Huawei to appeal Sweden’s ‘draconic’ 5G ban

Chinese company says the decision will create a monopoly for Ericsson

LAS VEGAS, UNITED STATES - JANUARY 08: People visit the stand of Huawei featuring '8K + AI' technology during the opening of 2019 Consumer Electronics Show (CES) at the Las Vegas Convention Center on January 8, 2019 in Las Vegas, the United States. The 2019 Consumer Electronics Show is held in Las Vegas on January 8-11. (Photo by Zhang Shuo/China News Service/Visual China Group via Getty Images)

Huawei Technologies is launching a legal challenge against Sweden’s decision to exclude it from 5G buildouts and says the move will create a monopoly for Ericsson.

The Chinese company has filed an appeal with an administrative court in Stockholm, arguing that the “draconic measure” violates European Union and national laws by effectively barring it from the Swedish market.

The Swedish Post and Telecom Authority last month ruled that operators participating in the country’s upcoming 5G spectrum auction can’t use equipment from Huawei or its much smaller rival ZTE.

The ban was based on an assessment by Sweden’s police and military agencies, which concluded that Chinese state influence over the private sector “brings with it strong incentives for privately owned companies to act in accordance with state goals and the communist party’s national strategies”.

But Huawei says Chinese intelligence agencies have no authority to order the company to spy for them. It further argues the decision would create a de-facto monopoly for Ericsson after three major operators in Sweden will have to leave Huawei for Nokia or its Swedish rival.

While the ruling “would mean an opportunity for Nokia to establish itself in the market, Ericsson’s advantage means that Nokia’s presence could to some extent be marginal in the foreseeable future”, Huawei said in its appeal.

Huawei’s calculations of the economic loss it will suffer from the ban have been redacted from the appeal, but the company had sales of about 5 billion kronor ($575 million) in Sweden last year. It also claims that a phasing out of its products from existing networks would cost operators about 10bn kronor.

The Chinese company is calling on the court to immediately suspend last month’s decision as the 5G spectrum auction in Sweden is set to begin on November 10.