US slams Huawei with racketeering charges

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Huawei
Huawei has been relentless in its pursuit to become the world's biggest tech company.
Photo: AndroidCentral

Apple’s biggest competition from China just got hit with the R.I.C.O.

The FBI and US Department of Justice revealed this afternoon 16 charges filed against Huawei, one of the world’s largest smartphone manufacturers. Prosecutors claim Huawei conspired to steal trade secrets, commit wire fraud and conspired to violate the Racketeer Influenced and Corrupt Organizations Act (RICO).

We’re still digging into the 56-page indictment, but it looks like Huawei was on a two-decade-long streak of keepin it gangsta.

This is the first time the federal government has lobbed RICO charges against a corporation of this size and alleges that Huawei and its other companies collectively acted as a criminal enterprise, not just a company that happened to break the law.

Huawei’s RICO charges

Huawei is accused of stealing from at least six companies using various methods. In some instances, Huawei used confidential agreements with American companies to gain access to secret information and copy. Another example was given where a Huawei engineer was found at another tech company’s booth snapping pictures of the circuitry of one of their networking devices.

Proving that a company as a whole conspired to break the law for profit could be tough to prove for prosecutors, but there’s one damning section of the indictment that shows it was a systemic issue:

“As part of the scheme, Huawei allegedly launched a policy instituting a bonus program to reward employees who obtained confidential information from competitors. The policy made clear that employees who provided valuable information were to be financially rewarded.”

So far, Huawei is saying this is all an attempt to damage its reputation for competition reasons. If the charges hold, Huawei would have to forfeit assets and profits relating to the racketeering. Considering the company is headquartered in China, the US would only get a tiny chunk of the $122 billion in sales revenue it made last year. Still, this could be great news for Apple and other US tech companies.