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Europe Daily Bulletin No. 12414
SECTORAL POLICIES / Digital

EU refuses to de facto exclude Huawei from its 5G market

The European Union refuses to give in to American pressure: it will not 'de facto' ban the Chinese equipment manufacturers Huawei and ZTE on its territory, as Washington had requested. On 29 January, the European Commission presented a toolbox that recommends a risk-based approach and encourages a "multi-vendor" approach. 

This "toolbox" is a kind of specification. It sets out the ideal behaviour of each link in the chain, from Member States to users (industrial companies) to telecom operators. It recommends behaviour for each risk identified in the October communication, whether massive network failure, state interference or even exploitation of connections between objects (IoT) (see EUROPE 12345/1)

First results in April at the earliest

The document does not specifically mention any particular player or country, but it does allow players to exclude an equipment manufacturer from all or part of the 5G market following a risk assessment based on European recommendations.

At present, Member States have allocated 16% of the pioneering 5G frequency bands and by the end of the year, the first 5G services should be available in 138 European cities. However, it will take until approximately 2023 before the 'true 5G', which allows fast two-way data transfer with low latency (stand-alone), will appear. 

In this context, the European Union therefore has a certain period of time at its disposal, which allows Member States to take account of their specificities. For Commissioner Thierry Breton, some Member States could indeed apply maximum security, without transition, in strategic locations (he mentions places where research is carried out, where hospitals are established or where confidential defence issues are present), where other Member States could give themselves time to discuss with equipment manufacturers to enable them to 'correct' a risk.

In the short term, the toolbox encourages Member States to put in place concrete and measurable actions to implement its requirements by 30 April 2020 and to produce a joint report on the implementation of these measures in each Member State two months later. 

What about Huawei and ZTE?

"All we want is to act openly and frankly", Margrethe Vestager explained at a press conference about Huawei. The Commissioner for the Internal Market was more direct: "We live in a world where, thanks to the Patriot/Cloud Act in the United States, U.S. authorities have the ability to intercept data without even informing the owners of this data. China, for its part, adopted legislation in 2017 requiring Chinese companies to allow the authorities access to the data they hold, regardless of its origin. We're in the middle and we say: these are the rules that are going to apply in Europe", explained Thierry Breton. "This type of behaviour has been identified - by not targeting anyone - as a high risk that needs to be addressed", he continued.  

A statement that should not please Washington, which accuses Huawei of spying for Beijing and urges its allies not to procure from it to build their 5G networks. Huawei, for its part, dismissed the charges and called for an "impartial and factual approach".  

UK leads the way 

The Chinese giant has reason to rejoice, since the Member States should logically follow the example of the United Kingdom. Indeed, the country, which Commissioner Breton said participated and validated the toolbox just before leaving the EU, announced on 28 January its intention to allow Huawei to operate on British territory for non-strategic infrastructure, such as relay antennas (see EUROPE 12413/6). "The United Kingdom was involved in both phases of the process. We have every reason to believe that they are very close to the conclusions, even if they can apply it as they wish", commented Thierry Breton.

However, Vestager and Breton were less vocal about the articles in the German press claiming that Berlin has had proof since December that "Huawei has been working with the Chinese services".  

All eyes are on the Americans

As a result, the press watched with interest the U.S. president's Twitter account following the release of the toolbox. But at the time this edition was completed, Donald Trump had not published anything. 

Asked by Bloomberg whether she expected retaliation from Washington, Vice President Vestager replied: “I wouldn’t know that. What I know is that the Presidents met and had a good conversation (in Davos) (see EUROPE 12304/25). And that work is ongoing on many different issues as we speak. The most important point is we cooperate with our partners on many issues, be it defence, cybersecurity, trade. (...) The obvious starting point is that we have American friends and we want to work with them”.

Link to the Commission's toolbox: http://bit.ly/38Kv3re (Original version in French by Sophie Petitjean)

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