President Biden will issue an executive order on Wednesday seeking to limit the sale of sensitive American data to China, Russia and four other countries, a first-of-its-kind attempt to prevent personally identifiable information from being obtained through blackmail, scams or other harm.
The president will ask the Justice Department to write rules that would limit 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 government-related information.
The White House said this type 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 represent the first blanket U.S. ban on the sale of digital data to individual countries in an era when companies known as data brokers collect vast amounts of information about people, from favorite hobbies to family income and health conditions, and then they typically sell it to marketers who target them with advertisements.
A senior administration official said on a call with reporters that countries such as China and Russia were purchasing this type of data from brokers, as well as obtaining it through other corporate relationships. Officials said countries were using their access to data for blackmail and surveillance and could use artificial intelligence to improve 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 crucial supplies and tried to force the sale of TikTok, owned by Chinese internet company ByteDance. In August, Biden introduced restrictions to make it harder for American investors to put money into developing sensitive technologies, such as artificial intelligence and quantum computing, inside China.
China also imposes restrictions on American technology companies operating within its borders and blocks access to sites such as Facebook and Google. Meanwhile, Chinese companies possessing sensitive data have attracted Washington’s attention. The government forced a Chinese company to sell the dating app Grindr and has previously worried about a Chinese genetics company, BGI.
Biden’s order is part of a trend in which countries increasingly seek to control data for their own protection and economic benefit.
Governments in Europe have required companies to store their citizens’ data within national borders in an effort to 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 lighter approach to regulating the flow of information on the Internet, dating back to President Bill Clinton’s declaration of a “global free trade zone” in 1997.
Government officials who spoke to reporters Tuesday sought to dispel the notion that the executive order was a sign that the approach was breaking down. They said the United States remains 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 carry out normal tasks such as running payroll.
Biden’s order will kick off a process at the Justice Department to write 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 intermediaries who might send it to China or other countries, the administration is considering a strict ban on the sale of genomic data. It is also considering restricting companies from providing sensitive data in other circumstances, for example through an investment agreement. Companies could get around those restrictions if they took steps to protect Americans’ privacy, such as encrypting data.
The rules have been in the works for years. Biden will issue the executive order about a week before his State of the Union address to Congress scheduled for March 7.
It is 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 very likely 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 information of 150 million Americans.