Congress is set to pass the cybersecurity legislation after four years in congress.
White House and lawmakers hope it will reduce the threat to U.S from foreign government and criminal hackers.
"It is difficult to overstate the threat posed by bad cyber actors to our security, our privacy and our economy. The bill is the most significant effort by Congress to address the cyber threat to date, and should now become law," Adam Schiff, member of the House Intelligence Committee said according to a report by The Washington Post.
President Barack Obama and his administration have campaigned for the legislation of the information-sharing policy.
U.S has faced major cyberattacks like Target and Sony that compromised personal data of 22 million individuals.
The bill may also allow the data gathered to prosecute crimes that may not be related to cyber threats.
"Once again, members of Congress are using the government funding bill to pursue their extremist agendas," Anthony D. Romero, American Civil Liberties Union executive director, said.
Critics of the cybersecurity legislation said that it will strip the American citizens of their privacy.
"It's a disingenuous attempt to quietly expand the U.S. government's surveillance programs," said Evan Greer, campaign director of Fight for the Future, according to USA Today.
"It will inevitably lead to law enforcement agencies using the data they collect from companies through this program to investigate, prosecute, and incarcerate more people, deepening injustices in our society while failing to improve security," Greer added.
Experts said that government agencies and small businesses will benefit from the bill.
"Large companies have already been sharing information among themselves, but not always with governments or smaller enterprises. So I expect this to level the playing field in a good way -by improving the weaker players," Stewart Baker, a former senior policy official at the Department of Homeland Security.
According to some critics of the cybersecurity legislation, the bill would do little to address problems that have led to recent data breaches.
