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Huawei could face charges over trade secrets in new federal investigation

Huawei could face charges over trade secrets in new federal investigation


An indictment could come soon

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Illustration by William Joel / The Verge

Federal prosecutors are pursuing a criminal investigation into the Chinese telecommunications company Huawei for reportedly stealing trade secrets and misappropriating technology from its US partners, including T-Mobile, according to The Wall Street Journal.

According to the Journal, this investigation is in its final stages and arose out of several civil lawsuits targeting Huawei. An indictment could come soon.

One of these civil lawsuits was posed by T-Mobile. In 2017, a Seattle jury found that Huawei had misused the technology behind T-Mobile’s smartphone testing robot “Tappy.” At the end of the legal battle, Huawei said that the “company continues to believe in the merits of its defense to the allegations made by T-Mobile,” and rejected the court’s decision.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party”

Huawei and the Justice Department did not immediately respond to a request for comment.

In November, the Justice Department announced a new initiative to stop Chinese espionage and intellectual property theft. The department said that it would work alongside the FBI to stop these trade secret thefts and would pursue civil action to block any export of products from China that were created with US designs.

US lawmakers have put Huawei’s actions under a microscope over the past year. New pressure mounted today when a bipartisan group of House lawmakers proposed legislation that would impose the same harsh penalties on Huawei that were proposed on behalf of another Chinese telecom, ZTE, last summer. If approved, the bill would enforce bans on the export of US components to Chinese companies that have violated either sanctions or export laws.

“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,” Senator Tom Cotton (R-AR), a co-sponsor of the bill said in a press release. “It’s imperative we take decisive action to protect U.S. interests and enforce our laws.”

“If Chinese telecom companies like Huawei violate our sanctions or export control laws,” Cotton continued, “they should receive nothing less than the death penalty—which this denial order would provide.”

Huawei has pushed back against those insinuations, arguing that the company does not work alongside the Chinese government and is not a threat to US national security.

Last month, authorities in Canada arrested Meng Wanzhou, Huawei’s chief financial officer and the daughter of the company’s president, at the request of US authorities. Allegedly, Wanzhou misled banks on the relationship Huawei had with Iran, which would violate US sanctions.