Reuters reports that the US government is investigating Alibaba to determine whether the organization poses a national security risk.
According to three people briefed on the matter, the Biden administration is investigating Alibaba to determine whether the Chinese government has access to American customers’ data. One of the sources notes that the investigation should reveal whether the Chinese government can deny Alibaba cloud access to American customers.
Alibaba’s US cloud business is substantial. The investigation may cause its business to be denied or regulated. We know that the US is willing to impose drastic sanctions on organizations suspected of privacy violations. Huawei is a prime example.
Reuters learned the news from three anonymous sources. A spokesperson for the Department of Commerce informed Reuters that the department does not answer questions about the existence of such investigations. Alibaba declined to comment as well.
Tension in the States
Reuters’ sources state that the investigation is conducted by the Office of Intelligence and Security, a small branch within the Department of Commerce. The branch was established during the presidency of ex-president Donald Trump. In the same period, the former administration planned to classify Alibaba as a security risk. In early 2021, those plans were nullified.
Alibaba was granted breathing room. Other organizations were not. A month back, the US government imposed sanctions on dozens of Chinese organizations. One of the accused is drone manufacturer DJI, which allegedly collaborated with the Chinese government.