Huawei has now filed its much-anticipated lawsuit against the U.S. government over the ban on its products, the latest move in the ongoing battle between state and company over control of the world’s 5G infrastructure.
“Today, Huawei announced that it has filed a complaint in a U.S. federal court that challenges the constitutionality of Section 889 of the 2019 National Defense Authorization Act (NDAA),” the company said online. “Through this action, Huawei seeks a declaratory judgment that the restrictions targeting Huawei are unconstitutional and a permanent injunction against these restrictions.”
This is about much more than the U.S.
On the face of it, the company’s complaint is that the NDAA stalls their 5G ambitions in the U.S., and they are claiming that “the restrictions on Huawei will stifle competition, leaving U.S. consumers paying higher prices for inferior products… Estimates from industry sources show that allowing Huawei to compete would reduce the cost of wireless infrastructure by between 15% and 40%. This would save North America at least US$20 billion over the next four years.”
But this is misleading, Huawei had seemed to be writing off its immediate U.S. ambitions, and it’s hard to conceive the Chinese equipment manufacturer playing a significant role in U.S. infrastructure, whatever the outcome of a lawsuit which won’t be settled in quick time. This is about what happens everywhere else, a battle for hearts and minds around the world as large-scale deployments of 5G get underway. The lawsuit comes in the midst of a much more attack-minded approach by the company to get itself back on the front foot against Washington.
“America doesn’t represent the world,” Huawei founder Ren Zhengfeitold told the BBC last month, and he was clear then that the company doesn’t need U.S. sales to continue its growth. But it does need to build its international 5G base. “There’s no way the U.S. can crush us,” he said.
On Tuesday, the company opened a cybersecurity center in Brussels at it continued its attempts to isolate the U.S. campaign against it from impacting its broader business. “Trust needs to be based on facts, facts must be verifiable, and verification must be based on common standards,” Huawei’s deputy chairman, Ken Hu, said as he opened the facility.
Ken Hu was not addressing the audience of European networks, regulators and politicians in the room, he was firing a salvo across the Atlantic. This followed the company’s orchestrated campaign around Mobile World Congress last week to paint the U.S. as more of a ‘proven’ cybersecurity villain than the U.S. is painting Huawei.
Liuping, Huawei’s Chief Legal Officer, again stressed today that the company “is not owned, controlled, or influenced by the Chinese government. Moreover, Huawei has an excellent security record and program. No contrary evidence has been offered.”
Hearts and minds
The real threat to the company from Washington has become clearer this year, with lobbying by figures as senior as Vice President Mike Pence and Secretary of State Mike Pompeo, directly and indirectly demanding that governments around the world (but especially in Europe) prohibit Huawei or risk future security collaboration with Washington. “If [Huawei] equipment is co-located where we have important American systems, it makes it more difficult for us to partner alongside them,” Pompeo said on his recent lobbying tour.
Huawei needs to split the U.S. from its Five Eyes, NATO and broader allies. The company can afford to curtail ambitions in America, but not in Europe, the Middle East and Asia as well.
Earlier this week, the South China Morning Post claimed that Huawei was now on the warpath; “no longer content with defending itself against U.S. accusations of espionage and bank fraud, taking the initiative with a full-blown legal offensive.”
The U.S. has continually raised its rhetoric and, when it became apparent that officials were to be dispatched by Washington to Barcelona to lobby the industry against Huawei at MWC, the company had to act. The company turned defense into attack, constant claims about independence and integrity were replaced with a “look who’s talking” challenge over Washington’s own cyber record. The company even suggested that the real driver behind the campaign against Huawei products was that they would prevent the U.S.’s own espionage activities. “Clearly the more Huawei gear is installed in the world’s telecommunications networks,” Huawei’s chairman wrote in the Financial Times, “the harder it becomes for NSA to ‘collect it all’.”
This lawsuit also comes less than a week after Huawei’s CFO Meng Wanzhou, detained in Canada on U.S. charges, filed a civil suit against the Canadian authorities. Also last week, Huawei pled not guilty to their own U.S. Department of Justice charges, with a trial set for next year.
Against this backdrop, the international rhetoric which had been aligning with the U.S. position in January is beginning to soften. Countries that had been veering towards the U.S. are now wavering, including Italy, Germany and even the U.K. “It’s a hugely complex strategic challenge which will span the next few decades, probably our whole professional lives,” said Jeremy Fleming, the head of U.K. intelligence agency GCHQ a week ago.
And so, although Guo Ping said in his statement on the lawsuit that “if
is set aside, as it should be, Huawei can bring more advanced technologies to the United States and help it build the best 5G networks. Huawei is willing to address the U.S. Government’s security concerns,” his much more pressing focus is the imminent assessments in Germany, the U.K. and elsewhere on the real (versus alleged) security threats from the company’s networking technology.
It is looking increasingly likely that key European markets will acknowledge the need to tread carefully with Huawei, given the company’s relationship with the Chinese state, but – led by the U.K. and Germany – will claim confidence that risks can be contained and mitigated. Although that could change. There are still “legitimate security concerns that need to be addressed,” a European Commission spokesperson said earlier in the week.
The coming months
The next two to three months will be critical for Huawei and the ongoing U.S. campaign against them. The various European assessments, including the lingering threat of an EU prohibition, will flush out. The company will build on the 5G contracts it signed at MWC, and we will see continual newsflow about 5G pilot deployments.
Huawei has survived the early rounds, now it will contend with the endless back and forth of complex legal cases whilst being much more focused on the real battle it is fighting in the world’s media.
“At Huawei, we are proud that we are the most open, transparent, and scrutinized company in the world,” said John Suffolk, Huawei’s Global Cyber Security & Privacy Officer. “Huawei’s approach to security by design development and deployment sets a high standards bar that few can match.”
We are about to find out if the world agrees.
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