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Huawei said to be preparing to sue US government

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The Chinese electronics giant Huawei is preparing to sue the US government for barring federal agencies from using the company's products, according to two people familiar with the matter.

[SHANGHAI] The Chinese electronics giant Huawei is preparing to sue the US government for barring federal agencies from using the company's products, according to two people familiar with the matter.

The lawsuit is to be filed in the Eastern District of Texas, where Huawei has its US headquarters, according to the people, who requested anonymity to discuss confidential plans. The company plans to announce the suit this week.

The move could be aimed at forcing the US government to make its case against the Chinese equipment-maker more publicly. It is part of a broad push by Huawei to defend itself against a campaign led by the United States to undermine the company, which Washington sees as a security threat. Executives have spoken out strongly against the US actions, and new marketing campaigns have been aimed at mending the company's image among consumers.

For many years, US officials have said Beijing could use Huawei's telecommunication equipment to spy and disrupt communication networks. The company has denied the allegations, but major wireless carriers such as AT&T and Verizon have effectively been prevented from using Huawei's equipment as a result.

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Over the past year, Washington has ramped up its pressure on the firm, which is preparing to take a major role in the construction of next-generation wireless networks around the world. US officials have urged other governments to ban the use of Huawei's products. This year, the Justice Department filed criminal charges against the company and its chief financial officer in connection with evading US sanctions on Iran.

A hearing set to begin this week in Canada will determine whether the company's finance chief, Meng Wanzhou, will be extradited to the United States to face charges. Meng's lawyers have sued the Canadian government and police, arguing that the circumstances of her arrest and detention in December violated her rights.

The criminal case against Meng in the United States could be complicated by comments from President Donald Trump as the White House has engaged in trade negotiations with China. While criminal cases have traditionally been independent matters, Mr Trump indicated that Huawei's fate could be a bargaining chip.

During a meeting in the Oval Office with a delegation of Chinese officials last month, Mr Trump said, "We'll be making that decision," when asked if he would drop the criminal charges against Huawei as part of the trade deal. He added, "We'll be talking to the attorney general."

A lawsuit by Huawei against the United States is expected to challenge a section of a military spending authorization law that was approved last year. The provision blocks executive agencies from using telecom equipment made by Huawei and another Chinese company, ZTE.

According to one of the people familiar with the matter, Huawei is likely to argue that the provision is a "bill of attainder," or a legislative act that singles out a person or group for punishment without trial. The Constitution forbids Congress from passing such bills.

Huawei's plans are not final. It could still decide to change course, or to not file a lawsuit at all.

The US Embassy in Beijing did not immediately respond to a request for comment. A call placed outside business hours to the US Courthouse in Plano, Texas, where Huawei's US headquarters are, was not answered.

In many ways, the Huawei case echoes that of another company that has aroused security concerns in the United States: the Russian cybersecurity firm Kaspersky Lab.

Around two years ago, US officials began expressing worries that Moscow could use the company's software to gather intelligence. The company denied the allegations. But in September 2017, the Department of Homeland Security directed federal agencies to begin removing the company's products from government systems. Congress then codified the ban in a spending law.

Kaspersky filed two lawsuits in response, arguing that the prohibition amounted to a bill of attainder. In May, a judge in Washington dismissed the suits, ruling that Congress was motivated by the legitimate desire to protect government computer networks against Russian intrusion. The judge also said that Kaspersky's sales to the US government were such a small fraction of the company's business that the ban was not especially harsh.

An appeals court upheld the ruling a few months later. Banning Kaspersky was a "prophylactic, not punitive" measure, the judge in the appeal, David S. Tatel, wrote.

"Given the not insignificant probability that Kaspersky's products could have compromised federal systems and the magnitude of the harm such an intrusion could have wrought, Congress's decision to remove Kaspersky from federal networks represents a reasonable and balanced response," Mr Tatel wrote.

NYTIMES