The US Department of Justice is charging Huawei and four subsidiaries with racketeering and conspiracies to steal US.
The new charges show that the battle between the US and the Chinese company is not only continuing, but is becoming even more serious.
The first US charges against Huawei and CFO came in January 2019.
The Justice Department had cited money laundering, conspiracy to defraud the United States, obstruction of justice and sanctions violations
Now, new categories are being added targeting both Huawei and Chief Financial Officer Wanzhou Meng, as well as four subsidiaries: Huawei Device Co. Ltd. (Huawei Device), Huawei Device USA Inc. (Huawei USA), Futurewei Technologies Inc. (Futurewei) and Skycom Tech Co. Ltd. (Skycom).
Wanzhou Meng was arrested last year in Canada.
New categories
The US Department of Justice claims that it has found evidence that proves “long-term efforts by Huawei and several of its subsidiaries, both in the United States and in the People’s Republic of China, to steal intellectual property from at least six US technology companies to develop Huawei’s own businesses.”
According to the Ministry, the stolen information includes trade secrets and intellectual property, such as source code and user manuals for routers , robot technology , etc.
“The means and methods of data included entering into agreements with the owners of American companies and then violating the terms of the agreements by misusing intellectual property for commercial use, hiring employees of other companies and instructing them to mislead other employees and employers, and using other specialists , such as professors, who worked at research institutions to obtain and provide technological secrets to the defendants.”
The researchers also allege that Huawei ran a bonus program to reward employees who obtained confidential information from competitors. Participants would send the stolen data in an email to a special @huawei.com inbox. The program had been running since 2013. Individuals who stole the most valuable information received larger rewards.
The Department now presents specific examples of Huawei's alleged theft of intellectual property from American companies:
- Using third parties (e.g. professors, research institutions or companies) to approach US companies, steal valuable information and send it to Huawei.
- Stealing source code, command-line interfaces, and device manuals from a router manufacturer (believed to be Cisco), building its own equipment, and selling it in the U.S. at lower prices. engineers made the mistake of leaving version numbers and other identifying information on the stolen code, interface, and manuals, revealing the theft. As a result, the Chinese company was forced to recall the products from the U.S.In court, Huawei claimed that it received the stolen code from someone else.
- In July 2004, a Huawei employee secretly entered a Chicago showroom and took photos of the internal circuitry of a device. When the employee was arrested, Huawei claimed that the employee was acting on his own behalf.
- A Huawei subsidiary struck a deal with a US company, exploited the deal and gained access to trade secrets about a wireless antenna technology, then sent the data to Huawei. Huawei is said to have made around $22 million from the sale of devices that had received this technology.
- The same thing happened to another company. Huawei stole data about a robotic-phone testing system.
- Another strategy involved “continuously recruiting people to cause “internal unrest” at American companies.” The Justice Department says this tactic was used against an American hardware manufacturer, a direct competitor of the Chinese company.
- Finally, Huawei is said to have invited employees from competing companies to give talks in China. The company gained access to presentation slides, copied the data and sent it to its engineers.
In addition, the US claims that the Chinese company had issued a manual called “Top Secret,” which instructs its employees to conceal their work at the company when meeting with foreign law enforcement officials.
The US claims that Huawei's efforts were successful and used to its advantage. It was able to gain an advantage over its competitors. The company used the stolen information to develop its own businesses and then sold its products (including in the US) at lower prices.
The Justice Department alleges that when the company was forced to confront US officials and the FBIabout its practices, it lied.
The new charges came after the FBI revealed it had uncovered 1,000 incidents of China stealing US technology secrets
