US boxes in ‘Queen’ Huawei in global tech chess game

3 min read
(Image credit: Bigstock/tanaonte)

After weeks of uncertainty, the US Department of Justice has finally filed charges against Huawei and its chief financial officer Meng Wanzhou.

The indictments concern two separate cases.

The first alleges that Huawei and Meng actively misled US authorities and an unnamed financial institution regarding the relationship between two subsidiaries—Huawei Device USA and Skycom Tech—in an effort to evade US sanctions and conduct business with Iran. The indictment comes with an official request from the US to Canada for the extradition of Meng, who is currently under house arrest at her Vancouver home after being apprehended while transiting there on Dec. 1.

The second set of charges alleges that Huawei stole technology from US phone carrier T-Mobile, and accuses the Chinese firm of obstructing justice and committing wire fraud. The technology in question, known as “Tappy,” was a robotics system developed by T-Mobile and used in testing the durability of smartphone screens. The indictment cites evidence, including a series of internal Huawei emails, in accusing the company of conspiring and agreeing to obtain the Tappy technology without authorization over a period spanning from 2012 to 2014.

The Tappy case, which has received considerably less public attention than the high-profile arrest and diplomatic drama around Meng, paints a picture of a company engaging in a coordinated attempt to steal the technology and cover up its wrongdoing. The indictment also includes details of a formal bonus system within Huawei China, regularly encouraging and rewarding staff for stealing confidential information from its competitors.

In a statement, Huawei expressed disappointment in hearing of the charges. It noted that the intellectual property (IP) theft was already the subject of a civil suit between the two parties, settled in 2014, and denied any of the indictment’s asserted violations of US law on the part of the company, its subsidiary, or affiliate. The statement went on to say that it was not aware of any wrongdoing by Meng and that the company believes the same conclusion will be reached by US courts.

A legal and political tangle

This is about far more than merely IP theft and wire fraud. Indeed, these are two components of a far broader more complex set of legal and geopolitical tensions.

While there is every reason to believe that the US federal courts processing each case will be fair and impartial in their proceedings, it is safe to assume that the context around the case is rife with political interests. This is certainly the case for the increased attention that Huawei has received from the US government.

In a statement made regarding the indictments, Federal Bureau of Investigation director Christopher Wray was explicit in his language as to the broader context of the case, accusing Huawei of “brazen and persistent actions to exploit American companies and financial institutions, and to threaten the free and fair global marketplace.”

He went on to directly connect Huawei to the Chinese government, and frame both as a threat to fundamental American norms, institutions, and national security, saying: “In pursuit of their commercial ambitions, Huawei relied on dishonest business practices that contradict the economic principles that have allowed American companies and the United States to thrive.” Adding that, with the Chinese government’s influence over companies like Huawei, the telecoms giant poses a threat to US national and economic security.

This is not the first time that Wray has spoken of China, its tech firms, and its people in these terms. In a February 2018 Senate Intelligence Committee hearing, Wray warned of a “whole-of-society threat” from China, citing the areas of academia and cybersecurity in particular.

There appears to be a broad consensus across the US national security apparatus that taking a harder line on China is in the country’s best interests. A national security strategy plan issued in 2017 framed China as a “strategic competitor,” along with Russia, both of which were characterized as “revisionist powers.” There now appears to be widespread agreement in Washington that China is seeking to, and acting in ways which challenge key US global interests.

Huawei: ‘Queen’ on global tech chessboard

As Washington’s posture towards Beijing becomes less friendly, Huawei has been placed in its sights. A symbol for many of the underlying commercial, cybersecurity, and cultural issues that lie at the heart of US-China tensions, Huawei is also perhaps China’s single most important technology firm. As 5G network infrastructure and cybersecurity become critical battlegrounds in the two countries’ battle for global influence, China, in many ways, goes as Huawei goes.

With this in mind, it is no surprise that the US and its security allies have been pressuring Huawei, and raising concerns—whether valid or invalid—about the cybersecurity risk posed by the company’s equipment, and placing the company under greater scrutiny for its practices.

On the geopolitical tech chessboard, Huawei is China’s queen and the US is doing its best to box her in.