The Biden administration is investigating China Mobile, China Telecom, and China Unicom over concerns that these companies could misuse access to American data through their U.S. cloud and internet operations by providing it to Beijing, according to three sources familiar with the matter.
The Commerce Department is leading the investigation, which has not been previously reported. They have issued subpoenas to the state-backed companies and have completed “risk-based analyses” of China Mobile (0941.HK) and China Telecom (0728.HK), but the investigation into China Unicom (0762.HK) is less advanced, the sources said, requesting anonymity as the probe is not public.
Despite their limited presence in the United States, these companies provide cloud services and route wholesale U.S. internet traffic, which gives them access to Americans’ data even after telecom regulators banned them from offering telephone and retail internet services in the U.S.
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 the Commerce Department, which also declined to comment. The Chinese Embassy in Washington expressed hope that the U.S. would “stop suppressing Chinese companies under false pretexts” and stated that China would continue to defend the rights and interests of Chinese companies.
Technologies.pk found no evidence that the companies intentionally provided sensitive U.S. data to the Chinese government or committed any other wrongdoing.
This investigation is part of Washington’s ongoing efforts to prevent Beijing from exploiting Chinese firms’ access to U.S. data to harm American companies, citizens, or national security, amid a deepening tech rivalry between the two nations. It indicates that the administration is seeking to eliminate all remaining avenues for Chinese companies already targeted by Washington to access U.S. data.
Regulators have not yet made decisions on how to address the potential threat, two sources said. However, equipped with the authority to investigate internet services sold into the U.S. by companies from “foreign adversary” nations, regulators could block transactions that allow these firms to operate in data centers and route data for internet providers, the sources added.
Blocking key transactions could hinder the Chinese companies’ ability to offer competitive cloud and internet services to global customers, potentially crippling their remaining U.S. operations, experts and sources said.
“They are our chief global adversary and very sophisticated,” said Doug Madory, an internet routing expert at Kentik, an internet analysis firm. “I think U.S. regulators would not feel like they were doing their job if they weren’t trying to shore up every risk.”
