Chinese apps could face subpoenas or bans under Biden order -sources

Kingsoft

18/06/2021 02:14

(Adds background on Biden orders)
    By Karen Freifeld
    June 17 (Reuters) - President Joe Biden's executive order
aimed at safeguarding Americans' sensitive data would force some
Chinese apps to take tougher measures to protect private
information if they want to remain in the U.S. market, according
to people familiar with the matter.
    The goal is to keep foreign adversaries like China and
Russia from gaining access to large amounts of personal and
proprietary business information.
    The U.S. Department of Commerce may issue subpoenas to
collect information about certain smartphone, tablet and desktop
computer software applications. Then the agency may negotiate
conditions for their use in the United States or ban the apps,
according to people familiar with the matter.
    Biden's June 9 order replaced former President Donald
Trump's 2020 bans against the popular Chinese applications
WeChat, owned by Tencent Holdings Co  0700.HK , and ByteDance
Ltd's TikTok. U.S. courts halted those bans.  urn:newsml:reuters.com:*:nL2N2NR1IW
    U.S. officials share many of the concerns Trump cited in his
order banning TikTok, according to one person familiar with the
matter. Notably, they fear that China could track the locations
of U.S. government employees, build dossiers of personal
information for blackmail and conduct corporate espionage.
    While the new order does not name companies, it could end up
capturing more apps than the Trump bans and hold up better if
challenged in court. Reuters is the first to report details on
how the Biden administration plans to implement the order,
including seeking support from other countries.
    U.S. officials have begun speaking with allies about
adopting a similar approach, one source said. The hope is that 
partner countries will agree on apps that should be banned. 
    U.S. Commerce Secretary Gina Raimondo will decide which apps
to target for U.S. action, but they must meet certain criteria.
For instance, they must be owned, controlled or managed by a
person or entity that supports the military or intelligence
activities of a foreign adversary such as China or Russia. 
    
    WECHAT, TIKTOK MAY BE REVIEWED
    If Raimondo decides an app poses an unacceptable risk, she
"has the discretion to notify the parties" directly or publish
the information in the government's official daily publication,
the Federal Register, a Commerce Department spokesman said. 
    Companies will then have 30 days to object or propose
measures to secure data better, the Commerce spokesman said.
    The process stems from a May 2019 Trump executive order for
reviewing information and communications technology from foreign
adversaries.  
    Apps from China are most likely to find themselves in the
Commerce Department's crosshairs given escalating tensions
between Washington and Beijing, the Chinese government's ability
to exert control over companies and the number of Chinese apps
used by Americans.  
    WeChat, TikTok and eight other apps targeted by the Trump
administration in its last months are eligible for review by
Biden's team, one source said. 
    The Trump targets also included Ant Group's  688688.SS  
Alipay mobile payment app, WeChat Pay, Tencent Holdings Ltd's QQ
Wallet, Tencent QQ, CamScanner, SHAREit, VMate published by
Alibaba Group  9988.HK  subsidiary UCWeb and Beijing Kingsoft
Office Software’s  688111.SS  WPS Office. L1N2JG2H2  
    Some of the apps named by Trump have serious data protection
issues, while it's unclear why others pose a heightened risk to
national security, according to another person familiar with the
matter.
    The order will apply to business apps, including those used
in banking and telecommunications, as well as consumer apps, the
first source said.
    Apps linked to other adversaries such as Iran or Venezuela
are already blocked under broader sanctions.

 (Reporting by Karen Freifeld; Editing by Chris Sanders, Cynthia
Osterman and Leslie Adler)
 ((karen.freifeld@thomsonreuters.com; +1(646) 223-6921;))