Last August, President Trump signed into law the Defense Authorization Act, which prohibited all US government agencies from using tech from ZTE, Huawei and others. This was in response to ZTE's failure to properly take measures to punish those involved in selling US-made technology to Iran.
The ban included Huawei for the same intellectual property violations in Iran, but also due to the suspicion that Huawei was using its devices to send intelligence back to the Chinese government.
Things came to a head in December when Huawei CFO Meng Wandzhou was arrested in Canada at the request of the United States. Just days ago, the Canadian government agreed to extradite Wanzhou to the US to face charges of intellectual property theft and the violation of trade sanctions imposed on Iran.
In response to the rising tensions and actions by the American government, Huawei is preparing to sue the US for the ban on their devices. Huawei has been very outspoken regarding the charges levied against them, with executives speaking out and marketing campaigns being aimed at restoring faith in their products. The lawsuit is expected to be filed in the Eastern District of Texas, which is where Huawei has its US headquarters, and will be formally announced next week.
While it's not clear what exactly the lawsuit entails, it's likely going to also seek retribution for the damage done to the Chinese giant's reputation. The US offered their allies incentives to ban Huawei equipment, warning telecom companies in Europe and elsewhere that the Chinese phones present a cybersecurity risk. While Huawei has continued to see strong sales growth in their largest Asian markets, the financial impact of the US' campaign against them is likely to be significant.
This isn't the first time a tech company has sued the US. In 2017, federal agencies banned the use of Kaspersky software due to suspicion that it was sending intelligence back to the Russian government. A subsequent lawsuit by Kaspersky was dismissed, with the judge stating that banning Kaspersky was a "prophylactic, not punitive" measure, and called it a "reasonable and balanced response." Given the similar circumstances, it's possible Huawei's lawsuit will suffer the same fate.
Second image courtesy enzozo via Shutterstock