Overnight Cybersecurity: Republicans press Obama to sanction China

Welcome to OVERNIGHT CYBERSECURITY, your daily rundown of the biggest news in the world of hacking and data privacy. We’re here to connect the dots as leaders in government, policy and industry try to counter the rise in cyber threats. What lies ahead for Congress, the administration and the latest company under siege? Whether you’re a consumer, a techie or a D.C. lifer, we’re here to give you …

THE BIG STORIES:

–JUST DO IT ALREADY: On Friday, Reps. Joe Wilson (R-S.C.) and Randy Forbes (R-Va.) will introduce a resolution urging President Obama to levy economic sanctions against Chinese businesses and state-backed entities that hack U.S. interests. The White House, under increasing pressure from lawmakers to penalize Beijing for cyber espionage, on Wednesday hinted that sanctions may be coming down the pike — although unnamed White House officials have said such penalties won’t happen until after Chinese President Xi Jinping’s official state visit next week. Forbes and Wilson’s resolution would put Congressional opinion on record when it comes to sanctioning China, but would not force any action by the White House. “The world must see that attacking American families, whether through conventional methods or emerging tactics, such as cyberattacks, should be exposed,” Wilson said in a statement to The Hill. “It is clear that there are Chinese businesses and state-owned enterprises that can be linked to cyberattacks against United States. I’m introducing a resolution tomorrow to urge the President to apply economic sanctions to send a clear message — this is dangerous to American families.” To read our full piece, click here.

–WE GOT A DEAL?: A senior Chinese official insisted Thursday that Beijing is willing to work with the U.S. on boosting Internet security, but will protect its own interests in the process. Ahead of next week’s state visit from Chinese President Xi Jinping, Beijing and Washington have been sparring over allegations that the Chinese government is behind a massive campaign to pilfer American intellectual property. President Obama has strongly hinted economic sanctions are looming, although the two sides have apparently reached some type of detente until at least after Xi’s visit. To read our full piece, click here.

–HOUSE RULES: China is also tangling with U.S. tech firms ahead of Xi’s trip stateside. Beijing officials are pressing major firms to sign a pledge that could require them to give access to user data and intellectual property. The document, distributed this summer, asks companies to promise they will store Chinese user data within the country. It also asks companies to pledge that their products are “secure and controllable,” a highly contentious phrase that critics say will give Beijing officials guaranteed access to encrypted data or even source code. The pledge could come up during next week’s meeting in Seattle between Chinese officials and tech heavyweights like Apple, Facebook, IBM, Google and Uber. To read our full piece, click here.

 

UPDATE ON CYBER POLICY:

–The House Judiciary Committee approved a bill Wednesday that would give European citizens the right to sue in U.S. courts over misuse of their personal data.

The measure, known as the Judicial Redress Act, is seen as central to helping mollify European allies angered by the revelation of widespread U.S. surveillance programs. The bill is also the lynchpin in a recently signed deal between the U.S. and European Union that would allow law enforcement agencies on both sides to swap more data.

The offering from Reps. John Conyers (Mich.), the panel’s top Democrat, and Jim Sensenbrenner (R-Wis.), is relatively non-controversial. It was approved by voice vote without amendments.

Read on, here.

 

LIGHTER CLICK:

–WHY LAUGH?

 

WHO’S IN THE SPOTLIGHT:

–AMERICAN AIRLINES, which had to ground flights for several hours at three major hubs because of computer problems. The airline blamed “connectivity problems,” highlighting the aviation industry’s ongoing struggle to keep its networks secure and functioning as it moves to more high-tech systems. Read more about the outage here.

The Federal Aviation Administration (FAA) has even had its own problems with air traffic control systems. The August outage of a high-profile air traffic control system exposed the difficulties of managing the government’s ever-expanding software networks that are keeping the country’s critical infrastructure afloat. Read more about that outage here.

And of course, any time there’s a computer glitch that grounds flights, people inevitably think “hack.” While there doesn’t appear to be any nefarious activity in the American Airlines snafu, the airline industry is under siege from cyberattackers. In recent months, hackers have infiltrated the U.S. air traffic control system, forced airlines to ground planes and potentially stolen detailed travel records on millions of people. To read more on that trend, check out our story here.

 

REPORTS IN FOCUS:

–COOL KIDS DON’T FOLLOW THE RULES. As China moves forward with a series of controversial counterterrorism and banking technology laws that critics say are thinly-veiled protectionism, the Information Technology & Innovation Foundation (ITIF) takes a look at Beijing’s history of policies that butt up against international World Trade Organization (WTO) rules the Asian power pledged to uphold.

“Disregard for international rules of market-based competition is increasingly apparent as China continues to develop a robust set of mercantilist policies, virtually all of which violate the spirit, if not the letter, of the World Trade Organization’s laws,” the report reads.

Check out the full thing here.

–J’ACCUSE! The Russian government may be behind a seven-year campaign to infiltrate governments worldwide, perhaps including the State Department and White House.

Security firm F-Secure has the report, which encompasses years of research.

 

IN CASE YOU MISSED IT:

Links from our blog, The Hill, and around the Web.

Lawmakers are accusing the Department of Homeland Security (DHS) of stonewalling Congress about a proposed reorganization of a government division that helps protect federal networks. (The Hill)

The nation’s top counterintelligence agency says it’s not responsible for keeping tabs on the Office of Personnel Management’s insecure networks. (The Hill)

The SEC is conducting its second round of cybersecurity exams for advisors and brokers. (The National Law Review)

The U.S. Cyber Command is building a massive system to provide a bird’s-eye view of vulnerabilities in the military’s computer networks. (Reuters)

Two D.C. equity firms have teamed up to buy a majority stake in a Colorado cybersecurity company. (The Washington Post)

The head of Britain’s counterintelligence agency called on social media companies to do more to help the agency track terrorists and other cyber criminals. (The Guardian)

Libraries are rallying around a New Hampshire library forced by the DHS to shut down its dark Web portal. (Motherboard)

U.S. derivatives regulators have brought their first case against a Bitcoin trading platform. (Reuters)

One of the 30 defendants accused in a massive insider trading scheme says he never traded on hacked information. (Reuters)

 

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