Chinese tech firm Huawei to sue U.S. as security fight heats up

The company denies it is beholden to the Chinese government and says an order from the FCC designed to hurt its U.S. sales was arbitrary.
Image: An employee uses her phone at the Huawei Digital Transformation Showcase in Shenzhen, China, on March 6, 2019.
Chinese telecom equipment maker Huawei said Wednesday it plans to sue the U.S. government over attempts to blacklist the company over security concerns.Wang Zhao / AFP - Getty Images file

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By David Ingram

Chinese telecom equipment maker Huawei said Wednesday it plans to sue the U.S. government over the latest attempt to blacklist the company from the American market over security concerns.

Huawei is at the center of a battle between the U.S. and China over the future of the internet, specifically the hardware used by mobile service carriers to handle the huge rise in data traffic as people rely increasingly on their smartphones. The battle has raged just as carriers seek to build out their capabilities in 5G, or fifth-generation, service.

Huawei is the No. 1 manufacturer of telecom gear worldwide but faces a challenge from the U.S. government, which calls Huawei a national security risk because of ties to the Chinese government. The Trump administration in May announced it was putting Huawei on a blacklist.

Huawei says the security fears are unfounded, and U.S. officials have not provided evidence of Huawei equipment being used for spying. But the dispute is playing out in scores of purchasing decisions by foreign governments and companies.

Last month, the Federal Communications Commission banned Huawei from a federal subsidies program, likely making its equipment more expensive for U.S. telecom carriers.

Huawei said in a statement Thursday morning in China that the FCC’s order was unlawful because it violated Huawei’s right to due process and was based on arbitrary findings.

The order was based on “unsound, unreliable, and inadmissible accusations and innuendo, not evidence,” said Glen Nager, a U.S. lawyer who represents Huawei, in a statement. “The designation is simply shameful prejudgment of the worst kind.”

The FCC did not immediately respond to a request for comment outside business hours.

In a statement last month as the FCC adopted its order, Chairman Ajit Pai said the commission was acting on the advice of FBI Director Chris Wray and Attorney General Bill Barr. The two law enforcement officials had expressed concern to Congress and to the FCC about the integrity of telecommunications infrastructure.

“We know that hidden ‘backdoors’ to our networks in routers, switches, and other network equipment can allow a hostile adversary to inject viruses and other malware, steal Americans’ private data, spy on U.S. companies, and more,” Pai said at the time.

The allegations about national security risks are occurring at the same the U.S. and China are locked in a broader dispute over trade and tariffs. A deal on trade has appeared close at times despite often-heated rhetoric.

Huawei is already suing the U.S. in another front of the blacklisting fight. In a lawsuit in Texas, where Huawei has its U.S. headquarters, the company is challenging the constitutionality of a new federal law that bans U.S. agencies from buying its equipment.

The company’s legal challenge against the FCC would be heard by a federal appeals court based in New Orleans.

In addition to making telecom gear, Huawei is the world’s No. 2 maker of smartphones after Samsung and ahead of Apple.