US government investigates China Mobile, China Telecom, and China Unicom over concerns they are providing American data to the Chinese government

China Mobile, China Telecom and China Unicom are reportedly under investigation by the US Department of Commerce over concerns that they are accessing American data and providing it to the Chinese government through their cloud services and internet businesses.

According to Reuters, the three companies are suspected of passing data to China in the course of their cloud services and other businesses.

Commerce Department officials are particularly concerned about some of the California data centers owned by China Mobile.

The Commerce Department has not yet decided how to address the concerns, according to people familiar with the matter, but the agency has the authority to scrutinize internet services offered by companies from hostile countries and is considering ultimately blocking the companies’ services.

China Telecom, China Mobile, and China Unicom have been the subject of U.S. government investigations for some time. In 2019, the Federal Communications Commission rejected their applications to provide telephone service, and China Telecom and China Unicom’s licenses to provide telephone service were revoked in 2021 and 2022, respectively. One of the factors behind the FCC’s decision was a report from the government agency that China Telecom had in at least nine cases mistakenly diverted internet traffic through China, putting it at risk of being intercepted, manipulated, or blocked from reaching its intended destination.

China Telecom sought to have the decision overturned, but the appeals court rejected that argument, saying ‘compelling evidence was presented that the Chinese government may use companies as vectors for espionage or sabotage.’

Chinese telecommunications companies also have eight points of presence (POPs) in the United States, which the Federal Communications Commission has also expressed concern about, citing significant national security and law enforcement risks.

In response to reports that the Commerce Department is investigating, the Chinese Embassy in Washington commented, ‘We urge the government to stop oppressing Chinese companies under false pretenses.’