Huawei Asks FTC for Help as Smartphone Maker Fights Restrictions

(Bloomberg) -- Huawei Technologies Co. is asking the Federal Trade Commission for help as the Chinese telecommunications equipment maker fights limits on its access to U.S. markets.

Restrictions put in place over security concerns harm consumers “who would otherwise benefit from more robust competition,” Huawei said in an Aug. 20 filing at the trade commission that also was entered Aug. 27 into the record at the Federal Communications Commission. It said Huawei doesn’t pose a heightened security risk.

Huawei said it wants to participate in FTC hearings that begin in September to explore issues of competition and consumer protection.

“There is a strong need for the FTC to provide Congress and the FCC with its expert economic analysis,” Huawei said in the filing. “The FTC is uniquely positioned to help prevent proposed restrictive regulations that would unnecessarily limit consumer choice and create market inefficiencies.”

Huawei and fellow Chinese gear maker ZTE Corp. have come under increased scrutiny by American officials over fears that gear could be used for spying. In July, a spokesman for China’s foreign ministry said the U.S. “should stop groundless speculation and intentional suppression against Chinese companies.”

Huawei listed a series of actions, including a decision by Congress to bar federal agencies from buying equipment or services from Huawei and ZTE, and decisions by AT&T Inc. and Verizon Communications Inc. not to market Huawei smartphones. The FCC is considering a measure to forbid U.S. carriers from using federal subsidies to buy gear from the companies.

“We have asked the Federal Trade Commission to work with their peers in government to ensure that the effects of these interventions are fully understood,” Huawei said in a separate statement. “Rules based on arbitrary security concerns are anticompetitive.”

Shenzhen-based Huawei, China’s top telecommunications equipment vendor and the world’s No. 3 smartphone maker, was founded in 1988 by former Chinese army engineer Ren Zhengfei. The company is private and owned by employees, Huawei said in its filing.

The U.S. Commerce Department in July lifted a the ban on American firms selling products to ZTE after the company paid a $1.4 billion penalty and made management changes. It was accused of selling American technology to Iran and North Korea.

Removing the ban on ZTE was a key Chinese government demand amid escalating tensions between the world’s two largest economies. President Donald Trump wants to shrink a $375 billion goods deficit with China.

Meetings between Chinese and U.S. officials in Washington last week made little headway, setting the stage for the U.S. to push ahead with the next round of tariffs on up to $200 billion worth of Chinese goods. Beijing has said it would retaliate.

©2018 Bloomberg L.P.