Huawei sues USA government, says ban on company is unconstitutional

Anna Jefferson
March 8, 2019

Its lawsuit, filed in federal court in Texas, seeks to overturn a provision in current USA military funding legislation that forbids government agencies and their contractors from using Huawei products.

But the Huawei prosecutions aren't likely to get sidetracked, USA legal experts say.

"It is not likely to result in Huawei gaining new access to the USA market".

It says the law causes the company "concrete and particularized injury, and imminent future injury" and subjects it to a "burden that is severe, permanent and inescapable" that amounts to the corporate "death penalty".

With this move Huawei is challenging that, using the US's own rules, which is somewhat ironic since the relatively closed and secretive nature of the Chinese state is a major contributor to U.S. suspicions. This would presumably improve China's odds of convincing other countries to buy Chinese products and might be useful to China in resolving its trade war with the U.S. USA demands include that China change its laws and practices to protect intellectual property and end forced transfers of technology to Chinese firms. The company has spent years trying to put to rest accusations it facilitates Chinese spying or is controlled by the ruling Communist Party. "We are compelled to take this legal action as a proper and last resort", Huawei's rotating chairman Guo Ping said in a statement.

"Huawei is in a public relations blitzkrieg", Capri said.

During a press conference in the early hours of Thursday morning, the company announced that it would be pursuing a lawsuit in a Texas court, claiming damages against the United States for what it described as an "unlawful" ban. The charges include conspiracy to steal trade secrets, attempted theft of trade secrets, wire fraud and obstruction of justice. She is fighting extradition to the United States. Huawei denies any wrongdoing.

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On Thursday, a Chinese foreign ministry official said China also objects to the US law.

Chinese Ministry of Foreign Affairs spokesman Lu Kang (陸慷) said in Beijing that it was "entirely legitimate and understandable for enterprises to safeguard their legitimate rights and interests through legal means". Some countries have joined the banning Huawei from the coming years-long push to establish 5G networks around the globe.

In the years leading up to the Huawei indictment, United States officials had been capturing information that would influence the investigation when telecom executives passed through U.S. airports, according to a number of sources familiar with the Huawei and ZTE investigations and the Meng indictment.

Meng appeared in a British Columbia court for a scheduled hearing, during which her lawyer Richard Peck raised the issue and referenced "comments by the U.S. President" without going into detail.

It would also ban any company in the world that uses Huawei products from working with the USA government. "Even worse, the USA government is trying to block us from the 5G market in other countries".

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China has become addicted to western technology components, and Huawei can't afford to get cut off from USA suppliers, especially as it seeks to build the world's next generation of wireless modems, Capri said.

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Huawei's chief legal officer Song Liuping described the lawsuit as a "purposeful and punitive" attack on Huawei, accusing Senator Marco Rubio of smearing the company as a "Trojan horse". "Huawei has an excellent security record and program. No contrary evidence has been offered".

Germany does not intend to prevent Chinese tech giant Huawei from developing 5G networks, the country's economy minister said, adding that the European Union stands ready to defend its interests, should a trade war with Washington escalate.

Huawei's top competitors are Sweden's Ericsson and Finland's Nokia Corp. Industry analysts say excluding the Chinese vendor from markets for 5G equipment would reduce competition and might lead to higher prices.

Founded in 1987 by a former military engineer, Huawei overtook Ericsson in 2017 as the biggest global supplier of network equipment.

The lawsuit is the latest action in the ongoing back-and-forth between China and the U.S. In addition to imposing tariffs on billions of dollars of goods, the U.S. requested that Huawei's chief financial officer be arrested. The company has announced contracts with customers including the United Arab Emirates in the Middle East for network technology.

While Meng is under house arrest in Vancouver, it is unclear where the two Canadians are being detained in China. That followed the Canadian government's announcement Friday that the extradition proceeding for Meng would be allowed to continue.

If a judge decides Huawei has a plausible claim the case will proceed to the discovery phase, in which internal documents are shared and US government officials could be forced to provide testimony and lay out their security concerns. If it did, the company would be able to negotiate with federal agencies to see if they want to purchase any of its networking equipment.

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Huawei denies altering its equipment to facilitate spying. It has set up testing centres in Britain, Canada and continental Europe to allow governments to examine its technology.

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