The US has launched an investigation into Chinese telecommunications giants China Mobile, China Telecom, and China Unicom.
Reuters reports that the primary concern revolves around these firms potentially exploiting their access to American data through their US-based cloud and internet services, posing a risk to national security.
US Looks Into How Chinese Tech Firms Handle American Data
The investigation, confirmed by three sources familiar with the matter, is a continuation of efforts by the US government to safeguard American data from potential exploitation by foreign adversaries.
Despite the companies maintaining a relatively small presence in the United States, their roles in providing cloud services and routing wholesale internet traffic grant them significant access to American data.
The Federal Communications Commission (FCC) has historically been vigilant about the presence of Chinese telecom firms in the US market. In recent years, the FCC has taken substantial actions to curb their operations:
In 2019, the FCC denied China Mobile's application to provide telephone services.
In 2021 and 2022, the FCC revoked China Telecom and China Unicom's licenses for telephone services.
Also in 2021, the New York Stock Exchange delisted the companies above in compliance with Executive Order 13959, which targets investments in companies linked to the Chinese military.
In April, the FCC barred these companies from providing broadband services.
These actions were influenced by concerns that China Telecom, for instance, had misrouted US internet traffic through China on at least nine occasions, increasing the risk of data being intercepted or manipulated.
The FCC has maintained that such operations provide "Chinese government-sponsored actors with openings to disrupt and misroute US data and communications traffic."
Visitors test Moto smartphones at the Mobile World Congress (MWC) in Shanghai on June 29, 2023. Photo by PEDRO PARDO/AFP via Getty Images
Broader Implications
Experts are concerned about Chinese companies controlling key points in the internet's infrastructure. These companies are sophisticated and could potentially exploit this control.
They stress how crucial it is for regulators to address all potential risks associated with this situation, as it could have serious implications for national security and law enforcement.
The investigation extends to the US cloud services offered by these Chinese firms. Commerce Department officials are particularly concerned about the potential for these companies to access personal information and intellectual property stored in their clouds and provide it to the Chinese government.
This is the same concern that prompted US lawmakers to consider banning TikTok. They are concerned that the Chinese government may force ByteDance to hand over data on TikTok's 170 million US users.
China Reacts
Reuters reports that the Chinese Embassy in Washington has responded to these developments, urging the US to "stop suppressing Chinese companies under false pretexts." They emphasized that China would continue to defend the rights and interests of its companies.
This investigation is part of a broader strategy by the US to mitigate risks posed by Chinese technology firms. Aside from strict tech sanctions targeting China's access to advanced chips, the US has recently imposed massive tariffs on more Chinese products, such as electric vehicles.
