US hits Huawei with new charges of racketeering

The United States on Thursday raised the stakes in its battle with Huawei Technologies Co Ltd, using a law historically associated with prosecuting mafia figures to claim the Chinese company engaged in decades of intellectual property theft.

Huawei, the world’s largest maker of telecommunications equipment, and chief financial officer Meng Wanzhou had already faced criminal charges.

The fresh allegations up the ante by including racketeering conspiracy, increasing the potential punishment. They come as the global battle for supremacy in fifth-generation wireless technology, or 5G, is joined.

“Huawei broke the law to drastically cut its research and development costs and associated delays, giving the company a significant and unfair competitive advantage,” the Justice Department said in a statement.

“The company even launched a bonus programme to reward employees who got their hands on confidential information from competitors,’’ prosecutors said.

The new charges depict a company that won international standing by stealing trade secrets, evading US sanctions and lying to authorities.

They are likely to increase tensions between Beijing and Washington, which has accused Huawei of spying for the Chinese government, even as Huawei won a brief reprieve from a proposed ban on buying parts.

The indictment doesn’t name the businesses from which Huawei allegedly stole intellectual property, but details of the allegations match descriptions of companies including Cisco Systems Inc, Motorola Inc and Cnex Labs Inc.

“The new indictment is part of the US Justice Department’s attempt to irrevocably damage Huawei’s reputation and its business for reasons related to competition rather than law enforcement,” a Huawei representative said.

“These new charges are without merit and are based largely on recycled civil disputes from the last 20 years that have been previously settled, litigated and, in some cases, rejected by federal judges and juries.”