Huawei accused of stealing trade secrets of American companies

Huawei accused of stealing trade secrets of American companies
Washington: Huawei Technologies Co. Ltd. (Huawei), the world’s largest telecommunications equipment manufacturer, has been charged with creating a scheme to steal trade secrets of the American companies in an effort to grow company’s business.

This is latest allegation added to the 16-count superseding indictment by the US’s Department of Justice (DoJ) on Thursday.

An official statement by the DoJ says, the Chinese tech mammoth and two US subsidiaries have been charged “with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO)”.

“The 16-count superseding indictment also adds a charge of conspiracy to steal trade secrets stemming from the China-based company’s alleged long-running practice of using fraud and deception to misappropriate sophisticated technology from U.S. counterparts,” read the statement.

The indicted defendants include Huawei and four official and unofficial subsidiaries — Huawei Device Co. Ltd. (Huawei Device), Huawei Device USA Inc. (Huawei USA), Futurewei Technologies Inc. (Futurewei) and Skycom Tech Co. Ltd. (Skycom) — as well as Huawei’s Chief Financial Officer (CFO) Wanzhou Meng (Meng).

Explaining the means and methods of the alleged misappropriation, the DOJ said that the company entered into “confidentiality agreements with the owners of the intellectual property and then violating the terms of the agreements by misappropriating the intellectual property for the defendants’ own commercial use, recruiting employees of other companies and directing them to misappropriate their former employers’ intellectual property, and using proxies such as professors working at research institutions to obtain and provide the technology to the defendants”.

Allegation of Facilitating Counties placed under Sanctions

The indictment also includes new allegations about “Huawei and its subsidiaries’ involvement in business and technology projects in countries subject to U.S., E.U. and/or U.N. sanctions, such as Iran and North Korea – as well as the company’s efforts to conceal the full scope of that involvement,” said the DoJ.

It further alleged Skycom, which was Huawei’s unofficial subsidiary that, among other services, assisted the Government of Iran in performing domestic surveillance, including during the demonstrations in Tehran in 2009.

Huawei Rejects Allegations

The Chinese firm has rejected the allegations, saying: “These new charges are without merit and are based largely on recycled civil disputes from last 20 years that heave been previously settled, litigated and in some case, rejected by federal judges  and juries”.


It further said that the new indictment against Huawei is part of the US Justice Department’s attempt to irrevocably damage its reputation and its business for reasons related to competition rather than law enforcement.