Qualcomm lands roundhouse in Apple legal battle

The on-going legal battle between Qualcomm and Apple has taken a twist as the US District Court for the Southern District of California has ruled in favour of Qualcomm.

The court has decided Apple’s iPhone 7, 7 Plus, 8, 8 Plus and X infringe two Qualcomm patents, while the iPhone 8, 8 Plus and X devices infringe on a third. As a result, the jury has awarded Qualcomm $31 million in damages.

“Today’s unanimous jury verdict is the latest victory in our worldwide patent litigation directed at holding Apple accountable for using our valuable technologies without paying for them,” said Don Rosenberg, General Counsel for Qualcomm.

“The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly. The three patents found to be infringed in this case represent just a small fraction of Qualcomm’s valuable portfolio of tens of thousands of patents. We are gratified that courts all over the world are rejecting Apple’s strategy of refusing to pay for the use of our IP.”

The three patents support different functions on iPhones, all of which has become normalised features of the devices. Patent No. 8,838,949 enables ‘flashless booting’, removing the need for a separate flash memory and allowing smartphones to connect to the internet quicker after being turned on. Patent No. 9,535,490 speeds up internet connections. Finally, Patent No. 8,633,936 enables high performance and rich visual graphics for games, while also increasing battery efficiency.

The $31 million bill will actually mean very little to Apple. Looking at the iLeader’s 2018 full year results, it would take just under 62 minutes Apple to generate revenues to cover the $31 million, though it does set precedent around the world.

Alongside this ruling in San Diego, courts in China and Germany has also ruled Apple has infringed Qualcomm patents, questioning whether Apple is legally allowed to continue sales not only in these countries, but other territories around the world. In Germany, Apple has been barred from selling any iPhone 7 and 8 models, while in China all devices from the iPhone 6 to the iPhone X have also been banned from sale.

The legal battle between two of the digital economy’s heavyweights has been dragging on for some time now, but this round has been undeniably chalked up to Qualcomm.

Facebook reportedly facing criminal charges over data sharing

Facebook’s day started off with a major outage and, should reports turn out to be true, it is ending with the social media giant facing a criminal investigation from Federal prosecutors.

According to the New York Times, a grand jury in New York has obtained records from two smartphone manufacturers, via subpoena, which will detail the data sharing partnerships in or previously in place with Facebook. Sources has retained anonymity and it is not exactly clear who the subpoenaed parties were, though Facebook did have more than 150 such relationships in place before winding-down over the last couple of years.

Although the investigation has not been officially confirmed, it will come as a surprise to few considering the scrutiny those dominating the data-sharing economy are facing. Over the last few months, there have been numerous attempts to weaken the influence of the internet giants, with some even suggesting legal force to break-up the empires. The internet giants created a cosy position, but this is certainly under threat.

That said, while the scandals over the last 18 months might lead some to presume the practice of selling personal data would be scaled back, there seems to be little evidence of this. A recent Motherboard investigation suggests various US telcos are still reaping the benefits, and in some cases, scaling up the practice.

What is worth noting is the concept of selling personal information is not illegal, as long as the right consent has been obtained from the end user. This is what Facebook, and the third-parties who entered into such arrangements, are facing criticism for today. Accusers suggest proper content was not obtained or done so in such a complicated fashion it should not be considered valid.

The data-sharing economy is gaining validity across the world, but only when the practice is managed in a fair and responsible manner. This is what GDPR and other regulations intend to enforce. The idea is not to stop the practice, but to ensure the companies involved act in a responsible manner, with the user properly informed and in control of the situation. The data-sharing economy can work, and can benefit everyone involved, as long as no single party abuses their position.

The partnerships which are reportedly being investigated here, however, have come under criticism for some time. Privacy campaigners suggest the partnerships violate a 2011 consent agreement between Facebook and the FTC, after allegations the social media giant had shared personal information in a way that deceived users. At one point, there were more than 150 such partnerships in place, though Facebook has been phasing out most of the agreements over the last few years.

Although this is a retrospective investigation into the company, it could potentially contradict statements from CEO Mark Zuckerberg and other executives suggesting the business was being more transparent and managing user data responsibly. Facebook has been making this statement for several years. This case could prove Facebook mislead the world with these claims as well.

There is a general feeling of ‘if’ not ‘when’ here. Politicians, governments and regulators are seemingly scouring the Facebook business for any cracks, allowing them to slap a significant fine and parade the streets with a victory on behalf of consumer privacy. Facebook’s lawyers have done a pretty good job of wriggling so far, but there is a bit of a feeling the dam could burst at any point.

Huawei CEO tries to deflect cybersecurity spotlight onto Ericsson and Cisco

It was just a matter of time before Huawei played the whataboutism card and Founder/CEO Ren Zhengfei couldn’t resist in a recent interview.

Chatting to CNN in Shenzhen Ren said the following when referring to the US ban on Huawei gear: “They have to have evidence. Everybody in the world is talking about cyber security and they are singling out Huawei. What about Ericsson, what about Cisco, don’t they have cybersecurity issues? Why has Huawei been singled out? There’s no Huawei equipment in the US networks but has that made the US networks totally safe? If not how can they tell other countries that your networks will be safe without Huawei?”

When Huawei announced its lawsuit against the US government we figured it would have a pop at Cisco sooner or later, but Ren decided to involve Ericsson for good measure (but not Nokia). He has a bit of a point, we suppose, but there are a couple of flaws in this fallacious approach. Firstly, if he thinks any other vendors might be a security risk then he is subject to the same burden of proof he is applying to the US. Secondly, even if they are dodgy that doesn’t mean Huawei isn’t.

The main theme of this resumption of the Ren roadshow was to augment the points Huawei made when in its lawsuit. Ren stressed he would rather shut the company down than let the Chinese state muck about with it and said US tactics will result in scaring away investment in the country. He also tried playing the martyr card, insisting that what doesn’t kill Huawei will make it stronger and even suggesting this aggro represents a timely wake-upcall for complacent Huawei employees.

Ren’s media tour coincides with parallel attempts to win hearts and minds among US allies, but it looks like those are being trumped by a more direct approach from the US. A recent report from Bloomberg reveals German spooks think Huawei is just too dodgy to be allowed into the country’s 5G networks.

Apparently the German intelligence officials remain unconvinced by Ren’s vows never to collaborate with the Chinese state and are also worried about upsetting the US. “It’s above all a matter of trustworthiness and of the impact on our relationship with our allies,” a Foreign Ministry official told some parliamentary committee.

On top of that the EU has recently been publicly expressing concerns about Chinese 5G kit in general so, for the time being at least, momentum seems to have swung back in US favour. Ren’s attempt to metastasise the aggro to other networking vendors must be causing some alarm, not least because it raises the prospect of them being caught in the orbit of the law suit. If we’re on a Huawei to hell, we’re taking you with us, seems to be the message.

 

The big promise of politics just got bigger

The Senator Elizabeth Warren campaign roadshow is officially underway, and the tech giants are sitting in the crosshairs.

We might be slightly protected from it in the UK, but politics in the US has become much more about theatre than concrete issues of today. For every campaign launched, there needs to be a monumental promise made which will shake the foundations of society. For Donald Trump, the wall proved to be that divisive point, and for Warren, it is the spearhead of US political and economic dominance on the global stage; the internet economy.

“I want a government that makes sure everybody – even the biggest and most powerful companies in America - plays by the rules,” Warren said in a Medium post.

“And I want to make sure that the next generation of great American tech companies can flourish. To do that, we need to stop this generation of big tech companies from throwing around their political power to shape the rules in their favour and throwing around their economic power to snuff out or buy up every potential competitor.

“That’s why my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.”

And just like Trump’s wall, in reality this promise is nothing more than a PR plug to grab headlines.

Stepping up the hubris game

President Donald Trump is the master and current reigning champion of this competition.

In 2015, Trump entered the world of politics with wide-sweeping messages of hate, xenophobia and borderline racism. These political sound bites, designed to rouse in Middle America and drive forgotten voters to the polls, culminated in the claim he would force Mexico to pay for a wall which would span the width of the US southern borders. Three years into his presidency, Trump is still searching for the wall’s funding, and Warren could be walking into the same problem.

Breaking up the internet giants, the very companies who drove the US economy for years and have now become the world’s punching bag, is a daunting task. It might sound attractive to voters, the people who seek fortunes but cannot congratulate those who have found them, but what happens if Warren is unable to deliver on the marquee promise of her campaign?

This is the very dilemma which Trump is currently facing. His campaign was built on the promise of the wall, but the world still awaits the delivery. Warren is now promising an outcome which will not come easily, potentially becoming the architect of her own downfall, offering ammunition to critics and opponents.

Big promises = big problems

Warren’s promises are a threat to the giants of Silicon Valley, and you can guarantee the lobby machine has already been kicked up a gear.

First, Warren is promising new legislation which will designate some business activities as ‘Platform Utilities’. Facebook is an example, and it does appear Warren’s vision is to separate the functional aspect of the platform from participation activities. It sounds very logical, but you have to consider that the platform in these companies is essentially run as a loss leader; these platforms are free for the consumer and would not exist if the parent company was not entitled to monetize the user.

“These companies would be prohibited from owning both the platform utility and any participants on that platform,” said Warren. “Platform utilities would be required to meet a standard of fair, reasonable, and non-discriminatory dealing with users. Platform utilities would not be allowed to transfer or share data with third parties.”

It would be interesting to hear how Warren thinks Facebook or the Google search engine would continue to function if the ability to make money was removed.

The second major point to consider from this post is the unwinding of what could be perceived as anti-competitive mergers.

At Google, Waze, Nest and DoubleClick are the three transactions which are considered anti-competitive, and therefore under these new plans would be reversed. We believe there are two major issues with this promise.

Firstly, removing these aspects of the business would be incredibly difficult, verging on impossible. This might not be the case for some, Nest for example, however DoubleClick is now so deeply embedded in various different functions of the Google business where do you even start?

Secondly, hindsight is an issue. Some of these transactions are only deemed as anti-competitive because of the success. DoubleClick may well not have been a success without the scale and power of Google. The company is being punished for being good at what it does.

In this case, 1+1+1 = 4. This transaction has been deemed as anti-competitive because of the sum of the parts. Google has collected several different components to make a greater result. Individually, each component is powerful, but the outcome is greater.

The not-so-slumbering giants

Google, Amazon, Facebook and numerous others will not take this aggressive attack on the basic business principles of Silicon Valley lying down.

Warren will not be the only politician to make a move against the wealth, power and influence of the internet giants, but the lobby and legal challenges will be astronomical. Should this promise get anywhere near a draft bill or even legislation to pass through the House, legal challenges will be lodged, PR propaganda will be launched, and in-direct, passive-aggressive threats will be made.

Lawyers are excellent at slowing the wheels of progress, and many of the world’s best lawyers call Silicon Valley home.

We suspect the Warren campaign team has not thought this strategy through entirely, there are too many holes and illogical conclusions. From a conceptual perspective, this is the Mexico wall promise in shape-shifting form. It is a promise which sounds attractive to voters but will be almost impossible to deliver.

That said, theatre in US politics works, and Silicon Valley is home to the bad guys right now. We suspect a political administration hell-bent on breaking-up the internet giants will fail, but it could be a big enough promise to attract votes.

Huawei lawyers-up in North America

Huawei’s CFO is suing Canada, while the company is also reportedly set to sue the US government.

While the US and Huawei kept their conflict muted during Mobile World Congress last week, they have wasted little time in picking up where they left off after that brief hiatus. Having said that there was widespread talk on the show floor last week that there were many representatives of the US government and other public institutions at the event, apparently canvassing for support.

Anyway, the BBC reports that last Friday Huawei’s CFO, Meng Wanzhou, filed a civil suit against Canada for breaching her civil rights when it arrested her late last year. The move coincided with the official commencement of her extradition process to the US, which wants to try her for a bunch of alleged crimes. Her case seems to rest on some perceived irregularities in the process by which she was arrested, but is probably part of a broader coordinated legal counter-attack by Huawei.

Meanwhile Huawei is also preparing to sue the US government, according to multiple reports, the first of which seems to have come from the New York Times. This suit is apparently unconnected to the latest US offensive, and concerns the much older ruling that banned US federal agencies from using Huawei products.

Once more, however, this would appear to be part of a greater legal push against the US by Huawei. In this case, by suing the US and therefore obliging it to defend itself, the cunning plan could be to bring specific allegations into the open, which Huawei could then refute. One of the biggest criticisms of the US war on Huawei has been a lack of specifics, so this seems like a plausible tactic.

At this stage it’s still really difficult to see how the war between the US and Huawei will play out. On one hand momentum seems to be against Huawei, with US allies feeling compelled to at least go through the motions of siding with it. On the other, if Huawei can publicly demonstrate that a significant proportion of the charges against it are unfounded, then maybe it can start to swing some Western public opinion its way. Either way both sides seem dug-in for a long conflict.

France continues charge against Silicon Valley

The City of Paris has joined the overarching French battle against Silicon Valley, suing Airbnb for publishing 1,000 illegal rentals adverts.

Over the last couple of weeks, France has become increasingly irked with Silicon Valley. This quest is not from the French government alone, but the anti-internet sentiment seems to be spreading throughout the country.

Here, the City of Paris has lodged its complaints against online marketplace and hospitality firm Airbnb, suggesting the website is illegally advertising properties. According to Reuters, home owners are allowed to rent out their properties for 120 days a year, but the home owner must be registered to ensure compliance.

Several countries around the world have expressed concerns over the impact of Airbnb on local markets, suggesting locals are suffering as profiteers increase housing prices while the traditional hospitality industry is being cripple, but this seems to be one of the first and most aggressive complaints. Paris is suing Airbnb for missing registration details on more than 1,000 adverts. With new national legislation in 2018 provisioning €12,500 per illegal posting, the fine could certainly go north very quickly.

“The goal is to send a shot across the bows to get it over with unauthorized rentals that spoil some Parisian neighbourhoods,” said Paris Mayor Anne Hidalgo.

While this might be a headache for Airbnb, this is just one example of France taking a more aggressive stance against Silicon Valley. Aside from this case, the French tax administration recently managed to get Apple to pay €500 million in back-taxes, data protection regulator CNIL has fined Google for GDPR violations, the country is also attempting to rollout ‘right to be forgotten rules’ worldwide and the French government is pressing ahead with plans to hold internet companies accountable to fair and reasonable tax rates.

The final one is perhaps one of the most interesting cases as it demonstrates a break from Europe. The tax strategies of the internet giants have now become infamous, though Europe wanted to tackle these regulatory oversights as a bloc. With the 28 members states not being able to come to any form of agreement, it had seemed the Silicon Valley lobbyists had won, but France was not done, deciding to go alone with its own 3% sales tax on revenues derived within its borders; the internet giants might be able to hide profits, but they haven’t found a good way to hide IP addresses yet.

While the world is certainly turning against the internet players, thanks mainly to data breaches and privacy scandals over the last 18 months, few countries are taking such an aggressive stance as the French. Considering how friendly some nations are to the internet players (see Ireland and Luxembourg) we can’t see this trend spreading everywhere across the European Union, but it will be interesting to see how many member states are buoyed on by the French foray.

AT&T sued by Sprint over 5G BS

US operator Sprint is so outraged by AT&T’s attempt to rebrand its LTE-A service as 5Ge that it’s taking its competitor to court over it.

Sprint has filed a suit against AT&T in New York, as first reported by Engadget. You can see the full complaint at the bottom of that report but, as ever, it’s needlessly lengthy and legalese so here’s an attempt to summarise it in words of one syllable.

AT&T is accused of numerous acts of deliberate deception around its attempt to promote its LTE Advanced service as ‘5G Evolution’. There is the outright lie involved in suggesting something is 5G when it isn’t and then there’s the damage done to Sprint competitively and the outright damage done to the US telecoms market by deceiving it into thinking 5G is already here.

The complaint notes that ‘AT&T has yet to deliver a contiguous mobile 5G network or release a 5G-enabled mobile phone or tablet capable of connecting directly to a 5G network.’ And yet is went ahead with this 5Ge marketing campaign regardless, which Sprint says is ‘false and misleading’.

It was, in fact ‘a transparent attempt to influence consumers’  purchasing decisions by deceiving them into believing that AT&T’s network—because it claims to be a 5G wireless network—is more technologically advanced and of higher quality than those of other wireless service providers, including Sprint,’ alleges the complaint.

The three main material complaints are that:

  1. AT&T is engaged in false advertising
  2. AT&T is therefore deceiving the public
  3. AT&T is directly harming Sprint through this deception

So what does Sprint want the court to do about it? The hilarious legal jargon calls this the ‘prayer for relief’. Sprint wants AT&T to be prevented from using ‘5G’ in any of its ads until it’s proper 5G and it wants as much cash as possible in damages. Ultimately Sprint wants its complaint to result in a full-blown jury trial, which could get very interesting if it’s granted. There didn’t seem to have been any public response from AT&T at time of writing.

Google challenges France’s first swing of the GDPR stick

Google has stated it will appeal the French regulator’s decision to dish out a €50 million fine for not being forthright enough with how it collects, stores and processes user’s personal data.

For Google, this is not about the money. €50 million for Google is nothing. This is a company which generated $33.7 billion over the final quarter of 2018. It would take a matter of minutes for the team to pay off this fine. However, should this ruling be allowed to stand Google would have to alter its business model, as would the rest of the data-sharing economy, causing a very unwelcomed, and potentially costly, disruption.

“The 50 million euro fine issued by the CNIL on 21 January 2019 significantly impacts Google as it directly challenges its business model based on the processing of personal data,” said Sonia Cissé, Head of TMT Practice of law firm Linklaters in Paris.

“Considering the seriousness of the CNIL’s findings and the broad publicity of this case, a potential appeal by Google is no surprise and makes perfect sense from a legal-strategy perspective.”

On Monday, France’s National Data Protection Commission (CNIL) dished out the fine for two violations of Europe’s General Data Protection Regulation (GDPR). Firstly, the search giant was not specific enough when requesting consent from users. Secondly, for users who wanted to dig deeper into the Google data practices, the company made it unnecessarily difficult to see the entire picture. Google was being too vague and not accessible enough.

“Users are not able to fully understand the extent of the processing operations carried out by Google,” the CNIL said in a statement.

This is the first time a regulator has used GDPR to hold one of the internet giants accountable, but there are plenty of other cases in the pipeline. Google is of course not the only target, as various different privacy advocates across the bloc lodge their complaints against the likes of Spotify, Amazon and Apple, just to name a few others.

In appealing this case, Google is making itself the tip of the spear for the entire internet ecosystem. There will be multiple appeals against the various rulings over the coming months because of how important precedent in this saga. If Google was to just let this ruling stand, it is effectively validating its opinion potentially undermining its own business model. If similar ruling start to appear across the continent the disruption to the data-sharing economy would be massive.

“In all likelihood, Google will challenge the CNIL’s decision on two main grounds: (i) procedural aspects (i.e., the competence of the CNIL); and (ii) the content of the case (i.e., challenging the facts),” said Cissé.

“Should Google be able to demonstrate that Google Ireland Limited was its main establishment in the European Union (EU) at the time of the CNIL’s investigations, then the competence of the CNIL could be validly challenged.

“Second, the content of the decision is another ground for action, and it will be up to the French administrative judges to determine, in light of the circumstances at stake, whether the transparency requirements under GDPR were met or not.”

GDPR is an incredibly complicated set of rules mainly because there are so many different definitions and clauses, but also certain exemptions. In most cases, companies would have to obtain consent from users to use data for explicit purposes, retaining the data only until these purposes have been satisfied. However, companies do not have to obtain consent when it is necessary to comply with another law, or there are ‘legitimate interests’. It paints a complicated picture.

Of course, for those who are more privacy sensitive, such rules and grey areas are a bounty of riches. The rules have created amble opportunity to challenge the internet giants’ business models, as well as the influence they have over the world. One of those is privacy campaigner Max Schrems.

“We are very pleased that for the first time a European data protection authority is using the possibilities of GDPR to punish clear violations of the law,” Schrems said following the CNIL ruling.

“Following the introduction of GDPR, we have found that large corporations such as Google simply ‘interpret the law differently’ and have often only superficially adapted their products. It is important that the authorities make it clear that simply claiming to be compliant is not enough.”

Schrems’ firm, None of Your Business (NYOB), has filed several complaints against other internet businesses on the grounds of accessibility. Those who will come under the scrutiny of Austrian courts include Apple, DAZN, Filmmit, Netflix and Amazon. More specifically, these complaints suggest the companies violated GDPR’s ‘right to access’, enshrined in Article 15 GDPR and Article 8(2) of the Chart of Fundamental Rights.

All of these cases will dictate how the internet economy will function over the coming years, but this battle between the CNIL and Google could prove to be a critical one, such is the power of precedent in the legal world.

“In a nutshell, it is highly difficult to identify certainties regarding the outcome of Google’s appeal,” said Cissé.

“Since data protection is a field of law particularly subject to interpretation and grey areas, one cannot exclude the possibility that Google could be successful in appealing the CNIL’s decision before the French Administrative Supreme Court. In any event, the ruling of the French administrative judges will be closely monitored by all the tech companies.”

Huawei facing US trade secret theft indictment and ZTE-style ban

The US Department of Justice is rumoured to be pursuing charges relating to trade secrets theft against Huawei, while four politicians have tabled a bill for a ban similar to what ZTE faced last year.

Leaving the Department of Justice for the moment, a bi-partisan collection of politicians have tabled the so-called ‘Telecommunications Denial Order Enforcement Act’, a proposed bill which would compel the White House to ban Huawei from using US components and IP within its supply chain. The ban would be the same punishment ZTE faced early last year.

“Huawei and ZTE are two sides of the same coin,” said Democratic Senator Chris Van Hollen. “Both companies have repeatedly violated US laws, represent a significant risk to American national security interests, and need to be held accountable. Moving forward, we must combat China’s theft of advanced US technology and their brazen violation of US law.”

Aside from Van Hollen, Republican Senator Tom Cotton, as well as Representatives Mike Gallagher (Republican) and Ruben Gallego (Democrat) are also supporting the proposed bill. This should hardly come as a surprise as the ZTE ban was imposed for violating the exact same trade sanctions which Huawei has allegedly ignored.

The saga surrounding the ZTE ban was short-lived, incredibly volatile and almost fatal. After being found violating trade sanctions, US Department of Commerce’s Bureau of Industry and Security (BIS) imposed a denial of export privileges order against the firm, denying it access to any US suppliers. President Trump stepped in to save the firm, which looked doomed as a result of the ban, before Congress blocked his efforts. Eventually a resolution was reached, though ZTE has been skating on thin ice since.

If precedent is anything to go by, Huawei should face the same punishment should it be found guilty of the same activities. Last month, Huawei CFO Meng Wanzhou was arrested in Canada, accused of violating the same trade sanctions with Iran using a suspect firm known as Skycom. Meng has been released on bail and awaits trial, though it appears the four politicians are already presuming guilt. Or maybe they are just being prepared.

Perhaps this is a sign the politicians do not believe President Trump is committed to precedent and appropriate action. The actions against ZTE smelt suspiciously like one of Trump’s strategic moves in the on-going trade war with China, though perhaps he did not realise he would have to do the same 12 months later, potentially antagonising the Chinese government with a move which is not in the grand plan.

The politicians might be tabling this bill to make sure Trump can’t find a reason not to ban Huawei. Following the arrest, Trump seemed to suggest in an interview with Reuters that he would be willing to make the Canadian charges go away if it would help him the US in its dispute with China.

“If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary,” Trump stated.

Not only does this completely undermine the standing of the Canadian judicial system, but also suggests Trump is willing to bend (or break) rules to bring the Chinese government to its knees. Perhaps Congress does need to be proactive to make sure the President follows the rules, taking appropriate action instead of whatever ludicrous idea floats in the breadth between his ears.

What is worth noting is the stance of Huawei executives. Clearly, they do not agree with anything which is going on, but both Rotating Chairman Guo Ping and Rotating CEO Ken Hu put across messages stating the resilience of the business. Ping and Hu suggested a ban would not impact the Huawei supply chain in the same manner as it did ZTE.

Heading back to the Department of Justice, the Wall Street Journal has reported the agency is pursing charges against Huawei concerning theft of trade secrets.

An indictment should be heading over to the Huawei offices in the near future, focusing on allegations the firm stole robotic mobile-testing technology from T-Mobile. The technology, known as Tappy, mimics human fingers and is used to test smartphones. A civil case between T-Mobile and Huawei over the technology was filed in 2014, though after a criminal investigation the Department of Justice feels it is appropriate to step in and raise criminal charges.

This case is a separate concern from all the other chaos which has surrounded the firm in recent months, though it will be just as concerning as the punishments can be incredibly severe.

The primary federal law that prohibits trade secret theft is the Economic Espionage Act of 1996, which allows the US the U.S. Attorney General to prosecute a person, organization, or company that intentionally steals, copies, or receives trade secrets. If the case if brought against an individual, the punishment could be as much as 10 years in prison or a $500,000 fine. However, we suspect the government would want to punish the firm not an individual, as Huawei would simply claim that person did not represent the company culture, in-line with White House aggression against China.

If a conviction is made against a company the fine can be increased to $5 million. However, if the Attorney General can prove the theft was made on behalf of a foreign government, this would be considered the silver bullet for the White House, corporate fines can be doubled, imprisonment could be 15 years and proceeds derived from the theft can be seized.

In short, Huawei has found itself in another uncomfortable position in the US. It does not appear 2019 is going to be any better than 2018 on the US side of the pond for Huawei.