Huawei is challenging the Spanish government for what it considers to be a ‘veto’ of its 5G network and equipment.
The Chinese tech giant has appealed the Ministry of Economy’s rules which may prevent it from accessing state aid.
Spain previously allocated over $527m to develop 5G networks in rural areas but plans to exclude companies which it considers high risk.
In an appeal filed by Huawei’s Spanish subsidiary with Spain’s National Court, the company called the rules ‘disproportionate’ and politically motivated.
Spain’s ruling is informed by the European Commission’s inclusion of Huawei in a list of ‘high-risk’ suppliers earlier this year in June.
The ruling could have major implications for Vodafone and Orange, which operate with equipment from Huawei.
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“The article in question interferes with the freedom of operators to choose the best provider based on objective criteria that reflect business, technical and security requirements.
“Instead, it seeks to exclude certain suppliers based on arbitrary political criteria. This approach will reduce competition, which will cause a distortion of the telecommunications sector in Spain,” Huawei’s Spanish subsidiary told El Pais.
In 2019, Huawei was added to a list of companies under US export controls, which meant that the telecommunications company was restricted from buying advanced chips and software from US businesses.
Embattled by the pandemic and trade restrictions, Huawei stated that it was operating in “survival mode” in 2020, which continued for the next three years.
The company’s business revenue peaked at $67bn in 2020 but almost halved in 2021.
Huawei announced in February that it would invest $400m to strengthen its cloud region in Saudi Arabia. The company also announced plans in September to open a cloud data centre in Riyadh, Saudi Arabia, as part of its planned expansion into the Middle East.