Trump’s Chinese tech assault will help fracture the internet

Trump’s Chinese tech assault will help fracture the internet

However, actions by the US to protect its national security have also got its allies nervous. The US Clarifying Lawful Overseas Use of Data (Cloud) Act extends criminal warrants served on a US-based provider to all emails regardless of where in the world the servers are located.

Essentially it means – in theory – the US can access emails and data on servers in foreign territories if they are on servers owned by US businesses. This has resulted in Australia leading the way in moves to enforce its own data sovereignty and mandate important data is held on servers with Australian jurisdiction.

Data sovereignty is likely to become more of an issue as the value of data increases in the 5G age. Countries are likely to introduce their own laws to protect data of their governments and citizens as they fight a three-pronged attack against increasing US security laws, cybercriminals and malign state actors.

Of course, the internet has never been truly global. Starting in rich western nations, many did not have access to it through lack of infrastructure. But as the reach increased, many authoritarian countries including China, Russia and Iran have censored the content for political or religious reasons.

Nevertheless, the inclusion of Hong Kong inside the so-called Great Firewall of China when Beijing introduced its National Security Law last month is another major step towards a divided internet.

It means that major US tech groups could find themselves having to decide whether continuing to do business in Hong Kong, within the ever-extending reach of China’s security and espionage services, is possible over the medium term.

For investors, this trend will have significant implications if, as seems likely, it continues. It will mean companies will need to rein in their global ambitions, as complying with different regulations in different jurisdictions will be a costly – if impossible – challenge. They may not even be able to operate in certain countries anyway, with tit-for-tat action following the US campaign against Huawei likely. 

The Splinternet is not a single event that will happen at a specific point in the future. It is a “death by a thousand cuts” that is evolving over time, as distrust and rivalry between Beijing and Washington increase.

Washington is now on record as wanting to cleanse Chinese influence from US communications and its infrastructure. Every action it takes to meet this goal will be one more step towards a more restricted global internet. The Splinternet is already here.

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