The U.S. Charges Chinese Telecom Company Huawei With Stealing Trade Secrets

Among the charges: lying to banks, violating sanctions, and dismembering a T-Mobile robot.
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The U.S. Department of Justice has filed a host of criminal charges against Chinese telecom giant Huawei and its chief financial officer, Meng Wanzhou.

The U.S. Department of Justice has filed a host of criminal charges against Chinese telecom giant Huawei and its chief financial officer, Meng Wanzhou.

The United States has accused Chinese telecom giant Huawei of stealing trade secrets and violating sanctions in its latest blow to a long-time Silicon Valley rival. On Monday, the Department of Justice unsealed two indictments against the company, charging Huawei with lying to banks, violating sanctions, and dismembering a T-Mobile robot, among others.

One of the indictments outlines Huawei's policy of rewarding employees who stole confidential information from competitors with bonuses. Tappy, a once-"cutting-edge" robot that T-Mobile created to test phones, was a particularly valuable target. An email chain laid out in the indictment reveals employees' attempts to copy and even steal Tappy's secrets: taking photos, asking a suspicious amount of questions, and even detaching its mechanical arm and stuffing in a bag.

The U.S. government will likely use this theft to argue that Huawei, a fierce competitor, poses a threat to the nations it works with—as does its new line of 5G wireless networks, the New York Times reports. It's becoming a common refrain: Chinese spies have targeted other tech companies in recent years, with greater success; just last year, investigators discovered a 2015 hack that had affected 30 companies, including Apple and Amazon.

The second indictment accuses Huawei of using a front company, Skycom, to export and sell products to Iran in violation of U.S. sanctions, as well as obstructing the criminal investigation into these violations. Huawei's chief financial officer, Meng Wanzhou, was also indicted on similar charges in December of 2018; now, acting attorney general Matthew G. Whitaker has requested to extradite her to Canada.

Meanwhile, the Chinese foreign ministry has denied all charges, calling the move an "unreasonable crackdown" against Huawei in a statement reported by Time. The indictment stops short of incriminating the Chinese government, but the Department of Justice has charged government-linked Chinese hackers for stealing intellectual property before—part of a long-running attempt to reduce their backers' influence in the U.S., Huawei chief among them.

American intelligence agencies have accused the company of espionage for years, even labeling it a national security threat in 2012. More recently, the six top intelligence chiefs warned Americans not to use products from it and other Chinese companies, which Federal Bureau of Investigations director Chris Wray testified were "beholden to foreign governments that don't share our values." Last year, Congress banned the use of components from Huawei and ZTE technology, putting pressure on U.S. contractors to distance themselves from the companies.

China's many tech conglomerates, already some of the biggest in world, have expanded their reach to challenge Silicon Valley companies—among them, ByteDance (which makes the popular app Tik Tok) and Alibaba; Huawei, for example, surpassed Apple's smartphone sales for the first time in 2018. As their reach has grown, so have the U.S. government's cybersecurity concerns.

Now, with U.S.–China trade talks beginning Wednesday, cyber espionage and Huawei are sure to come up. Trump administration officials might use Meng's detention as leverage in the months-long trade war, Forbes reports, but Chinese media continues to criticize the move as "political kidnapping."

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