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Huawei files lawsuit over US ban on rural carriers to buy its products

CHINESE tech giant Huawei is asking a US federal court to throw out a rule that bars rural phone carriers from using government subsidies to purchase its equipment on security grounds.

The lawsuit announced yesterday is Huawei’s second legal challenge this year to Trump administration efforts to reduce the company’s US market presence.

Huawei’s petition said the ban — imposed last month against the company and its Chinese rival ZTE on national security grounds — failed to substantiate claims that Huawei was a threat and was a violation of due process, and thus “unlawful.”

The petition says the Federal Communications Commission acted improperly when it voted last month to bar rural carriers from using government subsidies to buy equipment from Huawei or its Chinese rival, ZTE Corp.

The lawsuit says the FCC exceeded its authority by making national security judgments, designated Huawei a threat without evidence and violated its own procedures by adopting a rule without citing a legal basis.

Song Liuping, Huawei’s chief legal officer, said yesterday that there is no evidence that Huawei has threatened the national security of the United States, adding that the US decision was based on political motives.

“The US government has never presented real evidence to show that Huawei is a national security threat. That’s because this evidence does not exist,” Song said at the company’s headquarters in Shenzhen in southern China.

“Politicians in the US say they are very concerned about cyber security” but they are “banning a company like Huawei, just because we started in China,” he said.

“This does not solve any cyber security challenges.”

Huawei warned the FCC rule will hurt rural American carriers.

Song said that while potential lost sales are minimal, if the rule is allowed to stand, Huawei might suffer “reputational losses” that will “have a further impact on our business.”

Huawei has consistently dismissed the security accusations, saying Washington has provided no proof to back them up.

In a separate lawsuit filed in March, Huawei is asking a federal court in Texas to strike down a ban on the US government using its equipment or dealing with any contractor that does.

In Beijing, foreign ministry spokeswoman Hua Chunying told reporters, “I would like to ask you what the standard of safety is.”

“If things are not safe insofar as they are made by Chinese, how is it that American people can wear clothes and shoes made by Chinese? Do they pose a security threat to them?,” she asked.

Huawei has risen to become the world leader in telecom networking equipment and one of the top smartphone manufacturers.

The Trump administration imposed curbs in May that threaten to disrupt Huawei’s sales of smartphones and network gear by blocking access to US technology and components including Google’s music, maps and other mobile services.

But Trump has offered a series of temporary reprieves for Huawei to allow service providers covering remote rural areas time to comply with the ban.

Huawei’s US sales plunged after a congressional panel warned in 2012 the company and ZTE were security risks and told carriers to avoid them. However, its sales in Europe and developing markets in Asia and Africa have risen steadily. Huawei reported its global sales rose 24.4 percent in the first nine months of 2019 over a year earlier to 610.8 billion yuan (US$86 billion).

In November, Huawei started selling a folding smartphone, the Mate X, made without US-supplied processor chips or Google apps.