Huawei faces new US charges of IP theft

(Image credit: Future)

The US government’s hostility towards Huawei has intensified with new charges of racketeering and trade secret theft.

The Chinese telecommunications equipment manufacturer has long been frozen out of the US market on national security grounds. However the past year has seen Washington ban American firms from selling their wares to the company and the launch of legal action.

Now, the lawsuit has been expanded by prosecutors who allege Huawei had a “decades-long” plan to steal American technology.

US Huawei lawsuit

Specifically, Huawei is accused of stealing technology to reduce the time and expense of developing its own software and technology. This would have given it an unfair advantage over competitors who it was then able to undercut.

Huawei was already facing 23 charges of bank fraud, obstruction of justice and technology theft across two separate indictments.

The first concerns 13 counts of financial fraud, the breaching of economic sanctions against Iran, and money laundering, while the second involves 10 counts of theft and charges related to the theft.

The first indictment relates to the arrest of Huawei CFO Meng Wanzhou in Canada last year. It is alleged that Wanzhou aided Huawei to avoid sanctions on doing business in Iran, which if proven, could have put multinational banking organisations at risk of breaking those sanctions too. Wanzhou is fighting extradition to the US.

The second tranche of charges relate to the alleged theft of US carrier T-Mobile’s intellectual property. The US operator claimed in 2014 Huawei illegally stole technology related to mobile phone testing robot called ‘Tappy’, and a civil court in Seattle ruled that although trade secrets had been misappropriated, the act was not malicious.

Huawei blamed rogue elements within its organisation for the theft, but the DoJ claims it has evidence of a company-wide conspiracy to steal information related to Tappy.

Huawei has frequently denied any allegations of wrongdoing and has rejected these latest claims.

“This new indictment is part of the Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement,” said a spokesperson.

“These new charges are without merit and are based largely on recycled civil disputes from last 20 years that have been previously settled, litigated and in some cases, rejected by federal judges and juries. The government will not prevail on its charges, which we will prove to be both unfounded and unfair.”

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.