Swedish Court Upholds Government Decision to Ban Huawei in 5G Networks

On June 22, the Administrative Court of Sweden issued a ruling that upheld a government ban on using Chinese tech company Huawei’s equipment in the country’s 5G network.

In the ruling, the Administrative Court made it clear that it deferred to government decisions about national security, because “only the security police and the armed forces together have an overall picture regarding the security situation and the threat against Sweden.” Among other aspects of its reasoning, the Court said that it can be assumed that there are links between the Chinese government and Huawei, through the Chinese Intelligence Act and trade union affiliation; Huawei may receive pressure from the Chinese government and could cause damage to Sweden’s security (whether there are technical vulnerabilities or Huawei has been involved in such activity is irrelevant); and Huawei’s supplies may be affected by U.S. export restrictions, which can cause damage to Sweden’s security.

The Court further found that the government decisions at issue are compliant with the law, including the proportionality requirement, and also found that the decisions are not discriminatory.

Procedure-wise, the Court found the Swedish Post and Telecom Authority (PTS) violated its communication obligation by not letting Huawei speak to the authority. However, the Court ruled that there is no reason to revoke the decisions because they are not incorrect.

The Administrative Court also concluded that there was no obligation to notify either PTS's decisions or the applicable legislation to the European Commission in accordance with Directive (EU) 2015/1535 and that there is no need to obtain a preliminary ruling from the European Court of Justice.

Last October, the Swedish telecom regulator PTS issued a ban on the use of Huawei and ZTE telecom equipment in 5G central functions, citing security concerns raised by Sweden’s security service SAPO. The PTS also ordered the discontinuation of any existing products from Huawei by January 1, 2025. Huawei appealed the decision. At the time, China’s MOFCOM official stated that “[w]ithout any evidence, Sweden has excluded Chinese enterprises from its 5G network construction on so-called national security grounds. The move has violated the basic principles of the World Trade Organization and international rules, and damaged the legitimate rights and interests of Chinese enterprises.”  

In response to the recent court ruling, China's Global Times called it “a politicized decision” because “[t]he reason for the court ruling is considered ‘vague’ - it cited possible ‘national security’ risks” and “the PTS failed to produce any tangible evidences to demonstrate that Huawei's 5G gear has security issues.” Cui Hongjian, director of the Department of European Studies at the China Institute of International Studies, said the vague reasoning puts Swedish companies at risk because “[i]f Sweden bans Huawei citing so-called national security grounds, China can do the same to Swedish companies.” Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, said “the ban is also a mixed result of US government pressure as well as rivalry among various political forces in Sweden.”

Huawei can appeal this court ruling and is reportedly considering legal remedies.

In addition to Sweden, many European countries have decided to exclude Huawei’s equipment from their 5G network, and Nokia and Ericson have been the main beneficiaries. Dutch telecom company KPN has chosen Sweden’s Ericsson to build its 5G network. France does not ban Huawei, but discourages the use of Huawei products in 5G. French telecoms operator Free was not able to obtain government authorization to use Huawei and subsequently considered turning to Nokia instead. Similarly, Italy vetoed a deal between telecoms company Fastweb and Huawei to build its 5G core network. Germany plans to tighten scrutiny for telecoms network vendors and make it harder for Huawei to participate. Belgium telecom companies Orange Belgium and Proximus have dropped Huawei and picked Nokia to build its 5G network, even though the Belgian cybersecurity agency found no evidence of spying threats posed by Huawei. Britain decided to remove Huawei equipment from its 5G network. Romania also recently passed a law to bar China and Huawei from participating in 5G telecommunication networks, which stems from a 2019 US-Romania memorandum that highlighted the use of “only trusted and reliable vendors” in the 5G network.