Controversial Chinese manufacturer goes to court to force Washington to show evidence that its products are a national security threat
As expected, China-based Huawei Technologies filed a lawsuit in a Texas federal district court challenging the legitimacy of the sales ban of its products based on what’s described as unsubstantiated claims of risks to national security.
The Lowdown: Huawei is betting a lawsuit will force Washington to show its hand over whether it has evidence that supports claims that the China-made networking and telecommunications equipment contains active or dormant back doors that would allow Chinese intelligence agencies to spy or cripple critical infrastructure.
The Details: Specifically, Huawei is challenging not just the sales ban but also the legitimacy of Section 889 of the National Defense Authorization Act (NDAA). The law, signed by President Donald Trump in August 2018, banned the sale of Huawei products across the public and private sectors, effectively locking the company out of the U.S. market. Huawei says the law and the ban are unlawful, prevent it from competing in an otherwise open market, and ultimately hurt U.S. companies and consumers by artificially raising equipment prices as the result of an uneven playing field.
The Impact: Huawei’s court challenge is a long shot, legal experts say in published reports. U.S. federal courts are often reluctant to wade into national security issues, even when plaintiffs claim a lack of due process. As recently as November 2018, federal courts dismissed a similar case brought by Russian security software vendor Kaspersky Lab. Most likely, the court will reject the Huawei case, but the Chinese firm will raise attention and may force Congress to justify its ban.
Background: The U.S. government is the chief global critic of Huawei and ZTE, another China-based company banned under the NDAA. Several other countries, including Australia, New Zealand, and Japan, have imposed full or partial bans on Huawei product sales. Other countries considering bans include Canada, the Czech Republic, Hungary, and Poland, but leading European and Western countries such as the United Kingdom, Germany, France, and Italy are either wavering on a ban or have rejected security-risk claims.
The Buzz: “The U.S. Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products. We are compelled to take this legal action as a proper and last resort,” Huawei Rotating Chairman Guo Ping said in a statement.
“[The lawsuit is] an uphill battle because Congress has broad authority to protect us from perceived national security threats,” said Franklin Turner, a government contracts lawyer at McCarter & English, in an interview with Reuters.
“The current infrastructure around the world is built on a combination of communication suppliers from Europe, from China, from the U.S., everywhere,” said Cisco Systems CEO Chuck Robbins in an interview with CNN. “And I think that despite everything we hear, that’s going to be the case in the future as well.”
Counterpoint: Cisco, which has accused Huawei of stealing intellectual property in the past, is softening its stance on the company. In the CNN interview, Robbins suggests that Huawei will remain a viable part of the technology ecosystem. Many pundits interpreted the remark as Cisco’s acceptance that Huawei will and should compete openly.
Channelnomics Point of View: The U.S. government isn’t alone in its apprehension about Huawei. In previous surveys of solution providers, The 2112 Group found substantial misgivings and trust issues associated with Huawei. The immediate impact of Huawei being locked out of the U.S. and other markets is a lack of technology and innovation that could contribute to advancing new systems and services. Should Huawei succeed in opening the Western markets, it could reshape the