Tags: huawei | trade | secret | theft | china

WSJ: US Probes Huawei for Alleged Trade Secret Theft

close up of the logo of huawei technologies company
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Wednesday, 16 January 2019 03:47 PM

Federal prosecutors are investigating Huawei Technologies, the world's largest telecommunications equipment maker, for allegedly stealing trade secrets from U.S. businesses and could soon issue an indictment, the Wall Street Journal reported on Wednesday.

Citing people familiar with the matter, the Journal said that one area of investigation is the technology behind a device that T-Mobile U.S. Inc. used for testing smartphones.

Reuters could not immediately confirm the report.

The action is the latest in a long list taken to fight what some in the Trump administration call China’s cheating through intellectual property theft, illegal corporate subsidies and rules hampering U.S. corporations that want to sell their goods in China.

The investigation arose out of civil lawsuits against Huawei, the Journal said, including one in Seattle where Huawei was found liable for misappropriating robotic technology from T-Mobile (TMUS.O).

A Huawei spokesman and a spokeswoman for the U.S. attorney in the western district of Washington declined comment.

T-Mobile alleged in a 2014 lawsuit, filed in federal court in Seattle, that Huawei employees stole technology relating to a smartphone-testing robot T-Mobile had in a lab in Bellevue, Washington.

The robot, Tappy, used human-like fingers to simulate tapping on mobile phones.

According to T-Mobile’s lawsuit, Huawei employees photographed the robot and attempted to remove one of its parts.

In May 2017, a jury said Huawei should pay T-Mobile $4.8 million in damages.

Meanwhile, a bipartisan group of U.S. lawmakers introduced bills on Wednesday that would ban the sale of U.S. chips or other components to Huawei,  ZTE Corp. or other Chinese telecommunications companies that violate U.S. sanctions or export control laws.

Senator Tom Cotton and Representative Mike Gallagher, both Republicans, along with Senator Chris Van Hollen and Representative Ruben Gallego, both Democrats, introduced the measures, which would require the president to ban the export of U.S. components to any Chinese telecommunications company that violates U.S. sanctions or export control laws.

The bills specifically cite ZTE and Huawei, both of which are viewed with suspicion in the United States because of fears that their switches and other gear could be used to spy on Americans. Both have also been accused of failing to respect U.S. sanctions on Iran.

Huawei is the world’s biggest producer of telecommunications equipment.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” Cotton wrote in a statement. “If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty — which this denial order would provide.”

Huawei’s founder, Ren Zhengfei, denied this week that his company was used by the Chinese government to spy.

Canada detained Ren’s daughter, Meng Wanzhou, who is Huawei’s chief financial officer, in December at the request of U.S. authorities investigating an alleged scheme to use the global banking system to evade U.S. sanctions against Iran.

For its part, ZTE agreed last year to pay a $1 billion fine to the United States that had been imposed because the company breached a U.S. embargo on trade with Iran. As part of the agreement, the U.S. lifted a ban in place since April that prevented ZTE from buying the U.S. components it heavily relies on to make smartphones and other devices.

© 2019 Thomson/Reuters. All rights reserved.

   
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Federal prosecutors are investigating Huawei Technologies, the world's largest telecommunications equipment maker, for allegedly stealing trade secrets from U.S. businesses and could soon issue an indictment, the Wall Street Journal reported on Wednesday.
huawei, trade, secret, theft, china
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2019-47-16
Wednesday, 16 January 2019 03:47 PM
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