Huawei preparing to sue US for banning federal agencies from using products

The Chinese electronics giant Huawei is preparing to sue the United States government for banning federal agencies from using the company’s products, according to two people familiar with the matter.

The lawsuit is due to be filed in the Eastern District of Texas, where Huawei has its American headquarters, according to the people, who requested anonymity to discuss confidential plans. The company plans to announce the suit later this week.

The move could be aimed at forcing the United States government to more publicly make its case against the Chinese equipment maker. It is part of a broad push by Huawei to defend itself against a campaign led by the United States to undermine the company, which Washington sees as a security threat. Executives have spoken out strongly against America’s actions, and new marketing campaigns have been aimed at mending the company’s image among consumers.

For many years, United States officials have said that Huawei’s telecommunication equipment could be used by Beijing to spy and disrupt communication networks. The company has denied the allegations, but major wireless carriers such as AT&T and Verizon have effectively been prevented from using Huawei’s equipment as a result.

Over the past year, Washington has ramped up its pressure on the firm, which is preparing to take a major role in the construction of next-generation wireless networks around the world. American officials have urged other governments to ban the use of Huawei’s products. Earlier this year, the Justice Department filed criminal charges against the company and its chief financial officer in connection with evading American sanctions on Iran.

A hearing is set to begin this week in Canada that will determine whether the company’s finance chief, Meng Wanzhou, will be extradited to the United States to face charges. Ms. Meng’s lawyers have sued the Canadian government and police, arguing that the circumstances of her arrest and detention in December violated her rights.

The lawsuit that Huawei is preparing to file in the United States is expected to challenge a section of a defense spending authorization law that was approved last year. The provision blocks executive agencies from using telecom equipment made by Huawei and another Chinese company, ZTE.

According to one of the people familiar with the matter, Huawei’s lawsuit is likely to argue that the provision is a “bill of attainder,” or a legislative act that singles out a person or group for punishment without trial. The Constitution forbids Congress from passing such bills.

Huawei’s plans are not final. It could still decide to change course, or to not file a lawsuit at all.

The United States Embassy in Beijing did not immediately respond to a request for comment. A call placed outside business hours to the United States Courthouse in Plano, Tex., where Huawei’s American headquarters are located, was not answered.

In many ways, the Huawei case echoes that of another company that has aroused security concerns in the United States: the Russian cybersecurity firm Kaspersky Lab.

Around two years ago, American officials began expressing worries that the company’s software could be used by Moscow to gather intelligence. The company denied the allegations. But in September 2017, the Department of Homeland Security directed federal agencies to begin removing the company’s products from government systems. Congress then codified the ban in a spending law.

Kaspersky filed two lawsuits in response, arguing that the prohibition amounted to a bill of attainder. In May, a judge in the District of Columbia dismissed the suits, ruling that Congress was motivated by the legitimate desire to protect government computer networks against Russian intrusion. The judge also said that Kaspersky’s sales to the American government were such a small fraction of the company’s business that the ban was not especially harsh.

An appeals court upheld the ruling a few months later. Banning Kaspersky was a “prophylactic, not punitive” measure, the judge in the appeal, David S. Tatel, wrote.

“Given the not insignificant probability that Kaspersky’s products could have compromised federal systems and the magnitude of the harm such an intrusion could have wrought, Congress’s decision to remove Kaspersky from federal networks represents a reasonable and balanced response,” Judge Tatel wrote.