The U.S. government expanded its year-old lawsuit against Chinese tech firm Huawei, alleging the company conducted cyber espionage on six American competitors in an attempt to steal trade secrets to gain an unfair advantage.
Filed in the federal court’s Southern District in Brooklyn, the indictment charges that Huawei’s activities violated racketeering laws by illegally gaining an advantage related to Internet routers and antennas. The suit states that the company’s employees were incentivized with bonuses if they obtained confidential information.
Huawei denies the charges on its website, calling the indictment “political persecution, plain and simple” that don’t reveal anything new and are based largely on “civil disputes from the last 20 years that have been previously settled, litigated, and in some cases, rejected by federal judges and juries.”
The indictment also alleges that the Chinese company hid connections to North Korea and Iran, which were the U.S. believes were part of the scheme to give it an upper-hand in 5G wireless technology, where it leads the world everywhere but North America.
The initial prosecution resulted in the arrest of Huawei CFO Meng Wanzhou – the daughter of company founder Ren Zhengfei – who remains in a Canadian prison from where she is fighting U.S. extradition.
The indictment doesn’t name the U.S. companies purportedly victimized by the defendant, but it is known that Huawei previously litigated with Cisco, Motorola and Quintel over similar allegations. A source told the Washington Post that the three also companies thought to be wronged in the latest action also included Fujitsu, T-Mobile and CNEX Labs.
Sen. Richard Burr, R-N.C., and Sen. Mark Warner, D-Va., chairman and vice chairman of the Senate Select Committee on Intelligence, respectively, said that Huawei’s actions were “state-directed and [a] criminal enterprise.”
“The indictment paints a damning portrait of an illegitimate organization that lacks any regard for the law. Intellectual property theft, corporate sabotage, and market manipulation are part of Huawei's core ethos and reflected in every aspect of how it conducts business," Warner and Burr added in a statement. "It uses these tactics indiscriminately against competitors and collaborators alike. Huawei's unlawful business practices are a threat to fair and open markets, as well as to legitimate competition in a tech space that is critical for the global economy.”