China Reacts to US Trade Secrets Claims on Huawei and ZTE
January 20, 2019
Despite the recent and unprecedented pronouncements by Huawei’ CEO Ren Zhengfei that “he would "definitely" refuse any request from the Chinese government to access the company's user data”,Huawei is about to get more attention from the US government. A U.S. federal investigation was launched against the company, which will examine whether or not the company stole trade secrets from U.S. companies, according to the Wall Street Journal. The probe is in its advanced stages, and an indictment against the company could soon be coming. The new investigation reportedly grew out of a civil lawsuit against Huawei when a jury found that the company had misappropriated technology from a T-Mobile lab in Washington State. Huawei ultimately contested the case but admitted to two employees acting improperly in regard to a T-Mobile robotic device called “Tappy,”which was used to test smartphones. In 2014, T-Mobile sued Huawei for gaining access to the lab, taking photos of Tappy, and attempting to steal parts of the device. T-Mobile initially sought $500 million in damages but was ultimately only awarded $4.8 million in May 2017.Huawei has been facing accusations of being a national security threat for years, largely because of its ties to the Chinese government. According to reports, President Donald Trump is considering an executive order to ban U.S. companies from using products from Huawei. Government employees are already banned from using Huawei devices, but the new executive order could have significant implications when it comes to the deployment of network technology in the U.S.
Huawei may be facing issues in the U.S., but the company doesn’t seem to be suffering too much. It’s currently the second largest smartphone manufacturer in the world, trailing only Samsung — and beating out Apple. It gained the second spot in Q318, continued in Q418 and will likely continue to hold it for quite some time.
China’s Foreign Ministry said that proposed U.S. legislation targeting Huawei, ZTE and other Chinese telecommunications equipment companies was due to “hysteria”, and urged U.S. lawmakers to stop the bills. Ministry spokeswoman Hua Chunying made the comments at a regular news briefing in Beijing. A bipartisan group of U.S. lawmakers introduced bills that would ban the sale of U.S. chips or other components to Huawei Technologies Co Ltd [HWT.UL], ZTE Corp or other Chinese firms that violate U.S. sanctions or export control laws. The bills specifically cite ZTE and Huawei, both of which are viewed with suspicion in the United States because of fears that their switches and other gear could be used to spy on Americans.