Chinese telecommunications equipment vendors Huawei and ZTE are in hot water again, this time in Europe. The European Commission, via Trade Commissioner Karel De Gucht, cited the two firms this past Friday, May 17, for violating EU rules against dumping and subsidies in connection with the prices the two companies have charged for mobile network equipment, according to Reuters.
The citation means the European Commission will formally investigate whether the two firms engaged in such anti-competitive practices. If the investigation uncovers evidence that proves these claims, Huawei and ZTE likely would face sanctions.
The two companies have repeatedly denied that they engage in unfair pricing tactics or benefit from government-sponsored subsidies. "We hope the EU listens to our customers. Our low prices alone cannot win market share. It is only quality products and services which conform with the laws and regulations that are acceptable to our clients," Tao Jingwen, president of Huawei's West Europe Region, told China Daily in an article updated May 18.
Taking things a step further, Tao added, "Some European companies have blamed Chinese companies for their losses, but sometimes they were caused by their own laziness."
China Daily says that Huawei will take "strong action" if the investigation proceeds, but did not provide details.
The current troubles in Europe come after the two firms were labeled a threat to U.S. security by a House committee last October (see “U.S. House Intelligence Committee sees Huawei and ZTE as security threats”).
De Gucht last Wednesday, May 15, announced that his office was prepared to launch an ex-officio investigation into anti-competitive practices by “China” with regard to mobile network equipment without mentioning any companies by name. He said at the time that the investigation into such charges would be put on hold pending negotiations with “Chinese authorities.”
In an ex-officio investigation, the European Commission acts without having received an official complaint from a European company. Such an investigation is designed to shield individual European companies from retaliation for making such a complaint.
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