The Biden administration is investigating China Mobile, China Telecom, and China Unicom over concerns that these companies could potentially exploit their access to U.S. data through their cloud and internet services, potentially sharing this data with the Chinese government. According to a Reuters report, the investigation is part of a broader effort to prevent Beijing from accessing sensitive American information, further escalating the tech tensions between the two nations.

Cloud services presence: Despite being barred by telecom regulators from providing telephone and retail internet services in the U.S., these companies still maintain a presence through cloud services and internet traffic routing, which gives them access to American data. Both the Justice Department and the Commerce Department declined to comment on the ongoing investigation, while the Chinese Embassy in Washington called on the U.S. to cease its suppression of Chinese companies, insisting that China will defend the rights of its firms.

No evidence has been found that these companies have intentionally handed over U.S. data to the Chinese government or engaged in any wrongful activities. However, the investigation reflects Washington’s determination to close any remaining gaps that could allow Chinese firms to access U.S. data.

Regulatory decisions are still pending, but authorities have the power to block transactions that could allow these companies to operate within U.S. data centers or route data for internet providers. This could significantly hinder the ability of these Chinese firms to offer competitive services in the U.S. market, as noted by experts.

Doug Madory, an internet routing expert, emphasized the necessity of these actions, describing China as a sophisticated global adversary. The Federal Communications Commission (FCC) has a history of scrutinizing these companies, having previously revoked their licenses due to national security concerns, citing instances where internet traffic was misrouted through China, risking interception and manipulation.

The investigation also focuses on the companies’ Points of Presence (PoPs) within U.S. internet infrastructure and their cloud services. These PoPs, critical for internet exchange, pose significant security risks if operated by companies considered national security threats. Furthermore, Commerce Department officials are particularly concerned about a data center in Silicon Valley part-owned by China Mobile, which could potentially allow for unauthorized access to sensitive data.