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How data privacy made it into the foreign aid package

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Apr 24, 2024
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Illustration: Gabriella Turrisi/Axios

After decades of trying to protect Americans' data privacy, lawmakers this week passed legislation aimed at fending off foreign threats.

Why it matters: Tech bills are known to languish on Capitol Hill, but a sense of urgency regarding conflicts abroad presented lawmakers with an opportunity to get some privacy protections across the finish line.

While all eyes have been on TikTok, legislation that targets data brokers may ultimately be what protects more Americans faster.

  • "It breaks my heart, but TikTok is a name brand, and we don't have data brokers in our minds. They're a thing that people don't even understand exists, these behind-the-scenes companies that are making millions of dollars off of us," one senior House Energy and Commerce Democratic aide said.

State of play: President Biden on Wednesday signed into law the package that includes funding for Ukraine, Israel, the Indo-Pacific and humanitarian assistance, as well as the data broker bill and TikTok sale-or-ban measure.

  • Congressional aides told Axios that lawmakers saw the foreign aid package as a natural national security vehicle for the two data privacy bills.
  • "Some folks could say anything short of military aid isn't national security and we're … taking a broader view," a House GOP leadership aide said.

Behind the scenes: In March, former China Select Committee Chair Mike Gallagher and Ranking Member Raja Krishnamoorthi introduced a bill to force China-based ByteDance to sell TikTok or face a ban in the U.S., a version of which passed Tuesday night.

  • E&C Ranking Member Frank Pallone saw loopholes in the TikTok bill early on and seized on an opportunity to rope in data brokers, aides told Axios.

"Frank always believed that even if you got rid of China owning TikTok, we still have this giant problem in our country with troves of American data being collected," said the senior E&C Democratic aide.

  • Pallone told E&C Chair Cathy McMorris Rodgers he would not support the TikTok measure without the bill to stop data brokers from selling sensitive personal information to foreign adversaries.
  • With CMR on board to move the data broker and TikTok bills together, the two moved at breakneck speed, clearing the committee and the full House in a matter of days with overwhelming support.

Enter the Senate, where Commerce Committee Chair Maria Cantwell was quick to raise concerns with the TikTok bill after it passed the House.

  • "I spent about one hour with her going page by page through the legislation," Krishnamoorthi said of Cantwell, calling her push to extend the divestiture period "the most important" change.
  • Sen. Mark Warner had sought changes to address bill of attainder concerns, but DOJ's Lisa Monaco convinced him the legislation would withstand legal challenges as is, a Senate aide said.

How it works: Attaching the TikTok bill to must-pass legislation allowed backers to circumvent opposition and a tight calendar.

  • "Ukraine and Israel and Taiwan aid are high on the agenda [for the Senate]. So if you attach things to it, they become priorities all of a sudden," the House GOP leadership aide said.

Krishnamoorthi said he believes the TikTok bill would have passed the Senate regardless of the foreign aid package.

  • He added that the data broker bill "fills holes" in the TikTok measure, and both are likely to have an immediate impact on Americans because the litigation TikTok plans to launch will result in China behaving more cautiously.

Catch up quick: Data brokers have been on E&C's radar for years, but the threat of foreign adversaries came into focus in 2023 with the release of a Duke University report detailing how brokers were selling U.S. military personnel data.

  • The bill also was meant to cement into law a Biden administration executive order on data brokers from this year that committee aides knew could be easily overturned by a future administration.

Yes, but: It's easier to rally against foreign adversaries than it is to tackle homegrown data misuse, and lawmakers still have a long way to go to pass a federal data privacy law.

What's next: Congressional aides said they don't see legal standing for a lawsuit against the data broker bill, but companies are still likely to push back after it's signed into law.

  • "The data brokers bill very much runs the risk of getting caught up in litigation," the ACLU's Cody Venzke said, citing a First Amendment right to access information.
  • TikTok is expected to file suit as soon as possible on the sale-or-ban bill.
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