Here come the lawyers

Issue 27/2019

No, I don't mean Israel Folau's multi-million dollar lawsuit that could bankrupt Rugby Australia, but Google's fight against the Huawei ban:

"Google apparently has warned the Trump administration that its Huawei ban could endanger US national security.

The search giant's senior executives are pushing for an exemption from the Huawei blacklisting that basically banned US companies from doing business with the Chinese company.

They're worried that that the ban would stop them from updating Android on Huawei's phones, potentially prompting the company to develop its own version of the operating system, the report said. Huawei's Android alternative -- reportedly called "Hongmeng" -- would be easier to hack, the execs reckon."

Oh don't you just hate those pesky unintended consequences. Not only will Trump's Huawei decision potentially threaten rather than improve national security, but it's also going to take a toll on consumers' hip pockets:

"A ban on buying telecoms equipment from Chinese firms would add about 55 billion euros ($62 billion) to the cost of 5G networks in Europe and delay the technology by about 18 months, according to an industry analysis seen by Reuters.

The 55-billion-euro estimate reflects the total additional costs implied by a full ban on purchases from Huawei and Chinese peer ZTE for the roll out of 5G networks in Europe.

The two Chinese vendors have a combined market share in the European Union of more than 40%."

The number comes from an industry lobby group so should be taken with a heavy pinch of salt, but there's no doubt that the direction is correct: all else equal banning a major supplier will increase costs, despite Nokia denying the findings (expected given it's a major Huawei competitor in the 5G space).

But back to the lawyers, who apparently devised a way to circumvent the US "entity list" (which Huawei is now on) way back when the Obama administration was coming down hard on ZTE, another Chinese telco:

"...the possibility was dreamed up in March, 2016, by Kevin Wolf, then the assistant secretary of state for export administration and now a partner in the law firm Akin Gump.

At the time, the Commerce Department’s Bureau of Industry and Security was planning to place another Chinese company, ZTE, on the entity list, and Wolf was contemplating the many repercussions of such a move. On his commute into Washington from Arlington one day, he decided it would be a good idea to give companies a workaround in the form of a license."

Google currently has a 90-day exemption from the Huawei ban, allowing it to send software updates to its devices. What are the odds that its licence is eventually: (a) extended; or (b) expanded, similarly to the workaround devised by Kevin Wolf back in 2016?

For me it all depends on how long this saga continues. Remember, the ZTE case - which was eventually resolved in just 3 months after a cheeky $US1 billion payment to the US government - rested on the company's dealings with Iran in direct violation of US sanctions.

But Huawei? As far as I'm aware the only charge is that it is "engaged in activities that are contrary to US national security or foreign policy interest". Yes, Huawei's CFO Meng Wanzhou is currently being detained in Canada over alleged Iranian sanction violations. And yes, the T-Mobile theft case has been dragged back into it (Huawei settled that civil lawsuit back in 2014). But other than those somewhat lightweight accusations (apologies to Meng), the US hasn't actually caught Huawei with its hand in the cookie jar, so to speak, so national security was cited and it was placed on the semi-naughty list instead (Huawei is on the "entity list", whereas ZTE was placed on the more severe "denied persons list").

Unfortunately for Huawei, the lack of a smoking gun means the case will be more difficult to resolve, as there's no charge that can be settled with the payment of a simple billion dollar fine. So it's no wonder Google's (and Huawei's) lawyers have been busy: unless the US and China can drum up some kind of trade deal that includes Huawei before 19 August (which is when Google's 90-day exemption expires), it's going to need exemptions or risk a major competitor to its Android ecosystem emerging in China.

While we wait for that to happen, consumers of technology (i.e. everyone) will wear the cost in the form of reduced competition, lower quality and higher prices. Although I hear you can get a pretty good deal on a Huawei phone these days.

Enjoy the rest of this week's issue. Cheers,

— Justin


The bits


China's assembling its own naughty list

China: I see your "entity list" and raise you an "unreliable list". Yes, China is creating its own list of undesirable companies, no doubt to be populated with the who's who of the NASDAQ. The reason is apparently to encourage US companies to "use lobbying to push back against the government’s moves". Makes sense to me, and it seems to be working already with Google and even Trump's acting budget chief asking for a delay in the restrictions against Huawei.

Learn more:


Apple's $999 monitor stand

You read that correctly. Apple announced a swathe of new products last week but none drew more attention than the $999 Apple Pro display stand. Understandably, it was mocked relentlessly.

In other Apple news, it unveiled a "find my phone" feature using encrypted Bluetooth signals. Basically, Apple can now track you any time you're within Bluetooth range of another Apple device. The company says even it doesn't have the encryption keys (you need two Apple devices to get it to work, each will hold a copy of the others' key), but it hasn't released any code or audit results to confirm that. So in other words, "trust us". Yeah, right.

Learn more:




Image of the week

View source

A history of modern Australia shown in a single animated map.

The first animated image of the week starts in 1788 and shows how Australia's State borders (and the international border with New Zealand) changed over time.


That's all for now. If you enjoyed this issue, feel free to share it via email


Issue 27/2019: Here come the lawyers was compiled by Dr Justin Pyvis and delivered on 11 June, 2019. Feel free to send feedback, suggestions for future issues, ideas, insults, or pretty much anything that crosses your mind to his Keybase or Twitter account.