Chinese tech giant Huawei has lodged an appeal against Spanish government rules that could potentially exclude the company from receiving state aid. Spain has committed over €500 million ($527 million) in aid to develop 5G networks in rural areas, but has stated that suppliers deemed "high risk" will not be eligible. Huawei's Spanish unit filed an administrative appeal arguing that the exclusion of certain suppliers is unlawful, disproportionate, and driven by political motives.
In its appeal, Huawei argued that the rules interfere with operators' freedom to choose the best provider based on objective commercial, technical, and security criteria. The company claimed that the rules seek to exclude suppliers arbitrarily based on political considerations. The Chinese firm has a long-standing presence in Spain, and it is a major player in the country's 5G network development.
The rules state that critical components, equipment, and associated software of 5G networks should not be acquired from suppliers designated as high risk by Spain. Additionally, the rules allow for the replacement of equipment from suppliers determined to be high risk, even if operators have already deployed 5G technology. The Ministry of Economy, which formulates these regulations, has not yet published a list of banned suppliers and declined to comment on the appeal.
The European Commission has been urging member states to phase out Huawei and ZTE equipment from their advanced mobile networks, having banned these vendors from its own internal systems in June. Germany and Spain are among the countries in the European Union most reliant on Chinese equipment in their networks, a situation that the EU deems unacceptable.
According to a report by Strand Consult, Chinese suppliers accounted for 38% of Spain's 5G network as of December 2022. In comparison, Germany relied on Chinese equipment for 59% of its 5G network, while France and Italy stood at 17% and 51% respectively.
The appeal filed in Spain follows a similar action taken by Huawei in Portugal last month. The company appealed against a decision by Portugal's cybersecurity council that forbids operators from using Huawei equipment in the construction of 5G mobile networks.
The outcome of Huawei's appeal in Spain remains uncertain. However, it highlights the ongoing battle between the Chinese tech giant and several European countries over the involvement of Huawei in their critical infrastructure development, particularly concerning the rollout of 5G networks.