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Feds to Investigate Huawei and ZTE Over Security Concerns

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Nov 18, 2011, 8:22 AM by Eric M. Zeman

A committee has been formed in the House of Representatives to investigate both Huawei and ZTE over fears that the companies give "the Chinese government an opportunity for greater foreign espionage." The federal government has kept a close eye on both firms and limited their ability to expand into the U.S. by blocking acquisitions and other business deals. "The Chinese are aggressively hacking into our nation’s networks, threatening our critical infrastructure and stealing secrets worth millions of dollars in intellectual property from American companies," said Representative Dutch Ruppersberger in the release. "This jeopardizes our national security and hurts U.S. competitiveness in the world market." Huawei and ZTE have long maintained that they have no ties to the Chinese government or Chinese military. Huawei spokesperson William Plummer said to BusinessWeek via email that the company welcomes "an open and fair investigation. The integrity of our solutions has been proven worldwide." ZTE spokesperson Mitchell Peterson also said to BusinessWeek via email that, "ZTE is wholly committed to transparency and will cooperate in addressing any questions regarding our business. We are confident a fair review will further demonstrate ZTE is a trustworthy and law-abiding partner for all U.S. carriers and their customers." Both companies sell devices to U.S. consumers and provide telecom equipment to network operators.

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