Chinese electronics giant Huawei sues US over what it calls an ‘unfair ban’

HONG KONG: The Chinese electronics giant Huawei sued the United States government on Wednesday, arguing that it had been unfairly and incorrectly banned as a security threat.

The lawsuit will force the government to make its case against the company more public, but it could also leave Huawei vulnerable to deeper scrutiny of its business practices and relationship with the Chinese government.

The United States has argued that Huawei poses a risk because its equipment could be used by the Chinese authorities to spy on communications and disrupt telecommunications networks. That position has led major wireless carriers in the United States to avoid Huawei’s equipment.

Huawei denies the allegations and says the lawsuit is meant to prove it does not engage in such practices. The company’s plans to file the lawsuit were first reported Monday by The New York Times.

“The US Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products,” Guo Ping, Huawei’s rotating chairman, said in a statement announcing the filing of the lawsuit. “We are compelled to take this legal action as a proper and last resort.”

The lawsuit, which was filed in US District Court in Plano, Texas, where Huawei has its US headquarters, argues that part of the 2019 National Defense Authorization Act is unconstitutional because it singles out Huawei. The act bans government agencies from contracting with Huawei or companies that use the company’s equipment.

The suit is part of a legal and public relations offensive that Huawei has recently mounted to push back against spying accusations. The company, China’s biggest maker of telecommunications gear, has been under pressure for months by US authorities.

In December, Meng Wanzhou, the daughter of Huawei’s founder and the chief financial officer of the company, was detained in Canada at the behest of the United States, which is seeking to extradite her.

Her father, Ren Zhengfei, the company’s founder, has since rejected the claims against his daughter and said that he would wait to see if President Donald Trump would intervene in the case. Meng has been in court this week in Vancouver, British Columbia, as part of an extradition hearing.

In the meantime, Huawei has battled against many of its customers and nations that have said they would pull back from buying its products. China has also retaliated against Canada by detaining several Canadian citizens.

Huawei’s lawsuit argues that by singling out the company, Congress has violated constitutional principles on the separation of powers and also the bill of attainder clause, which prohibits legislation that singles out a person or entity for punishment without trial.

“The actual and intended effect of these prohibitions is to bar Huawei from significant segments of the US market for telecommunications equipment and services, thereby inflicting immediate and ongoing economic, competitive, and reputational harms on Huawei,” the company’s lawyers wrote in the suit.

They added that the prohibitions have been carried out without “a fair hearing or the opportunity to rebut the allegations against it, and without opportunity for escape.”

Russian cybersecurity firm Kaspersky Lab filed, and ultimately lost, a similar legal challenge two years ago. After the Department of Homeland Security directed federal agencies to ban Kaspersky products from their systems, Congress codified the directive into a law.

Kaspersky filed two lawsuits, arguing it had been singled out for punishment without a trial. A judge ultimately dismissed the lawsuits, pointing out they came from a legitimate desire to protect US networks.

While the Justice Department filed criminal charges against Huawei earlier this year, those suits focus on the company’s connections to evading US sanctions on Iran and its theft of intellectual property. Neither relates to the core question faced by governments around the world about whether using Huawei’s equipment in new 5G networks causes security concerns.

The new suit seeks to focus on that question, and push the US government to make the case. While it is unlikely Huawei will reverse US opposition to the company, it may hope to win back representatives from governments in countries like those in Europe, who will be closely following the lawsuit.

Debate about the security of Huawei’s systems has come at a critical moment, with countries around the world preparing to spend hundreds of billions of dollars on expanding cellular networks to next generation 5G technology.

The new networks will have faster speeds, but also be used to connect a bewildering number of new sensors and data-collection systems alongside smartphones. That would make vulnerabilities in the networks potentially more serious than with the cell networks of the past.