The U.S. Department of Justice confirmed on Wednesday that it had been the victim of a massive hacking operation linked to Russian intelligence.  In a statement, Justice Department spokesman Marc Raimondi said about 3% of the agency’s email accounts appeared to have been compromised, although no classified information was accessed. “After learning of the malicious activity, the Office of Chief Information Officer eliminated the identified method by which the actor was accessing the … email environment,” Raimondi said. Raimondi said the department learned about the previously unknown hack on its networks on Christmas Eve and determined that it constituted a “major” security incident. The disclosure came a day after U.S. intelligence agencies said that the hack was part of an ongoing intelligence operation and likely being carried out by Russia.  FILE – This Feb. 11, 2015, photo shows FireEye offices in Milpitas, Calif.The hack came to light in early December when private cybersecurity firm FireEye disclosed that its networks had been compromised. Investigators have traced the breach to SolarWinds, a Texas-based network management software company that the hackers used to penetrate the computer networks. In a statement Tuesday, the FBI, the Cybersecurity & Infrastructure Security Agency (CISA), the Office of the Director of National Intelligence (ODNI), and the National Security Agency (NSA) said that of the approximately 18,000 SolarWinds customers impacted by the hack, “a much smaller number has been compromised by follow-on activity on their systems.”  FILE – The SolarWinds logo is seen outside its headquarters in Austin, Texas, Dec. 18, 2020.“We have so far identified fewer than 10 U.S. government agencies that fall into this category and are working to identify the nongovernment entities who also may be impacted,” the agencies said. Officials had previously confirmed that the departments of Defense, Treasury, State, Homeland Security, Commerce and Energy were impacted. Among targeted businesses were Microsoft and Amazon.  U.S. President Donald Trump has faced criticism for failing to respond to the alleged Russian hacking operation and for suggesting that China may have been responsible.  The National Security Council has set up a task force made up of intelligence agencies to investigate and remediate the attack. “At this time, we believe this was, and continues to be, an intelligence gathering effort,” the agencies said in a statement. “We are taking all necessary steps to understand the full scope of this campaign and respond accordingly.” 
 
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U.S. intelligence officials investigating last month’s massive cybersecurity breach that impacted thousands of companies and dozens of government agencies warn the hack is part of an ongoing intelligence operation, likely being carried out by Russia. The public conclusion, shared Tuesday by the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency (CISA), the Office of the Director of National Intelligence (ODNI) and the National Security Agency (NSA), is the first formal statement of attribution from U.S. officials, and confirms previous comments by senior officials and lawmakers who said the evidence pointed “pretty clearly” to Moscow. FILE – The sign outside the National Security Agency (NSA) campus in Fort Meade, Md., June 6, 2013. All fingers are pointing to Russia as author of the worst-ever hack of U.S. government agencies.”This work indicates that an Advanced Persistent Threat (APT) actor, likely Russian in origin, is responsible for most or all of the recently discovered, ongoing cyber compromises of both government and nongovernmental networks,” according to the statement from the intelligence and security agencies. “At this time, we believe this was, and continues to be, an intelligence gathering effort,” they added. “We are taking all necessary steps to understand the full scope of this campaign and respond accordingly.” ‘Serious compromise’Evidence of the breach involving SolarWinds, a Texas-based software management company, first emerged in early December when the private cybersecurity firm FireEye announced its systems had been penetrated and that sensitive information had been stolen. In the days that followed, the hack was traced to SolarWinds, with investigators warning that approximately 18,000 customers, including U.S. government agencies and companies around the world, had been affected. FILE – Microsoft’s corporate headquarters in Redmond, Washington. (VOA/Diaa Bekheet)Late last month, software giant Microsoft said the hackers even managed to use the breach to access some of the company’s heavily guarded source code — the basic programming essential to running Microsoft programs and operating systems. But despite the huge number of SolarWinds customers affected by the hack, U.S. intelligence officials said Tuesday that “a much smaller number” were compromised by follow-on activities. “We have so far identified fewer than 10 U.S. government agencies that fall into this category and are working to identify the nongovernment entities who also may be impacted,” they said in the statement. U.S. officials had previously said the hack had impacted the departments of Defense, State, Homeland Security, Energy, Treasury and Commerce, as well as state and local governments. “This is a serious compromise that will require a sustained and dedicated effort to remediate,” the FBI, CISA, ODNI and the NSA said in Tuesday’s statement, adding the agencies will “continue taking every necessary action to investigate, remediate and share information with our partners and the American people.” Trump responseU.S. President Donald Trump has been largely silent on the SolarWinds hack, tweeting last month, “Everything is well under control,” while appearing to deflect blame from Moscow. “Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of discussing the possibility that it may be China,” Trump said.The Cyber Hack is far greater in the Fake News Media than in actuality. I have been fully briefed and everything is well under control. Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of….— Donald J. Trump (@realDonaldTrump) December 19, 2020In a tweet late Tuesday, the White House National Security Council said the president “continues to surge all appropriate resources to support the whole-of-government response to the recent cyber incident affecting government networks.”President @realDonaldTrump continues to surge all appropriate resources to support the whole-of-government response to the recent cyber incident affecting government networks. We are taking every necessary step to understand the full scope of this incident & respond accordingly. https://t.co/WnmH2dE1Y7— NSC (@WHNSC) January 5, 2021Democratic Senator Mark Warner, the vice chair of the Senate Intelligence Committee, however, accused the Trump administration of dragging its feet. “It’s unfortunate that it has taken over three weeks after the revelation of an intrusion this significant for this administration to finally issue a tentative attribution,” Warner said in a statement late Tuesday. “We need to make clear to Russia that any misuse of compromised networks to produce destructive or harmful effects is unacceptable and will prompt an appropriately strong response.” 
 
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U.S. intelligence officials investigating last month’s massive cybersecurity breach that impacted thousands of companies and dozens of government agencies warn the hack is part of an ongoing intelligence operation, likely being carried out by Russia. The public conclusion, shared Tuesday by the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency (CISA), the Office of the Director of National Intelligence (ODNI) and the National Security Agency (NSA), is the first formal statement of attribution from U.S. officials, and confirms previous comments by senior officials and lawmakers who said the evidence pointed “pretty clearly” to Moscow. FILE – The sign outside the National Security Agency (NSA) campus in Fort Meade, Md., June 6, 2013. All fingers are pointing to Russia as author of the worst-ever hack of U.S. government agencies.”This work indicates that an Advanced Persistent Threat (APT) actor, likely Russian in origin, is responsible for most or all of the recently discovered, ongoing cyber compromises of both government and nongovernmental networks,” according to the statement from the intelligence and security agencies. “At this time, we believe this was, and continues to be, an intelligence gathering effort,” they added. “We are taking all necessary steps to understand the full scope of this campaign and respond accordingly.” ‘Serious compromise’Evidence of the breach involving SolarWinds, a Texas-based software management company, first emerged in early December when the private cybersecurity firm FireEye announced its systems had been penetrated and that sensitive information had been stolen. In the days that followed, the hack was traced to SolarWinds, with investigators warning that approximately 18,000 customers, including U.S. government agencies and companies around the world, had been affected. FILE – Microsoft’s corporate headquarters in Redmond, Washington. (VOA/Diaa Bekheet)Late last month, software giant Microsoft said the hackers even managed to use the breach to access some of the company’s heavily guarded source code — the basic programming essential to running Microsoft programs and operating systems. But despite the huge number of SolarWinds customers affected by the hack, U.S. intelligence officials said Tuesday that “a much smaller number” were compromised by follow-on activities. “We have so far identified fewer than 10 U.S. government agencies that fall into this category and are working to identify the nongovernment entities who also may be impacted,” they said in the statement. U.S. officials had previously said the hack had impacted the departments of Defense, State, Homeland Security, Energy, Treasury and Commerce, as well as state and local governments. “This is a serious compromise that will require a sustained and dedicated effort to remediate,” the FBI, CISA, ODNI and the NSA said in Tuesday’s statement, adding the agencies will “continue taking every necessary action to investigate, remediate and share information with our partners and the American people.” Trump responseU.S. President Donald Trump has been largely silent on the SolarWinds hack, tweeting last month, “Everything is well under control,” while appearing to deflect blame from Moscow. “Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of discussing the possibility that it may be China,” Trump said.The Cyber Hack is far greater in the Fake News Media than in actuality. I have been fully briefed and everything is well under control. Russia, Russia, Russia is the priority chant when anything happens because Lamestream is, for mostly financial reasons, petrified of….— Donald J. Trump (@realDonaldTrump) December 19, 2020In a tweet late Tuesday, the White House National Security Council said the president “continues to surge all appropriate resources to support the whole-of-government response to the recent cyber incident affecting government networks.”President @realDonaldTrump continues to surge all appropriate resources to support the whole-of-government response to the recent cyber incident affecting government networks. We are taking every necessary step to understand the full scope of this incident & respond accordingly. https://t.co/WnmH2dE1Y7— NSC (@WHNSC) January 5, 2021Democratic Senator Mark Warner, the vice chair of the Senate Intelligence Committee, however, accused the Trump administration of dragging its feet. “It’s unfortunate that it has taken over three weeks after the revelation of an intrusion this significant for this administration to finally issue a tentative attribution,” Warner said in a statement late Tuesday. “We need to make clear to Russia that any misuse of compromised networks to produce destructive or harmful effects is unacceptable and will prompt an appropriately strong response.” 
 
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U.S. President Donald Trump on Tuesday signed an executive order banning transactions with eight Chinese software applications, including Ant Group’s Alipay, the White House said, escalating tensions with Beijing before President-elect Joe Biden takes office this month. The order, first reported by Reuters, tasks the Commerce Department with defining which transactions will be banned under the directive and targets Tencent Holdings Ltd.’s QQ Wallet and WeChat Pay as well. The move is aimed at curbing the threat to Americans posed by Chinese software applications, which have large user bases and access to sensitive data, a senior official told Reuters. A U.S. Tencent spokeswoman did not immediately comment. FILE – WeChat has an average of 19 million daily active users in the United States.The order signed by Trump also names CamScanner, SHAREit, Tencent QQ, VMate and WPS Office and says “the United States must take aggressive action against those who develop or control Chinese connected software applications to protect our national security.” A U.S. official told Reuters that even though the order gave the Commerce Department 45 days to act, the department plans to act before January 20 when Trump leaves office to identify prohibited transactions. Trump’s order says “by accessing personal electronic devices such as smartphones, tablets, and computers, Chinese connected software applications can access and capture vast swaths of information from users, including sensitive personally identifiable information and private information.” It added the data collection “would permit China to track the locations of federal employees and contractors, and build dossiers of personal information.” The Chinese Embassy in Washington did not immediately respond to a request for comment. FILE – A TikTok logo is displayed on a smartphone in this illustration.Another official said the order mirrors earlier Trump executive orders signed in August directing Commerce to block some transactions with WeChat and Chinese-owned Tiktok seeking to bar some transactions that have been blocked by U.S. courts. Any new transactions prohibited by the Trump administration are likely to face similar court challenges as the Commerce Department did when it sought to block transactions with WeChat and TikTok. The Commerce orders would have effectively banned the Chinese app’s use in the United States and barred Apple Inc. and Alphabet Inc.’s app stores from offering them for download for new users. U.S. Secretary of Commerce Wilbur Ross said in a statement he supports Trump’s “commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party.” The latest action has been under debate within the administration for an extended period. Many administration officials are eager to cement the hardline U.S. position with China on a number of fronts before Trump leaves office. Last month, the Commerce Department added dozens of Chinese companies, including the country’s top chipmaker SMIC and Chinese drone manufacturer SZ DJI Technology Co Ltd., to a trade blacklist. Also last month the administration published a list of Chinese and Russian companies with alleged military ties that restrict them from buying a range of U.S. goods and technology. In November, the administration put on hold an effort to blacklist Ant Group, the Chinese financial technology company affiliated with e-commerce giant Alibaba. 
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Online communication and collaboration service Slack reported a global outage Monday, as millions returned to work after the Christmas and New Year’s holidays.”Our team is currently investigating, and we’re sorry for any troubles this may be causing,” Slack said in a statement.Slack has seen its popularity grow as many people work and study from home during the coronavirus pandemic. When it last reported, the company said it had 12 million daily users. Slack shares have surged by 80% over the past year.According to The Associated Press, the outage began around 10 a.m. Eastern time, with outages reported in the United States, Germany, India, Britain, Japan and other countries.The disruption in service was the latest in a string of tech outages, which have seen Google services, Zoom and some Microsoft products suffer breakdowns in recent months.According to Bloomberg, Salesforce.com agreed to buy Slack Technologies, Inc. last year for $27.7 billion.  
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More than 200 Google employees in the United States have formed a workers’ union, the elected leaders of the union wrote in a New York Times opinion piece on Monday.
 
The “Alphabet Workers Union” aims to ensure that employees work at a fair wage, without fear of abuse, retaliation or discrimination, the union heads wrote.
 
Google has been under fire from the U.S. labor regulator, which has accused the company of unlawfully questioning several workers who were then terminated for protesting against company policies and trying to organize a union. Google has said it was confident it acted legally.
 
“We’re building on years of organizing efforts at Google to create a formal structure for workers,” the union leaders wrote, adding that so far 226 employees had signed union cards with the Communications Workers of America.
 
“Our employees have protected labor rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees,” Kara Silverstein, director of people operations at Google, said on Monday.
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The hacking group behind the SolarWinds compromise was able to break into Microsoft Corp. and access some of its source code, Microsoft said Thursday. In a blog post, Microsoft said its investigation into the SolarWinds breach had turned up irregularities with a “small number of internal accounts” and that one of the accounts “had been used to view source code in a number of source code repositories.” It added that the account had no ability to modify the code. The disclosure adds to the growing picture of the compromises associated with the SolarWinds hack, which used the Texas-based company’s flagship network monitoring software as a springboard to break into sensitive U.S. government networks and other tech companies. Microsoft had disclosed that, like other firms, it found malicious versions of SolarWinds’ software inside its network, but the source code disclosure is new. FILE – A woman walks in front of the Microsoft stand during the Cybersecurity Conference in Lille, northern France, Jan. 29, 2020.A company’s source code, the underlying set of instructions that run a piece of software or an operating system, is typically among its most closely guarded secrets. It is not clear how many or specifically which source code repositories the hackers were able to access or how long the hackers were lurking in Microsoft’s systems. A Microsoft spokesman declined to elaborate on the blog post. Modifying source code, which Microsoft said the hijacked account could not do, could have potentially disastrous consequences, but experts said that even just being able to review the code could offer hackers insight that might help them subvert Microsoft products or services. “The source code is the architectural blueprint of how the software is built,” said Andrew Fife of Israel-based Cycode, a source code protection company. “If you have the blueprint, it’s far easier to engineer attacks.” Both he and Ronen Slavin, Cycode’s chief technology officer, said a key unanswered question was which source code repositories were accessed. Microsoft has a huge range of products, from its flagship Windows operating system to lesser-known software such as social networking app Yammer and the design app Sway. Slavin said he was also worried by the possibility that the SolarWinds hackers were poring over Microsoft’s source code as prelude for something more ambitious. “To me the biggest question is, ‘Was this recon for the next big operation?’ ” he said. In its blog post, Microsoft said it had found no evidence of access “to production services or customer data.” “The investigation, which is ongoing, has also found no indications that our systems were used to attack others,” it said.  
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In the not-so-distant future, America’s evening skies could be filled with the buzzing sounds of delivery drones.On Monday, the Federal Aviation Administration (FAA) approved the use of delivery drones over populated areas at night. Many see the move as the next step to widespread adoption of drone deliveries.“The new rules make way for the further integration of drones into our airspace by addressing safety and security concerns,” FAA Administrator Steve Dickson said in a statement. “They get us closer to the day when we will more routinely see drone operations such as the delivery of packages.”Delivery companies like UPS and Amazon have been investing in the technology for years. Both companies have seen surging profits during the coronavirus pandemic as more Americans turn to home delivery for many items, including groceries.Alphabet’s Wing is also investing in drone technology.The FAA said the new regulations provide “an essential building block toward safely allowing more complex” drone operations. According to the new FAA rules, drones of more than a certain weight must have remote identification capabilities and be equipped with anti-collision lights. The FAA also said the drones cannot have any exposed rotating parts that could potentially injure a person.In some cases, the drones can be operated above moving vehicles “depending on the level of risk.” The new rules will become effective 60 days after they are published in the Federal Register next month.Despite the new regulations, Bloomberg reports it will still be years before delivery drones are widely used. 
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People around the world turned to technology to help them get through the pandemic, but in some key ways tech fell short. Michelle Quinn reports.Videographer:  Deana Mitchell, Matt Dibble
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The suspected Russian hackers behind the worst U.S. cyberattack in years used reseller access to Microsoft Corp. services to penetrate targets that had no compromised network software from SolarWinds Corp., investigators said.Updates to SolarWinds’ Orion software were the only known point of entry until Thursday, when security company CrowdStrike Holdings Inc. said hackers had gained access to the vendor that sold it Office licenses and had used that to try to read CrowdStrike’s email. It did not specifically identify the hackers as being the ones that compromised SolarWinds, but two people familiar with CrowdStrike’s investigation said they were.CrowdStrike uses Office programs for word processing but not email. The failed attempt, made months ago, was pointed out to CrowdStrike by Microsoft on December 15.CrowdStrike, which does not use SolarWinds, said it had found no impact from the intrusion attempt and declined to name the reseller.”They got in through the reseller’s access and tried to enable mail ‘read’ privileges,” one person familiar with the investigation told Reuters. “If it had been using Office 365 for email, it would have been game over.”Many Microsoft software licenses are sold through third parties, and those companies can have near-constant access to clients’ systems as the customers add products or employees.Be on guardMicrosoft said Thursday that those customers need to be vigilant.”Our investigation of recent attacks has found incidents involving abuse of credentials to gain access, which can come in several forms,” said Microsoft senior director Jeff Jones. “We have not identified any vulnerabilities or compromise of Microsoft product or cloud services.”The use of a Microsoft reseller to try to break into a top digital defense company raises new questions about how many avenues the hackers, whom U.S. officials have alleged are operating on behalf of the Russian government, have at their disposal.FILE – This Feb. 11, 2015, photo shows FireEye offices in Milpitas, Calif.The known victims so far include CrowdStrike security rival FireEye Inc. and the U.S. departments of Defense, State, Commerce, Treasury and Homeland Security. Other big companies, including Microsoft and Cisco Systems Inc., said they found tainted SolarWinds software internally but had not found signs that the hackers used it to range widely on their networks.Until now, Texas-based SolarWinds was the only publicly confirmed channel for the initial break-ins, although officials have been warning for days that the hackers had other ways in.Microsoft reportReuters reported a week ago that Microsoft products were used in attacks. But federal officials said they had not seen it as an initial vector, and the software giant said its systems were not utilized in the campaign.
 
Microsoft then hinted that its customers should still be wary. At the end of a long, technical blog post Tuesday, it mentioned seeing hackers reach Microsoft 365 Cloud “from trusted vendor accounts where the attacker had compromised the vendor environment.”Microsoft requires its vendors to have access to client systems in order to install products and allow new users. But discovering which vendors still have access rights at any given time is so hard that CrowdStrike developed and released an auditing tool to do that.After a series of other breaches through cloud providers, including a major set of attacks attributed to Chinese government-backed hackers and known as CloudHopper, Microsoft this year imposed new controls on its resellers, including requirements for multifactor authentication.The Cybersecurity and Infrastructure Security Agency and the National Security Agency had no immediate comment.Also Thursday, SolarWinds released an update to fix the vulnerabilities in its flagship network management software Orion following the discovery of a second set of hackers who had targeted the company’s products.That followed a separate Microsoft blog post Friday saying that SolarWinds’ software had been targeted by a second and unrelated group of hackers in addition to those linked to Russia.The identity of the second set of hackers, or the degree to which they may have successfully broken in anywhere, remains unclear.Russia has denied having any role in the hacking.
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The U.S. cybersecurity agency said on Wednesday that a sprawling cyber espionage campaign made public earlier this month is affecting state and local governments, although it released few additional details.The hacking campaign, which used U.S. tech company SolarWinds as a springboard to penetrate federal government networks, was “impacting enterprise networks across federal, state, and local governments, as well as critical infrastructure entities and other private sector organizations,” the Cybersecurity and Infrastructure Security Agency (CISA) said in a statement posted to its website.The CISA said last week that U.S. government agencies, critical infrastructure entities, and private groups were among those affected but did not specifically mention state or local bodies. So far only a handful of federal government agencies have officially confirmed having been affected, including the U.S. Treasury Department, the Commerce Department, and the Department of Energy.CISA did not identify the state or local agencies affected and did not immediately return an email seeking additional detail on the notice.Reuters has previously reported that Pima County, Arizona, was among the victims of the wave of intrusions.The county did not immediately return a message seeking comment late Wednesday. The county’s chief information officer previously told Reuters his team had taken its SolarWinds software offline immediately after the hack became public and that investigators had not found any evidence of a further compromise.Senior U.S. officials and lawmakers have alleged that Russia is to blame for the hacking spree, a charge the Kremlin denies.
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Twitter said Tuesday it would not automatically transfer the millions of followers of official Trump administration accounts to the incoming Biden administration but instead would give users the option to continue or not. The move affects followers of government-led accounts such as @WhiteHouse and @POTUS, which will be transferred to Joe Biden when he takes over the presidency in January. Twitter’s decision won’t affect the personal account @realDonaldTrump, which is frequently used by President Donald Trump and has some 88 million followers. FILE – President Donald Trump’s Twitter feed is photographed on an Apple iPad in New York, June 27, 2019.The official government accounts “will not automatically retain their existing followers. Instead, Twitter will notify followers of these accounts to provide context that the content will be archived and allow them the choice to follow the Biden administration’s new accounts,” a Twitter statement said. “For example, people who follow @WhiteHouse will be notified that the account has been archived as @WhiteHouse45 and given the option to follow the new @WhiteHouse account.” Twitter has been working on the transition for the platform widely used by Trump since the election results were finalized and has indicated that as a private citizen Trump may not have as much leeway in stretching the rules for newsworthy comments. While not as widely followed as Trump’s personal account, @POTUS has some 33 million followers and @WhiteHouse 26 million. The transfer will affect other institutional accounts such as @VP, @FLOTUS, @PressSec, @Cabinet, and @LaCasaBlanca, according to Twitter. Last month, Twitter indicated any special treatment that Trump has enjoyed ends with his presidency. “Twitter’s approach to world leaders, candidates and public officials is based on the principle that people should be able to choose to see what their leaders are saying with clear context,” the San Francisco company said. “This policy framework applies to current world leaders and candidates for office, and not private citizens when they no longer hold these positions.” 
 
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U.S. lawmakers are expected to endorse $1.9 billion to fund a program to remove telecom network equipment that the U.S. government says poses national security risks as part of a year-end spending bill and COVID-19 bill, a source briefed on the matter said on Sunday.Lawmakers are also expected to back $3.2 billion for an emergency broadband benefit for low-income Americans.The Federal Communications Commission said in June it had formally designated China’s Huawei Technologies Co and ZTE Corp as threats, a declaration that bars U.S. firms from tapping an $8.3 billion government fund to purchase equipment from the companies.Earlier this month, the FCC finalized rules that require carriers with ZTE or Huawei equipment to “rip and replace” that equipment but is awaiting funding from Congress.Huawei said earlier this month it was disappointed in the FCC’s decision “to force removal of our products from telecommunications networks. This overreach puts U.S. citizens at risk in the largely underserved rural areas – during a pandemic – when reliable communication is essential.”The $7 billion COVID Relief Broadband Package “establishes a temporary, emergency broadband benefit program at the FCC to help low-income Americans, including those economically challenged by the COVID-19 pandemic, get connected or remain connected to broadband,” the source said.The source also said the program will supply a $50 monthly subsidy to qualifying households “to help them afford broadband service and an internet-connected device.”The bill also expands eligibility for the rip-and-replace reimbursement program to communications providers with 10 million subscribers or less but prioritizes reimbursement for providers with 2 million subscribers or less, the source said, citing a draft fact sheet.The bill is expected to include $285 million for connecting minority communities and will establish an Office of Minority Broadband Initiatives at the National Telecommunications and Information Administration (NTIA). 
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U.S. lawmakers briefed on the massive cybersecurity breach that has impacted government agencies and the private sector are calling for the country to act, warning that so far, all evidence is pointing to Russia as the culprit. The admonitions, from both Republicans and Democrats, follow warnings from U.S. cybersecurity officials that the scope of the hack is potentially much bigger than originally thought, encompassing multiple software platforms going back at least as far as March of this year. FILE – Sen. Marco Rubio, R-Fla., asks a question during a Senate Foreign Relations committee hearing in Washington, July 30, 2020.”The full extent of the cyberhack [sic] is still unknown but we already know it is unprecedented in scale & scope,” the acting chairman of the Senate Intelligence Committee, Republican Marco Rubio, tweeted Friday. “The methods used to carry out the cyberhack are consistent with Russian cyber operations,” Rubio added, warning that once officials can attribute the intrusion with complete certainty, “America must retaliate, and not just with sanctions.” The full extent of the cyberhack is still unknown but we already know it is unprecedented in scale & scope, in all likelihood ongoing & at a level of sophistication only a few nation-states are capable of.
— Marco Rubio (@marcorubio) FILE – Sen. Mark Warner, D-Va., addresses the news media in Alexandria, Va., Nov. 3, 2020.”An incident of this magnitude and lasting impact requires an engaged and public response by the U.S. government,” Senator Mark Warner said in a statement issued Friday. “It is extremely troubling that the president does not appear to be acknowledging, much less acting upon, the gravity of this situation.” Indications of a cyber intrusion first went public earlier this month when the private cybersecurity firm FireEye announced its systems had been penetrated and that sensitive information had been stolen. The hack was later traced to updates for network management software from a Texas-based company called SolarWinds, which the hackers exploited to get into the networks of at least 18,000 users. In an updated alert issued Friday, the cybersecurity unit of the U.S. Department of Homeland Security warned the hackers had been exploiting the SolarWinds software update going back to at least March. The SolarWinds logo is seen outside its headquarters in Austin, Texas, Dec. 18, 2020.But the Cybersecurity and Infrastructure Security Agency (CISA) further warned the problem was not contained to SolarWinds. “CISA has evidence of initial access vectors other than the SolarWinds Orion platform,” the alert warned, saying the agency is investigating instances in which other platforms were used to access critical networks. “This threat poses a grave risk to the federal government and state, local, tribal and territorial governments, as well as critical infrastructure entities and other private sector organizations,” CISA said. “This is a patient, well-resourced and focused adversary that has sustained long duration activity on victim networks.” Research by tech giant Microsoft, made public Thursday, indicated the hackers precisely targeted at least 40 organizations. The vast majority were in the United States, but companies in Canada, Mexico, Britain, Belgium, Israel and the United Arab Emirates were also attacked. FILE – Microsoft President Brad Smith speaks during a Reuters Newsmaker event in New York, Sept. 13, 2019.”This is not ‘espionage as usual,’ even in the digital age,” Microsoft President Brad Smith wrote on the company’s blog. “This is not just an attack on specific targets, but on the trust and reliability of the world’s critical infrastructure.” Former U.S. government officials also worried about the impact of the hack. “The scope of it is large but exactly how large remains to be seen, and exactly how severe remains to be seen,” Michael Daniel, who served as a special assistant to former U.S. President Barack Obama on cyber issues, told VOA’s Russian Service. “The damage could be very, very significant to U.S. national security and to our economic security,” he said. Yet despite the warnings from current and former government officials, and private security firms, as of late Friday, U.S. President Donald Trump had yet to comment on the breach. Instead, Trump’s Twitter feed was full of unsubstantiated allegations of election fraud, praise for the distribution of coronavirus vaccines and threats to veto the $740 billion defense spending bill, which drew the ire of some key lawmakers. I will Veto the Defense Bill, which will make China very unhappy. They love it. Must have Section 230 termination, protect our National Monuments and allow for removal of military from far away, and very unappreciative, lands. Thank you! https://t.co/9rI08S5ofO
— Donald J. Trump (@realDonaldTrump) December 17, 2020″This year’s National Defense Authorization Act provides critical tools and authorities to help defend against and disrupt malicious cyber activity and effectively hunt for threats and vulnerabilities on the federal cyber network,” the chairman and ranking member of the Senate Armed Services Committee said in a joint statement late Friday. “The NDAA is always ‘must-pass’ legislation,” Republican Jim Inhofe and Democrat Jack Reed added. “But this cyber incident makes it even more urgent that the bill become law without further delay.” NEW: Senate Armed Services Committee statement on #SolarWindsHack
“significant, sophisticated, and ongoing cybersecurity intrusion against the United States… has the hallmarks of a #Russia|n intelligence operation” per @JimInhofe@SenJackReedpic.twitter.com/2d5KqPrECR
— Jeff Seldin (@jseldin) December 17, 2020Already, officials have determined that the hackers gained access to systems for the departments of Energy, Treasury and Commerce, though the Energy Department said networks related to nuclear security appeared to have been spared.  “At this point, the investigation has found that the malware has been isolated to business networks only and has not impacted the mission essential national security functions of the department,” spokeswoman Shaylyn Hynes said in a statement Thursday.  DOE UPDATE ON CYBER INCIDENT RELATED TO SOLAR WINDS COMPROMISE pic.twitter.com/l9X1AH4VJw
— DOE Press Staff (@EnergyPress) December 17, 2020U.S. President-elect Joe Biden called the cybersecurity breach “a matter of great concern.” “I want to be clear: My administration will make cybersecurity a top priority at every level of government — and we will make dealing with this breach a top priority from the moment we take office,” he said in a statement Thursday, shortly after the latest CISA alert was issued. “Our adversaries should know that, as president, I will not stand idly by in the face of cyber assaults on our nation,” he added. Biden is set to be inaugurated as the 46th U.S. president on January 20. Russian Service’s Danila Galperovich contributed to this report.
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In recent weeks, Chinese regulators have cracked down on some of the country’s biggest and most powerful technology companies, illustrating the immense market power of these companies, which has drawn concern from the government. On Monday, the State Administration for Market Regulation (SAMR), China’s top market regulator, fined three of the country’s largest technology companies, including e-commerce giant Alibaba Group and social-media juggernaut Tencent, for failing to disclose acquisitions of smaller competitors. Last month, China Securities Regulatory Commission halted the record initial public offering of Ant Group, one of China’s dominant digital payment platforms backed by Alibaba. It then announced new draft rules targeting monopolistic practices on the country’s digital platforms.  FILE – Signs of Alibaba Group and Ant Group are seen during the World Internet Conference in Wuzhen, Zhejiang province, China, Nov. 23, 2020.Analysts who spoke to VOA said these moves reflect the Chinese government’s rising concern over financial technology and e-commerce companies that are using unfair competitive practices to undermine traditional payments and financial service companies. There is also a concern that the companies could pose a systemic risk to the economy.  First fine On Monday, a subsidiary of Alibaba Group, a unit of Tencent Holdings, and an affiliate of express delivery company SF Holding were fined $75,000 (500,000 RMB) each for breaching China’s anti-monopoly law.  SAMR said in a statement that the online economy has become increasingly controlled by a few companies. “Complaints about platform monopoly have been on the rise, indicating competition risks and problems in the online economy,” it said.  FILE – Zhang Mao, minister of China’s State Administration for Market Regulation, attends a news conference on the sidelines of the National People’s Congress in Beijing, China, March 11, 2019.This marks the first fine towards the country’s internet giants since the enforcement of the anti-monopoly law in 2008.  Lu Suiqi, an associate professor of finance at Peking University, says the government has been turning a blind eye to monopoly issues for the past decade, because developing the digital economy was an important part of China’s industrial policy.  “Now these companies have become too strong, they have been using inappropriate means to drive their competitors out of the market,” Lu said. “They have grasped an excessively high market share and there’s a lack of healthy competition, which is bad for the overall economy.” Some 70% of the top 30 Apps in China belong to either Alibaba or Tencent. The two companies are each believed to oversee a payment and financial tractions ecosystem with a market value around $1.5 trillion (10 trillion RMB).  Li Chengdong, founder of the Beijing-based Dolphin think tank, says that the explosive growth of internet firms has made governments around the world vigilant. In the United States earlier this month, attorney generals from 48 states sued Google and Facebook, accusing them of illegally conspiring to shut out smaller rivals. Analysts say there is a similar dynamic happening in China. 38 States Sue Google Over Antitrust Complaints It is the third major lawsuit against the tech giant since October “It’s very common in China for big internet giants to crack down on small- and medium-size start-ups,” he said, adding only more strict regulation and enforcement can put the economy back on track.  Rebalancing away from technology?  Meanwhile, experts recommend China needs to rebalance its economy between e-commerce and brick and mortar stores to achieve more sustainable growth.  Tomson Tang, vice chairman of China Electronic Commerce Association, says China’s e-commerce has developed rapidly over the past 20 years in terms of users and the value of transactions, at the cost of hundreds and thousands of brick and mortar stores.  “The policy and regulations couldn’t catch up with the speed at which e-commerce develops. That include systematic problems on issues around monopoly, which is bad for the real economy,” he told VOA. However, he said the digital economy is a key element for China to maintain overall economic momentum down the road. The government needs to use regulations to make sure that market opportunities created should be open to all participants and cannot be monopolized by a few large companies.  Beijing’s antitrust watchdogs last month announced draft rules targeting monopolistic practices on the country’s digital platforms, which analysts say will have negative implications for major internet companies with dominant positions across segments.  Paul Triolo, a China digital economy fellow at the Washington-based think tank New America, says although the tech giants must comply with the tightening regulations, they might succeed in bargaining with authorities on how the regulations are implemented.  Tang predicts that in the next two to three years, China will establish a national digital economy bureau to oversee all internet companies. “Without such an authority to supervise, coordinate and enforce regulations, it would be difficult to grasp the financial data and structures of these internet giants, thus impact the implementation of the new anti-monopoly law,” he said.  
 
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Technology giant Alibaba Group Holding Ltd. has facial recognition technology that can specifically pick out members of China’s Uighur minority, surveillance industry researcher IPVM said in a report. Alibaba itself said it was dismayed a unit developed software that can tag ethnicity in videos, and that the feature was never intended to be deployed to customers. The report comes as human rights groups accuse China of forcing more than 1 million Muslim Uighurs into labor camps in the region of Xinjiang and call out firms suspected of complicity. FILE – Residents line up inside a vocational training center in Artux, in western China’s Xinjiang region, Dec. 3, 2018. Critics say China uses some of these facilities as detention camps for forced labor.China has repeatedly denied forcing anyone into what it has called vocational training centers and has also said Xinjiang is under threat from Islamist militants. Still, sensitivities have prompted caution among Chinese internet firms that often self-censor to avoid running afoul of a government that strictly controls online speech and that last month published draft rules to police livestreaming. Report’s findingsU.S.-based IPVM in a report published Wednesday said software capable of identifying Uighurs appears in Alibaba’s Cloud Shield content moderation service for websites. Alibaba describes Cloud Shield as a system that “detects and recognizes text, pictures, videos and voices containing pornography, politics, violent terrorism, advertisements and spam, and provides verification, marking, custom configuration and other capabilities.” An archived record of the technology shows it can perform such tasks as “glasses inspection,” “smile detection,” whether the subject is “ethnic” and, specifically, “Is it Uighur?” Consequently, if a Uighur livestreams a video on a website signed up to Cloud Shield, the software can detect that the user is Uighur and flag the video for review or removal, IPVM researcher Charles Rollet told Reuters. IPVM said mention of Uighurs in the software disappeared near the time it published its report. Alibaba’s responseAlibaba in a statement said it was dismayed that Alibaba Cloud developed facial recognition software that includes ethnicity as an attribute for tagging video imagery, and that it never intended the software to be used in this manner. The feature was trial technology not intended for customers. Alibaba did not mention Uighurs in its statement. “We have eliminated any ethnic tag in our product offering,” an Alibaba spokeswoman told Reuters. Alibaba is listed on both the New York and Hong Kong stock exchanges. It is the biggest cloud computing vendor in China and the fourth biggest worldwide, showed data from researcher Canalys. Earlier this month, U.S. lawmakers sent letters to Intel Corp. and Nvidia Corp. following reports of their computer chips being used in the surveillance of Uighurs.  
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The lawsuits against Alphabet Inc.’s Google continue to pile up. On December 17, 38 states filed a joint antitrust complaint that accuses the tech giant of expanding its search monopoly through smart speakers, televisions and cars, according to Reuters. It is the third major lawsuit against the company. The states are seeking to attach their suit with a federal suit announced by the Justice Department in October, according to the Colorado attorney general’s office. The federal case alleges Google made deals with phone makers, including Apple and Samsung, to make Google the default search engine. It alleges it is also using its Android operating system to pressure device makers to preload Google search apps and other Google products. On December 16, another case was filed by another group of states led by Texas. That case alleges Google is harming competitors by engaging in “false, deceptive or misleading acts” with its Google Ads product. In the latest case, the states allege Google is seeking to use exclusionary agreements to dominate search and search advertising over a new set of devices like smart speakers, which Google produces. Accusations against GoogleAccording to CNET, Google accounts for about 90% of U.S. search traffic. That generates “almost all” of the company’s $160 billion in annual sales. The company has long been accused of shutting out competitors by using its dominance to promote its own products. The new lawsuit alleges Google is doing the same with newer devices like voice assistants. “Google is preventing competitors in the voice assistant market from reaching consumers through connected cars, which stand to be a significant way the internet is accessed in the near future,” said Iowa Attorney General Tom Miller, according to Reuters. Google has yet to comment on the lawsuit. Big Tech has come under increasing attack from both Democrats and Republicans. In addition to the Google cases, Facebook Inc. is also facing antitrust lawsuits. Reuters said the suits were the “biggest antitrust cases in a generation.”  
 
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The U.S. government confirmed on Wednesday that a recent hacking campaign affected its networks and said the attack was “significant and ongoing.”Hackers believed to be working for Russia have been monitoring internal email traffic at the U.S. Treasury and Commerce departments, Reuters reported earlier this week, citing people who said they feared the hacks uncovered so far may be the tip of the iceberg.”This is a developing situation, and while we continue to work to understand the full extent of this campaign, we know this compromise has affected networks within the federal government,” said a joint statement issued by the FBI, the Cybersecurity and Infrastructure Security Agency (CISA), and the Office of the Director of National Intelligence (ODNI).Technology company SolarWinds Corp., which was the key stepping-stone used by the hackers, said up to 18,000 of its customers had downloaded a compromised software update that allowed hackers to spy unnoticed on businesses and agencies for almost nine months.”Over the course of the past several days, the FBI, CISA, and ODNI have become aware of a significant and ongoing cybersecurity campaign,” the joint statement said.”The FBI is investigating and gathering intelligence in order to attribute, pursue, and disrupt the responsible threat actors,” the statement said.The FBI, CISA and ODNI have formed a Cyber Unified Coordination Group to coordinate the U.S. government’s response, it said.White House national security adviser Robert O’Brien cut short a European trip on Tuesday and returned to Washington to deal with the attack.
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Ten states on Wednesday brought a lawsuit against Google, accusing the search giant of “anti-competitive conduct” in the online advertising industry, including a deal to manipulate sales with rival Facebook.Texas Attorney General Ken Paxton announced the suit, which was filed in a federal court in Texas, saying Google is using its “monopolistic power” to control pricing of online advertisements, fixing the market in its favor and eliminating competition.”This Goliath of a company is using its power to manipulate the market, destroy competition, and harm you, the consumer,” Paxton said in the video posted on Twitter.Google, which is based in Mountain View, California, called Paxton’s claims “meritless” and said the price of online advertising has fallen over the past decade.”These are the hallmarks of a highly competitive industry,” the company said in a statement. “We will strongly defend ourselves from (Paxton’s) baseless claims in court.”Paxton led a bipartisan coalition of 50 U.S. states and territories that announced in September 2019 they were investigating Google’s business practices, citing “potential monopolistic behavior.”Now Texas is bringing the suit along with other Republican attorneys general from Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah.The complaint targets the heart of Google’s business – the digital ads that generate nearly all of its revenue, as well as all the money that its corporate parent, Alphabet Inc., depends on to help finance a range of far-flung technology projects.As more marketers have increased their spending online, those digital ads have turned Google into a moneymaking machine. Through the first nine months of this year, Google’s ad sales totaled nearly $101 billion, accounting for 86% of its total revenue.And now the states contend Google intends to use its alleged stranglehold on digital ads to choke off other avenues of potential competition and innovation. The company struck an illegal deal with Facebook, a major competitor for ads, to manipulate advertising auction, according to the complaint. Facebook declined to comment.”Google has an appetite for total dominance, and its latest ambition is to transform the free and open architecture of the internet,” the suit alleges.’Ad tech’ marketplaceIn the “ad tech” marketplace that brings together Google and a huge universe of online advertisers and publishers, the company controls access to the advertisers that put ads on its dominant search platform. Google also runs the auction process for advertisers to get ads onto a publisher’s site. Nine of Google’s products in search, video, mobile, email, mapping and other areas are estimated to have over a billion users each, providing the company a trove of users’ data that it can deploy in the advertising process.Google officials say the company shares the majority of its “ad tech” revenue with publishers, such as newspaper websites. An official recently rejected even the assertion that Google is dominant, saying that market dominance suggests abuse, which is foreign to the company.The state’s suit comes after the U.S. Justice Department sued Google in October for abusing its dominance in online search and advertising – the government’s most significant attempt to buttress competition since its historic case against Microsoft two decades ago.Separately, the FBI is investigating whether Paxton, a close ally of President Donald Trump, broke the law in using his office to help a wealthy donor who is also under federal investigation. This fall, eight of the attorney general’s top deputies accused him of bribery, abuse of office and other crimes in the service of an Austin real estate developer who employs a woman with whom Paxton is said to have had an extramarital affair.All eight of Paxton’s accusers have since been fired or resigned, including the deputy attorney general who had been leading the office’s probe of Google. The court complaint list attorneys with private firms in Houston, Chicago and Washington, D.C., as the lead lawyers on the case.Paxton announced the lawsuit the week after the U.S. Supreme Court rejected his legal push to overturn Joe Biden’s victory in the presidential election, a case that prompted widespread speculation that the attorney general is angling for a preemptive pardon from Trump.  
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The U.S. government’s suit against Facebook for illegally stifling competition and limiting consumer choice will be watched worldwide, particularly by the social network’s more than two billion users. Tina Trinh reports. 
Produced by: Tina Trinh  
 
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On an earnings call two months ago, SolarWinds Chief Executive Kevin Thompson touted how far the company had gone during his 11 years at the helm. There was not a database or an IT deployment model out there to which his Austin, Texas-based company did not provide some level of monitoring or management, he told analysts on the October 27 call. “We don’t think anyone else in the market is really even close in terms of the breadth of coverage we have,” he said. “We manage everyone’s network gear.” Now that dominance has become a liability – an example of how the workhorse software that helps glue organizations together can turn toxic when it is subverted by sophisticated hackers. On Monday, SolarWinds confirmed that Orion – its flagship network management software – had served as the unwitting conduit for a sprawling international cyberespionage operation. The hackers inserted malicious code into Orion software updates pushed out to nearly 18,000 customers. SolarWinds Corp. CEO Kevin Thompson celebrates his company’s IPO on the floor of the New York Stock Exchange (NYSE) in New York, Oct. 19, 2018.And while the number of affected organizations is thought to be much more modest, the hackers have already parlayed their access into consequential breaches at the U.S. Treasury and Department of Commerce. Three people familiar with the investigation have told Reuters that Russia is a top suspect, although others familiar with the inquiry have said it is still too early to tell. A SolarWinds representative, Ryan Toohey, said he would not be making executives available for comment. He did not provide on-the-record answers to questions sent via email. In a statement issued Sunday, the company said, “we strive to implement and maintain appropriate administrative, physical, and technical safeguards, security processes, procedures, and standards designed to protect our customers.” Cybersecurity experts are still struggling to understand the scope of the damage. Sending the malicious updates from March to June, when America was hunkering down to weather the first wave of coronavirus infections, was “perfect timing for a perfect storm,” said Kim Peretti, who co-chairs Atlanta-based law firm Alston & Bird’s cybersecurity preparedness and response team. Assessing the damage would be difficult, she said. “We may not know the true impact for many months, if not more – if not ever,” she said. US Cybersecurity and Infrastructure Security Agency logoThe impact on SolarWinds was more immediate. U.S. officials ordered anyone running Orion to immediately disconnect it. The company’s stock has tumbled more than 23% from $23.50 on Friday – before Reuters broke the news of the breach – to $18.06 on Tuesday. SolarWinds’ security, meanwhile, has come under new scrutiny. In one previously unreported issue, multiple criminals have offered to sell access to SolarWinds’ computers through underground forums, according to two researchers who separately had access to those forums. One of those offering claimed access over the Exploit forum in 2017 was known as “fxmsp” and is wanted by the FBI “for involvement in several high-profile incidents,” said Mark Arena, chief executive of cybercrime intelligence firm Intel471. Arena informed his company’s clients, which include U.S. law enforcement agencies. Security researcher Vinoth Kumar told Reuters that, last year, he alerted the company that anyone could access SolarWinds’ update server by using the password “solarwinds123.” “This could have been done by any attacker, easily,” Kumar said. Neither the password nor the stolen access is considered the most likely source of the current intrusion, researchers said. Others – including Kyle Hanslovan, the cofounder of Maryland-based cybersecurity company Huntress – noticed that, days after SolarWinds realized their software had been compromised, the malicious updates were still available for download. The firm has long mooted the idea of spin-off of its managed service provider business and on Dec. 9 announced that Thompson would be replaced by Sudhakar Ramakrishna, the former chief executive of Pulse Secure. Three weeks ago, SolarWinds posted a job ad seeking a new vice president for security; the position is still listed as open. Thompson and Ramakrishna could not be reached for comment. 
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Apple on Monday began adding labels that reveal what user data is gathered by games, chat or other software offered in the App Store for its popular mobile devices. The iPhone maker announced plans for such privacy labels when it first unveiled the new version of its iOS mobile operating system, which it released in September. “App Store product pages will feature summaries of developers’ self-reported privacy practices, displayed in a simple, easy-to-read format,” Apple said in a blog post when iOS 14 launched. “Starting early next year, all apps will be required to obtain user permission before tracking.” Apple began pushing out the labels Monday, with the rule applying to new apps for iPhones, iPads, Apple Watch, Apple TV and Mac computers. The labels will contain information provided by developers when they submit apps for approval to appear on the App Store’s virtual shelves, according to the Silicon Valley-based company. Apple last week began requiring developers to submit privacy information for use in labels. “Apple recently required that all apps distributed via their App Store display details designed to show people how their data may be used,” Facebook-owned smartphone messaging service WhatsApp said in a blog post explaining what data the app gathers. “We must collect some information to provide a reliable global communications service,” it said. The aim, according to Apple, is for users to be able to easily see and understand what apps do with their data, from lists of contacts to where they are. Data types added to labels will include tracking in order to target advertising or sharing with data brokers, as well as information that could reveal user identity. Apple and Android mobile operating systems provide tools for controlling the kinds of data apps can access once they are installed. 
 
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After nearly an hour of widespread global outages of Google services, most users were again able to access their Gmail, Google Drive and YouTube accounts Monday morning.
 
“Update — We’re back up and running! You should be able to access YouTube again and enjoy videos as normal,” YouTube tweeted once service was restored.
 
Google, a subsidiary of Alphabet Inc., has not said what caused the outage.
 
Some users of Google Home Services, which can control lighting and other smart devices, reported outages, as well.
 
“I’m sitting here in the dark in my toddler’s room because the light is controlled by @Google Home. Rethinking … a lot right now,” tweeted one user.I’m sitting here in the dark in my toddler’s room because the light is controlled by @Google Home. Rethinking… a lot right now.— Joe Brown (@joemfbrown) December 14, 2020 
According to Bloomberg, Google search and advertisements were not affected by the down time.
 
While outages among Big Tech companies are not uncommon, this outage was notable because it impacted so many different Google products, Bloomberg reported. 
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The U.S. added China’s biggest computer chipmaker SMIC to a blacklist of alleged Chinese military companies last week, a move that will further widen the gap between China’s chip technology and the rest of the world.Despite its status as the world’s factory, China has never figured out how to make advanced chips. In recent years, Beijing has been planning a series of sweeping government policies and pouring billions of dollars into the industry to fulfill its chip self-sufficiency goal.So far, under ever-tightening international export controls, however, the country has only found itself mired in some of the most embarrassing industrial failures in its recent history. Most notably, one of the nation’s most high-profile chipmakers was taken over by municipal authorities in its home city of Wuhan, and a Beijing-based chipmaker, the Tsinghua Unigroup, defaulted on a corporate bond.FILE – A Chinese microchip is seen through a microscope set up at the booth for the state-controlled Tsinghua Unigroup project which is driving China’s semiconductor ambitions during the 21st China Beijing International High-tech Expo in Beijing.In this highly internationally integrated industry, experts say, no country can manufacture chips on its own, and China’s efforts to develop its semiconductor sector remains out of reach.Highly globalized chainSemiconductor production is considered one of the most sophisticated manufacturing processes in the world, involving more than 50 disciplines. Billions of transistor structures must be built within a few millimeters.The core equipment used to manufacture computer chips includes lithography machines. A Dutch company called ASML is the only company in the world currently capable of producing high-end extreme ultraviolet lithography machines. Of its 17 core suppliers, though, more than half are from the United States, and the rest are companies located throughout Europe.The company is jointly owned by shareholders from dozens of countries. According to its official website, among the top three major shareholders, two are from the United States and one is from the United Kingdom. Capital Research and Management Co. is the largest shareholder, and the second largest is the BlackRock Group; both are in the U.S. Additionally, Taiwan’s TSMC and South Korea’s Samsung also hold shares in ASML, allowing these two manufacturers to enjoy the priority right to purchase the machine.   In Bid to Rely Less on US, China Firms Stockpile Taiwan Tech HardwareChina wants to become technologically self-reliant in 10 years but needs help for nowWhile ASML may dominate the chipmaking machine market, it is only one part of the long chain in the industry. The lens of its lithography machine is manufactured by Zeiss of Germany, the laser technology is owned by Cymer of the United States, and a French company provides key valves.Jan-Peter Kleinhans, a senior researcher at the Berlin think tank New Responsibility Foundation and director of the Technology and Geopolitics Project, said no country can make chips without foreign companies’ technology. He told VOA in a telephone interview that it took ASML more than two decades to develop their machines, and “they rely themselves on a network of around 5,000 suppliers to build this machine.”Kleinhans said that without the participation of any one of these companies, the entire global semiconductor chain would break.Kobe Goldberg, a researcher at the New American Security Research Center, told VOA that what China is trying to do is to build a totally nationalized supply chain in a highly internationalized industry. “That is much more difficult in an industry like semiconductors since it is so internationally integrated.”John Lee, a senior researcher at the Mercator Institute for China Studies, a think tank in Germany, said several Chinese firms already have the capacity to manufacture or fabricate some semiconductors. But they can easily face a crackdown by the U.S. government since American companies have a very strong dominance in the upstream segment of the supply chain, such as chip design.
 Huawei’s Survival at Stake as US Sanctions LoomStarting Sept. 15, China’s telecom giant Huawei will be cut off from essential supplies of semiconductors and without those chips, Huawei cannot make smartphones or 5G equipment on which its business depends, business analysts say”The dominance of U.S.-origin technology in upstream sectors of the global semiconductor supply chain means that Chinese ICT [information and communications technology] firms across the board are exposed to U.S. export controls, regardless of what happens to SMIC or Huawei as individual companies,” Lee added.Multilateral export controlThe multilateral export control implemented by democratic countries can be traced back to the informal multilateral regime called the Coordinating Committee for Multilateral Export Controls (CoCom).  Established in 1949, the 17-member organization, including the United States, the United Kingdom, Japan, France and Australia, attempted to coordinate controls over the export of strategic materials and technology to communist countries. In 1952, a separate group was established to scrutinize exports to China.US Imposes Curbs on Exports by China’s Top Chipmaker SMICNew Commerce Department requirements mean American suppliers of certain technology products to SMIC must apply for individual licenses before they can exportAlthough CoCom ceased to function on March 31, 1994, the list of prohibited items it formulated was later inherited by another multilateral export agreement, the Wassenaar Arrangement, which was signed in 1996. As many as 42 European, American and Asian countries joined the program, which allows member states to exercise control over their own technology exports, and China is again included in the list of targeted countries.Last December, the group reached an agreement to add chip manufacturing technology to the list of items subject to export controls.  While this revision does not explicitly target China, it points out that export restrictions are targeted at nonmember states, while China, along with Iran and North Korea, are not member states. Some Chinese observers called the jointly implemented move a “collective action” against China by countries that dominate the chip manufacturing supply chain.The Bureau of Industrial Security of the U.S. Commerce Department also announced in October of this year that six emerging technologies would be included in a new export control under the Wassenaar Agreement. All these technologies are directly related to chip manufacturing, including extreme ultraviolet lithography necessary for advanced chip manufacturing.Martijn Rasser, a senior researcher at the Center for New American Security’s Technology and National Security Project, told VOA the world’s liberal democracies have a huge advantage in their network of alliances and partnerships, adding: “It’s something that China just completely lacks, and that’s a big, a big headwind for them.”
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