“It shouldn't be that you can't have fun on an app anymore without it collecting your entire personal profile and shipping it off to a hostile nation-state, who will do who knows what with it,” Hawley said in an interview with The Technology 202. “And of course, they will amass more and more of this information over time.”
Hawley's legislation underscores the growing national security concerns in Washington surrounding the tech industry’s ties to Beijing amid a broader trade war. But it would also create new barriers for tech companies who try to operate in both countries — potentially contributing to a further divide in the tech services available in the U.S. and China.
American companies, including Apple, would also be prohibited from storing data in China and certain other countries that present national security concerns. Those restrictions could make it difficult for American companies to comply with local laws and limit their ability to operate in the country.
The senator acknowledges that U.S. companies would likely need to change their strategy. “It would certainly prevent them from doing business on Beijing’s terms,” said Hawley, who gave both TikTok and Apple the empty-chair treatment at a Capitol Hill hearing earlier this month, blasting the companies for not accepting his invitation to publicly testify about their relationships with the Chinese government.
TikTok has been on the defensive as Washington officials to take a closer look at its data security practices and reports that it engages in censorship at the behest of the Chinese government. The company is at the center of an investigation by the Committee on Foreign Investment in the United States, which has the power to place severe limitations on the business or even unwind ByteDance’s acquisition of Musical.ly, which was later rebranded as TikTok. The 2017 deal largely sailed through with little regulatory scrutiny until more recently, when TikTok surged in popularity among American teens. Hawley’s bill would also require CFIUS to block such mergers unless the companies obtain preapproval.
TikTok has said that it stores American users’ data in the United States and, in some instances, Singapore. TikTok chief executive Alex Zhu told the New York Times today that TikTok user data was separated from the rest of Bytedance, and was not even used to support ByteDance’s artificial intelligence and other technologies. “The data of TikTok is only being used by TikTok for TikTok users,” he said.
Hawley’s legislation would require that the company annually certify to the Federal Trade Commission that it’s not transferring Americans' data to China and otherwise complying with the law.
“In those countries where the risks are high, I think we have got to err on the side of protecting American consumers' privacy and by extension, protecting our own national security,” Hawley says.
American tech companies probably will fight some of the restrictions Hawley is proposing because complying with them could make it impossible to offer certain products and services in China. Apple for instance has said that to offer its iCloud services in the country, it is required to store Chinese customers’ data and sensitive encryption keys locally in compliance with Chinese law, raising concerns among legal experts that Beijing could use it to carry out human rights abuses. Any change to that practice could cut them off from more than 1 billion potential customers in a country where tech adoption is rapidly on the rise.
But Hawley thinks American tech titans will fare just fine under his proposed bill. “I suspect that [Apple] will find ways to do business, perhaps even to access the Chinese market through other means,” he said.
BITS, NIBBLES AND BYTES
BITS: Republicans are criticizing Twitter’s new political ad policies, saying the company’s recently unveiled rules could censor conservatives. Twitter confirmed Friday that it will bar advertising from candidates, political action committees and dark-money groups, my colleagues Tony Romm and Isaac Stanley-Becker report.
Brad Parscale, campaign manager for President Trump's reelection bid, called the policy “yet another attempt to silence conservatives, since Twitter knows President Trump has the most sophisticated online program ever known,” in a statement to Reuters
The new advertising policy, which goes into effect Nov. 22, will allow some organizations to continue to pay to promote content about social, economic and environmental issues, but Twitter will limit how the advertisers target their messages.
Twitter will not allow political and advocacy groups to advocate for or against a candidate or legislation, which could also put many nonprofit groups with political advocacy arms in a bind, Kate Conger at the New York Times reports.
“While Twitter’s potential new issues ads policy is more permissive than a total ban, it’s still going to be a challenge for groups who are trying to drive political or legislative change using the platform,” Nick DeSarno, the director of digital and policy communications at the Public Affairs Council, a nonpartisan, nonpolitical association for public affairs professionals, told Kate.
The finalized ad policy also doesn't police unpaid ads with misinformation, nor does the company have a fact-checking program in place, Tony and Isaac report.
But Twitter argues that the new guidelines will make it easier for users to spot false information. “Anyone — whether they’re running an ad or not — can be held accountable for what they say and their actions in this space,” Del Harvey, the vice president for trust and safety at Twitter, said.
NIBBLES: The international police agency Interpol will join calls from U.S. officials in condemning the spread of warrant-proof encryption services, citing their role in concealing child abuse, people briefed on the matter told Joseph Menn at Reuters. The move could turn up the heat on leadership at Facebook, whose decision to use end-to-end encryption for its Messenger product set off a firestorm of complaints from international lawmakers and child advocates.
“Tech companies should include mechanisms in the design of their encrypted products and services whereby governments, acting with appropriate legal authority, can obtain access to data in a readable and useable format,” a draft of the resolution seen by Reuters said. The FBI introduced the resolution at an Interpol conference in Lyon, France, and it will be released without a formal vote by the other countries in attendance, sources told Joseph.
The resolution echoes a recent push from the U.S. Justice Department, the United Kingdom and Australia to Facebook, urging the company to reverse its decision to use end-to-end encryption for its Messenger product.
Interpol did not respond to a request for comment from Reuters on Sunday. The FBI referred questions to Interpol.
BYTES: National security officials say that China is paying U.S. scientists to moonlight at Chinese institutions to gain access to U.S.-funded research and surpass the United States in technological development, the Wall Street Journal's Aruna Viswanatha and Kate O'Keeffe report. The problem has attracted attention from members of the Senate Homeland Security subcommittee on investigations, who will meet this Tuesday to examine how to protect U.S.-funded research.
U.S. authorities have flagged thousands of researchers recruited by Beijing for the “Talent Programs,” but prosecutors have found it difficult to prove wrongdoing in court. In one case, the Justice Department charged University of Kansas engineering professor Franklin Feng Tao with defrauding the university and U.S. government by failing to disclose his employment at a Chinese university. Tao alleged in court that the false charges were fabricated by an embittered colleague who accused him of stealing her work.
The case highlights a tricky position for the Justice Department, which seeks to crack down on intellectual property theft amid a trade war with China, while not targeting based on ethnicity.
“We can’t let the actions of the government put all of their nationals under a cloud of suspicion,” the Justice Department’s national security division chief John Demers said at a recent conference in Washington. China has denied orchestrating a systematic plan to steal U.S. technology.
— News from the private sector:
— News from the public sector:
— Tech news generating buzz around the Web:
- Microsoft has hired former United States Attorney General Eric Holder to conduct an audit of facial recognition company AnyVision, NBC News first reported.
— Coming up:
- The Senate Homeland Security Subcommittee on Investigations will host a hearing to examine securing the United States research enterprise from China's talent recruitment plans on Tuesday at 10am
- The Senate Commerce Committee will host a hearing on the deployment of autonomous vehicles on Tuesday at 10 a.m.
- The House Financial Services Committee will host a hearing on the role of big data in financial services on November 21 at 9:30 a.m.