On June 9, 2021, the Biden Administration issued Executive Order 14034, “Protecting Americans’ Sensitive Data from Foreign Adversaries” (“EO 14034”). EO 14034 revokes three executive orders issued by the Trump Administration that effectively banned certain Chinese connected software applications (“apps”) from operating in the United States. Although EO 14034 revokes these legal authorities and calls for their implementing rules to be rescinded, EO 14034 signals that the Biden Administration will continue to analyze the national security risks presented by apps developed by persons subject to the jurisdiction or control of “foreign adversaries” and suggests that additional restrictions may be issued in the future.
The Revoked EOs
The Trump Administration issued three executive orders (“Revoked EOs”) that provided the authority for the US Commerce Department to restrict or prohibit certain Chinese apps from operating in the United States:
- Executive Order 13942 (prohibiting certain transactions involving ByteDance Ltd. and its subsidiaries (including the TikTok app)) (“EO 13942”);
- Executive Order 13943 (prohibiting certain transactions involving Tecent Holdings Ltd.’s WeChat app) (“EO 13943”); and
- Executive Order 13971 (prohibiting certain transactions involving persons that develop or control the following Chinese apps, or their subsidiaries: Alipay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office) (“EO 13971”).
The Revoked EOs were originally issued under the authority of Executive Order 13873 (“EO 13873”), which authorizes the Commerce Department to block or impose conditions on transactions involving information and communications technology and services (“ICTS”) originating in certain countries designated as “foreign adversaries.” Our blog posts on the EO 13873 regulations and EO 13971 are available here and here, respectively. EO 14034 does not revoke EO 13873 and directs the Secretary of Commerce to continue to evaluate transactions involving apps that may pose risks to US national security under EO 13873 and its implementing regulations.
EO 14034 repeals the Revoked EOs and directs the relevant executive agencies to rescind the regulations implementing EO 13942 and 13943. Commerce Department orders barring certain transactions involving ByteDance Ltd. and WeChat were blocked from taking effect in 2020 through legal challenges that resulted in injunctions against implementation of the orders. The Biden Administration abandoned litigation challenging the injunctions in February 2021 pending completion of a broader review of the national security threat presented by the collection of US persons’ data through such apps.
Broad review of national security risks of apps with ties to “foreign adversaries”
EO 14034 reflects the Biden Administration’s new approach to addressing the national security risks presented by apps from “foreign adversaries.” EO 14034 calls for a “rigorous, evidence-based analysis” of the national security risks associated with the transfer of or access to US persons’ data, particularly with regard to access by persons owned, controlled, or subject to the jurisdiction of “foreign adversaries,” including the People’s Republic of China.
Reports analyzing these risks and recommending additional legal actions to address such risks are due to be submitted to the US National Security Advisor on October 7, 2021 and December 6, 2021, respectively. EO 14034 suggests that future legal authorities issued by the Biden Administration to protect the ICTS supply chain may be more general and will not focus on individual companies.
