Huawei files lawsuit in US to dispute security threat

Chinese firm Huawei Technologies Co. has filed a lawsuit in the United States to challenge its designation as a national security threat by the Federal Communications Commission, escalating legal challenges in the country despite a change of administration in Washington.

The lawsuit filed Monday in the United States Court of Appeals for the Fifth Circuit sought a review of an FCC ruling last year that the company posed a threat to national security and barred telecom operators Americans to access a multi-billion dollar fund to buy Huawei. telecommunications equipment.

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The complaint is Huawei’s latest challenge to the many actions the United States has targeted it over the past few years. Former President Donald Trump’s administration has barred the company from accessing American technology and sought to persuade allies that Huawei’s telecommunications equipment posed national security risks.

Huawei’s lawsuit said the FCC’s decision in December exceeded its authority and was “arbitrary, capricious and an abuse of discretion, and not supported by substantial evidence.”

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An FCC spokesperson said, “Last year, the FCC issued a final designation identifying Huawei as a national security threat based on a substantial body of evidence developed by the FCC and numerous agencies. national security forces. We will continue to defend this decision.

U.S. officials have long said that Beijing could exploit Huawei telecommunications equipment to spy on or disrupt telecommunications networks, although they have not publicly shown evidence of such behavior. Huawei founder Ren Zhengfei said the company would never spy on behalf of any country.

Huawei filed his complaint hours before Mr Ren told a group of reporters in China that he hoped the Biden administration would be more open to policies “that are in the best interests of American businesses,” adding that he would welcome a phone call from the new President.

“We still hope that we can buy many American components, parts and machines so that American companies can also grow with the Chinese economy,” Ren said Tuesday.

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The Biden administration has not clearly defined its approach to Huawei. During a hearing last month, President Biden’s candidate for Commerce Secretary Gina Raimondo vowed to protect the United States from Chinese technological threats, but declined to promise to maintain Huawei’s blacklist by the Commerce Department, pending review.

Huawei has pursued a combative legal response to the actions of the Trump administration, challenging both the FCC and a US law that prohibited the company from doing business with US contractors. A Texas federal judge dismissed the latest action last year.

A separate protest against the FCC filed in 2019, which also challenges Huawei’s designation as a security threat, continues.

The legal efforts reflect Huawei’s willingness to exhaust all of its options as it faces the prospect of losing what remains of its foothold in the U.S. telecommunications market. Huawei executives have long expressed frustration at Western suspicions – never publicly proven – that the company poses security risks and have challenged U.S. officials to present evidence of any espionage.

Despite concerns in Washington, Huawei has long partnered with rural telecoms operators across the United States who have praised its prices and the reliability of its service. Company executives had hoped Huawei could build on that record to work with larger carriers and introduce its smartphones to U.S. consumers.

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Mr Trump dashed those hopes as the company became a key target in its trade war with Beijing. In addition to blocking the export of American technology to Huawei, the United States, led by Mr. Trump, has issued two criminal indictments against the company, alleging it stole the technology and evaded sanctions against the company. Iran. Meng Wanzhou, the company’s chief financial officer, has been under house arrest in Canada for more than two years as she resists US authorities’ efforts to extradite her to the United States.

US stocks have pressed Huawei. The Commerce Department tightened Huawei’s export ban in August, cutting it off from computer chips essential to its smartphones and telecommunications equipment. Analysts said Huawei relies on stored inventory to manufacture its products.

The tighter controls had the biggest impact on the company’s smartphone business, which accounted for more than half of its revenue in 2019. Shipments of its phones fell by more than 40% over the course of the year. quarter, as of December 31 compared to the previous year, and Huawei in November. sold its low-budget Honor smartphone brand to a government-led consortium in Shenzhen, the southern Chinese city where Huawei is based.

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Mr Ren said in his remarks Tuesday that the company has consistently managed to increase its profits and revenues last year despite the challenges, although it has yet to report its 2020 results. In 2019, Huawei made approximately $ 9.7 billion in profit on over $ 130 billion in revenue.

Write to And Strumpf at [email protected]