U.S. Charges Huawei with Racketeering, Trade Secret Theft

Posted on February 13, 2020 by Paul Thurrott in Cloud with 33 Comments

The U.S. government on Thursday charged Chinese telecommunications giant Huawei with racketeering and trade secret theft. This is in addition to the blacklisting that prevents the firm from doing business with U.S.-based partners.

“The new charges in this case relate to the alleged decades-long efforts by Huawei, and several of its subsidiaries, both in the U.S. and in the People’s Republic of China, to misappropriate intellectual property, including from six U.S. technology companies, in an effort to grow and operate Huawei’s business,” a U.S. Department of Justice press release explains. “The misappropriated intellectual property included trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology, and robot testing technology.”

According to the DOJ, Huawei repeatedly entered into confidentiality agreements with the unnamed victimized companies in order to steal their intellectual property, steal employees to misappropriate information from their former employers, and use researchers, professors, and other proxies to obtain and steal IP from other companies. Huawei allegedly instituted an internal bonus program that awarded employees who were able to steal IP from its competitors.

The DOJ says that Huawei’s efforts were successful, and that it was able to drastically cut its own research and development costs and come to market more quickly, giving it “a significant and unfair competitive advantage.”

The government also alleges that Huawei does business with countries like Iran and North Korea that are sanctioned by the United States, European Union, and/or the United Nations. Huawei’s activities in those countries were allegedly handled through local affiliates, and they were given codenames, like A2 for Iran and A9 for North Korea, in corporate communications.

Amusing, the DOJ also notes that the charges “are allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.”

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