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Source:Worchi Zingkhai, Shutterstock
Summary
- Huawei files lawsuit in US court to overturn national security threat designation.
- Company profits drop by 40 per cent following US ban.
- US officials accuse Huawei of spying, stealing sensitive technologies.
Chinese telecom giant Huawei Technologies Co. has filed a lawsuit in a US court against its designation as a national security threat by the Federal Communications Commission.
US officials have accused the Shenzhen-based company of having close links with the Communist government for various clandestine operations, including stealing intellectual property rights.
The Trump administration had banned Huawei on charges of stealing sensitive technologies and the private data of American citizens. However, the company has denied the allegations.
The lawsuit, filed at the US Court of Appeals for the Fifth Circuit on Monday, demanded a review of the designation as well as an order blocking US telecom companies to buy Huawei-made products.
Huawei’s latest legal recourse is one of the many that it had initiated over the past several years against US sanctions against the company. But President Trump had taken a step further by asking US allies to impose a similar ban on the Chinese company, claiming a national security threat.
FCC Designation
The FCC had designated the company last December. Huawei said the commission has no legal authority to pass such an order, which is arbitrary and not supported by evidence.
The commission acted after several US agencies based on their intelligence reports had last year supported actions against Huawei and other Chinese companies in the country, including Tik Tok.
US officials claimed that telecom gear developed by Huawei can be used by the Chinese government agencies for spying or for disrupting US telephone networks. However, no evidence was presented to prove their claims.
Huawei founder Ren Zhengfei refuted the allegations.
Mr. Ren said that he welcomes President Biden’s plan to reach out to all those who have faced difficulties or being victimized during the Trump administration.
He made the remarks to journalists in China hours before the lawsuit had been filed.
US Restrictions Hit Huawei Profits
He said that Huawei wants to buy equipment, machinery, and components from the US for various use in the company that will also help the American businesses.
President Biden’s nominee for Commerce Secretary Gina Raimondo did not commit to upholding the ban on Huawei when asked at a Senate confirmation hearing last week. But she said that she would review the case in consultation with US allies before making her decision.
Last year, the US Commerce Department had barred Huawei from purchasing computing chips used in smartphones and telecom equipment. The ban may have affected its smartphone business.
According to an estimate, its smartphone exports had dropped by over 40 per cent in the December quarter, and it also had to sell its Honor brand last year to reduce costs.
