The Chinese multinational information technology and consumer electronics company Huawei has faced numerous criticisms for various aspects of its operations, particularly in regards to cybersecurity, intellectual property, and human rights violations.
Huawei has faced allegations, primarily from the United States and its allies, that its wireless networking equipment could contain backdoors enabling surveillance by the Chinese government. Huawei has stated that its products posed "no greater cybersecurity risk" than those of any other vendor, and that there was no evidence of the U.S. espionage claims. The company had also partnered with British officials to establish a laboratory to audit its products.
These concerns intensified with Huawei's involvement in the development of 5G wireless networks, and have led to some countries implementing or contemplating restrictions on the use of Chinese-made hardware in these networks. In March 2019, Huawei sued the U.S. government over a military spending bill that restricted the purchase of equipment from Huawei or ZTE by the government, citing that it had been refused due process. Huawei exited the U.S. market due to these concerns, which had also made U.S. wireless carriers reluctant to sell its products.
Huawei has also faced allegations that it has engaged in corporate espionage to steal competitors' intellectual property, and in 2019, was restricted from performing commerce with U.S. companies, over allegations that it willfully exported technology of U.S. origin to Iran in violation of U.S. sanctions. The company has also been accused of assisting in the mass-detention of Uyghurs in internment camps, and employing forced Uyghur labour in its supply chain.
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".
Huawei said that its U.S. subsidiary Futurewei had withdrawn its Quidway routers from the market in January 2003 and that it subsequently stopped selling other routers using the same software code worldwide. 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. 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. As part of the settlement Huawei admitted that it had copied some of Cisco's router software. 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.
Following the settlement between Cisco and Huawei, Cisco, Huawei and 3Com filed a stipulation and order of dismissal with prejudice in the U.S. District Court for the Eastern District of Texas, Marshall Division, under which Cisco's claims against Huawei were dismissed.
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. 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. 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.
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.
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.
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.
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. In April 2011, Motorola and Huawei entered into an agreement to settle all pending litigation, with Motorola paying an undisclosed sum to Huawei for the intellectual property that would be part of the sale to NSN.
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. The following day, ZTE countersued Huawei for patent infringement in China.
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. 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. A former CSIS official said the agency approached the company but was rebuffed.
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.
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. The employee denied the accusation, but was later dismissed.
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.
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.
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, given that Ren Zhengfei, the founder of the company, served as an engineer in the army in the early 1980s. 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. In 2010, Sprint Nextel blocked bids by Huawei on a supply contract, after the company was contacted by the Secretary of Commerce.
In the United Kingdom, the Conservative Party raised concerns about security over Huawei's bid for Marconi in 2005, 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. 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.
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. Earlier, in 2005, Huawei was blocked from supplying equipment to India's Bharat Sanchar Nigam Limited (BSNL) cellular phone service provider.BSNL Cancels Huawei GSM Tender Covering Southern India Cellular News. 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".CBI to probe link between BSNL officers, Chinese firm Hindustan Times.PMO forced BSNL to remove top officials Hindustan Times. 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.
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. 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. 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."