The similarities between the November 2018 Kaspersky Lab’s case, which was dismissed, with Huawei’s lawsuit increases the likelihood that it will meet the same fate.
On Thursday, controversial Chinese telecoms equipment maker Huawei Technologies Co Ltd confirmed that it is suing the U.S. government over a section of a defense bill which became law in 2018 which restricted the scope of its business in the United States.
U.S. President Donald Trump had signed the National Defense Authorization Act (NDAA) into law in August. Huawei said it had filed a lawsuit in a federal court in Texas which challenges the constitutionality of Section 889 of the NDAA.
This law bans U.S. federal agencies and their contractors from procuring equipment and services of Huawei.
“The U.S. 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 Guo Ping, Huawei’s Rotating Chairman in a statement. “This ban not only is unlawful, but also restricts Huawei from engaging in fair competition, ultimately harming U.S. consumers. We look forward to the court’s verdict, and trust that it will benefit both Huawei and the American people.”
He went on to add, “Lifting the NDAA ban will give the U.S. Government the flexibility it needs to work with Huawei and solve real security issues”.
Incidentally, before the ban came into effect, Huawei had very little market share in the U.S. The company is however a cornerstone for China’s plan to dominate economically given that Huawei is the world’s biggest producer of telecoms equipment and is seeking to be at the forefront of a global roll-out of 5G mobile networks and services.
Huawei’s lawsuit states, its “equipment and services are subject to advanced security procedures, and no backdoors, implants, or other intentional security vulnerabilities have been documented in any of the more than 170 countries in the world where Huawei equipment and services are used.”
It is to be noted that in 2017, China enacted a law which compels citizens and Chinese companies to collaborate with its national intelligence gathering.
Contrary to Chinese law, Huawei’s founder and Chief Executive Ren Zhengfei stated, it has never and will never share data with the Chinese government.
In its lawsuit, Huawei has argued that a section of the NDAA is illegal since it can potentially significantly limit its company’s ability to do business in the United States.
According to legal experts, Huawei’s lawsuit is likely to be dismissed since U.S. courts are reluctant to second-guess national security determinations by other branches of government.
Thus this lawsuit “will be an uphill battle because Congress has broad authority to protect us from perceived national security threats,” said Franklin Turner, a government contracts lawyer at McCarter & English.
In November 2018, a federal appeals court rejected a similar lawsuit filed by Russian cybersecurity firm Kaspersky Lab, which was challenging a ban on the use of the company’s software in U.S. government networks.
Although the previous hearing will not have a binding effect on Huawei’s case however, the Texas court is likely to adopt a similar reasoning due to the similarities in both disputes, opined Steven Schwinn, professor of law at John Marshall Law School in Chicago.
“I don’t see how (Huawei) can really escape that result,” said Schwinn.
Huawei’s legal action comes at a time when Canadian authorities have arrested and have started extradition proceedings against Huawei’s chief financial officer, Sabrina Meng Wanzhou on the grounds that she has committed bank and wire fraud in relation to trade sanctions against Iran.