Regulation of Data Brokers: Executive Order 14117 on Preventing Access to Americans’ Sensitive Data by Countries of Concern

Regulation of Data Brokers: Executive Order 14117 on Preventing Access to Americans’ Sensitive Data by Countries of Concern

INSIGHTi

Regulation of Data Brokers: Executive Order
14117 on Preventing Access to Americans’
Sensitive Data by Countries of Concern
May 16, 2024
In February 2024, the Biden Administration issued Executive Order (E.O.) 14117 Preventing Access to
Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of
Concern. E.O. 14117 authorizes the Attorney General, in coordination with the heads of other relevant
agencies, to issue regulations to prevent the transfer or sale of bulk sensitive personal and government-
related data to countries of concern when access would pose an “unacceptable risk to the national security
of the United States.” The Biden Administration, Congress, and industry and civil society groups have
engaged in debates on data security with increased frequency as artificial intelligence (AI) and other data
analytics tools increase the potential for exploitation or manipulation of sensitive data.
The Department of Justice (DOJ) issued an Advance Notice of Proposed Rulemaking (ANPRM) to
explain its proposed regulations and solicit feedback. The proposed program would cover transactions
with countries of concern involving six types of bulk U.S. sensitive personal data (with the definition of
“bulk” ranging from 100 to 10,000 U.S. persons, depending on the type of data) and two types of
government-related data (regardless of volume)
(see text box).
Covered Data

Bulk U.S. Personal Data
Under the proposed program, transactions
•
personal identifiers
involving human genomic data and data
•
personal financial data
brokerage transactions involving any type of
•
personal health data
covered data would be classified as prohibited.
•
precise geolocation data
Other transactions related to vendor,
•
biometric identifiers
employment, or investment agreements and
involving covered data would be classified as
•
human genomic data
restricted and have to comply with security
Government Data
requirements to be set by the Secretary of
•
geolocation data
Homeland Security. The ANPRM identifies the
•
sensitive personal data on current or former
People’s Republic of China (PRC or China),
government employees
China’s Special Administrative Regions of Hong
Source: ANPRM
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Kong and Macau, Iran, North Korea, Cuba, and Venezuela as countries of concern. The program is to be
implemented in stages with exceptions for certain types of cross-border data transactions.
Data Brokerage and Countries of Concern
One of the major sources of access to U.S. citizens and U.S.-government-related data that E.O. 14117
aims to address is the data brokerage industry. Data brokers are broadly defined as firms engaged in the
acquisition and sale of data, generally personal data on consumers such as age, location, health
conditions, political affiliation, and lifestyle preferences (e.g., travel, purchases). At least one industry
expert has found that the large quantities of data for sale on individuals, including active-duty military,
may violate civil rights and pose national security risks. One study on data brokers found data brokers
employed little to no safeguards to verify the identity of buyers interested in purchasing large quantities of
data on military servicemembers, even when the buyer had an IP address in Asia. In an April 2023 hearing
on data brokers, one industry expert testified that countries of concern could steal sensitive data from data
brokers if such firms do not have adequate data protection in place. For example, PRC hackers gained
access to sensitive data on millions of Americans in the 2017 Equifax hack, underscoring the importance
of data protection related to collection and storage of sensitive data.
U.S. Policy on Cross-Border Data Flows
E.O. 14117 comes at a juncture in U.S. policy on cross-border data flows when the Administration and
some in Congress are reevaluating the benefits and risks of open cross-border data flows. Until 2023, the
United States generally supported digital trade policies that promote the free flow of data across borders.
The E.O. is one of several actions by the Administration and Congress that represent a change in U.S.
policy towards restrictions on cross-border data flows. In 2023, the Biden Administration removed its
support for language supporting open cross-border data flows and prohibiting data localization at the
World Trade Organization (WTO), citing the need for domestic policy space given shifting debates on
technology regulation and other digital economy issues. In April 2024, a supplemental appropriation (P.L.
118-50) became law that contains the Protecting Americans’ Data from Foreign Adversaries Act, which
prohibits data brokerage transactions with foreign adversaries related to U.S. citizens’ personally
identifiable sensitive data. The E.O. and these other actions may influence future U.S. digital trade policy,
particularly the treatment of cross-border data flows.
E.O. 14117 states that the restrictions are calibrated to minimize the impact on commercial activity, and it
does not put in place any data localization requirements. Despite the E.O.’s commitment to an open
Internet and the promotion of cross-border data flows that enable trade and investment, cross-border
commercial transactions may be impacted, particularly in digital economy sectors such as cloud
computing.
Issues Facing Congress
The 118th Congress is considering legislation related to data security and could consider how the aim and
implementation of E.O. 14117 overlap with existing or proposed legislation. The Protecting Americans’
Data from Foreign Adversaries Act is focused on prohibiting transactions of any volume related to
personal data and comes into force 60 days after enactment, while E.O. 14117 covers government-related
and bulk personal transactions and builds an implementation program in tranches with no timeline.
Congress could consider whether it wants to oversee or be consulted on the DOJ’s implementation of the
E.O. As part of those efforts, Congress could consider the content of E.O. 14117 (e.g., whether it provides
adequate data protection, and covers the appropriate countries of concern, data, and transactions). The
United States has not enacted comprehensive federal data privacy legislation. Some Members of Congress

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have proposed such legislation, and Congress could assess how such legislation might relate to the goals
of the E.O.
Congress could also consider how E.O. 14117 could impact the U.S.’s broader efforts to oversee or
regulate the digital economy and the technology sector.

Author Information

Danielle M. Trachtenberg

Analyst in International Trade and Finance

Disclaimer
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