships. Officials said countries use their access to the data for blackmail and surveillance and can use artificial intelligence to enhance the use of the information. The White House made the officials available on condition of anonymity.
The executive order is also the latest escalation in a digital cold war between Washington and Beijing. The United States has cut off Chinese hardware makers from critical supplies 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 put money into the development of sensitive technology, such as artificial intelligence and quantum computing, inside China.
China also places restrictions on US tech companies operating within its borders and blocks access to websites such as Facebook and Google. Meanwhile, Chinese companies that hold sensitive data have attracted scrutiny in Washington. The government forced a Chinese company to sell dating app Grindr and has previously worried 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.
Governments in Europe have required companies to store data on their citizens within their national borders as they pursue what they call “digital sovereignty”. Russia has followed China’s lead, building infrastructure that allows the government to completely block the Internet.
The United States has long taken a more lax approach to regulating the flow of information over the Internet, beginning with President Bill Clinton’s declaration of a “global free trade zone” in 1997.
Administration officials who spoke to reporters on Tuesday sought to dispel the idea that the executive order was a sign that the approach was flagging. They said the United States remained committed to the free flow of data around the world and that the rules would free up the flow of data needed for multinational companies to conduct normal activities, such as managing payroll.
Mr. Biden’s order will begin a process at the Justice Department to draft the rules, during which the public and companies can provide feedback on how they should be structured.
In addition to banning the sale of sensitive individual data to brokers who could send it to China or other countries, the administration is considering a strict ban on the sale of genomics data. It also weighs restricting companies from providing sensitive data under other circumstances, such as through an investment agreement. Companies could circumvent 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 is issuing 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 for restricted countries to access data from Americans without purchasing it. FBI Director Christopher A. Wray said in 2020 that if “you’re an American adult, it’s more likely that China has stolen your personal data.” He linked the Chinese military to the 2017 breach of Equifax, the credit rating agency, which exposed the personal information of 150 million Americans.
