US warns of potential data leaks from Chinese-made drones

Government alert comes after escalation in disputes regarding tech group Huawei and trade

- Tim Bradshaw & Demetri Sevastopulo | Financial Times

The US Department of Homeland Security has taken aim at Chinese drone manufacturers such as DJI in a warning about potential data leaks, expanding the scrutiny by US authorities of the country’s tech industry.

The memo warns American businesses about the hazards of using drones manufactured or sold by companies “operating under the control or influence of a foreign authoritarian state”, since the camera- and sensor-laden devices are “capable of collecting and transferring potentially revealing data about their operations and the individuals and entities operating them”.

The warning follows President Donald Trump’s executive order last week that effectively bars US companies from doing business with China’s Huawei, as trade tensions between the two countries flared.

Huawei, the world’s second-largest smartphone maker and a leading telecoms equipment manufacturer, now faces the prospect of losing access to key US software and semiconductor components, including Google’s latest Android operating system and associated services.

Unlike Huawei, which is already effectively locked out of the consumer market in the US, drone maker DJI has become a household name among American tech enthusiasts thanks to its pioneering Phantom and Mavic aerial camera systems. Its annual sales worldwide run into billions of dollars.

Now, the US Cybersecurity and Infrastructure Security Agency, a subsidiary of DHS, has warned American corporate buyers to take extra steps to secure their data when using “unmanned aerial vehicles” that are made in China.

“Be cautious when purchasing UAS (unmanned aircraft system) technology from Chinese manufacturers as they can contain components that can compromise your data and share your information on a server accessed beyond the company itself,” said the DHS alert, a copy of which was obtained by the Financial Times.

“China imposes unusually stringent obligations on its citizens to support national intelligence activities”, the memo said.

The warning comes as the US boosts efforts to combat Chinese espionage, particularly since the Trump administration labelled China a strategic “competitor” in its first National Security Strategy in 2017.

Over the past two years, the Federal Bureau of Investigation and US intelligence agencies have sounded alarms about China’s ability to conduct traditional and cyber espionage. In recent months, the US has warned allies such as the UK and Germany that allowing Huawei into their 5G networks could impact intelligence sharing.

In addition to taking action against companies such as Huawei, the FBI has warned US universities about the potential for Chinese students and academics to obtain sensitive information from scientific laboratories. The US has also made it harder for Chinese students who want to study science and engineering-related subjects to obtain visas to study in the US.

The justice department has also charged — and in some cases obtained guilty pleas from — several former US intelligence officers who have been accused of spying for China.

Though DHS did not mention DJI by name, the Shenzhen-based company’s drones have dominated the global market for aerial cameras. Skylogic Research, which tracks the drone industry, has estimated DJI made up almost three-quarters of global sales last year. As well as recreational uses, the technology can be deployed for agricultural surveys, search-and-rescue operations and infrastructure inspection.

DJI insisted that its technology is secure and said several government agencies were already using its products.

“At DJI, safety is at the core of everything we do, and the security of our technology has been independently verified by the US government and leading US businesses,” DJI said in a statement on Monday. “We give customers full and complete control over how their data is collected, stored, and transmitted.

”In a 2018 report, the US Department of the Interior said it had flown more than 1,500 test flights using DJI drones, which have been used for wildfire monitoring and land management. The agency is still in the process of evaluating DJI’s products before a full deployment.

The DHS memo is not the first time that DJI — whose products use sophisticated facial-recognition and object-detection software to aid piloting and image capture — has encountered US security concerns. In 2017, a leaked draft memo from the Los Angeles office of US Immigration and Customs Enforcement accused DJI of “providing US critical infrastructure and law enforcement data to the Chinese government”. DJI at the time dismissed the claims as “clearly false and misleading”.

Since then, the Sequoia Capital-backed company has introduced additional security measures to its products, including the ability of its drones to operate offline in “local data mode”, similar to a smartphone’s “aeroplane mode”, while its fleet management systems for corporate customers can now be hosted on a company’s own IT systems or an independent cloud.

“Every day, American businesses, first responders and US government agencies trust DJI drones to help save lives, promote worker safety, and support vital operations, and we take that responsibility very seriously,” DJI said.

DHS did not respond to a request for comment.

Original article at Financial Times, here.

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