This really shouldn’t come as a surprise. After all, Huawei has been in the US government’s crosshairs perhaps longer than ZTE. After the latter was slapped with a crippling sanction for violating the US’ export sanctions against Iran, it was really only a matter of time before Huawei gets the same treatment. Huawei is now reported to be under investigation by the US Department of Justice for the very same reasons and, considering Huawei’s luck, it might get the same verdict as ZTE.
The US forbade expert of communications technology to Iran as part of its sanction against certain regimes, including North Korea. ZTE was found to have violated that sanction and was fined a hefty $1.2 billion last year. The new sanction, which banned export of any US hardware or software technology to ZTE, was imposed after the US government determined that the company lied about the steps it took to correct its actions or punish those involved in violating the sanctions.
Wall Street Journal wasn’t able to get a hold of the details of the criminal investigation other than it was also about violating trade embargos against Iran. Should it be proven guilty of the same violation, it’s likely to be fined like ZTE, perhaps even more. An export ban is also very likely on the table.
Huawei is hardly a stranger to pressure from the US government and this is just the latest in a string of efforts to discredit the Chinese OEM. It started years ago with the accusation that the Chinese government uses companies like Huawei and ZTE to spy on other countries like the US. Earlier this year, things escalated when carriers and, later, retailers pulled out from partnerships with Huawei, refusing to sell its smartphones.
Depending on how things turn out, Huawei might still end up in a better spot than ZTE. Unlike the latter, Huawei isn’t completely dependent on US technologies like Qualcomm’s Snapdragon and makes its own mobile processor. It’s biggest problem will be licensing Google’s proprietary Play apps and services for Android, though Chinese OEMs have been known to use alternatives to those when necessary.