Chinese tech giant Huawei is asking a US court to throw out a rule that bars phone carriers from using American government money to purchase its equipment on security grounds.
The FCC last month voted unanimously to designate Huawei Technologies Co Ltd and peer ZTE Corp 000063.SZ as national security risks, barring their USA rural carrier customers from tapping an $8.5 billion government fund to purchase Huawei or ZTE telecommunications equipment. In February, it also threatened to sue the Czech government for saying its smartphones are not secure, according to The Wall Street Journal. The order "exceeds the FCC's statutory authority and violates federal law, the Constitution, and other laws", the company said in its filing (see below). In response, Huawei has dramatically increased the amount it spends on lobbying in the U.S.
Huawei said on Thursday it filed a petition with the Fifth Circuit Court in New Orleans challenging the FCC decision.
Washington has long had Huawei in its crosshairs, placing it on an economic blacklist in May, barring American firms from doing business with the company on the grounds that its networking gear could be used for espionage, despite repeated objections and denials from top executives.
Huawei's chief legal officer, Song Liuping, said at a press conference that FCC Chairman Ajit Pai hasn't provided any evidence that the company is a security threat.
Song said the FCC could not back its decision with "evidence or sound reasoning or analysis".
Trump later allowed ZTE to resume imports under tough conditions.
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"There is an obvious lineage to what happened here", Carvin added. It is not clear when the FCC decision will come into effect.
Both Li and his legal representative declined to comment to Reuters. But analysts cautioned that while the latest lawsuit might succeed in delaying implementation of the FCC decision, it was unlikely to win the company friends in Washington or elsewhere.
Song noted that Huawei is willing to work together with the US government on the matter.
The lawsuit, which comes nearly exactly one year after the arrest of Huawei chief financial officer Meng Wanzhou on charges of bank fraud, is the second time this year Huawei has taken the USA government to court. In March, it launched a suit against a ban on federal agencies buying its equipment.
Because the ruling also deemed Huawei a national security threat - stating it was obligated under Chinese law to pass its data to the government - the company says it was unlawfully deprived of its right to due process.
The company, which employs almost 200,000 people worldwide and generated more than $100 billion in sales past year, has also grown to dominate the market for superfast 5G wireless technology networks.