Regulating personal data for national security

The Cyberlaw Podcast

The United States is in the process of rolling out a sweeping regulation for personal data transfers. But the rulemaking is getting limited attention because it targets transfers to our rivals in the new Cold War – China, Russia, and their allies. Adam Hickey, whose old office is drafting the rules, explains the history of the initiative, which stems from endless Committee on Foreign Investment in the United States efforts to impose such controls on a company-by-company basis. Now, with an executive order as the foundation, the Department of Justice has published an advance notice of proposed rulemaking that promises what could be years of slow-motion regulation. Faced with a similar issue—the national security risk posed by connected vehicles, particularly those sourced in China—the Commerce Department issues a laconic notice whose telegraphic style contrasts sharply with the highly detailed Justice draft.

I take a stab at the riskiest of ventures—predicting the results in two Supreme Court cases about social media regulations adopted by Florida and Texas. Four hours of strong appellate advocacy and a highly engaged Court make predictions risky, but here goes. I divide the Court into two camps—the Justices (Thomas, Alito, probably Gorsuch) who think that the censorship we should worry about comes from powerful speech-monopolizing platforms and the Justices (Kavanagh, the Chief) who see the cases through a lens that values corporate free speech. Many of the remainder (Kagan, Sotomayor, Jackson) see social media content moderation as understandable and justified, but they’re uneasy about the power of large platforms and reluctant to grant a sweeping immunity to those companies. To my mind, this foretells a decision striking down the laws insofar as they restrict content moderation. But that decision won’t resolve all the issues raised by the two laws, and industry’s effort to overturn them entirely on the current record is also likely to fail. There are too many provisions in those laws that some of the justices considered reasonable for Netchoice to win a sweeping victory. So I look for an opinion that rejects the “private censorship” framing but expressly leaves open or even approves other, narrower measures disciplining platform power, leaving the lower courts to deal with them on remand.

Kurt Sanger and I dig into the Securities Exchange Commission's amended complaint against Tim Brown and SolarWinds, alleging material misrepresentation with respect to company cybersecurity. The amended complaint tries to bolster the case against the company and its CISO, but at the end of the day it’s less than fully persuasive. SolarWinds didn’t have the best security, and it was slow to recognize how much harm its compromised software was causing its customers. But the SEC’s case for disclosure feels like 20-20 hindsight. Unfortunately, CISOs are likely to spend the next five years trying to guess which intrusions will look bad in hindsight.

I cover the National Institute of Standards and Technology’s (NIST) release of version 2.0 of the Cybersecurity Framework, particularly its new governance and supply chain features.

Adam reviews the latest update on section 702 of FISA, which likely means the program will stumble into 2025, thanks to a certification expected in April. We agree that Silicon Valley is likely to seize on the opportunity to engage in virtue-signaling litigation over the final certification.

Kurt explains the remarkable power of adtech data for intelligence purposes, and Senator Ron Wyden’s (D-OR) effort to make sure such data is denied to U.S. agencies but not to the rest of the world. He also pulls Adam and me into the debate over whether we need a federal backup for cyber insurance. Bruce Schneier thinks we do, but none of us is persuaded.

Finally, Adam and I consider the divide between CISA and GOP election officials. We agree that it has its roots in CISA’s imprudently allowing election security mission creep, from the cybersecurity of voting machines to trying to combat “malinformation,” otherwise known as true facts that the administration found inconvenient. We wish CISA well in the vital job of protecting voting machines and processes, as long as it manages in this cycle to stick to its cyber knitting.

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