Chinese tech giant Huawei confirms lawsuit against US government as tensions escalate

Chinese tech giant Huawei has pleaded not guilty to US charges that it stole trade secrets from T-Mobile.
PHOTO: Reuters

HONG KONG - Chinese telecoms equipment maker Huawei Technologies Co Ltd on Thursday (March 7) said it is suing the US government over a section of a defence bill passed into law last year that restricted its business in the United States.

Huawei in a statement said it has filed a complaint in a US district court in Texas challenging its addition to the US National Defence Authorisation Act (NDAA).

The firm claims the restrictions targeting Huawei are "unconstitutional".

"The US 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," said Huawei's Rotating Chairman Guo Ping in the statement.

"This ban not only is unlawful, but also restricts Huawei from engaging in fair competition, ultimately harming US consumers. We look forward to the court's verdict, and trust that it will benefit both Huawei and the American people."

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While Huawei had very little market share in the US telecoms market before the bill, it viewed Section 889 as a stumbling block to addressing broader problems with Washington as its existence prevented any steps towards reconciliation.

"Lifting the NDAA ban will give the US Government the flexibility it needs to work with Huawei and solve real security issues," Guo said.

The move comes as Washington tries to persuade allies to ban Huawei from business alleging espionage risks. Huawei has repeatedly denied the claims.

The privately owned firm has embarked on a public relations and legal offensive over the past two months as Washington lobbies allies to abandon Huawei when building fifth-generation (5G) mobile networks, centring on a 2017 Chinese law requiring companies co-operate with national intelligence work.

Founder and Chief Executive Ren Zhengfei has said Huawei, the world's biggest telecoms gear maker, has never and will never share data with China's government.

Close to 10 senior Reuters journalists have been approached recently by Huawei recruiters for public relations director roles, with some offered annual pay packages of $200,000. Such appointments would beef up its international media team just as it restructures a 300-strong corporate affairs department.

In response to a Reuters query, Joe Kelly, vice-president of communications, said Huawei was hiring but not more than usual, to fill positions where people had been assigned overseas. He did not verify salaries, which were advertised by headhunters.


The planned legal action and public relations outreach compare with a more restrained response in December emphasising "trust in justice" when its chief financial officer, Sabrina Meng Wanzhou, was arrested in Vancouver at US request.

The United States has accused Meng - Ren's daughter - of bank and wire fraud related to breaches of trade sanctions against Iran.

Huawei's legal action, first reported by the New York Times on Monday, comes after news that Meng was suing Canada's government for procedural wrongs in her arrest.

READ ALSO: Huawei CFO Meng Wanzhou suing Canada over December arrest

Days earlier, Canada authorised a hearing for an extradition request, quashing Chinese hopes of a rejection on grounds that Meng's arrest was politically motivated.

The case had strained relations with China, which this week accused two arrested Canadians of stealing state secrets in a move widely seen as retribution for Meng's arrest.

While Meng is under house arrest in Vancouver, it is unclear where the two Canadians are being detained in China. Sources previously told Reuters that at least one of the Canadians did not have access to legal representation.


Ren met international media for the first time in several years in mid-January, calling US President Donald Trump "great" and refraining from commenting directly on Meng's case.

Shifting tone, Ren in mid-February said Meng's arrest was politically motivated and "not acceptable".

A week later at the Mobile World Congress, where Huawei unveiled the world's most expensive foldable phone, Rotating Chairman Guo Ping opened his speech with a jab at the United States.

"PRISM, PRISM, on the wall, who is the most trustworthy of them all," he said, referring to the US National Security Agency's internet surveillance programme PRISM, which collected data from major internet companies.

Guo later said the United States wanted to thwart Huawei's rise as it "hampers US efforts to spy on whomever it wants".

A senior member of Huawei's public relations team told Reuters the firm was taking a more proactive approach to US attacks. It launched and invited media to tour its Shenzhen headquarters.

"We've had enough," the staffer said.