In what is one of the most interesting documents of its type, we get to see the case against Huawei for trying to steal detailed information about a robotic telephone testing system made by T-Mobile. It carries some lessons for anyone doing business with Huawei, should the stated charges turn out to be representative of Huawei's actions.
It is obvious in the indictment that T-Mobile and Huawei U.S. were trying to follow rules established by T-Mobile for the protection of its proprietary testing robot. They had an area set aside for the testing and restricted access, initially to only T-Mobile testers. They might have been better served to stay with that approach. They had a physical guard and entry requirements. They had non-disclosure agreements. Huawei in the US actually listened to what T-Mobile told them, but asked the questions that Huawei China asked them to ask. Repeatedly, Huawei US told Huawei China that T-Mobile was not going to give up that information.
What they found was that over a two-three year period the questions got more detailed and more persistent. There was increasing pressure and soft warnings. Huawei phones were not passing the tests and they really wanted a robot to test before sending them to the US for sale. T-Mobile wouldn't sell them one, so according to the indictment, they set out to steal what they needed. When T-Mobile caught wind of what they were up to, they were banned from the testing lab but kept coming back. When caught the second time, Huawei US did an "internal investigation" and found employees were "rouge" and fired them (I remind you that the Chinese have done these firings before and moved the individuals to other jobs in their own affiliates, or in the case of ZTE, didn't fire them). Huawei and T-Mobile settled this on their own, after T-Mobile threatened a civil suit. But, Huawei China made this more difficult by offering bounty money for information on certain types of technical data its employees could get.
It seems odd that five years later we get an unsealing of the indictment and a criminal prosecution. but, what it does point out is how difficult it is for US operating locations to say no to their corporate parents. US subsidiaries, large customers dependent on Huawei for devices, and retailers might think twice about entering into this kind of arrangement with a company that was clearly intent on getting the proprietary information it was after, using whatever methods it could force on the business partners. This is a great case study for business schools.
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