Chinese networking giants could face extra import costs if found guilty
The EU is set to launch a huge investigation into Huawei and ZTE after it revealed it had evidence the Chinese telecoms firms had benefited from illegal government subsidies, allowing them to sell products into Europe at a lower cost.
According to a report in the Financial Times, the EU set out its position at a closed-door meeting held last week. The report claims the EU has over the last few months compiled "very solid evidence" that the companies had been taking part in a practice called "dumping," when government subsidies allow a company to sell products in the EU below cost.
The Financial Times reports says the investigation could be launched as soon as next month. If it finds China guilty of the accusations Huawei and ZTE could face punitive tariffs when selling their products into the European region.
The case would be the first time the EU has launched an investigation of its own accord rather than following a complaint from a member state or a company.
Karel De Gucht, the EU trade commissioner, suggested the EU is taking matters into its own hands as countries are too worried about the repercussions if they were to make a complaint.
"It is undeniable that many European companies are unwilling to come forward and make justified trade defence complaints due to fear of consequences for their business," he said at a conference earlier in May.
"The consequences can be serious for companies that export to or invest in the country in question. In our current system it is not clear how we ensure these companies have a fair shot," he added.
Huawei recently signed a managed services contract with mobile operator Telefónica. The agreement will see Huawei will plan and manage Telefónica UK’s core transmission, mobile access and network construction in the multivendor core network.
ZTE meanwhile has been pushing its video conferencing products recently. The new video conferencing systems provide enhanced call quality and visual communication for small to medium business environments, said the company.