Criticism of Huawei

Criticism of Huawei — BrandWiki

Intellectual property and theft

Cisco patent lawsuit

In 2003 Cisco General Counsel Mark Chandler traveled to Shenzhen to confront Huawei founder Ren Zhengfei with evidence of Huawei's theft of Cisco IP. The evidence included typos from Cisco's technical manuals that also appeared in Huawei's, after being presented with the evidence Ren replied "coincidence".[6]

In February 2003, Cisco Systems sued Huawei Technologies for allegedly infringing on its patents and illegally copying source code used in its routers and switches.[7] According to a statement by Cisco, by July 2004 Huawei removed the contested code, manuals and command-line interfaces and the case was subsequently settled out of court.[8] As part of the settlement Huawei admitted that it had copied some of Cisco's router software.[6] Both sides claimed success—with Cisco asserting that "completion of lawsuit marks a victory for the protection of intellectual property rights", and Huawei's partner 3Com (which was not a part of lawsuit) noting that court order prevented Cisco from bringing another case against Huawei asserting the same or substantially similar claims.[9]

Huawei's chief representative in the U.S. subsequently claimed that Huawei had been vindicated in the case, breaking a confidentiality clause of Huawei's settlement with Cisco. In response, Cisco revealed parts of the independent expert's report produced for the case which proved that Huawei had stolen Cisco code and directly copied it into their products.[10] In a company blog post Cisco's Mark Chandler stated that the settled case had included allegations of "direct, verbatim copying of our source code, to say nothing of our command line interface, our help screens, our copyrighted manuals and other elements of our products" by Huawei and provided additional information to support those allegations.[11] Prior to Cisco providing conclusive proof in 2012 the story of Huawei's blatant plagiarism had obtained the status of folklore within the routing and switching community.[12]

T-Mobile smartphone testing robot

In September 2014, Huawei faced a lawsuit from T-Mobile US, which alleged that Huawei stole technology from its Bellevue, Washington, headquarters. T-Mobile claimed that Huawei's employees snuck into a T-Mobile lab during the period of 2012–2013 and stole parts of its robot Tappy used for testing smartphones. It alleged that the employees then copied the operating software and design details, and Huawei is now using the data to build its own testing robot. A Huawei spokesman stated to The New York Times that there is some truth to the complaint, but that the two employees involved have been fired. T-Mobile has since stopped using Huawei as a supplier, which T-Mobile says could cost it tens of millions of dollars as it moves away from its handsets.[13]

In May 2017, a jury concluded that Huawei had misappropriated T-Mobile's trade secrets but awarded $4.8 million of damages only for a breach of supplier contract, not espionage. Huawei contended that the Tappy robot's secrets had already been publicly disclosed by T-Mobile in 2012. A limited inspection of Huawei's robotics facilities by a third-party expert turned out inconclusively.[14][15]

Motorola patent lawsuit

In July 2010, Motorola filed an amended complaint that named Huawei as a co-defendant in its case against Lemko for alleged theft of trade secrets.[16][17]

Motorola–Nokia Siemens Networks sales dispute

In January 2011, Huawei filed a lawsuit against Motorola to prevent its intellectual property from being illegally transferred to Nokia Siemens Networks ("NSN") as part of NSN's US$1.2 billion acquisition of Motorola's wireless network business.[18][19][20][21] In April 2011, Motorola and Huawei entered into an agreement to settle all pending litigation,[22] with Motorola paying an undisclosed sum to Huawei for the intellectual property that would be part of the sale to NSN.[23][24]

ZTE patent lawsuit

In a further move to protect its intellectual property, Huawei filed lawsuits in Germany, France and Hungary in April 2011 against ZTE for patent and trademark infringement.[28][29][30] The following day, ZTE countersued Huawei for patent infringement in China.[31][32]

Nortel

Brian Shields, former chief security officer at Nortel, said that his company was compromised in 2004 by China-based hackers; executive credentials were accessed remotely, and entire computers were taken over.[33] Nortel's own specialist did not find any abnormality. In 2008, Shields decided to approach an outside expert, who reported finding sophisticated malware in the company's machines and activities traced to Chinese IP addresses and discussions on a Mandarin Internet forum. Shields had been trying to escalate the issue within the company, but senior staff members did not take any action.[34] A former CSIS official said the agency approached the company but was rebuffed.[35]

Cybersecurity experts have some doubts about a hack of such magnitude as described by Shields, calling it "unlikely". Shields does not think Huawei was directly involved, but industry insiders, including him, believe that Huawei was a beneficiary.[33][36]

Circuit boards

In June 2004, a Huawei employee was caught after-hours taking photographs of a piece of Fujitsu networking equipment at the SuperComm trade show. His memory card and hand-drawn diagrams were subsequently confiscated. The employee said he did not know taking photographs were forbidden. Huawei said his action was not authorized and either terminated the employee or reduced his pay, according to various reports.[37] The employee denied the accusation, but was later dismissed.[38][39]

Akhan Semiconductor diamond glass

Huawei was under investigation by FBI in the United States for sending some diamond glass samples developed by the company Akhan Semiconductor to China without authorization to test and destroy the product in order to steal intellectual property.[40]

CNEX Labs

CNEX Labs claims that a Huawei executive, with the help of a Chinese university, attempted to steal CNEX's solid-state drive computer storage technology.[41][42]

Espionage and security concerns

2000s

In the U.S., officials and politicians within the federal government have raised concerns that Huawei-made telecommunications equipment may be designed to allow unauthorised access by the Chinese government and the Chinese People's Liberation Army,[43][44][45][46] given that Ren Zhengfei, the founder of the company, served as an engineer in the army in the early 1980s.[47] The Committee on Foreign Investment in the United States scrutinized a deal by Bain Capital to acquire 3Com with Huawei as a minority investor, and an attempt to acquire the virtualization firm 3Leaf Systems, both due to security concerns (with concerns that China could gain access to U.S. military-grade technology in the case of the former). Both deals fell through.[44][48][49] In 2010, Sprint Nextel blocked bids by Huawei on a supply contract, after the company was contacted by the Secretary of Commerce.[50][51][52][47][44]

In the United Kingdom, the Conservative Party raised concerns about security over Huawei's bid for Marconi in 2005,[45] and the company's equipment was mentioned as an alleged potential threat in a 2009 government briefing by Alex Allan, chairman of the Joint Intelligence Committee.[53] In November 2010, Huawei agreed to proactively allow local officials to perform cybersecurity examinations of its products, resulting in the opening of the Huawei Cyber Security Evaluation Centre (HCSEC). Its oversight board includes members of the National Cyber Security Centre and GCHQ.[54][55]

In October 2009, the Indian Department of Telecommunications reportedly requested national telecom operators to "self-regulate" the use of all equipment from European, U.S. and Chinese telecoms manufacturers following security concerns.[56] Earlier, in 2005, Huawei was blocked from supplying equipment to India's Bharat Sanchar Nigam Limited (BSNL) cellular phone service provider.[57] In 2010, the Indian Central Bureau of Investigation (CBI) insisted on cancelling the rest of the Huawei contract with BSNL and pressed charges against several top BSNL officers regarding their "doubtful integrity and dubious links with Chinese firms".[58][59] In June 2010, an interim solution was introduced that would allow the import of Chinese-made telecoms equipment to India if pre-certified by international security agencies such as Canada's Electronic Warfare Associates, U.S.-based Infoguard, and Israel's ALTAL Security Consulting.[60]

Early 2010s

In a 2011 open letter, Huawei stated that the security concerns are "unfounded and unproven" and called on the U.S. government to investigate any aspect of its business.[61][62] The U.S.-based non-profit organisation Asia Society carried out a review of Chinese companies trying to invest in the U.S., including Huawei. The organisation found that only a few investment deals were blocked following unfavorable findings by the CFIUS or had been given a recommendation not to apply. However, all large transactions had been politicised by groups including the U.S. media, members of Congress and the security community.[63] However, another article unrelated to the report published by the Asia Society reported that, "fear that the P.R.C. government could strongarm private or unaffiliated Chinese groups into giving up cyber-secrets is reflected in the U.S. government's treatment of Chinese telecom company Huawei."[64]

In December 2011, Bloomberg reported that the U.S. is invoking Cold War-era national security powers to force telecommunication companies including AT&T Inc. and Verizon Communications Inc. to divulge confidential information about their networks in a hunt for Chinese cyber-spying.

Late 2010s

In 2018, an investigation by French newspaper Le Monde alleged that China had engaged in hacking the African Union headquarters in Ethiopia from 2012 to 2017.[78] The building was built by Chinese contractors, including Huawei, and Huawei equipment has been linked to these hacks.[79][80] The Chinese government denied that they bugged the building, stating that the accusations were "utterly groundless and ridiculous."[81] Ethiopian Prime Minister Hailemariam Desalegn rejected the French media report.[82] Moussa Faki Mahamat, head of the African Union Commission, said the allegations in the Le Monde report were false. "These are totally false allegations and I believe that we are completely disregarding them."[83]

2020s

In June 2020, the head of France's cybersecurity agency, the Agence nationale de la sécurité des systèmes d'information, stated that he would encourage telecom operators not to use Huawei equipment while not outright banning Huawei.[101]

On 28 August 2020, President Emmanuel Macron said, France will not formally exclude Chinese telecom giant Huawei for its upcoming 5G telecommunication networks, but favored European providers for security reasons.[102] However all Huawei components used in 5G networks would have to be phased out by 2028 placing a de facto ban on Huawei.[103]

On 15 April 2021, the Romanian government approved a law that aims to exclude Chinese group Huawei from the future 5G mobile network. According to the draft proposals, telecommunications companies may not be considered in Romania because of "risks, threats or vulnerabilities to national security".[104]

Chinese law requirement

In December 2018, Arne Schönbohm, head of Germany's Federal Office for Information Security (BSI), stated that the country had not yet seen evidence that Huawei had used its equipment to conduct espionage on behalf of China.[106] That month, it was also reported that the Japanese government had ceased future procurement of Huawei and ZTE products.[107]

The Czech Republic's cybersecurity agency issued a warning against Huawei and ZTE products, arguing that Chinese law required companies to "cooperate with intelligence services, therefore introducing them into the key state systems might present a threat". Huawei refuted the arguments, stating that it is not required to include backdoors in its products, nor has the company ever received any requests to do so. Shortly afterward, prime minister Andrej Babiš ordered that government offices cease using Huawei and ZTE products. However, the ban was reversed after the agency's claims were found to be without basis.[108][109][110]

5G networks

Four members of the Five Eyes international intelligence alliance—Australia, New Zealand, the United Kingdom and the U.S.—have declared the use of Huawei telecommunications equipment, particularly in 5G networks, poses "significant security risks", while Canada is carrying out its own security review; only Britain is permitting the company to participate in the rollout of the new technology.[114] In late November 2018, the New Zealand signals intelligence agency Government Communications Security Bureau blocked telecommunications company Spark from using Huawei equipment in its planned 5G upgrade, claiming that it posed a "significant network security risk." The NZ ban followed a similar ban in Australia in August 2018.[115][116]

In October 2018, BT Group announced that it had been phasing out Huawei equipment from "core" components of its wireless infrastructure (excluding parts such as phone mast antennas), including its 5G services,[117]

Consumer electronics

In 2015, German cybersecurity company G Data Software alleged that phones from Huawei and several other Chinese manufacturers had been shipped with malware via infected versions of legitimate apps, that could record phone calls, access user data, and send premium SMS messages. A Huawei spokesperson told G Data these breaches were likely to have taken place further down the supply chain, outside the manufacturing process.[124] In January 2018, with the proposal of the Defending US Government Communications Act (which would ban the use of Huawei and ZTE products and equipment by U.S. government entities), calls for the FCC to investigate the company, as well as government pressure, it was reported that U.S. carrier AT&T had abruptly pulled out of an agreement to offer its Mate 10 Pro smartphone, while Verizon Communications had declined to carry any future Huawei products.[125][126]

On 14 February 2018, heads of six U.S. intelligence agencies testified to the Senate Select Committee on Intelligence against the use of Chinese telecom products by U.S. citizens, such as those of Huawei and ZTE.

Security exploits

In July 2012, Felix Lindner and Gregor Kopf gave a conference at Defcon to announce that they uncovered several critical vulnerabilities in Huawei routers (models AR18 and AR29)[130] which could be used to get remote access to the device. The researchers said that Huawei "doesn't have a security contact for reporting vulnerabilities, doesn't put out security advisories and doesn't say what bugs have been fixed in its firmware updates", and as a result, the vulnerabilities have not been publicly disclosed. Huawei replied that they were investigating the claims.[131]

In January 2019, Huawei patched a security flaw that was discovered by Microsoft in the "PCManager" software bundled on its laptops, after detecting that the software used a driver with behavior similar to the DoublePulsar exploit.[132]

In March 2019, the Oversight Board of the UK government's Huawei Cyber Security Evaluation Centre found "serious and systematic defects" in Huawei software engineering and their cyber security competence, and cast doubt on Huawei's ability and competence to fix security problems that have been found, although they do not believe these flaws are caused by Chinese government interference.[133]

U.S. business restrictions

In August 2018, the National Defense Authorization Act for Fiscal Year 2019 (NDAA 2019) was signed into law, containing a provision that banned Huawei and ZTE equipment from being used by the U.S. federal government, citing security concerns.[138] Huawei filed a lawsuit over the act in March 2019,[139] alleging it to be unconstitutional because it specifically targeted Huawei without granting it a chance to provide a rebuttal or due process.[140]

On 15 May 2019, the Department of Commerce added Huawei and 70 foreign subsidiaries and "affiliates" to its entity list under the Export Administration Regulations, citing the company having been indicted for "knowingly and willfully causing the export, re-export, sale and supply, directly and indirectly, of goods, technology and services (banking and other financial services) from the United States to Iran and the government of Iran without obtaining a license from the Department of Treasury's Office of Foreign Assets Control (OFAC)".[141] This restricts U.S. companies from doing business with Huawei without a government license.[142][94][143][144]

Various U.S.-based companies immediately froze their business with Huawei to comply with the regulation,[145] including Google—which removes its ability to certify future devices and updates for the Android operating system with licensed Google Mobile Services (GMS) such as Google Play Store,[146] as well as Broadcom, Intel, Qualcomm, Microsoft, Xilinx [147] and Western Digital. The German chipmaker Infineon Technologies also voluntarily suspended its business with Huawei, pending "assessments".[148]

On 17 May 2019, Huawei voluntarily suspended its membership to JEDEC, as a temporary measure, "until the restrictions imposed by the U.S. government are removed".[152] Speaking to Chinese media, Huawei founder Ren Zhengfei accused U.S. politicians of underestimating the company's strength, and explained that "in terms of 5G technologies, others won't be able to catch up with Huawei in two or three years. We have sacrificed ourselves and our families for our ideal, to stand on top of the world. To reach this ideal, sooner or later there will be conflict with the US."[153][154][155]

Kevin Wolf, an international trade lawyer and former assistant secretary of commerce for export administration during the Obama administration, argued that Huawei could not even use the open source Android Open Source Project (AOSP) code, as it could fall under U.S. trade regulations as technology of U.S. origin because Google is the majority developer.[156] In China, it is normal for Android phones (including those of Huawei) to not include Google Play Store or GMS, as Google does not do business in the region. Phones are typically bundled with an AOSP-based distribution built around an OEM's own software suite, including either a first-party app store run by the OEM (such as Huawei's own AppGallery) or a third-party service.[157][158][159]

Google issued a statement assuring that user access to Google Play on existing Huawei devices would not be disrupted. Huawei made a similar pledge of continued support for existing devices, including security patches, but did not make any statements regarding the availability of future Android versions (such as Android 10).[160][161] On 19 May 2019, the Department of Commerce granted Huawei a temporary, three-month license to continue doing business with U.S. companies for the purposes of maintaining its existing smartphone and telecom products without interruption, whilst long-term solutions are determined.[162][163][164][165]

On 22 May 2019, Arm Holdings also suspended its business with Huawei, including all "active contracts, support entitlements, and any pending engagements". Although it is a Japanese-owned company based in the UK, Arm cited that its intellectual property contained technologies of U.S. origin that it believed were covered under the Department of Commerce order. This prevents Huawei from manufacturing chips that use the ARM architecture.[166] It was also reported that several Asian wireless carriers, including Japan's SoftBank and KDDI, and Taiwan's Chunghwa Telecom and Taiwan Mobile, had suspended the sale of upcoming Huawei devices such as the P30 Lite, citing uncertainties over the effects of the U.S. sanctions on the availability of the Android platform. NTT docomo similarly suspended pre-orders of new Huawei phones, without citing any reasoning.[167]

On 23 May 2019, it was reported that the SD Association had removed Huawei from its list of members—implicating a revocation of its membership to the association.[168] The same day, Toshiba briefly suspended all shipments to Huawei, as a temporary measure while determining whether or not they were selling U.S. made components or technologies to Huawei.[169] Panasonic also stated that it had determined its business relationship to be in compliance with U.S. law, and would not suspend it.[170] The next day, the Wi-Fi Alliance also "temporarily restricted" Huawei's membership.[152][171]

On 24 May 2019, Huawei told Reuters that FedEx attempted to divert two packages sent from Japan and addressed to Huawei in China to the United States, and tried to divert two more packages sent from Vietnam to Huawei offices elsewhere in Asia, all without their authorization. At first, FedEx China claimed that "media reports are not true". On May 28, however, they apologized on their Chinese social media account for the fact that "a small number of Huawei shipments were misrouted", and claimed that "there are no external parties that require FedEx to ship these shipments".[172][173][174]

On 29 May 2019, it was reported that Huawei was once again listed as member of JEDEC, the SD Association, and Wi-Fi Alliance.[175] In addition, while the science organization IEEE had initially banned Huawei employees from peer-reviewing papers or handling papers as editors on 30 May 2019, citing legal concerns, that ban was also revoked on 3 June 2019.[176]

On 31 May 2019, it was reported that Huawei had temporarily stopped its smartphone production lines.[177] On 17 June 2019, it was reported that Huawei was preparing for a sales drop of US$30 Billion, selling 40 million to 60 million smartphones less than last year in overseas markets.[178][179]

On 29 June 2019 at the G20 summit, Trump and Chinese president and general secretary Xi Jinping agreed to resume trade negotiations. Trump made statements implicating plans to ease the restrictions on U.S. companies doing business with Huawei, explaining that they had sold a "tremendous amount of products" to the company, that they "were not exactly happy that they couldn't sell", and that he was referring to "equipment where there's no great national security problem with it." BBC News considered this move to be a "significant concession".[180][181][182]

On 25 October 2019, Arm Holdings stated that it would continue to allow Huawei to license its technology, as it determined that its recent architectures were sufficiently considered to be of British origin and not subject to the sanctions.[183]

On 15 May 2020, the U.S. Department of Commerce extended its export restrictions to bar Huawei from producing semiconductors derived from technology or software of U.S. origin, even if the manufacturing is performed overseas.[184][185][186]

Replacement operating systems

During the sanctions, it was noted that Huawei had been working on its own in-house operating system codenamed "HongMeng OS": in an interview with Die Welt, executive Richard Yu stated that an in-house OS could be used as a "plan B" if it were prevented from using Android or Windows as the result of U.S. action, but that he would "prefer to work with the ecosystems of Google and Microsoft". Efforts to develop an in-house OS at Huawei date back as far as 2012.[187][188][189] Huawei filed trademarks for the names "Ark", "Ark OS", and "Harmony" in Europe, which were speculated to be connected to this OS.[190][191]

In June 2019, Huawei communications VP Andrew Williamson told Reuters that the company was testing HongMeng in China, and that it could be ready "in months". However, in July 2019, chairman

Opaque ownership

Huawei claims to be a privately held, employee-owned company: founder Ren Zhengfei retains approximately 1 percent of the shares of Huawei's holding company, Huawei Investment & Holding, with the remainder of the shares held by a trade union committee that also provides services for its staff. This is also due to a limitation in Chinese law preventing limited liability companies from having more than 50 shareholders (the employees' interest is treated as a single share via the union).[148] Although employee shareholders receive dividends, their shares do not entitle them to any direct influence in management decisions. Ren has the power to veto any decision made by the board of directors.[205]

A 2019 research paper published by Donald Clarke of George Washington University and Christopher Balding of Fulbright University Vietnam accused Huawei of being "effectively state-owned" due to this structure "if the trade union and its committee function as trade unions generally function in China" (being required to be associated with a labor federation tied to the Chinese Communist Party). They also claimed that the arrangement was only a profit-sharing arrangement and not actual ownership. Chief secretary of the board Jiang Xisheng disputed the paper, stating that its authors had "an incomplete understanding of Huawei's corporate policies and a limited knowledge of its ownership structure". Spalding defended the research, telling The Nikkei that "believing Huawei would defy Beijing defies credibility. With the Communist Party actively overseeing and enforcing regulations and state interests abroad, it simply does not match the facts of Chinese interest in promoting companies and interests abroad that Huawei could refuse to assist if asked."[206][207][205]

Some Huawei employees initiated legal challenges against the company regarding the employee stock for the year 2003 on a Chinese court, however both the Shenzhen city Intermediate people's court and the Guangdong province High people's court ruled that their stock ownership are for reference only and there are no legal basis to employees' claims on their ownership of Huawei's stock.[208]

On 7 October 2020, the U.K. Parliament's Defence Committee released a report claiming that there was evidence of collusion between Huawei and Chinese state and the Chinese Communist Party. The U.K. Parliament's Defence Committee said that the conclusion was evidenced by Huawei's ownership model and government subsidies it had received.[209]

Treatment of workforce and customers

A United States Army Strategic Studies Institute report on Argentina published in September 2007 describes Huawei as "known to bribe and trap clients". The report details unfair business practices, such as customers framed by "full-paid trips" to China and monetary "presents" offered and later used by Huawei as "a form of extortion".[210]

According to a WikiLeaks cable, in 2006, Michael Joseph, then-CEO of Safaricom Ltd, allegedly struggled to cancel a contract with Huawei due to poor after-sales experience, after which the Kenyan government pressured him to reinstate the contract.[211] When questioned regarding this incident, Joseph replied, "It [the cable] is not a reflection of the truth as evidenced by Safaricom being a major purchaser of Huawei products including all 3G, switching and the recent OCS billing system upgraded over the weekend."[212]

In May 2010, it was reported in The Times of India, that security agencies in India became suspicious of Chinese Huawei employees after learning that Indian employees allegedly did not have access to part of Huawei's Bangalore research and development (R&D) office building.[213] Huawei responded that the company employs over 2,000 Indian engineers and just 30 Chinese engineers in the R&D center in Bangalore, and "both Indian and Chinese staff have equal access rights to all our information assets and facilities".[214] According to The Times of India, the intelligence agencies also noted that Chinese employees of Huawei had extended their stay in Bangalore for many months.[213] Huawei stated that many of these employees were on one-and-a-half-year international assignments to serve as a technical bridge between in-market teams and China, and that "all the Chinese employees had valid visas and did not overstay".[215]

In October 2007, 7,000 Huawei employees resigned and were then rehired on short-term contracts, thereby apparently avoiding the unlimited contract provisions of the Labour Contract Law of the People's Republic of China. The company denied it was exploiting loopholes in the law, while the move was condemned by local government and trade unions.[216][217]

Huawei's treatment of its workforce in Guangdong, Southern China, also triggered a media outcry after a 25-year-old software engineer, Hu Xinyu, died in May 2006 from bacterial encephalitis, as a result of what is believed to have been work-related fatigue.[218][219]

In its 2010 Corporate Social Responsibility report, Huawei highlighted the importance of employee health and safety. In 2010, Huawei provided annual health checks to all full-time employees and performed 3,200 checks to employees exposed to occupational health risks.[220][221]

In early 2018, Li Hongyuan was urged to resign by Huawei's HR in Shenzhen. Li asked for compensation based on the Labor Law of China. In late 2018, Huawei's HR transferred 300,000 yuan to Li via a personal account. Then Huawei reported to the police for racketeering and blackmailing because Huawei asserted that Li threatened to "report business fraud" as a condition of resignation. The police then detained Li on 16 December 2018 and arrested him on 22 January 2019. According to a secret recording tape provided by Li's wife, the two-hour negotiation between Li and Huawei's HR did not mention any Huawei's allegations. Li was released after 251 days in prison.[222] In December 2019, The Guardian reported that police are commonly deployed against former employees, thereby raising questions on Huawei's links to the state. Reports and trending hashtags about the detentions have been censored in China, and the Communist Youth League of China posted an article online claiming that protesters in Hong Kong had passed information about Li's case to destabilise China after The Guardian reported the case.[223]

Alleged violation of economic sanctions and technology theft

Iran

On 25 October 2012, the Reuters news agency published a report, based on documents and interviews, alleging an Iranian-based seller of Huawei (Soda Gostar Persian Vista) tried to sell embargoed American antenna equipment (made by American company Andrew LLC) to an Iranian firm (MTN Irancell). Specifically, the Andrew antennas were part of a large order for Huawei telecommunications gear that MTN Irancell had placed through Soda Gostar, but the MTN Irancell says it cancelled the deal with Huawei when it learned the items were subject to sanctions and before any equipment was delivered. Vic Guyang, a Huawei spokesman, acknowledged that MTN Irancell had cancelled the order; Rick Aspan, a spokesman for CommScope, said the company was not aware of the aborted transaction.[234]

In December 2012, Reuters reported the "deep links" existed as early as 2010 between Huawei through Meng Wanzhou (who was then CFO of the firm) and an Iranian telecom importer named Skycom. At least 1.3 million Euros worth of embargoed Hewlett-Packard computer equipment was sold to "Iran's largest mobile-phone operator in late 2010". The next month, Reuters detailed more Huawei behaviour, including direct governance by Meng of Skycom.[235] Meanwhile, the U.S. had long-standing sanctions on Iran, including against the importation of U.S. technology goods into Iran. At some point in 2018, the U.S. Attorney-General filed charges in court against Huawei and, in particular, Meng.

In April 2018, it was reported that the U.S. Justice Department had joined the U.S. Treasury Department's Office of Foreign Assets Control, or OFAC, and the Department of Commerce, to investigate possible violations of economic sanctions by Huawei for its provision of equipment in Iran, North Korea, Syria, and Venezuela. The U.S. inquiry stems from an earlier sanctions-violation probe that ultimately led to penalties against ZTE.[236]

On 1 December 2018, Huawei vice-chairwoman and CFO Meng Wanzhou,[237] daughter of company founder Ren Zhengfei, was arrested in Canada at the request of U.S. authorities. She faces extradition to the United States on charges of violating sanctions against Iran.[238] 22 August 2018 arrest warrant was issued by the U.S. District Court for the Eastern District of New York.[239] Meng is "charged with conspiracy to defraud multiple international institutions", according to the prosecutor.[240] The warrant was based on allegations of a conspiracy to defraud banks which were clearing money that was claimed to be for Huawei, but was actually for Skycom, an entity claimed to be entirely controlled by Huawei, which was said to be dealing in Iran, contrary to sanctions. None of the allegations have been proven in court.[241] On 11 December 2018, Meng Wanzhou was released on bail.[242]

On 28 January 2019, U.S. federal prosecutors formally indicted Meng Wanzhou and Huawei with thirteen counts of bank and wire fraud, obstruction of justice, and misappropriating trade secrets.[243][244] The department also filed a formal extradition request for Meng with Canadian authorities that same day. Huawei responded to the charges and that it "denies that it or its subsidiary or affiliate have committed any of the asserted violations", as well as asserted Meng was similarly innocent. The China Ministry of Industry and Information Technology believed the charges brought on by the United States were "unfair".[245]

In May 2019, Chinese authorities arrested Canadian former diplomat Michael Kovrig and consultant Michael Spavor on charges of espionage.[246][247] This was widely seen as a retaliatory move from the Chinese authorities, and other subsequent arrests were also questioned.[248] These arrests have been viewed as hostage diplomacy,[249] as has the subsequent arrest of Australian Yang Hengjun.[250][251][252]

In November 2019, Huawei announced that it will pay RMB2 billion (US$286 million) in bonuses to its staff, and double their October salaries, as a reward for their efforts to counter the effect of recent U.S. trade sanctions on their supply chain.[253]

"Canada is not the only one grappling with the Gordian knot of national security, global alliance and competitive market issues that Huawei represents," wrote the Financial Post in December 2019, noting that Australia and New Zealand have banned Huawei equipment, Britain is weighing its options, and the situation in the United States is "complicated".[254]

On 27 May 2020, Meng lost her bid for freedom in the B.C. Supreme Court of Heather Holmes. She remained held in Vancouver on the extradition matter while her file was processed. The B.C. Supreme Court judge ruling that extradition proceedings against the Huawei executive should proceed, denying the claim of double criminality brought by Meng's defense team.[255] It was noted that Meng could appeal to the Supreme Court of Canada and then finally to the Minister of Justice.[256][257]

In June 2020, it came to light that more paper trail existed between Meng and Skycom, the Iranian importer of sanctioned U.S. technology. The paper trail purported to show how Meng attempted to insulate Huawei and herself by fig-leaf from clearly violating the sanctions regime. The charges against Meng include that she met the deputy head at HSBC of global banking for the Asia-Pacific region and that she made "numerous misrepresentations regarding Huawei's ownership and control of Skycom."[235]

On 24 September 2021, the Department of Justice announced it had suspended its charges against Meng Wanzhou after she entered into a deferred prosecution agreement with them in which she conceded she helped misrepresent the relationship between Huawei and its subsidiary Skycom to HSBC in order to transact business with Iran, but did not have to plead guilty to the fraud charges. The Department of Justice will move to withdraw all the charges against Meng when the deferral period ends on 21 December 2022, on the condition that she is not charged with a crime before then.[258]

Iraq

According to a report by Iraqi officials Huawei supplied "optic fibre and switching equipment" to the Iraqi military in 2001–2002 during the Ba'athist period when the country was ruled by Saddam Hussein, this was in violation of sanctions imposed by the United Nation on Iraq in 1991.[259] Huawei denied the claims.[259]

Syria

In 2019, Reuters reported that Huawei was linked to a suspicious front company in Mauritius which has conducted operations in Syria - despite Huawei's claim that they are unrelated.[260]

Taliban

See section.

North Korea

In 2019, The Washington Post reported that Huawei was linked to a suspicious Chinese state-owned firm which has conducted operations in North Korea.[261]

Misleading marketing

Benchmark cheating

In September 2018, AnandTech reported that recent Huawei and Honor phones, including the Huawei P20 and Honor Play, had been configured to activate a high-performance mode when certain benchmarking software was detected, causing increased frame rates at the expense of efficiency and battery life. A Huawei executive admitted that the company was attempting to compete with domestic vendors, including one it accused of providing "unrealistic" scores. However, he also expressed an opinion that manufacturers should evaluate their phones on benchmarks that more accurately reflect real-world use, and that the company would vet its benchmark scores via third-parties before publishing them as promotional material.[277]

After confirming the behavior with a version of its software that could not be easily detected, 3DMark delisted scores for several Huawei and Honor devices from its database.[278] Huawei subsequently announced that it would add a "Performance Mode" feature to its EMUI 9 software, allowing users to enable this state on-demand to improve performance of apps such as games.[279][280]

Cameras

On several occasions, Huawei has issued promotional materials promoting the camera capabilities on its smartphones, that were later found to have actually used professional DSLR cameras instead. In 2015, Huawei posted a promotional photo on Google+ featuring Ella Woodward bathed in a sunrise, asking readers to share their own photos of the sunrise taken with the Huawei P9—as aided by its low-light capabilities. It was pointed out that Exif metadata on the photo identified it as having been taken with a Canon EOS 5D Mark III, and the wording and intent of the post could potentially mislead readers into believing that the photo itself was also taken with a P9. Huawei pulled the post and apologized, stating that it was meant to "inspire our community", and that the caption should have been more clear.[281][282]

In 2018, behind-the-scenes photos from the filming of a Nova 3 commercial by Huawei's Egyptian branch revealed that a DSLR had been used for certain scenes, implied to have been taken with the phone itself during the commercial. An actor was seen miming the taking of a selfie, without actually having a phone in his hand. It is not explicitly disclaimed in the ad.[283][284]

National politics

China

Huawei Mate 10 Islamic feature dispute

In November 2017, Chinese users discovered the Salah (Islamic prayer) notification feature in Huawei Mate 10 phone, on the company's website for mainland China. It was viewed as an unjustified promotion of Islam given that Muslims are a minority religious group in mainland China that make up only about 1–2% of the population. Significant backlash has formed on the Chinese internet and some have even tried to boycott Huawei phones for including such feature, and make fun of the phone by calling it "the first phone with a Halal prayer feature" and describe the event as the "Islamic conversion of Huawei".[291][292][293]

Later, Huawei published an official statement via Sina Weibo,[294] stating that the feature was only a personalized notification service designed for "certain overseas regions" that was not available in China. Netizens questioned why promotion of that feature was available on the company's Chinese website in the first place if that was not the intended area but those comments were deleted before getting any response. A Taoist priest commented that the mosque-finding service on the device was also available in mainland China, inconsistent with the official explanation about these religious features.[295] After Huawei published the official statement, many news reports and discussions made on Chinese online media or Chinese discussion platforms were made inaccessible or removed from the internet.[296][297]

Chou Tzu-yu Republic of China flag incident

In January 2016, people found out that Chou Tzu-yu, a Taiwanese artist performing in South Korea and endorsed the Huawei Y6 in advertisement beforehand, was displaying the flag of Republic of China in a Korean entertainment show and accused the artist's behavior as supporting Taiwanese independence. As a response to the discovery, Huawei announced on the official forum that the arrangement was decided by their South Korean carrier partner LG U+ and they have already told LG U+ to terminate their cooperation with Chou Tzu-yu and her agency company.[298] However LG U+ rejected the statement and claim their contract with the artist are still valid despite disputes.[299][300] Chinese netizens have called for boycotting Huawei phones as a form of protest.[301]

P-series phones listing Taiwan as a separate country

In August 2019 Chinese netizens criticized Huawei because their P-series phones listed Taiwan as a separate country when set to use traditional Chinese characters.[302] Chinese netizens called for a boycott of Huawei using the Weibo hashtag #HuaweiGetoutofChina (华为滚出中国) and accused the company of supporting separatism.[303]

Intellectual property and theft

Cisco patent lawsuit

T-Mobile smartphone testing robot

Motorola patent lawsuit

Motorola–Nokia Siemens Networks sales dispute

ZTE patent lawsuit

Nortel

Circuit boards

Akhan Semiconductor diamond glass

CNEX Labs

Espionage and security concerns

2000s

Early 2010s

Late 2010s

2020s

Chinese law requirement

5G networks

Consumer electronics

Security exploits

U.S. business restrictions

Replacement operating systems

Human rights abuses

Opaque ownership

Treatment of workforce and customers

State subsidy and dumping

Alleged violation of economic sanctions and technology theft

Iran

Iraq

Syria

Taliban

North Korea

Link to surveillance program

China

Iran

Russia

Taliban

Misleading marketing

Benchmark cheating

Cameras

National politics

China

Huawei Mate 10 Islamic feature dispute

Chou Tzu-yu Republic of China flag incident

P-series phones listing Taiwan as a separate country

Huawei Mate 10 Islamic feature dispute

Chou Tzu-yu Republic of China flag incident

P-series phones listing Taiwan as a separate country

See also

References

Support for Huawei from business partners