Monday 19th November 2018

US Intelligence directors warn consumers about buying Huawei phones

Jason Smith
by on 14th February 2018

Six intelligence directors, including the Directors of the FBI, NSA and CIA, have warned consumers about buying mobile phones from Chinese manufacturer Huawei.

Huawei, which at various points last year overtook Apple as the world’s second largest mobile phone manufacturer by sales volume, has been trying to enter the US market with little success.

More recently, Huawei has tried to establish a partnership with American network carrier AT&T but to no avail.

The Information reports that the deal fell through after a letter was sent from the U.S. Senate to the Federal Communications Commission expressing concern about Huawei’s plans to partner with U.S. carriers.

Reuters meanwhile reported “national security concerns.”

In a hearing with the Senate Intelligence Committee, FBI Director Chris Wray testified “We’re deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks.”

“It provides the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage”, said Wray.

Huawei has struggled with its image in the US, particularly after being sued by T-Mobile in 2014 and Cisco in 2003 for allegedly stealing their technology, as well as for the background of its founder and Senior Engineer (who has a history with the People’s Liberation Army).

The EU has also continually threatened to investigate what it claims are illegal Government subsidies to Chinese telecommunications providers; the EU claims state subsidies gives Chinese telecommunications providers an unfair advantage in global markets.

Reuters also reports that U.S. officials are warning firms that dealing with Huawei could jeopardise their ability to do business with the U.S. Government.

Huawei does currently sell phones in the US however they aren’t attached to any specific carrier and they are sold online. A partnership with a carrier is a huge coup for mobile manufacturers as many carriers subsidize the cost of the phone.

In a statement, Huawei said “Huawei is aware of a range of US government activities seemingly aimed at inhibiting Huawei’s business in the U.S. market. Huawei is trusted by governments and customers in 170 countries worldwide and poses no greater cybersecurity risk than any ICT vendor, sharing as we do common global supply chains and production capabilities.”

This spat with Huawei isn’t the first example of US officials intervening against Chinese corporations.

The US Government also intervened in a proposed $1.2 billion takeover of MoneyGram, a US payment provider, by Ant Financial (an affiliate of Alibaba, one of China’s largest corporations with a market capitalization of $459.9 billion).

According to CNBC, the deal fell through because Ant Financial was not able to obtain the required regulatory approval for the transaction from the Committee on Foreign Investment. According to Reuters, the protection of personal data was also cited as a concern by U.S. regulators.