A bill introduced to the US Senate on Monday could make it illegal for internet companies to transfer American user data and encryption keys to China, in an effort to prevent user data leaks to the Chinese government.
Why it matters: If passed, the bill introduced by Republican Senator Josh Hawley would be the first to ban tech companies from storing US user data in China citing national security concerns.
- In a statement announcing the bill, Hawley singled out Apple and TikTok, two companies which only two weeks ago declined to testify at a Congressional hearing on their data transfer practices to China.
- This could mean trouble for companies which operate in China, which are required to store Chinese user data in the country.
“If your child uses TikTok, there’s a chance the Chinese Communist Party knows where they are, what they look like, what their voices sound like, and what they’re watching. That’s a feature TikTok doesn’t advertise.”
—Senator Josh Hawley
Details: The bill would also stop Chinese companies from collecting non-essential data from US citizens.
- Hawley also wants the US Committee on Foreign Investment (CFIUS) to pre-approve any acquisition of US tech companies by Chinese businesses.
- The bill also singles out Russia as a “country of concern.”
Context: Hawley held a congressional hearing Nov. 5 exploring security risks brought by social media platforms and their ties to Beijing. Executives from Apple and TikTok declined to attend.
- TikTok has said that all of the data from its American users is stored in the US.
- Just a day before the hearing was set to take place, CFIUS opened an investigation in TikTok’s parent company Bytedance’s 2017 acquisition of Musical.y.
- Apple had to comply with Chinese data localization laws, which prohibits storing Chinese user data abroad, and partnered with a Chinese company to continue operating its iCloud service. Critics say that Beijing can force Apple’s local partner to hand over these encryption keys, which could open access to US user data as well. Apple said that it has control over the encryption keys, not its partner.
- TikTok is reportedly more popular than Facebook among young Americans, surpassed by only Facebook’s WhatsApp and Messenger in number of downloads this year.