Huawei aims to fight back against US government with lawsuit

Huawei plans to take its push-back against the US government to a new level this week.

The embattled Chinese tech company intends to file a lawsuit against the American government over a law that bans US federal agencies from buying Huawei products, according to reports by The New York Times and the Financial Times citing unidentified sources.

Huawei declined to comment on the matter.

In its lawsuit, Huawei will claim that the National Defense Authorization Act violates the US Constitution by singling out a single individual or group for punishment without trial, according to the reports. The legislation, which was passed in August, specifically forbids government agencies from using technology from Huawei and its smaller Chinese rival ZTE (ZTCOF).

It’s the latest twist in the clash between the US and China over technology.

A man walks past a Huawei store in Beijing on December 10, 2018. - China on December 10 protested Canada's "inhumane" treatment of an executive of telecom giant Huawei who is being held on a US extradition bid, following reports she was not getting sufficient medical care. (Photo by GREG BAKER / AFP) (Photo credit should read GREG BAKER/AFP/Getty Images)

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Huawei — which describes itself as employee-owned — is one of China’s largest and most successful companies. It’s a key player in the introduction of super-fast 5G wireless networks around the world, and a leading smartphone brand that competes with Apple (AAPL) and Samsung (SSNLF).

The US government says Huawei’s products could be used by Chinese intelligence services for spying — a claim the company has repeatedly denied. Huawei founder Ren Zhengfei said in January that the company would never harm its customers.

Washington has been leading an international campaign to pressure US allies to ban the Chinese company from their 5G networks.

In a speech in Europe last month, US Vice President Mike Pence said his country had been “very clear” on the threat posed by Huawei.

“We must protect our critical telecom infrastructure, and the United States is calling on all our security partners to be vigilant and to reject any enterprise that would compromise the integrity of our communications technology or national security systems,” he said.

Mobile operators around the world have said the US campaign is complicating their efforts to upgrade their networks. Analysts and industry executives say Huawei has already built up such a strong lead in 5G technology that it’s practically irreplaceable for many wireless carriers.

Security concerns have led to the company’s technology being completely banned in Australia, a major US ally, and partially restricted in New Zealand.

European countries including the United Kingdom and Germany are still deciding what stance to take.

Canada caught in the crossfire

China has vigorously defended Huawei, the world’s biggest maker of telecommunications equipment. Beijing officials say the US moves against the company are politically motivated attempts to stifle its business.

Canada was dragged into the fray when Huawei’s chief financial officer, Meng Wanzhou, was detained in Vancouver in December. Canadian police arrested Meng at the request of US authorities, who have charged her and Huawei with evading sanctions on Iran and bank fraud. Huawei and Meng deny the charges.

Huawei Chief Financial Officer Meng Wanzhou

Related article Huawei CFO Meng Wanzhou files lawsuit accusing Canada of illegally detaining her

Meng, the daughter of Huawei’s founder, has filed a lawsuit against Canadian authorities alleging that the way in which she was detained and searched by border officers was an unlawful violation of her rights.

Shortly after Meng’s arrest, Chinese authorities detained two Canadians on suspicion of activities that endangered China’s national security and sentenced another to death for drug trafficking. The moves were widely viewed as retaliation for Meng’s arrest despite denials from Beijing.

On Monday, just days after Canadian authorities allowed extradition proceedings against Meng to go ahead, China revealed details of its case against the detained Canadians. In a statement, Chinese officials accused former diplomat Michael Kovrig of spying and businessman Michael Spavor of providing intelligence to Kovrig.

Canada has called the detentions arbitrary and are calling for Kovrig and Spavor’s immediate release.

China has similarly requested that Meng be freed, warning Canada that it has made a serious mistake.

Related article China reveals case against two Canadians detained in wake of Huawei arrest

Meng was released on bail in December. She remains in Vancouver with her husband and daughter, where she is living under electronic surveillance at one of her multimillion-dollar homes. She is due to appear Wednesday at the Supreme Court of British Columbia.

Kovrig and Spavor are being held at an undisclosed location in China with limited access to consular services. Kovrig’s employer, the International Crisis Group, said he has not been allowed to see a lawyer or any family members.

The Brussels-based think tank said in a statement Tuesday that it has “heard nothing official about any charges being laid against our colleague, Michael Kovrig.”

“Vague and unsubstantiated accusations against him are unwarranted and unfair,” it added.