EU Cites Chinese Telecoms Huawei, ZTE For Trade Violations

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UK accuses Chinese telecom equipment manufacturers of breaking the rules.

In a ground-breaking move, the EU calls out Chinese mobile telecommunication equipment manufacturers Huawei and ZTE Corp for violating anti-dumping and anti-subsidy guidelines – sending the message: rule breakers not allowed.

According to a statement by the top European trade official, Chinese telecoms are engaging in “anti-competitive” behavior and hacking at an integral part of Europe’s economy.

“Huawei and ZTE are dumping their products on the European market,” Karel De Gucht, European Union Trade Commisioner, told Reuters in an exclusive interview last month.

By launching a formal investigation into their sales practices, the Chinese firms are facing a potential multibillion-euro suit.

Moreover, the companies are fighting against accusations of illegal hacking, which claim Huawei and ZTE acquired confidential information in order to underbid their European competitors.

Back in April of 2011, Ericsson, the world’s largest maker of wireless phone networks, filed lawsuits against ZTE in Europe for several patent infringements. The case was settled out of court, with both parties agreeing to withdraw the suits.

However, the U.K. has left itself vulnerable to cyber attacks by allowing a Chinese telecommunications company to become a major player in Britain without adequate security checks, a parliamentary committee said.

Following the accusations of dumping and illegal government subsidies, Huawei and ZTE released formal statement denying any involvement in foul play.

In a press release, Huawei states the company “is disappointed that the European Commission has taken the unprecedented step of deciding in principle to open the first ever ex officio dumping and subsidy investigations.”

However, these are not the first attacks against the two Chinese telecom behemoths.
In the Fall of last year, ZTE and Huawei were both deemed security threats by the US government and imports from both companies to US public institutions have been banned.

“If the EU wants to rehabilitate the UK economy and its manufacturers, they should look towards the American precedent,” David Zoldan, President of Launch 3 Telecom, said. “Chinese authorities need to understand that these practices will not be tolerated in the global market.”