Embattled Chinese tech giant Huawei is suing the US government in its most aggressive move yet to fight back against accusations that its technology poses a global security threat.
Huawei, the world’s biggest maker of telecommunications equipment, said Thursday that it has filed a lawsuit in Texas challenging a recent US law that bans federal agencies from buying its products.
“This ban not only is unlawful, but also restricts Huawei from engaging in fair competition, ultimately harming US consumers,” Huawei Deputy Chairman Guo Ping said at a news conference at the company’s headquarters in the Chinese city of Shenzhen. He accused Congress of acting as “judge, jury and executioner” by imposing the ban.
The big picture
The Chinese company, which is also a top smartphone maker, is asking a US federal court to overturn part of the National Defense Authorization Act, which was signed by President Donald Trump in August. Huawei alleges that a portion of the law — which specifically forbids government agencies from using technology from Huawei and its smaller Chinese rival, ZTE (ZTCOF) — violates the US Constitution by singling out an individual or group for punishment without trial.
“The US Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products,” Guo said. “We are compelled to take this legal action as a proper and last resort.”
US government officials weren’t immediately available to comment on the lawsuit outside of regular office hours.
’Huawei is showing that it will not roll over’
Huawei’s court challenge takes its heated standoff with the US government to a new level.
The company is one of China’s biggest tech firms and a key player in the global rollout of super-fast 5G wireless networks. Its smartphones compete globally with those of Apple (AAPL) and Samsung.
But Washington has for years been suspicious that the Chinese government could use Huawei equipment to spy on other nations, without providing specific evidence. Huawei describes itself as an employee-owned company and denies any of its products pose a security risk.
Huawei’s lawsuit, which was filed in Texas, where the company’s American headquarters are located, could force the US government to present a public case against the Chinese tech company as it ramps up its pressure campaign.
The Trump administration has been urging allies to ban or restrict Huawei products from their 5G networks, citing spying concerns but without providing clear evidence. That has complicated Huawei’s ambitious plans for growth and prompted complaints from wireless carriers that the US campaign is disrupting their plans to build the networks.
“Huawei is showing that it will not roll over on the US full court press,” said Paul Triolo, an expert on global tech issues at consulting firm Eurasia Group.
“It is not likely to result in Huawei gaining new access to the US market,” he added. “But it is a symbolic marker that could influence other players around the world considering potential limitations or bans against the firm.”
Governments in countries such as Germany and the United Kingdom are deciding what kinds of restrictions to impose on Huawei equipment. Australia banned the company from providing technology for its 5G networks last year.
The US ‘hacked our source code’
At the news conference Thursday, Guo accused American officials of hypocrisy.
Even as the US government has branded Huawei as a cybersecurity threat, he said, it “has hacked our servers and stolen our emails and the source code.”
The claim appeared to be a reference to reports from 2014, citing documents provided by Edward Snowden, the former US National Security Agency contractor who leaked huge volumes of information on American intelligence and surveillance operations to the media.
The US government says Huawei is a threat because it’s unable to say no to the Chinese government.
“Chinese law requires them to provide Beijing’s vast security apparatus with access to any data that touches their networks or equipment,” Vice President Mike Pence said last month.
The company pushed back against those allegations on Thursday, reiterating that it would refuse any Chinese government requests to gain access to the technology it sells to telecom operators.
“Huawei has not and will never implant ‘back doors,’” Guo said. “We will never allow others to install any in our equipment.”
Adding to the complexity, US prosecutors have filed criminal charges against Huawei in Washington state and New York.
Huawei pleaded not guilty in Seattle last week to charges that it tried to steal trade secrets from T-Mobile (TMUS).
The company’s arraignment in Brooklyn on charges that it worked to skirt US sanctions on Iran is scheduled for later this month. Huawei’s chief financial officer, Meng Wanzhou, has also been charged in that case. She was arrested in Canada in December and faces extradition to the United States.
Meng and Huawei have denied the charges.
Sandi Sidhu and Eric Cheung contributed to this report.