A proposed executive order aimed at keeping American cloud computing companies out of certain foreign countries is being circulated within the Trump administration and to tech industry players, Axios has learned, disconcerting the firms that could be affected.
Why it matters: The proposal would likely represent a chance to plant another tough-on-China flag before the president leaves office. Trump's Commerce Department, where the draft order originated, has repeatedly sought to prove that it will stand up to countries that it believes want to supplant or infiltrate American tech.
Yes, but: It's unclear if the proposal will go anywhere. Even if it makes it to Trump's desk, there's not enough time left in his administration to complete any rulemaking or other procedures to carry out such an order, and the incoming Biden administration could scrap it immediately.
Driving the news: Under the proposed order, Commerce would have the authority to ban U.S. cloud providers from doing business in certain countries and ban U.S. customers from using cloud providers from certain countries.
How it works: Infrastructure-as-a-service companies such as Google Cloud, Amazon Web Services or Oracle Cloud would have to collect customer data from both U.S. and foreign clients including phone numbers, email addresses, financial information and IP addresses in case the government ever asked for it, according to a point-by-point summary of the draft EO viewed by Axios.
- Under the EO, the Commerce Secretary could then prohibit cloud service transactions originating from "particular foreign jurisdictions."
- A Commerce spokesperson didn't immediately respond to a request for comment.
Between the lines: If enacted, the order would most likely be used against countries like China, Russia and Iran. The authority cited in the draft order stems from an emergency declared in 2015 authorizing sanctions on any person or nation that engages in malicious cyber-activity against the U.S.
What's happening: The Commerce Department has been reaching out to cloud companies for feedback and thoughts on the proposal, an industry source told Axios, who said the firms feel it is being rushed and would unfairly impact their relationships with other countries.
- There's worry that other countries could retaliate, making it harder for U.S. cloud companies to do business within their borders, and that it would be yet another fracture point for the increasingly balkanized global internet.
- There's no evidence that foreign cyber operators have used cloud companies to launch attacks, the source added.
