On February 21, US President Donald Trump penned a memo instructing senior members of his government to influence the balance of trade involving data and tech services between the USA and the rest of the world. The title of the memo was typically unsubtle.
Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties
Trump’s grievances will be familiar to regular readers of Commsrisk; many were also voiced by the Biden and Obama administrations. I sympathize with some of their complaints. For example, Canada should never have told social media platforms like YouTube to rig algorithms so that Canadian users would see more content from Canadian creators. YouTube is a global platform that permits anyone to see content from anywhere, and balkanizing algorithms encourages other countries to retaliate in a way that will harm Canadian creators in the long run. I also understand the opposition to digital services taxes that punish US companies for being successful. However, there are parts of Trump’s memo which brazenly seek to rig markets in favor of US businesses. To make my point, I have added some emphasis to the following paragraph from the memo.
Beginning in 2019, several trading partners enacted digital services taxes (DSTs) that could cost American companies billions of dollars and that foreign government officials openly admit are designed to plunder American companies. Foreign countries have additionally adopted regulations governing digital services that are more burdensome and restrictive on United States companies than their own domestic companies. Additional foreign legal regimes limit cross-border data flows, require American streaming services to fund local productions, and charge network usage and Internet termination fees. All of these measures violate American sovereignty and offshore American jobs, limit American companies’ global competitiveness, and increase American operational costs while exposing our sensitive information to potentially hostile foreign regulators. [Emphasis added]
The pot calls the kettle black. There may be people who believe data privacy is respected in the USA and the only threat to the privacy of Americans comes from foreigners. Those people are morons. The vast majority of the human race has their personal data exploited by US corporations far more often than foreign corporations exploit the personal data of Americans. That justifies sovereign countries passing laws which limit the flow of data overseas. There is far more risk that data will be transferred and abused in the USA than any other country because of the scale and rapacious of US businesses and the weakness of US privacy laws and the authorities which are supposed to enforce them. It was just a few weeks ago that Trump undermined privacy safeguards that were supposed to protect Europeans from the abuse of their data. And the sad truth is that the communications sector has been a leading enabler of the exploitation of personal data by US corporations.
Trump can be singled out for criticism when it comes to denying foreign corporations access to personal data because of his flip-flopping stance on TikTok. He could have adopted a principled position that favors either bilateral trade or personal privacy. He could have been straightforward in expressing his support or opposition to flows of personal data from one country to another. There are valid arguments on both sides of the political debate. However, his about-face on TikTok reveals a troubling lack of principle when it comes to data, communications and privacy.
At first Trump demanded TikTok be sold by its Chinese owners or else be banned for US users. Then Trump realized TikTok was popular with his younger supporters, so he started arguing against fellow Republicans who took a hard line against China and its data-gathering capabilities. TikTok went offline for Americans late on January 18 because the owners were not going to meet a deadline for divesting the business per a US law passed in April 2024 with Republican support. TikTok came back online when Trump signed an executive order on January 20 that granted a 75-day postponement to the deadline. We are now more than half-way through that extension, but there are no clear indications of how this face-off will be resolved.
Will Trump find another way to keep TikTok alive in the USA if the owners still have not sold it? Either way, this sorry episode reveals a complete divorce between what the US government says about personal data and the real objectives of American politicians. If they can be so arbitrary and unpredictable about one of the world’s most popular phone apps then they cannot be expected to behave more reliably when making decisions about data and privacy that will receive far less attention from American voters.
Regular readers of Commsrisk will be familiar with a plethora of diktats where telcos around the world have been burdened with additional costs and bureaucracy because the US wants to gather data about phone users, without showing any willingness to reciprocate. Scores of US government agencies have demanded foreign telcos trace calls for them, without making any effort to coordinate their demands to manage the workload created. The US Federal Communications Commission (FCC) mandates that foreign telcos must register with their databases and make themselves available for queries on a 24/7 basis. They freely admit that one goal is to incentivize foreign telcos to implement call monitoring technology patented by US firms. They invent deadlines that they impose on foreign telcos and then threaten to cut those telcos off, even when the claim that they have disconnected a foreign telco is meaningless. A billion-dollar business gets a monopoly contract to oversee the governance of calls in the USA, then gets appointed to do the same job for the whole world without anyone asking the rest of the world if they agree.
All of this occurs whilst the FCC has to hide the lack of enforcement action it takes against American businesses that enable illegal traffic, chooses to grossly exaggerate the action it is taking to protect the public, and issues pathetically weak fines for US businesses that repeatedly leak phone data.
Why should the rest of the world pretend that the US can be trusted to use phone data wisely when the leading American experts know this is untrue? There are no elected politicians who are more conscious of the need for data protection than Senator Ron Wyden, who has criticized both Democrat and Republican administrations for undermining privacy. Whilst other American politicians chose to say nothing, Wyden challenged the apparently illegal payments made by the White House for access to AT&T’s trillion-CDR surveillance database. Former White House advisor and FCC CTO Eric Burger played a leading role in realizing STIR/SHAKEN but he openly admits the system is not being used to prosecute ‘slam dunk’ cases of illegality by US telcos. The FCC continues to lobby other countries to mandate STIR/SHAKEN so they can augment the US government’s ability to trace calls despite there being no governance body that would review such demands to prevent privacy abuses.
It is usually around this point that an American corporate stooge or an ill-informed European naïf will start mouthing platitudes about ‘collaboration’ and ‘taking steps in the right direction’. There is nothing collaborative about US government agencies and big US corporations demanding data from foreign companies on the pretext that it will be used to protect Americans at the same time as they miserably fail to tackle obvious instances of wrongdoing by American companies. They are shifting blame to distract the attention of the American public from where it really belongs. And they have a track record of secretly augmenting their ability to spy on foreigners whilst loudly protesting against any foreign power ever having reciprocal rights to gather data about American citizens. The rest of the world will not benefit by playing along with one-sided American political games.
One good thing about Trump is that he makes so little attempt to disguise the zero-sum thinking that places America first and humanity last. We do need international cooperation to make privacy inherent to technology, to punish the abuse of networks, and to protect ordinary people from the terrors of the digital age. That means Asian, African and European leaders need to step up and do more to protect personal data because America’s leaders keep showing they do not serve any interests but their own.
Trump’s memo on “Defending American Companies and Innovators From Overseas Extortion and Unfair Fines and Penalties” can be found here.
