(Bloomberg) — The European Commission is exploring ways to force European Union member states to phase out Huawei Technologies Co. and ZTE Corp. from their telecommunications networks, according to people with the matter.
Commission Vice President Henna Virkkunen wants to convert the European Commission’s 2020 recommendation to stop using high-risk vendors in mobile networks into a legal requirement, according to the people, who asked not to be identified because the negotiations are private.
While infrastructure decisions rest with national governments, Virkkunen’s proposal would compel EU countries to align with the commission’s security guidance.
The EU is increasingly focused on the risks posed by Chinese telecom equipment makers as trade and political ties with its second-largest trading partner fray. The concern is that handing over control of critical national infrastructure to companies with such close ties to Beijing could compromise national security interests.
Virkkunen is examining ways to limit the use of Chinese equipment suppliers in fixed-line networks, as countries push for the rapid deployment of state-of-the-art fiber cables to expand high-speed internet access.
The commission is also considering measures to dissuade non-EU countries from relying on Chinese vendors, including by withholding Global Gateway funding from nations that use the grants for projects involving Huawei equipment, according to the people.
Representatives for the commission and Huawei did not immediately respond to requests for comment. China’s Foreign Ministry has previously criticized the EU’s characterization of Huawei and ZTE as high-risk suppliers as lacking in legal or factual basis.
Concerns over Huawei and ZTE have resurfaced across Europe, as both Germany and Finland weigh tighter restrictions on Chinese vendors, Bloomberg News reported. While countries like the UK and Sweden banned the use of Chinese vendors years ago, others like Spain and Greece continue to allow the deployment of Chinese vendors in their networks. China hawks in the EU have warned this uneven approach poses significant security risks.
Banning certain vendors is likely to spark a political battle, as countries have long resisted ceding control over decisions about Huawei to the commission. Telecom operators will also oppose restrictions, arguing that Huawei’s technology is cheaper and better than Western alternatives.
The issue first gained prominence during US President Donald Trump’s first term, when Washington barred Huawei and lobbied heavily for European nations to follow suit.
The commission wrote its “5G toolbox,” which urged countries to exclude high-risk vendors from their radio and core network infrastructure. However, EU countries were not obligated to follow the toolbox as critical infrastructure and national security are at countries’ discretion.
Sweden implemented a full ban on Huawei, but the move triggered a backlash from China that discouraged other countries from following suit.
Former European Commissioner Thierry Breton later sought to increase pressure on countries by explicitly naming Huawei and ZTE — a shift from earlier references to anonymous high-risk vendors. He also pledged to remove their technology from the commission’s own networks, but this failed to spur action in national capitals.
When Trump began his second term this year, the telecom industry anticipated renewed scrutiny of the role of Chinese technology companies in Europe. Huawei’s Finnish rival Nokia Oyj has been warning about the widespread use of Huawei in European networks, as China moves to phase out Nokia and other Western suppliers from its domestic market.
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