from Hacker News

The U.S. is charging Huawei with racketeering

by crivabene on 2/13/20, 6:54 PM with 301 comments

  • by throwawei on 2/13/20, 10:58 PM

    Using a throwaway to share our $0.02 relating to this. AMA I guess.

    We're a US-based startup that does about $100-200k in business annually with Futurewei (Huawei's R&D subsidiary). I've never dealt with Huawei proper. I can say they're genuinely investing in R&D, and trying to build a product unlike anything being offered right now. We're working with tech that's floating around the academic conferences, but no one else commercially will touch.

    This in contrast to our experiences with established US companies which, a) don't want to deal with early-stage research, b) wouldn't work with us as a new, small company, and c) gave bad IP terms (ironically).

    Not excusing other activities, but for us it's been above-board and beneficial. If they want to pump their profits into the US ecosystem, I see that as beneficial.

  • by djrogers on 2/14/20, 5:20 AM

    About a dozen years ago I was working for a small-ish hardware company ($350-400M revenue), which was acquired by a bigger company. BiggerCo had a Joint Venture with Huawei (let’s called it JVco).

    About 6 months Post acquisition one of our employees found that Huawei was selling a 100% complete rip-off of one of our products. JVco had access to some of our development resources, but Huawei was never supposed to see any of that per the agreements.

    The box looked, acted, and functioned the same - all they did was localize the language, barely rebrand it, and repackage our weekly updates for their customers the day after we released them.

    Legal from BiggerCo got involved, and it was all papered over as a ‘misunderstanding’ by the Joint Venture company. Haven’t trusted a thing with their name on it or any company that does business with them since...

  • by anonobviosly on 2/13/20, 9:32 PM

    My previous employer and my current one (both Fortune-50 tech companies) each had quiet policies that prospective job candidates who had Huawei on their resume needed extra clearing before they could even interview. Reading through the indictment makes the policies seem less paranoid or perhaps even not paranoid enough.

  • by nostromo on 2/13/20, 9:17 PM

    > The DoJ alleges that Huawei and a number of its affiliates used confidential agreements with American companies over the past two decades to access the trade secrets of those companies, only to then misappropriate that intellectual property and use it to fund Huawei’s business.

    These American companies thought they could build their products for a fraction of the price in China and increase margins. They didn't stop to consider that by teaching China how to build their products they were creating a new low-cost competitor. And they've since lost their manufacturing ability. Oops.

    It's hard to feel too sorry for these companies. It's not exactly a secret that this is how China operates and has operated for a very long time.

  • by busymom0 on 2/13/20, 8:57 PM

    Here’s the DOJ statement:

    https://www.justice.gov/opa/pr/chinese-telecommunications-co...

    Also here's Huawei Technologies Chief Security Officer Andy Purdy talking to Maria Bartiromo:

    https://youtu.be/iPczYamcruo

  • by thorowawaytoga on 2/14/20, 2:57 AM

    In a small town in Israel, called Hod Hasharon there was a company named "Toga Networks".

    This company was paying as twice as you currenly earn, if you work at Cisco or Juniper. Just like that, as twice as, just ocme work with us.

    One year went by, and it turned out that Toga Network is no other than Huawei.

    So I do not know about stealing source code, but I know they looked after its IP which is in people's mind.

  • by KingMachiavelli on 2/13/20, 9:15 PM

    While this doesn't directly have to do with the CCP having backdoors in Huawei products, it does seem a bit too coincidental that the DOJ is just happening to go after them since corporate espionage is a common theme when dealing with China.

    Hopefully this reflects a changing of the tides when it comes to enforcing IP laws in China rather than just an excuse to target a single company. I don't even like IP laws but if we are going to hold the rest of the industrialized world to the letter of the law then at some point China will have to be brought into the fold.

  • by euix on 2/13/20, 9:31 PM

    I think the train on Huawei has already left the station. The most likely scenario is a U.S. maybe a few states highly dependent on U.S. security assurances vis-a-vis China toeing the line and everybody else using some combination of Huawei and Nokia/Ericsson in various combinations within their infrastructure based on how close they align with the U.S. or China.

    This whole thing looks just like AIIB a couple years ago where the U.S. made a huge stink about not joining the club and in the end everybody but Japan and Taiwan signed up.

  • by thorwasdfasdf on 2/14/20, 12:31 AM

    > "Huawei is alleged to have stolen source code for Company 1’s routers, which it then used in its own products."

    I've never really understood how IP theft works. I've been a software engineer for a long time and I know that Reading and making sense of an existing million line code base is a hella of a lot harder than just writing new code from scratch. Why on earth would anyone want to steal source code from a competitor?

  • by pbhjpbhj on 2/13/20, 9:38 PM

    >Charges also Reveal Huawei’s Business in North Korea and Assistance to the Government of Iran in Performing Domestic Surveillance //

    Surely evidence would reveal that, but this DOJ press release doesn't appear to be concerned with that.

    >As revealed by the government’s independent investigation and review of court filings, //

    Mwah-ha-ha-ha! They know how to tell 'em.

    >the new charges in this case relate to the alleged decades-long efforts by Huawei, and several of its subsidiaries, both in the U.S. and in the People’s Republic of China, to misappropriate intellectual property //

    Aren't new charges a new case? Aren't these extending speculations rather leading for a case that is in process, shouldn't they make the allegations and present any evidence - if they wish - rather than make extended claims bracketed by "allegedly". I can't believe that this has been written as anything other than a chance to make unsubstantiated claims ... have the courts hear the charges and then expound at length about the conviction.

    I thought these sorts of things from one of the main parties involved (the USA government) were strongly decried by courts as they tend to colour juries and judicial bodies; aren't the DOJ perverting the course of justice here with such a diatribe?

    >"Huawei’s efforts to steal trade secrets and other sophisticated U.S. technology were successful. Through the methods of deception described above, the defendants obtained nonpublic intellectual property relating to internet router source code, cellular antenna technology and robotics. As a consequence of its campaign to steal this technology and intellectual property, Huawei was able to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage."

    That may all be true, but if you're currently prosecuting a case and have to determine if it's true it would be nice, as a DOJ, to not making statements that -- despite legal ass covering -- is clearly intended to presuppose the guilt of the defendant.

    When USA decided to go after Huawei to bolster their own telecoms companies, I wondered if they realised they'd end up stooping so low?

  • by jhallenworld on 2/13/20, 11:34 PM

    Huawei clearly is on parity with western technology. The evidence is here:

    https://www.eetasia.com/news/article/Integrated-5G-Chips-Unv...

    And in particular, with its 5G modem:

    http://www.hisilicon.com/en/Products/ProductList/Balong

    Some news about this:

    https://www.bloomberg.com/news/articles/2019-09-09/huawei-an...

    And also for the base stations:

    https://www.fiercewireless.com/wireless/huawei-s-5g-ran-port...

  • by sandoooo on 2/13/20, 11:27 PM

    >In one case, a technology company looking for a partnership with Huawei sent over a presentation deck with confidential information about its business in order to generate commercial interest with Huawei. From the indictment:

    > Immediately upon receipt of the slide deck, each page of which was marked ‘Proprietary and Confidential’ by Company 6, HUAWEI distributed the slide deck to HUAWEI engineers, including engineers in the subsidiary that was working on technology that directly competed with Company 6’s products and services. These engineers discussed developments by Company 6 that would have application to HUAWEI’s own prototypes then under design.

    Well, yeah, what the hell else are you supposed to do when some supplier sends you a highly technical slide deck, except discuss it with your engineers working on the same thing? I seriously can't fathom why anybody involved here would have any expectation to the contrary.

  • by jonathaneunice on 2/14/20, 1:39 PM

    Copying successful technology is a goes-around, comes-around cycle. In 1780-1850, the USA was the premier pirate, stealing the world's premier technology and know-how, from Britain. By 2050, the Chinese will be fighting the very same battle with someone else (Nigeria and Angola maybe?), and bitterly bemoaning IP theft in the same terms.

  • by crmrc114 on 2/13/20, 9:32 PM

    <quote>and using proxies such as professors working at research institutions to obtain and provide the technology to the defendants</quote> You know this talk about using American Professors as proxies for exfiltrating information reminds me of this: https://www.nature.com/articles/d41586-020-00291-2

  • by ReptileMan on 2/13/20, 9:21 PM

    Any lawyer that can pitch in? I don't think that this fits the spirit of the RICO laws.

  • by sunstone on 2/13/20, 10:03 PM

    Pretty clearly Huawei is now the cow that the US and China will be fighting over. Meng is now likely to be caught up in this as well regardless of how the current charges go. The US standing right up to China and punching it the nose. It's an inflection point for the world economy.

  • by thatiscool on 2/14/20, 5:56 AM

  • by jbduler on 2/14/20, 4:33 AM

    This another example of what is called the Master-Slave dialectic from Hegel, an 18th century philosopher. Something that I studied in a philosophy class and had a profound influence on my understanding of work. Please take 10' to understand it and it applies to the relationship between engineers and salespeople, to the relationship now between China and the USA. https://en.wikipedia.org/wiki/Master%E2%80%93slave_dialectic

  • by thrownaway954 on 2/13/20, 9:26 PM

    so what does this mean? do they haul all the executives and workers into court? what happens if they are found guilty? do the executives go to jail, is the company forced to shutdown, or do they just have to pay a fine and all is good. hell, do they even have to pay the fine?

    so many questions :(

  • by pastime on 2/14/20, 4:21 AM

    Something seems off.

    If China steals all the US IP, why are US technology companies still so valuable?

    For example, Apple is a very valuable US technology company that also has extensive dealings in China.

  • by mzs on 2/13/20, 11:19 PM

    >The superseding indictment also includes new allegations about Huawei and its subsidiaries’ involvement in business and technology projects in countries subject to U.S., E.U. and/or U.N. sanctions, such as Iran and North Korea – as well as the company’s efforts to conceal the full scope of that involvement. The defendants’ activities, which included arranging for shipment of Huawei goods and services to end users in sanctioned countries, were typically conducted through local affiliates in the sanctioned countries. Reflecting the inherent sensitivity of conducting business in jurisdictions subject to sanctions, internal Huawei documents allegedly referred to such jurisdictions with code names. For example, the code “A2” referred to Iran, and “A9” referred to North Korea. edit from this superseding indictment itself:

    >For example, an official HUAWEI manual labeled “Top Secret” instructed certain individuals working for HUAWEI to conceal their employment with HUAWEI during encounters with foreign law enforcement officials.

    >Beginning in or about 2000, the defendants HUAWEI and FUTUREWEI misappropriated operating system source code for internet routers, command line interface (a structure of textual commands used to communicate with routers) and operating system manuals from a U.S. technology company headquartered in the Northern District of California (“Company 1”), an entity the identity of which is known to the Grand Jury, and incorporated the misappropriated source code into HUAWEI internet routers that FUTUREWEI sold in the United States from approximately April 2002 until December 2002. Toward this end, HUAWEI and FUTUREWEI hired or attempted to hire Company 1 employees and directed these employees to misappropriate Company 1 source code on behalf of the defendants.

    >In or about July 2004, at a trade show in Chicago, Illinois, a HUAWEI employee (“Individual-3”), an individual whose identity is known to the Grand Jury, was discovered in the middle of the night after the show had closed for the day in the booth of a technology company (“Company 3”), an entity the identity of which is known to the Grand Jury, removing the cover from a networking device and taking photographs of the circuitry inside. Individual-3 wore a badge listing his employer as “Weihua,” HUAWEI spelled with its syllables reversed. In official correspondence with Company 3 shortly after this incident, HUAWEI claimed that Individual-3 attended the trade show in his personal capacity and that his attempted misappropriation occurred “without Huawei’s authorization.” According to a purported official statement published in Reuters, HUAWEI claimed, “This is a junior engineer who had never traveled to the United States before. His actions do not reflect the culture or values of Huawei.” Notably, a resume that Individual-3 submitted to the U.S. government in approximately 2012 stated that he had been a “senior R&D Engineer” at HUAWEI from 1997 until July 2004, the time of the incident.

    https://news.ycombinator.com/item?id=22320499

  • by rickety-gherkin on 2/13/20, 10:48 PM

    US political and militarized forces protecting corporate interest for the sake of...what again? Upholding ridiculous IP law?

    Is it naive to think that IP law should be disintegrated? How would the world, and more specifically the digital landscape, look if there was no concept of IP.

  • by secfirstmd on 2/14/20, 11:58 AM

    I wonder when the US will start charging Israeli companies for IP theft?....

  • by killjoywashere on 2/14/20, 8:27 AM

    Here's my question: which American companies are so insanely dumb that they actually thought sharing any version of any of this made any sense? are these the organizational consequences of rich people not actually managing the companies that the engineers are working for? Maybe the engineers are like "Just to hell with my country, my company, my neighbors my family and futire myself, I'll do whatever it takes to get my raise. The left-wing folks at Berkeley are right, everyone's here for the common good, we just don't really understand the Chinese. We should share more, and gain their trust."

  • by Dahoon on 2/13/20, 11:45 PM

    So Huawei is coping US companies and still creating better equipment than those it copy from? Ask anyone (well maybe anyone outside the US) in the tele industry and they'll tell you that Huawei is cheaper, better and also faster to fix a problem in both software and hardware. At least I have never heard anyone state otherwise outside of anon people on a forum. So, ask a real person and see.

  • by jariel on 2/14/20, 4:22 AM

    "A ‘competition management group’ was tasked with reviewing the submissions and awarding monthly bonuses to the employees who provided the most valuable stolen information."

    Just wow.

    How could any nation, let alone any company, allow any employee of Huawei anywhere near their operations?

    Literally, they are incented to steal whatever they can from you, out in the open, systematically, with nary much effort to cover it up it seems.

  • by cityzen on 2/14/20, 1:48 PM

    Irony that a country led by Donald Trump is charging companies with racketeering. Shows what a joke we have become.

  • by plandis on 2/14/20, 1:15 AM

    What the fuck is up with these comments? Are you all really okay with blatant lawbreaking with no consequences?

  • by kimsant on 2/14/20, 3:55 AM

    All low level geopolitics from Trumpist USA.

    The message is, you Chinese can do some tech but don't grow too big! Facebook, Microsoft, Intel, Amd, Google, AWS, Cisco. Those big must remain American.

    Mobile World Congress suden cancelation because Huawei represents half of it... Same same

  • by jorblumesea on 2/13/20, 9:55 PM

    Isn't this what TPP was supposed to solve? It's ironic that the Trump admin killed Obama's China containment strategy, only to try to implement it in a half assed way without any allied alignment. Also doesn't help Trump is a highly polarizing figure.

    Pretty much describes the Trump admin in a nutshell. Whatever Obama did, get rid of it, regardless of its value, then implement a worse solution instead.

  • by resters on 2/14/20, 12:54 AM

    Ironically, this is an attempt by the Trump administration to steal IP from China. US firms are behind in 5G because they have sat on the sidelines while Huawei engineered the chipsets.

    It's tremendously ironic that these charges will likely allow US firms to steal money and/or IP from Huawei through what is for all intents and purposes the Trump administration's fiat.

    Worse yet, as has been the pattern with the Trump administration so far, many aspects of the economy that were relatively stable and allowed planning and investment have been destroyed, like when a child throws a tantrum and upsets a board game sending the pieces onto the floor. Many international agreements, standards, and trade and diplomatic relationships have been set back decades by the administration.

    Note that the major claims have all been false so far:

    - The daughter (a journalist) of the Huawei CEO was harrassed and detained without cause, in what was essentially a kidnapping for ransom/extortion. How did the American people not feel outrage when Trump did this?

    - There have been repeated accusations of backdoors into 5G hardware, but yet no example of a device that has been hacked by the US or any private sector researchers.

    - US officials have (quite inappropriately) tried to foment xenophobia and hatred of Chinese immigrants in the US. This combined with Trump's xenophobic comments show the US's hand quite clearly. China is now a rival and no dirty tactics are off limits.

    As an American, I am so deeply embarrassed by all of this.

  • by ep103 on 2/13/20, 8:42 PM

    You can charge a company with RICO? Maybe we can charge a political party then.

  • by tibbydudeza on 2/13/20, 8:55 PM

    I have a Huawei phone and home gateway ... oh dear.

    I wonder how much GM and Boeing depends on the Chinese home market , two can play that game since the soybean tradewar went so great they had to bailout oops sorry "aid" the farmers.