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China’s Huawei Technologies Co. filed a lawsuit in the United States challenging its designation as a threat to national security by the Federal Communications Commission, intensifying legal challenges in the country, despite a change of administration in Washington.
The lawsuit opened on Monday in the U.S. Court of Appeals for the Fifth Circuit called for a review of an FCC decision last year that concluded the company poses a threat to national security and blocked American telecom operators from accessing a fund. multibillion dollar to buy products made by Huawei. telecommunications equipment.
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The complaint is Huawei’s latest challenge to the numerous US actions against it in recent years. Former President Donald Trump’s administration blocked the company’s access to American technology and sought to persuade allies that Huawei’s telecommunications equipment posed national security risks.
Huawei’s action said the FCC’s decision in December exceeded its authority and was “arbitrary, capricious and an abuse of discretion, and is not supported by substantial evidence”.
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An FCC spokeswoman said: “Last year, the FCC issued a final designation identifying Huawei as a threat to national security based on a substantial body of evidence developed by the FCC and several U.S. national security agencies. We will continue to defend this decision ”.
American officials have long said that Beijing could exploit Huawei’s telecommunications equipment to spy on or disrupt telecommunications networks, although they have not publicly shown evidence of such behavior. Huawei founder Ren Zhengfei said the company would never spy on behalf of any country.
Huawei filed its lawsuit hours before Ren told a group of journalists in China that he expected the Biden government to be more open to policies “that are in the interests of American companies”, adding that he would receive a call from the new President.
“We still hope to be able to buy a lot of components, parts and machinery from the US so that US companies can also develop with the Chinese economy,” said Ren on Tuesday.
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The Biden government has not clearly defined its approach to Huawei. During a hearing last month, President Biden’s nominee for secretary of commerce, Gina Raimondo, promised to protect the U.S. from threats from Chinese technology, but refused to promise to keep Huawei’s Commerce Department blacklist, pending a review.
Huawei sought a combative legal response to the Trump administration’s actions, challenging both the FCC and a U.S. law that prohibited the company from doing business with American contractors. A Texas federal judge dismissed the last lawsuit last year.
A separate challenge against the FCC filed in 2019, which also challenges Huawei’s designation as a security threat, continues.
The legal efforts reflect Huawei’s effort to exhaust all of its options as it faces the prospect of losing what remains of its position in the United States telecommunications market. Huawei executives have long expressed frustration with Western suspicions – never publicly proven – that the company poses security risks and challenges American officials to present evidence of any espionage.
Despite concerns in Washington, Huawei has long partnered with rural US telecommunications operators who praise its prices and the reliability of its service. Company executives hoped that Huawei could take advantage of this record to work with larger operators and launch their smartphones to American consumers.
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Mr. Trump dashed those hopes when the company became a key target in its trade war with Beijing. In addition to blocking US technology exports to Huawei, the United States under Trump has issued double criminal charges against the company, claiming that it stole technology and avoided sanctions on Iran. Meng Wanzhou, the company’s CFO, is in house arrest in Canada for more than two years, while resisting efforts by US authorities to extradite her to the US
United States stocks have put pressure on Huawei. The Commerce Department enforced Huawei’s export ban in August, cutting it off from essential computing chips for its smartphones and telecommunications equipment. Analysts said Huawei is relying on stockpiled inventory to build its products.
The stricter controls had the biggest impact on the company’s smartphone business, which accounted for more than half of its revenue in 2019. Shipments of its handsets fell more than 40% in the quarter through December 31 of a year earlier, and Huawei in November it sold its budget smartphone Honor brand to a consortium led by the government of Shenzhen, the city in southern China where Huawei is based.
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Mr. Ren said in his comments on Tuesday that the company still managed to increase both profit and revenue last year, despite the challenges, although it has not yet released its 2020 results. In 2019, Huawei achieved about $ 9.7 billion in profit over more than $ 130 billion in revenue.
Write to Dan Strumpf at [email protected]