Huawei and ZTE, the Chinese telecommunication equipment suppliers, are the subject of an investigation by a US House Intelligence Committee over whether the companies pose a security threat to the States.
The investigation will examine if Huawei's and ZTE's expansion into the American market gives the Chinese government an opportunity to hijack the nation's infrastructure to conduct espionage. US lawmakers worry that the networking equipment sold could secretly contain Chinese military technology to spy and interfere with US telecommunications.
"The fact that our critical infrastructure could be used against us is of serious concern," said US Representative Mike Rogers, who along with Representative Dutch Ruppersberger announced the investigation in a statement yesterday.
The investigation is just the latest obstacle Huawei has faced in its US business activities. In September, the US Department of Commerce said it had informed Huawei that the company was barred from participating in a project to build a national wireless network. The Department of Commerce has declined to explain why, citing security reasons.
In response, Huawei said the blocking could have a "chilling effect" on its US business and questioned if the move had more to do with politics, than actual security.
Earlier this year, the company also reversed a deal to acquire a California-based startup after a government panel had requested it. Since then, Huawei has been more vocal about defending its reputation, going as far to ask the US government in February to investigate the company to dispel concerns that the company is a security threat.
Huawei did not respond to a request for comment on the investigation. ZTE said in a statement that the company was committed to transparency and would cooperate with authorities' inquiries. "Our company is publicly-traded with operations in more than 140 countries and we are confident a fair review will further demonstrate ZTE is a trustworthy and law-abiding partner for all US carriers and their customers," the company added.
The US committee's investigation said it will target "Chinese-owned telecommunications companies". China Telecom, a carrier with 116 million mobile subscribers in its home country, said last week it plans to launch a mobile service in the US Analysts believe the move could draw attention from US regulatory groups.
Chinese actors in the US have also come under scrutiny in the States after being accused of "persistent cyber spying" to collect information for the government in China.
Huawei had better news in the UK where the company was cleared in a racial discrimination case.