What today’s Huawei indictment didn't say
Companies have sued Huawei for years over allegedly stealing trade secrets. Experts say today's indictment is "more of the same."
The U.S. upped its offensive on Huawei, unveiling an indictment on Thursday against the Chinese tech giant. The Department of Justice accused Huawei and its subsidiaries of violating federal racketeering laws and conspiring to steal trade secrets from American businesses. But for people who have been following the U.S.' years-long campaign against Huawei, the indictment offers few surprises — and no mention of collusion between the company and the Chinese government.
Some of the allegations stretch back two decades and have been widely reported. But the charges are notable for painting a vivid picture of a company that has allegedly skirted U.S. law to obtain unfair advantages over its competitors time and again. It's a pattern that the U.S. now says violates the RICO act, which has most famously been used to prosecute mafia bosses.
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"This is mostly just recapitulating the charges from a year ago and providing a bit more detail and context for the charges themselves," said Nicholas Weaver, a senior staff researcher on computer security at the International Computer Science Institute in Berkeley, and lecturer at the University of California, Berkeley.
Last year, the U.S. charged Huawei and its CFO, Meng Wanzhou, over alleged attempts to steal trade secrets and evade sanctions against Iran. Meng is now in Canada awaiting extradition to the U.S.
The Justice Department alleges that Huawei stole intellectual property, including technology related to internet router source code, cellular-antenna technology and robotics, from six unnamed U.S. tech firms. The indictment also alleges that Huawei and its subsidiaries did business in sanctioned countries and used code names like "A2" for Iran and "A9" for North Korea.
"I see the indictments as part of playing a chess game against China," said Herb Lin, a Cyber Policy and Security fellow at Stanford University's Hoover Institution. "It's the U.S. trying to use the tools it knows how to use to try and suppress Huawei's rise on the global stage." Lin said it was unfortunate that the U.S. has offered "no credible alternative to Huawei, and all we can do is to tell our partners to 'just say no' to Huawei."
Companies have accused Huawei of plotting to steal intellectual property for years, and many of these incidents are repeated in today's indictment. Cisco filed suit against Huawei in 2003 for alleged patent violations and for "blatant and systematic copying" of its code — an incident referenced in the new charges. Another incident outlined in the indictment (which Light Reading reported on in 2004) describes a Huawei employee who was kicked out of a trade show for examining circuit boards and taking photographs of a competitor's products. In that case, the vendor confiscated the Huawei employee's memory sticks and notes, which included proprietary diagrams of an AT&T office, according to the report. Motorola also sued Huawei in 2010, claiming that Huawei worked with more than a dozen of its employees to steal confidential data on cellular network equipment.
Many of these episodes offered specific details of the alleged IP theft. Cisco, for example, said Huawei copied its operating source code verbatim — including a bug. "The only plausible explanation for the presence of these file names and bug in [Huawei's code] is that they were adopted through Huawei's copying of [Cisco's] source code," according to a Cisco motion for preliminary injunction. The two companies reached a settlement in 2004.
Today's indictment alleges that these incidents and others were part of a pattern that sometimes involved recruiting employees of competing firms and used professors as spies to gain access to nonpublic information. In 2013, Huawei launched a formal bonus program to reward employees who obtained confidential technology from competitors, according to the indictment.
Emily Harris, an international security fellow at Chatham House, a London think tank, and CEO of Oxford Information Labs, a U.K. cyber intelligence company, said the new charges "seem like more of the same" and "do not provide the long-awaited smoking gun showing collusion between Huawei and the Chinese state."
Although the Justice Department did not say in its announcement why these racketeering charges were brought today instead of earlier, they come at a key moment for Huawei. The U.S. has slowly ramped up its campaign against Huawei as its attempts to convince allies to drop the company's equipment from their 5G infrastructure plans have faltered. The U.K. said in late January that it would not ban Huawei equipment from its 5G network rollout. German lawmakers are set to vote in the coming weeks on similar measures: The ruling Christian Democrat party has reportedly backed a position that also stops short of a Huawei ban.
This week, The Wall Street Journal reported that U.S. intelligence officials told allies that Huawei was capable of accessing mobile networks through backdoors meant only for law enforcement.
"This new indictment is part of the Justice Department's attempt to irrevocably damage Huawei's reputation and its business for reasons related to competition rather than law enforcement," according to a statement from Huawei. "These new charges are without merit and are based largely on recycled civil disputes from [the] last 20 years that have been previously settled, litigated and in some cases, rejected by federal judges and juries."
U.S. lawmakers were swift to criticize Huawei after the indictment was made public. "Huawei's unlawful business practices are a threat to fair and open markets, as well as to legitimate competition in a tech space that is critical for the global economy," Sens. Richard Burr and Mark Warner — the chair and vice-chair of the Senate Select Committee on Intelligence — said in a joint statement.