By Aaron Pressman and Clay Chandler
January 30, 2019

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The Justice Department’s case against Huawei Technologies, unveiled in Washington Monday, consists of two separate indictments. One alleges senior Huawei executives, including chief financial officer Meng Wanzhou, defrauded global banks to evade U.S. sanctions against Iran. The other involves a bizarre tale of conspiracy to steal the designs of a T-Mobile testing robot named “Tappy.”

And yet the case—announced by acting attorney general Matt Whitaker fronting heads of several other federal agencies—also feeds China’s suspicions that charges against Huawei have been trumped up as part of a broader U.S. government strategy to destroy China’s biggest telecom equipment manufacturer and halt the rise of China itself as a technological power.

The Tappy charges reopen a seven year-old dispute between Huawei and T-Mobile, the U.S. wireless services provider, that reads as if it were cribbed from an episode of Silicon Valley.

The indictment alleges that between June 2012 and September 2014, Huawei tried repeatedly to steal information about the robot, which was designed to test the performance of mobile devices. The 10-count indictment recounts a series of Keystone capers in which Huawei engineers tried multiple times to sneak into T-Mobile’s Bellevue lab, got caught, were banned from the lab, and eventually regained access—enabling one to steal Tappy’s robotic arm and send photos back to China. (You’ll find detailed summaries of the whole saga in these reports from NPR and Business Insider.)

The Tappy affair certainly casts Huawei in an ugly light. The indictment depicts a corporate culture with no respect for intellectual property rights, and claims Huawei even had a formal policy of awarding bonuses employees who stole confidential information from competitors.

But it’s also old news. In a 2017 civil lawsuit, Huawei was ordered to pay T-Mobile $4.8 million in damages. The two companies later reached a private settlement. In a statement, Huawei, which denies wrongdoing, says allegations in the Tappy case were “already the subject of a civil suit that was settled by the parties after a Seattle jury found neither damages nor willful and malicious conduct on the trade secret claim.”

Alex Lo, a columnist for the Alibaba-owned South China Morning Post, argues that the Trump administration’s claims against Huawei are every bit as contrived as the Bush administration allegations that Iraqi dictator Saddam Hussein possessed weapons of mass destruction. “Disguising the state-sponsored attack against China’s leading telecoms company and 5G provider as criminal charges may convince those who already harbor anti-China biases,” he wrote, “but will not blind others who are clear-sighted about America’s tactics and intentions.”

The Tappy indictment left some Western analysts puzzled, as well. “If Tappy is as far as they’ve gotten (on intellectual property) theft, that seems to be pretty thin gruel for waging a large campaign against Huawei,” Council on Foreign Relations cybersecurity expert Adam Segal told the Associated Press.

Clay Chandler


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