Huawei loses suit against US federal purchase ban

A federal judge in Texas rejected Huawei Technologies Co Ltd's constitutional challenge to a US law that restricted its ability to do business with federal agencies and their contractors.
A federal judge in Texas rejected Huawei Technologies Co Ltd's constitutional challenge to a US law that restricted its ability to do business with federal agencies and their contractors.PHOTO: REUTERS

No constitutionally guaranteed right to a contract with federal govt, says US judge

HOUSTON • Washington has the right to block US federal agencies from buying products made by Huawei on cyber-security grounds, a US judge has ruled, dismissing the Chinese telecoms giant's legal challenge to a purchase ban.

Huawei filed the suit nearly a year ago, claiming that Congress had failed to provide evidence to support a law that stopped government agencies in the United States from buying its equipment and services, or working with third parties that are Huawei customers.

The dispute was one of several fronts in a bruising trade war between Beijing and Washington, which has accused the tech firm of stealing trade secrets from American companies and warned allies that Huawei equipment could be used to spy on other countries.

Huawei has denied the claims and accused the US of trying to put the company out of business through an "unconstitutional" restriction on its access to the American market.

But Tuesday's US court ruling found there was no constitutionally guaranteed right to a contract with the federal government.

The ban was also justified in the context of a congressional investigation "into a potential threat against the nation's cyber security", wrote US District Judge Amos Mazzant.

Huawei said in a statement that it was disappointed with the court ruling and would "continue to consider further legal options".

Washington has long considered Huawei a possible security danger due to the background of founder Ren Zhengfei, a former Chinese army engineer.

It has warned that the company's systems could be manipulated by Beijing to conduct espionage and disrupt critical communications in foreign countries, and is urging other countries to shun the firm.

Concerns have intensified with Huawei's rise to become a global leader in telecoms networking equipment and one of the world's top smartphone manufacturers.

The firm is expected to play a major part in the rollout of ultra-fast 5G networks that will allow wide adoption of next-generation technologies such as artificial intelligence.

The US has banned Huawei from its own 5G rollout, but the European Union and the United Kingdom have both left the door open for a limited role in building network infrastructure - prompting rebukes from Washington.

The US has banned Huawei from its own 5G rollout, but the European Union and the United Kingdom have both left the door open for a limited role in building network infrastructure - prompting rebukes from Washington.

 
 

Last week, the US also slapped the Chinese company with criminal charges over an alleged "decades-long" effort to steal trade secrets from American companies.

Meanwhile, Huawei's chief financial officer Meng Wanzhou was arrested in Canada in 2018 on a US warrant in a related probe into her company's alleged violation of American sanctions. She is under house arrest awaiting a ruling on whether she will be extradited to face charges in the US.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on February 20, 2020, with the headline 'Huawei loses suit against US federal purchase ban'. Print Edition | Subscribe