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The backstory: Huawei and ZTE, two big players in the telecom world, have been caught in the crosshairs, with Western countries accusing them of posing national security risks. Basically, some officials say these Chinese companies could be used by the government of China for spying, censorship and even tracking people. But Huawei and ZTE have denied they’re involved in anything like that.
You see, many telecom operators in Europe went for Huawei gear in building out their 5G networks because it was cheaper and just as dependable as competing suppliers. But in 2020, the European Commission suggested removing "high-risk" suppliers from networks without explicitly naming any country or company. Fast forward a few years, and now the commission is specifically targeting China's top 5G vendors.
More recently: In January 2020, the EU introduced a "5G cybersecurity toolbox" to check out the risks tied to certain 5G infrastructure providers. Specifically, this move was prompted by concerns over the security of Huawei, leading countries like the UK to ban the company’s equipment. Last November, the US took further measures by prohibiting the sale and import of communications equipment from five Chinese firms, including Huawei and ZTE.
Now, Germany's starting to investigate Chinese components used in its 5G networks. This is a big deal since China is one of Germany’s biggest trading partners, and Germany even hosts Huawei’s European headquarters. Meanwhile, Portugal's also thinking of passing a resolution that might stop telecom operators from using Chinese gear in its 5G buildout.
The development: Last week, Thierry Breton, the EU industry chief, encouraged more EU countries to join the 10 nations that have so far slapped restrictions or bans on Huawei and ZTE in their 5G networks. According to the European Commission, these Chinese suppliers pose higher risks compared to other 5G providers, mainly because they are subject to laws that could threaten Europe’s data security.
The Commission gave a shout-out to European governments that have taken action against Huawei and ZTE gear. But he expressed concerns about some EU countries that are still relying on perceived high-risk components in their 5G networks, hinting at intrusive intelligence and data security laws from other countries, including China.
Breton made it clear that he wants the rest of the EU’s telecom operators to follow suit with these bans, and he announced that both companies would be kept out of EU-funded projects. The European Commission also plans to exclude Huawei and ZTE from their telecom services purchases.
In response, a Chinese Foreign Ministry spokesperson said the country is against those bans, arguing that the European Commission doesn't have the legal basis or evidence to back up its claims. And Huawei? It's said the decision didn't properly evaluate 5G networks and went against the principles of free trade. ZTE has also chimed in, arguing that it should be treated the same as its competitors.
"To date, only 10 of them have used these prerogatives to restrict or exclude high-risk vendors. This is too slow, and it poses a major security risk and exposes the Union's collective security, since it creates a major dependency for the EU and serious vulnerabilities," said EU industry chief Thierry Breton in a press conference.
“We will ask our connectivity services to tell suppliers to be free from Huawei and ZTE, and this applies of course for new and existing contracts,” said Breton.
"As an economic operator in the EU, Huawei holds procedural and substantial rights and should be protected under the EU and Member States' laws as well as their international commitments," said a Huawei spokesperson.
"ZTE's only request is to be treated fairly and objectively by regulators and legislators - just like any other vendor," said ZTE in an email to Reuters. "We welcome external assessment and scrutiny of our products by regulators and technical supervisory bodies at any time."