According to three informed sources, the Biden administration is investigating China Mobile, China Telecom, and China Unicom over concerns that these companies might be acquiring U.S. data through their cloud services and internet operations in the United States and passing it on to Beijing.
The investigation, conducted by the Department of Commerce, has not been previously reported. Sources indicate that the Department has issued subpoenas to these state-owned enterprises and completed a "risk-based analysis" for China Mobile and China Telecom, but the inquiry into China Unicom has not progressed to the same stage. Given the confidential nature of the investigation, these sources requested anonymity.
The scale of these companies' operations in the U.S. is relatively small, such as providing cloud services and wholesale internet traffic routing. This allows them to access American data even after U.S. telecom regulators banned them from offering telephone and retail internet services.
The Chinese companies and their attorneys in the U.S. have not responded to requests for comment. The Department of Justice declined to comment, the White House referred questions to the Department of Commerce, which also declined to comment. The Chinese Embassy in Washington expressed hope that the U.S. would stop suppressing Chinese companies under false pretenses and added that China will continue to defend the rights and interests of Chinese enterprises.
Reuters has not found evidence that these companies have deliberately provided sensitive U.S. data to the Chinese government or engaged in any other types of misconduct.
This investigation is the latest effort by Washington to prevent Beijing from exploiting Chinese enterprises to access American data in ways that could harm U.S. companies, citizens, or national security. It is also part of the increasingly fierce technological war between the two geopolitical rivals. This indicates that the Biden administration is attempting to close off all remaining avenues for Chinese enterprises to acquire U.S. data.
