As I suggested earlier in the week, it looks almost certain that the European Union will collectively snub U.S. entreaties for member countries to align with Washington on a prohibition of Huawei 5G equipment, settling for ‘careful and considered’ inclusion instead of blanket bans. The view that will be taken is that risks can be mitigated, and any moves to fully strip Huawei out of their networks and 5G deployment plans would carry untenable scheduling and financial penalties.
On Friday Reuters reported that “the European Commission will next week urge EU countries to share more data to tackle cybersecurity risks related to 5G networks but will ignore U.S. calls to ban Huawei Technologies.” EU countries will be directed to “exchange information and coordinate on impact assessment studies on security risks and on certification for internet-connected devices and 5G equipment.”
It’s not all good news for Huawei, though. Also on Friday, it was reported that the company’s CFO, arrested in Canada in December on U.S. charges relating to breaches of Iranian sanctions, had snubbed their own devices for Apple alternatives. Court documents showed that Meng Wanzhou was arrested with a MacBook Air, an Ipad Pro and an iPhone 7 Plus.
Huawei has recently been accused of targeting Apple trade secrets and of punishing staff for publicly using Apple devices. So, maybe Meng Wanzhou’s use of Apple products was just ‘research‘.
There are no real surprises in the latest news from Europe. Germany, Italy and even the U.K. have been heading in this direction for some months. Huawei has entreated them to scrutinize the company for security vulnerabilities, saying it will invest to fix any that are found, opening a cybersecurity transparency center in Brussels to emphasize the point. And all the time there has been a vacuum of tangible data from the U.S. to back up claims that the company might collect intelligence at the behest of Beijing.
Ultimately, though, it’s the industry that has most helped Huawei. No major carrier has come out in support of a ban, most have remained neutral or talked positively about the Chinese company’s innovation and product quality. The company filed more patents than anyone else last year: “An all-time record by anyone,” according to WIPO’s director.
The company also helped its cause by running a meticulous campaign at Mobile World Congress last month, where they combined the usual technical fizz with a challenge to the U.S. on their own cybersecurity and data integrity record. Much of this was a PR stunt, of course, but the view of the industry started to firm in their favor. “We’ve not seen any evidence of backdoors into the network,” said Vodafone’s most senior lawyer in the U.K. “If the Americans have evidence, please put it out on the table.” And this neatly summed up Washington’s conundrum.
Reuters reported that “European digital chief Andrus Ansip will present the recommendation on Tuesday. While the guidance does not have legal force, it will carry political weight which can eventually lead to national legislation in European Union countries.” The EU member countries want a way out of this, without damaging relationships with the U.S., but also without stalling their own 5G plans. There will be a range of security concessions and containments to come.
All that said, the battle is not yet won. But 5G deployments will move rapidly now, and once Huawei is included it won’t be removed. The company announced multiple contracts at MWC and we can expect more to come through this year. They are likely to write off any North American ambitions if they can maintain their leading role in EMEA and Asia-Pacific.
… and devices
On a lighter note, the court documents showing Meng Wanzhou’s devices at the time of her arrest are little more than an embarrassment. But it isn’t ‘nothing’. There was an outcry in China after her arrest, with calls for the boycott of Apple products.
Nikkei Asian Review even reported that “a machinery maker in Shenzhen, where Huawei is based, threatened to confiscate Apple devices from employees and fire those who did not comply… Shenzhen Yidaheng Technology said it would fine staffers who bought iPhones the equivalent amount of their device, while other companies threaten to withhold bonuses.”
And Huawei themselves have been publicly sensitive about employees’ use of Apple products. In January, it was reported that employees were fined after a “Happy #2019” tweet from the company was tagged as being sent by ‘Twitter for iPhone’.
And no-one likes hypocrisy.
Last month, Huawei was alleged to have targeted information on Apple’s trade secrets, approaching suppliers and “trying their luck” to uncover detail that would help their own product design. Huawei denied any wrongdoing: “Employees must search and use publicly available information and respect third-party intellectual property per our business conduct guidelines,” explained a company spokesperson. “Huawei does not seek or have access to our competitors’ confidential information.”
The rest of 2019 will be characterized by a seemingly controlled inclusion of Huawei in new 5G plans. There will be some feisty rhetoric around intelligence and data sharing between the U.S. and its allies. But, in truth, it is unlikely that with the ongoing fight against terrorism – including the far-right – as well as the threats from Russia, Iran and China itself, the world security order can significantly change.
And then there’s the trade war and the negotiations that are likely to put everything on the table. There was always a chance that the battle against Huawei would be a card played in those talks, it’s quite possible that developments in Europe make that more likely as it will be seen as using the card before it dissipates.
“There’s no way the US can crush us,” Huawei’s founder told the BBC last month. “The world cannot leave us because we are more advanced.” At the time that seemed overly confident. Not so much anymore.
Although, as much as Huawei is smiling today, I suspect Apple is smiling more. After battling the inexorable rise of Huawei smartphones and tackling emerging challenges in the Chinese consumer market which have hit hard on sales, this will be seen as ‘poetic justice’. As far as adverts go for the quality and innovation of your product set, this one is hard to beat.