Biden administration investigating three Chinese companies to determine internet risks
The Biden administration is investigating China Mobile, China Telecom and China Unicom over concerns the firms could exploit access to American data through their U.S. cloud and internet businesses by providing it to Beijing, three sources familiar with the matter said.
The Chinese companies and their U.S.-based lawyers did not respond to requests for comment. The Justice Department declined to comment and the White House referred questions to Commerce, which declined to comment. The Chinese Embassy in Washington said it hopes the United States will “stop suppressing Chinese companies under false pretexts,” adding that China will continue to defend the rights and interests of Chinese companies.
Regulators have not yet made decisions about how to address the potential threat, two of the people said. But, equipped with the authority to probe internet services sold into the U.S. by companies from “foreign adversary” nations, regulators could block transactions allowing them to operate in data centres and route data for internet providers, the sources said.
China Telecom, China Mobile and China Unicom have long been in Washington’s crosshairs. The FCC denied China Mobile’s application to provide telephone service in 2019 and revoked China Telecom and China Unicom’s licenses to do the same in 2021 and 2022 respectively. In April, the FCC went further and barred the companies from providing broadband service. A spokesman for the FCC said the agency stands by its concerns.
China Telecom has previously denied the government’s allegations and told U.S. agencies that routing problems are common and occur on all networks. Commerce investigators are also probing the companies’ U.S. cloud offerings, the focus of the 2020 referral from the Justice Department on China Mobile, China Telecom and Alibaba that prompted the investigations, the people said. The probe was later expanded to include PoPs and China Unicom, whose cloud business was small at the time of the referral, two of people added. Alibaba did not respond to a request for comment.
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