EU puts Huawei, ZTE in crosshairs. Who will pull trigger?

The European Union's executive arm would like to go after China-based companies Huawei and ZTE, but rival firms that would be expected to support the effort have shied away.

The European Commission would like to prepare a case against China-based companies Huawei and ZTE over the possibility of unfair business practices, but it needs help from technology companies that are unwilling to get involved, according to a new report.

Reuters, which claims to have spoken to people with knowledge of the issue, reported that the EC would like to investigate whether Huawei and ZTE have been unfairly using state subsidies to undercut prices offered by European companies. The EC is the executive arm of the European Union.

For the trade investigation to move forward, the EC needs to have at least one competing company, like Ericsson or Alcatel-Lucent, file a complaint.

The trouble is, no company has said it will actually file a complaint. There is apparently a fear of being viewed unfavorably by the Chinese government and being locked out of the country's exploding marketplace.

So, the EC has a problem. It can either drop its hope for a complaint against the Chinese companies because European firms won't line up to support its efforts -- or it can keep searching for a willing company. According to Reuters, the EC could also push for an investigation on its own, though that's not typically how things proceed.

Huawei and ZTE have been in the crosshairs of both U.S. and European regulators over concerns that the companies, which provide telecommunications equipment, are a security risk. Some lawmakers and other government officials believe that the companies are influenced by the Chinese government, which may want to use their equipment to spy on nations. Huawei and ZTE have both denied such claims and say that they are operating independently and without malice.

In addition, Huawei and ZTE have denied the EC's claims that they're taking advantage of unfair subsidies. They attribute their low-cost alternatives to more efficient manufacturing.

 

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