Huawei sues US over 'unlawful' ban

Company seeks 'fair treatment' by arguing that it was penalized without a trial, analysts say

Chinese tech giant Huawei Technologies Co is suing the United States government over a ban that bars federal agencies from using its products, marking arguably its biggest push to seek "fair treatment" in one of the world's largest telecom markets, analysts said.

They said the move signals that Huawei is resorting to US laws to safeguard its legitimate interests, after the US government called it a security threat without giving the company a chance for due process.

Guo Ping, Huawei's rotating chairman, said on Thursday at a news conference in Shenzhen, Guangdong province, that "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."

Huawei filed the lawsuit in a federal court in Texas to target a US statute that banned federal agencies and their contractors from using Huawei's equipment or services. Huawei argued in the suit that it is unconstitutional to single out a person or a group for penalty without a fair trial.

"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," Guo said.

He said that if the law is set aside, Huawei can bring more advanced technologies to the US and help it build the best 5G network, and the company is willing to address the US government's security concerns.

Foreign Ministry spokesman Lu Kang said on Thursday that it is fully understandable that an enterprise would protect its legitimate interests through legal means.

As the world's largest telecommunications equipment maker, Huawei is a key player in introducing the next-generation 5G network technologies and a leading smartphone brand that rivals US companies such as Apple.

Jia Mo, an analyst from global market research company Canalys, said: "Huawei wants to get fair treatment and prove its innocence via US laws. It is the company's latest push to undermine Washington's attempts to discourage other countries from using the company's products."

Huawei is not the first Chinese company to sue the US government. In 2015, an affiliate of Chinese machinery manufacturer Sany settled a lawsuit with the US government, which had forbidden its wind farm projects in Oregon on national security grounds.

Peng Jun, senior partner at Beijing-based Jincheng Tongda & Neal law firm, said that considering Sany's case as a reference, Huawei is making a strategic move by filing a suit regarding lack of due process, which Peng said makes it relatively easy to win the support of a court.

"Any rational company will not simply seek to sue someone ... especially such a powerful (entity as) the US government. The move is part of Huawei's overall strategy to negotiate with the US," Peng said.

Yi Jiming, director of the Institute for International Intellectual Property of Peking University, said Huawei has been forced to make a necessary counterattack, since it faces groundless allegations and has been excluded from the US market.

"The lawsuit, if properly handled, can help Huawei clarify itself and find a way to enter the US market. Also, it may offer new room for its future growth in the global telecom arena by reducing concerns in European countries," Yi said

But it may take three to five years, or even longer, for Huawei to settle the dispute, given the complicated legal procedures in the US and the complexity of the case, he added.

Despite the security concerns that Huawei faces in some markets, the company has been steadily increasing its 5G contracts. Huawei said in late February that it has secured more than 30 5G contracts globally, shipped over 40,000 5G base stations, and inked deals with more than 50 partners around the world for the next-generation wireless technology.

Foreign telecom operators also either confirmed new orders or expressed a willingness to do business with Huawei at the Mobile World Congress in Barcelona, Spain, last month.

Contact the writers at masi@chinadaily.com.cn

(China Daily 03/08/2019 page1)