Two smartphone companies based in China, Huawei and ZTE, are now being investigated by the US government. Reuters reports that the U.S. House of Representatives' Intelligence Committee is looking into whether or not the two firms have received subsidies from the Chinese government.
The fear of the US government is that hardware made by Huawei and ZTE that are sold in the US could be used to steal information or perform cyber attacks. The Intelligence Committee is expected to complete its report later this summer and may try to propose laws based on the results of those reports.
Both Huawei and ZTE have denied that they have received any subsidies from the Chinese government. However, the Intelligence Committee's chairman Mike Rogers stated, "We must get to the bottom of these issues before the companies have further access to our market."
Huawei was just announced as one of four hardware launch partners by Microsoft that will make smartphones for the Windows Phone 8 operating system later this year. ZTE has also announced it will launch some kind of Windows Phone product in the US sometime before the end of 2012.