House Advances Bill Empowering FTC to Punish Data Transfers to Foreign Adversaries

The U.S. House of Representatives last week unanimously advanced a bill that would empower the Federal Trade Commission (FTC) to pursue civil penalties of no less than US$ 50,000 when a data broker sells information to foreign adversaries or entities controlled by them, such as China, Iran, Russia, and North Korea.

The measure seeks to revise the FTC's terminology regarding investigations into activities that are "unfair or deceptive," which adversely affect consumers, including the inclusion of foreign competitor data transfers in the agency's regulations. 

The Protecting Americans’ Data from Foreign Adversaries Act passed the lower chamber with a unanimous 414-0 vote last week. 

This legislation was introduced in early March by House Energy and Commerce Committee leaders Cathy McMorris Rodgers (R-Wash.) and Frank Pallone, Jr. (D-N.J.), in response to a recent executive order signed by President Joe Biden. 

The executive order grants multiple agencies increased legal authority to curb data transfers to foreign adversaries, prompting the introduction of this bill.

It is now advancing to the Senate, and upon approval, will be sent to President Joe Biden for his signature.

“Data brokers’ sale of Americans’ most sensitive information to our foreign adversaries is wrong and damages our national security,” said Senate Commerce Committee Chairwoman Maria Cantwell, D-Wash.  

Earlier this month, the FTC announced a final rule that extends telemarketing fraud protections to businesses, alongside updates to the rule's recordkeeping obligations, reflecting advancements in technology and the market landscape. 

Additionally, the Commission introduced a proposed rule aimed at equipping the agency with substantial new resources to combat tech support scams.