Huawei sues FCC over a federal subsidy ban, calling it ‘unconstitutional’

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Huawei-Cyber-Security-Lab
A staff member at the front desk of Huawei’s Cyber Security Lab on July 29, 2019, in Dongguan, Guangzhou. (Image credit: TechNode/Shi Jiayi)

Huawei has filed a lawsuit against a top US telecommunications regulator over its decision last week to bar state-subsidized carriers from buying equipment from the Chinese company, Huawei chief legal officer Song Liuping announced Thursday.

Why it matters: Huawei has filed a number of lawsuits challenging the US government’s attempts to exclude it from the country’s telecom market, though they are widely considered a component of a global public relations campaign.

  • The company is pursuing legal action against an array of overseas critics including a French researcher and a small newspaper in Lithuania, and has threatened to sue the government of the Czech Republic for claiming that the company’s smartphones are insecure, according to the Wall Street Journal.
  • The US government has banned from its 5G network rollout any equipment made by the Shenzhen-based company, the world’s largest telecommunications equipment maker, and in May added it to a trade blacklist.

Details: Huawei filed a lawsuit on Thursday with the Fifth Circuit Court of Appeals in New Orleans against the US Federal Communications Commission (FCC) over an order that bars US carriers receiving federal subsidies from purchasing equipment from Huawei and its rival ZTE, Song announced at a press conference at Huawei’s headquarters in Shenzhen.

  • The company argues that the FCC order, which the agency unanimously approved on Nov. 23, violates the US Constitution and the Administrative Procedure Act.
  • The order could potentially eliminate Huawei’s sales to rural carriers that receive federal subsidies and seek lower-cost equipment from the company. Song claimed that the FCC decision would “harm their interests.”
  • “The FCC claimed Huawei is a national security threat, but the FCC chairman Ajit Pai didn’t provide any evidence,” Song said, adding that the US government had never provided any evidence that Huawei posed a threat. “That’s because such evidence doesn’t exist,” he added.
  • “The FCC’s order violates the US Constitution, and we have no choice but to take legal actions,” Song said.
  • Glen Nager, a partner at law firm Jones Day which represents Huawei in the case, claimed that FCC has no authority to determine whether a company poses a national security threat.

“It’s simply shameful pre-judgment of the worst kind. The rule of law, to which the United States proudly adheres, does not permit this kind of arbitrary and unfair action by a government agency. Under the rule of law in the United States, agencies have to have legal authority for taking actions, they actually have to have actual evidence for the facts that they purport to find.”

— Glen Nager, lead counsel for Huawei and partner at Jones Day

Context: In March, Huawei filed a lawsuit against the US government over a law that prohibits federal agencies from using its equipment.

  • The lawsuit, which was filed with the US District Court for the Eastern District of Texas, seeks to overturn a provision in the National Defense Authorization Act (NDAA), which bans US government agencies from using equipment from Huawei.
  • In May, Huawei filed a motion requesting the court to rule in its favor in reference to the March lawsuit.
  • The company filed last month three defamation claims in Paris over comments made during television programs by a French researcher, a broadcast journalist, and a telecommunications sector expert.
  • Earlier November, Huawei claimed that a Lithuanian court had ordered a local newspaper to retract a story that said Huawei equipment was involved in a data transaction from the African Union to servers in China.