Huawei, the company I can’t help but report on, is under investigation by the federal government. The Wall Street Journal tells us that Huawei may have violated US sanctions against Iran. In this political climate, that’s a big no-no. Actually it’s a big no-no anytime but especially now.
It’s a little more critical now
In the past, the Commerce and Treasury departments have investigated Huawei. This time the Justice Department’s investigators are leading the charge. That’s not good. There haven’t been any reports of other countries investigating Huawei for this — yet — but if the Justice Department’s findings hold up, this could spell doom not only for the company’s US ambitions but for their European ones as well. As we are learning, there are several governments involved in this Iran deal, and it seems that an affront to one is an affront to all.
Not surprisingly, Huawei’s spokespeople deny these charges, saying that
Huawei complies with all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and EU.
Here in this country we assume people are innocent until proven guilty, and that applies to corporations as well. I believe in that premise and I’ll give Huawei the benefit of the doubt as much as possible. This simply isn’t the first time (or the fifth) that I’ve reported on the company and how they could be guilty of several offenses, including exposing the entire US cellular network to risk.
What’s the worst that could happen?
First of all it’s never good to ask that question. Investigations by the Justice Department are, by definition, criminal investigations. People involved could face penalties that include jail time. This is serious stuff, people. This is how major companies fall. If Huawei is banned completely from doing business in the United States and Europe, that’s a big dent in their plans. The company is very strong in Asia. I presume they still would be, no matter what. Still, it would become harder and harder to compete, especially if they were banned from doing business with US companies.
Recently, the US government said US component makers cannot sell to ZTE (another Chinese company with similar charges levied against them.) This means no Qualcomm processors. It also means no Google apps and limits on what versions of Android can be used in their phones. Think of how much of the world’s cellular runs on Qualcomm processors, Android, and Google Apps. That could become a massive problem.
Of course, this is all hypothetical at this point. Luckily for all of you, I plan on reporting on things, every step of the way.