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The Huawei Technologies Co., China, has filed a lawsuit in the U.S. by challenging the Federal Communications Commission’s designation as a national security threat, which raises legal challenges in the country, despite a change in government in Washington.
The lawsuit filed in the U.S. Court of Appeals for the Fifth Circuit on Monday called for a review of a ruling by the FCC last year, which found that the company posed a national security threat and barred U.S. telecommunications operators from accessing a $ 1 billion fund to buy Huawei-manufactured telecommunications equipment.
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The complaint is Huawei’s latest challenge to the US’s numerous actions directed at it over the past few years. Former President Donald Trump’s government has blocked the company from gaining access to US technology and has tried to persuade allies that Huawei’s telecommunications pose national security risks.
Huawei’s lawsuit said the FCC’s ruling in December exceeded its authority and that it was “arbitrary, fickle and an abuse of discretion and not supported by material evidence.”
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An FCC spokesman said: “Last year, the FCC issued a final designation identifying Huawei as a national security threat, based on a large body of evidence developed by the FCC and numerous U.S. national security agencies. We will continue to defend the decision. ”
U.S. officials have long said that Beijing could use Huawei telecommunications devices to spy on or disrupt telecommunications networks, although they have not publicly shown evidence of such behavior. Huawei founder Ren Zhengfei said the company would never spy on behalf of any country.
Huawei filed its lawsuit a few hours before Mr. Ren told a group of journalists in China that he hoped the Biden government would be more open to policies “that are in the interest of US companies” and added that he would welcome a call from the new company. president.
“We still hope to be able to buy many American components, parts and machinery so that American companies can also develop with the Chinese economy,” he said. Ren said Tuesday.
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The Biden government has not made its approach to Huawei clear. During a hearing last month, President Biden’s nominated candidate for trade secretary, Gina Raimondo, promised to protect the US from Chinese threats, but refused to uphold Huawei’s blacklist, pending a review.
Huawei sought a direct response to the Trump administration’s actions and challenged the FCC as well as a U.S. law that barred the company from doing business with U.S. contractors. A federal judge in Texas dismissed the latter case last year.
A separate challenge against the FCC filed in 2019, which also disputes the designation of Huawei as a security threat, continues.
The legal efforts reflect Huawei’s attempt to exhaust all of its options, as it has the prospect of losing its remaining position in the US telecommunications market. Huawei executives have long expressed frustration over Western suspicion – which has never been proven in public – that the company poses security risks and have challenged US officials to provide evidence of any espionage.
Despite concerns in Washington, Huawei has long had a partnership with rural telecommunications services across the U.S. that has praised their pricing and the reliability of its service. Operations executives were hoping Huawei could build on the record to work with larger entrepreneurs and throw its smartphones at US consumers.
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Mr. Trump destroyed this hope when the company became a major target in its trade war with Beijing. In addition to blocking the export of US technology to Huawei, the US under Mr. Trump issued double criminal charges against the company, claiming that it stole technology and evaded sanctions against Iran. Meng Wanzhou, the company’s chief financial officer, has been under house arrest in Canada for more than two years for resisting US officials’ efforts to extradite her to the United States.
The American actions made Huawei anxious. The Department of Commerce tightened an export ban on Huawei in August and cut it off from computer chips that are critical to its smartphones and telecommunications equipment. Analysts said Huawei relies on inventory to build its products.
The tighter control had the biggest impact on the company’s smartphone business, which in 2019 accounted for more than half of its revenue. Shipments of its devices fell more than 40% in the quarter to December 31 of a year earlier, and Huawei in November. sold its budget brand Smartphones to a consortium led by the government of Shenzhen, the southern Chinese city where Huawei is based.
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Mr. Ren said in his remarks on Tuesday that despite the challenges, the company was still able to increase both profit and revenue last year, although it still had to report its revenue from 2020. In 2019, Huawei earned about $ 9.7 billion in revenue with more than $ 130 billion in revenue.
Write to Dan Strumpf at [email protected]