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Politicos to revisit crackdown on U.S. firms in 'Internet-restricting' countries

House panel on Tuesday is expected to approve bill aimed at regulating how American companies operate in China and other foreign locales notorious for censorship.

Correction: A previous version of this story incorrectly named the House bill. It is the Global Online Freedom Act.

Updated Tuesday at 9:04 a.m. PDT: Try as it might, Congress failed last year to pass new rules for U.S. companies--backed by fines of up to $2 million--that do business in "Internet-restricting" locales like China.

But the politicians apparently aren't giving up on the idea just yet.

The House of Representatives Committee on Foreign Affairs has scheduled a Tuesday vote on the Global Online Freedom Act. Past iterations have enjoyed support from human rights activists but have been criticized by some companies, Microsoft included, as being counterproductive.

A committee spokeswoman told CNET News.com on Monday that she expects the latest bill to pass with little debate and few, if any, changes.

The proposal, chiefly sponsored by Rep. Christopher Smith (R-N.J.) and reintroduced in January, largely mirrors a version that received subcommittee approval more than year ago but was subsequently ignored. It was originally introduced shortly after politicians spent a day lashing out at representatives from Google, Microsoft, Yahoo and Cisco on Capitol Hill over their alleged cooperation with Chinese censorship and filtering practices.

The bill proposes establishing "minimum corporate standards" for all American businesses that do business in countries designated by the State Department as "Internet-restrictive." (Smith, for his part, has suggested China, Belarus, Cuba, Ethiopia, Iran, Laos, North Korea, Tunisia and Vietnam would be among the places on that list.)

Storing any "electronic communication" that contains personally identifiable information, such as e-mail, on servers or other media in those designated countries would be a no-no for American firms. That rule seems to be an attempt to make it more difficult for foreign governments to force access to those records.

U.S. companies would also be barred from turning over personal information about their subscribers to governments in those locales--except for "legitimate law enforcement purposes" in the eyes of the U.S. Department of Justice. That appears to be a direct attack on allegations that Yahoo divulged information to Chinese authorities about pro-democratic online writings by Chinese journalists, leading to their conviction and imprisonment.

In an effort to add more transparency to reports of search engine filtering and other Internet content blocking at the request of foreign governments, American Web firms would also have to give the State Department a detailed breakdown of how their search results have been restricted and all URLs that have been removed or blocked.

However well-intentioned the enterprising politicians may be, some corporate skeptics, such as Microsoft, have warned in the past that the approach will lead to even greater restrictions in countries of concern, further cutting off citizens' access to even a limited pool of information.

"At this time we are not advocating for a legislative solution," Microsoft spokeswoman Ginny Terzano said in an e-mail Monday, adding that the company hasn't had a chance to review the latest bill. She added that her company, Google, Vodafone, Yahoo and others have been in talks with academics, investors and human rights organizations to come up with a set of guiding business principles and believes that's the best approach for now.

Google and Yahoo representatives did not respond immediately to requests for comment on Monday but have previously been somewhat noncommittal about their stances on the bill.

The vote comes against a backdrop of numerous recent reports of nations stifling Internet content or access for various reasons: the Chinese government because of major political events; the Burmese government allegedly trying to quell political dissent by cutting off Internet access; and the Thai government restricting YouTube viewing.

Separately, Rep. Tom Lantos (D-Calif.), the foreign affairs panel's chairman and well-established Net company critic, has also summoned a Yahoo executive to Washington for grilling over reports the company was not entirely truthful about its role in the case involving the Chinese journalists. Yahoo, for its part, has denied any missteps.