Authorities in Taiwan are investigating whether China’s Xiaomi poses a cyber security risk, according to reports.
A spokesperson for the Taiwan government has been quoted in the press saying that recent reports of Xiaomi phones sending back user data to Xiaomi servers in China prompted the investigation. The spokesperson said that the Taiwanese government would release the findings from its investigation in three months time.
This isn’t the first time Xiaomi, the low-cost high-performance smartphone brand from China, has caught the ire of a government. This past August, Singapore’s government said it would investigate Xiaomi after complaints from users in-country that Xiaomi phones were copying users’ data back to servers in China.
In China, firms storing data in-country must comply with orders (without a warrant) to turn over data to authorities. Apple has come under intense criticism for placing iCloud servers within China, making users’ data vulnerable to these requests.
For Taiwan, which China considers a rogue province, the thought that Xiaomi phones may be an arm of Chinese electronic intelligence gathering efforts is particularly concerning as IDC reports say that Xiaomi is one of the top five smartphone brands in the country. Already, the Taiwan government has banned its employees from using Xiaomi phones for fears that they may be used to eavesdrop on official government business.
At the same time, Xiaomi’s growth has come at the expense of Taiwan’s home-grown HTC (TPE: 2498). While Xiaomi has grown explosively over the past few years — and shows no sign of slowing down as it expands into new markets like 4K TVs — HTC’s growth has stagnated. Much like how Huawei (SHE: 002502) has curtailed the growth of US-based Cisco (NASDAQ: CSCO), leading to the company lobbying for more Congressional investigations of Huawei in the name of cybersecurity, perhaps Taiwan’s government is looking to protect its own.