Security should be key to future digital policy, departing Commerce secretary says

Published on 16 November 2016. By Mike Swift

Saying cybersecurity should be a centerpiece of the Trump administration's digital policy, departing Commerce Secretary Penny Pritzker said Wednesday that Silicon Valley is willing to engage more closely with the federal government to achieve security and other goals to bolster the digital economy.

"We've arrived at a very important inflection point. Innovation and technology are outpacing our ability to ensure privacy and security," Pritzker said in a speech before the Council on Foreign Relations in which she called on Congress to make it easier for digital companies to collaborate with the government to tackle security and privacy problems.

"Congress needs to create the ability to have collaboration outside enforcement, and that's going to require some new laws to facilitate that collaboration. We need to really focus on baking security into innovation," Pritzker said.

Reflecting on the backlash against international trade agreements that she said helped elect Donald Trump to the presidency, Pritzker was pessimistic about the ability of Europe to complete negotiations on the Transatlantic Trade and Investment Partnership, or TTIP, in the wake of the UK's Brexit vote.

"I think the agreement is, first of all, in a tougher place than TPP, because it's not even negotiated," Pritzker said, referring to the TransPacific Partnership agreement. "With Britain pulling out of the EU, I think the focus in Europe, the time and attention of the limited number of trade people at the European Commission, has to go to that first. It's hard to see that as being a priority in Europe if Article 50 is invoked early next year."

Article 50 is the legal trigger mechanism for a member state's withdrawal from the EU. Trade agreements in Asia and Europe are critical to the continued growth of the US' digital economy, she said, because they can limit the spread of data localization laws and other checks on the international transfer of data that make it more difficult for US online companies to flourish in international markets.

Encryption is one key privacy issue the next administration must confront and resolve, Pritizker said, because it is an issue that affects the ability of US companies to compete globally, as well as a requirement to balance the critical needs of national security and law enforcement.

Those three competing priorities "are all banging into each other right now, and it's a challenge," she said.

"We must strive to ensure any changes in our encryption policies do not jeopardize our national security or undermine our ability to compete globally," she said. "And yet we cannot compromise our safety by leaving law enforcement blind. I fundamentally believe that collaboration with industry is essential if we are to make any progress on this challenge."

Apple's standoff with the US Department of Justice this year over whether it should help create software that could defeat the encryption built into the iPhone was closely watched in Europe. At an international privacy conference in Brussels last week, the director of the European Commission's department of fundamental rights, Paul Nemitz, said because of Europe's concerns about privacy and security, many companies are choosing to invest in data centers and data storage in Europe, rather than getting certified under Privacy Shield to transfer their data to cloud companies in the US.

Pritzker said she has already drafted a 20-page transition letter to the Commerce secretary selected by Trump. Wilbur Ross, a billionaire who has worked in the coal, steel and textile industries and who has been a critic of international trade deals such as TPP and Nafta, was widely reported Wednesday to be Trump's leading candidate.

On Twitter Tuesday, Trump said he has a "very organized process" underway for filling Cabinet posts. "I am the only one who knows who the finalists are!" the president-elect said in a tweet.

As departing officials tend to do, Pritzker spent time during Wednesday's remarks talking about her digital achievements since becoming Commerce Secretary in June 2013, including the administration's "digital economy agenda," and the Privacy Shield data transfer agreement with Europe. That agenda is oriented around efforts to promote a free and open Internet, along with assuring privacy and data security of users.

"Trust is a key pillar of that agenda," she said Wednesday.

"As innovation moves faster than our ability to regulate and legislate, we have to consider whether we need new ways to protect privacy in a future headed toward artificial intelligence, machine learning, virtual reality and other technologies from the science fiction films of my youth," she said.