A husband-and-wife team named John Strand and Roslyn Layton founded a website called China Tech Threat in 2019. Layton regularly contributes to media outlets like Bloomberg Law and Forbes, penning articles about technology, cryptocurrency and railroad regulation, while Strand is a well-known telecom consultant with clients worldwide.
Now they’re being sued for allegedly being part of a scheme funded by what a Chinese chipmaker claims is a campaign by American tech companies to undermine competitors.
The lawsuit comes at a moment of heightened bipartisan political hand-wringing about Chinese technology, as the United States and other western countries move to crack down on Chinese-owned technology brands such as Huawei, ZTE and TikTok.
The allegations in the lawsuit offer a peek at how some American corporate giants may be fanning the flames of anti-China sentiment to pad their bottom line.
The complaint, filed in California federal court last month by Chinese memory chipmaker Yangtze Memory Technologies Company or YMTC, alleges computer giant Dell and memory chip manufacturer Micron helped fund a public affairs campaign to raise doubts about the security of YMTC and other Chinese technology products.
Layton and her husband’s company, Strand Consult, are being sued for trade libel and unfair business practices for articles and research reports they posted on China Tech Threat. YMTC pointed to one report in particular, co-authored by Layton, which it says falsely tied the company to the Chinese military and misstated the threat that its memory chips pose for data collection. Bloomberg first reported that Dell and Micron were funding China Tech Threat earlier this year, highlighting the group’s attacks on a Dell competitor called Lenovo, which makes laptops.
Layton told NOTUS that she had not seen the lawsuit and had not been served papers associated with the complaint. Though an American by birth, Layton lives in Denmark with Strand, a Danish citizen. Strand told NOTUS that China is waging a global war to try to silence its critics and is undermining human rights worldwide. Dell and Micron did not respond to requests for comment.
YMTC alleges that China Tech Threat is part of an “astroturfing” campaign, the practice of creating supposedly independent commentary or grassroots advocacy that is part of a carefully orchestrated paid public relations effort. Numerous files posted to the China Tech Threat website show that employees of a Washington, D.C., public affairs firm called DCI Group helped produce content for the China Tech Threat website. DCI Group’s managing partners did not respond to a request for comment.
The names of at least five DCI Group employees were included in the metadata of the documents embedded on the website over the past several years. Some of those documents have since been taken down and replaced with new documents without metadata, but the older versions have been captured by the Internet Archive’s Wayback Machine. State-level lobbying records show that DCI Group has represented Dell in numerous state capitals.
“On the content on China Tech Threat, we have made money,” Strand said. He declined to say if DCI Group paid him or Layton. He said Dell and Micron were not paying clients of his firm. He also said that he and Layton never altered their positions for clients.
He later clarified by email: “When I say that we have made money from the content from CTT, I mean in in that sense that we used the website to demonstrate our expert knowledge about the supply chain of semiconductors and the importance of chips in devices and networks.”
“I’ve never been told what to write and how to write it. I don’t change my opinion,” Strand said. “I’m not a prostitute.”
U.S. officials have long been concerned about Chinese hardware and software companies collecting user data. Interviews with technologists, current and former government officials and national security experts confirm that Chinese technology products could pose espionage or data security risks in some circumstances.
But the interests of many U.S. tech companies dovetail nicely with Washington’s growing concerns around Chinese tech — and often provide a useful cudgel for U.S. business interests to push their products over Chinese ones in the trillion-dollar global tech marketplace.
The Washington Post reported in 2022 that Meta, which operates Facebook and Instagram, was paying a GOP public affairs firm to malign rival TikTok, which is owned by a Chinese parent company and has been under bipartisan scrutiny for years. In April, President Joe Biden signed a bill that would ban TikTok in the U.S. unless it is sold to an American company.
Apple shelved plans to use YMTC memory chips in iPhones in 2022, according to media reports. One of China Tech Threat’s reports highlighted that Micron was the only U.S.-based manufacturer of flash memory and that YMTC’s rise as a supplier in the global chip marketplace could jeopardize semiconductor jobs in the United States.
In addition, material posted to China Tech Threat’s website shows that they have been studying how much various state governments spend on Lenovo and Lexmark hardware — and, in some cases, actively discouraging state governments from purchasing Lenovo equipment.
Lenovo is a key rival of Dell’s in the laptop and hardware market. Lenovo was founded in China; Lexmark is an American company that was spun out of IBM in the 1990s but was purchased by a Chinese ownership group in 2016.
The lawsuit says that statements in a China Tech Threat report about YMTC were false and defamatory — including an allegation that YMTC was linked to the Chinese military as well statements that its memory chips could collect data from consumers. Strand said the research report contained footnotes to publicly available information.
Memory chips like those made by YMTC pose less of a mass data collection risk, per Serge Egelman, a computer scientist and researcher at the University of California, Berkeley. Microchips with secret components for intelligence gathering have been seen in the past, targeting specific individuals, but the high cost of adding transmission capabilities is an obstacle to implementing such a program at scale, Egelman noted.
One First Amendment expert says the lawsuit raises “colorable” issues that will be carefully considered by the court.
“It’s hard to say how it comes out,” said Ari Cohn, a First Amendment lawyer and free speech counsel at the nonprofit think tank TechFreedom. “It’s never a great look to sue critics. But, at the same time, at some point companies do have to protect their reputation and good name.”
Strand said that the lawsuit was intimidation meant to bankrupt critics with legal fees. “What the Chinese are doing now is attacking academics — silencing them,” Strand said.
Layton contributes opinion journalism to outlets like Forbes and others as a disinterested expert. Forbes told NOTUS that it retracted more than 300 of Layton’s pieces over what it called “a failure to follow our editorial guidelines.” Forbes declined to specify what editorial guidelines she violated. A note on many of Layton’s articles on Forbes simply reads, “This page is no longer active. We regret any inconvenience.”
Strand said that they were never told why his wife’s articles were removed and denied she had any conflicts of interest that would prevent her from being an independent voice on technology and other topics.
The lawsuit is part of the tit-for-tat tech war that’s broken out between the U.S. and China. It has left companies on both sides of the Pacific caught in the middle of escalating geopolitical tensions over technology, particularly microchips — a conflict made more complicated by strains on the supply chain.
YMTC alleges that it lost business opportunities in the United States after China Tech Threat’s report, which was one of the first to allege national security risks in a proposed deal between Apple and YMTC.
“In fact, YMTC lost opportunities with numerous prospective customers and technical partners in the fall of 2022, including those in this judicial district, shortly after Defendants published the defamatory and libelous [China Tech Threat] Report,” YMTC said in its lawsuit. Attorneys for YMTC did not respond to a request for comment.
Apple began exploring using YMTC chips in 2022 after one of its Japanese suppliers experienced a supply disruption that threw the global memory chip supply chain into chaos. If Apple had used a Chinese chipmaker, it would have been seen as a major coup for China, which has been trying to boost its domestic semiconductor industry to compete globally.
In June that year, China Tech Threat put out a report co-authored by Layton titled “Silicon Sellout: How Apple’s Partnership With Chinese Military Chip Maker YMTC Threatens American National Security.” The issue reached the halls of Congress — even though Apple was only reportedly considering using YMTC chips in iPhones that would be sold in the Chinese market.
“Apple is playing with fire,” Sen. Marco Rubio, the top Republican on the Senate Intelligence Committee, told the Financial Times in 2022. “It knows the security risks posed by YMTC. If it moves forward, it will be subject to scrutiny like it has never seen from the federal government. We cannot allow Chinese companies beholden to the Communist party into our telecommunications networks and millions of Americans’ iPhones.”
A month after Rubio’s remarks, Apple abandoned plans to use YMTC in iPhones. By December 2022, the U.S. Commerce Department put YMTC on a restricted export list — forbidding U.S. companies from selling goods or services to them without a difficult-to-obtain license.
—
Byron Tau is a reporter at NOTUS.