Huawei wants US rule on rural carriers thrown out
(5 Dec 2019) Chinese tech giant Huawei is asking an American federal court to throw out a rule that bars rural phone carriers from using government money to purchase its equipment on security grounds.
“When passing this decision, the FCC (Federal Communications Commission) did not offer Huawei due process or verify the facts, but they very loudly and very publicly labeled our company as a national security threat. The FCC’s order violates the constitution,” said Huawei’s chief legal officer Song Liuping during a press conference in Shenzhen, China on Thursday.
“We have no choice but to seek the legal remedy.”
The lawsuit announced Huawei Technologies Ltd.’s second legal challenge this year to US President Donald Trump’s administration’s efforts to reduce its already minimal US market presence.
The company is scrambling to preserve its global sales of smartphones and network gear following sanctions announced in May that limit access to US components and technology.
Huawei, which says it is employee-owned and has no government ties, denies US accusations that it is a security risk and might facilitate Chinese spying.
Huawei is at the centre of US-Chinese tension over Beijing’s technology ambitions and complaints the communist government steals or pressures foreign companies to hand over know-how.
Huawei’s lawsuit in US federal court in New Orleans says the Federal Communications Commission acted improperly when it voted last month to bar rural carriers from using government subsidies to buy equipment from Huawei or its Chinese rival, ZTE Corp.
Lead counsel for Huawei Glen Nager said that decision was “based on unsound, unreliable and inadmissible accusations and innuendo, not evidence which could form the basis of actual factual findings. It’s simply shameful prejudgement of the worst kind.”
The lawsuit says the FCC exceeded its authority by making national security judgements, designated Huawei a threat without evidence and violated its own procedures by adopting a rule without citing a legal basis.
American courts have traditionally been reluctant to second-guess government judgements about national security.
In a separate lawsuit filed in March, Huawei is asking a federal court in Texas to strike down a ban on the US government using its equipment or dealing with any contractor that does.
Meanwhile, US prosecutors are trying to extradite Huawei’s chief financial officer from Canada to face charges she lied to banks about dealings with Iran.
Chinese authorities said the US is exaggerating security concerns to block a potential competitor.
Huawei warned the FCC rule will hurt rural American carriers, which buy the Chinese vendor’s equipment because other major suppliers such as Nokia and Ericsson are more expensive.
Huawei’s US sales plunged after a congressional panel warned in 2012 the company and ZTE were security risks and told carriers to avoid them.
However, its sales in Europe and developing markets in Asia and Africa have risen steadily.
Huawei earlier reported its global sales rose 24.4% in the first nine months of 2019 over a year earlier to 610.8 billion yuan (86 billion US dollars).
The Trump administration imposed curbs in May that threaten to disrupt Huawei’s sales of smartphones and network gear by blocking access to US technology and components including Google’s music, maps and other mobile services.
In November, Huawei started selling a folding smartphone, the Mate X, made without US supplied processor chips or Google apps.
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