The Information War Takes to the Air

The Chinese drone maker DJI controls nearly 70% of the commercial drone market (Credit: Hindustan Times). DroneXL says that the control 54% of the total drone market. DoneXL says that number is down 15% from last year (which could match the 70% number) . In any case, their next nearest competitor is Autel at 7% and Parrot at 3%.

As you can see, they are a major player, no matter the number.

In 2020 the Interior Department grounded its fleet of 800 DJI drones, except in cases of emergency.

Why? Because the government is concerned that DJI is routing information back to China. China is in the mode of collecting data now and figuring out how to use it later.

Most Americans don’t seem to care. After all, the drones work and they don’t understand national security – and that is someone else’s job, right?

If the data is going back to China, it is likely going back to the government – specifically the intelligence community.

Last week the feds blocked American investment in DJI. Last year the administration blocked US companies from selling it parts. There is a bill in the Congressional sausage maker that would ban the feds from buying DJI drones and the FCC wants it banned in the US period.

For a decade now, the occupants of the White House have been sounding the warning bell about China’s voracious appetite for US data, while stopping foreign companies from doing the same thing to Chinese citizens. That is why many US companies are leaving China. Some, like Apple, find the market too lucrative to leave. Instead give in to the Chinese government’s demands to give them access to all of their users’ data while coming up with a bogus spin story so that they can pretend that they care about user’s privacy. Other’s like Microsoft’s LinkedIn and Yahoo are telling the Chinese to get lost and are pulling out of the market.

Since everything from toilets to yoga mats are now transmitting data (and probably made in China) and no one really knows what data is being collected and for what purpose, some folks are getting nervous.

One possible use for all the data? As training material for artificial intelligence and machine learning.

Many countries are starting to think about protecting their citizens’ data. Not surprisingly, the US is far behind other countries because big tech lives on using your data. China on the other hand, just issued a new edict seriously locking down what big tech companies, especially US ones, can do with consumers’ data. They are also mandating government controlled cybersecurity reviews (AKA let me see and steal your source code) and China even mandated a review of the source code of Chinese companies that want to list their stock on foreign stock exchanges. This is just a not so covert way to get those Chinese companies to delist from foreign capital markets.

The former US administration attempted to ban TikTok (of all of the data sources, is this the most risky?) and also to get our allies to build a clean telecom network, free of Chinese gear. That went somewhere in the US, but did not catch on elsewhere.

The FCC says that DJI sells about 95% of the drones priced between $350 and $2,000. That is market dominance. If the FCC decides to ban DJI (by refusing the review the radio frequency emanations, making them illegal to sell here), it is likely that China would retaliate in some way. What way? Not clear. While China says it is unfair to block DJI here, they do their best to block US companies in China.

DJI has released versions of its drones that it claims allow users to control where the data goes. If you believe them.

Remember that Chinese companies are required to assist the Chinese government if asked and keep that fact quiet. Based on that, what foreign government is going to trust any privacy statements made by DJI.

All of this is affecting DJI’s share of the corporate market. After all, what publicly traded company wants to be known for buying Chinese drones. But DJI is trying to fight back by offering quality and features at a way below cost price. After all, the Chinese government will help them if needed.

Stay tuned to see what Congress and the FCC do. Credit: Yahoo

by