US Court Rejects Huawei's Appeal Against FCC Sanctions

AP News "Court Tradition of Following Government Decisions on Security Issues" Analysis

[Image source=AP Yonhap News]

[Asia Economy Reporter Cha Min-young] A U.S. court has ruled that the Federal Communications Commission's (FCC) decision to completely ban transactions involving telecommunications equipment deemed a threat to U.S. security is lawful. This is seen as bolstering the Biden administration's tough stance on China.

According to the Associated Press and Bloomberg on the 18th (local time), the U.S. Fifth Circuit Court of Appeals dismissed Huawei's appeal seeking to overturn the FCC's order.

The three-judge appellate panel issued a 60-page ruling affirming this decision. It explained that the order prohibiting the purchase of Huawei equipment using federal funds falls within the FCC's authority. The court also rejected Huawei's claim that the FCC lacks expertise in national security matters.

Earlier, on the 17th (local time), the FCC, the U.S. telecommunications authority, announced a plan to ban approval for purchases of equipment from Chinese companies such as Huawei and ZTE, which are considered threats to U.S. national security. The FCC passed this proposal unanimously with a 4-0 vote.

During the Trump administration in May 2019, the FCC prohibited the purchase of equipment or services from companies deemed national security threats, including Huawei, using the federal subsidy known as the "Universal Service Fund."

Huawei, listed on the sanctions list, filed a lawsuit claiming the FCC's decision was "politically motivated rather than security-based" and that national security determinations exceed the FCC's authority.

Local U.S. media analyzed that the court is aligned with the administration on security issues. Bloomberg reported that the ruling "upholds the lower court decision in favor of the FCC." The Associated Press described the ruling as following the longstanding U.S. judicial tradition of not overturning government decisions related to national security.

Since the Trump administration, the U.S. has imposed stringent regulations on Chinese telecommunications equipment companies such as Huawei and ZTE. This policy continues under the Biden administration, citing concerns that Huawei's ties to the Chinese Communist Party could be exploited for espionage.

Huawei has suffered in the global market as the U.S. has urged not only itself but also its allies to ban Huawei equipment. Its 2020 revenue was 891.4 billion yuan, a 3.8% increase from the previous year. This is a relatively strong performance despite U.S. sanctions, though it is significantly lower than the 14.3% average annual growth rate from 2016 to 2020.

This content was produced with the assistance of AI translation services.