The White House has threatened to veto a controversial Cyber Intelligence Sharing and Protection Act (Cispa) due to go before the House of Representatives this week for a second time.
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The Obama administration wants more privacy protections despite several amendments to the bill since it failed to pass through Senate last year, according to the BBC.
The proposed legislation is aimed at protecting corporate networks from cyber attacks by enabling private companies to share cyber security information with government agencies.
Cispa has the support of several large technology firms, including Intel, IBM, Oracle and Facebook, but opponents have raised concerns that the provisions of the bill could threaten the privacy of data.
They say the bill allows a wide range of data to be shared with government, and a petition against the bill with 100,000 signatures was submitted to the White House in March.
A White House statement said: "The administration remains concerned that the bill does not require private entities to take reasonable steps to remove irrelevant personal information when sending cyber security data to the government or other private sector entities."
Internet privacy groups also claim that Cispa is aimed at file sharers rather than hackers.
More on the Draft Data Communication Bill
- Parliamentary committee joins criticism of draft communications data bill
- Draft Data Communications Bill a security risk, says Jimmy Wales
- Draft Communications Bill will be ineffective, says ICO
- Wikipedia founder Jimmy Wales slams Draft Communications Data Bill
- Campaigners slam snooping Communications Data Bill
- Why the Data Communications Bill is proportionate, measured and necessary
UK snooping bill unacceptable
Proposals for similar snooping legislation in the UK have also been strongly criticised by civil liberties groups, forcing government to reconsider.
In February 2013, a report by a cross-party intelligence and security committee appointed by the prime minister said the government’s proposed Communications Data Bill needed more work.
The so-called "snooping bill" is aimed at making it easier for security and police services to spy on emails, phone calls and internet activity, but has been widely criticised as an assault on civil liberties.
Campaigners believe the proposed changes could lead to blanket surveillance of the entire UK population. The proposals have also drawn criticism from members of the technology industry.
The committee, which has been charged with scrutinising the bill before it is enacted, has raised concerns about “insufficient consultation” with service providers about practical implementation.
The committee also raised concerns about a lack of “coherent communication” about the way in which communications data is used and the safeguards that will be in place.