Huawei USA security chief plays down repeated claims of IP theft

NEW YORK, Dec 29, 2019, CNBC. Huawei USA’s chief security officer, Andy Purdy, on Friday played down the company’s history of alleged intellectual property theft. “There are instances of wrongdoing by us and other companies, and any instance of that is wrong,” Purdy told CNBC’s “Squawk Box.” “I’m saying when you conflate it to be this gigantic thing, that’s not true,” CNBC reported.

The Chinese telecommunications giant has been repeatedly accused of IP theft by its rivals and the U.S. government, though Huawei has maintained that it respects intellectual property rights. Purdy, when responding to IP theft claims in May, told CNBC that he doesn’t “forgive acts that have happened in the past.”

When asked about it on Friday by CNBC’s Becky Quick, Purdy, a former top cybersecurity official at the U.S. Department of Homeland Security, shot down claims that Huawei is a repeated perpetrator of IP theft.

“I understand that’s your position. I understand that’s the position of the U.S. government,” he said. “That’s not the facts, when you look at the objective information.”

Purdy on Friday also said a report that claimed the Chinese tech giant received billions in government financial support was “drastically overstated.”

Purdy’s interview comes two days after The Wall Street Journal reported that Huawei had access to as much as $75 billion in Chinese support over the past 25 years as it grew to become the world’s largest telecommunications equipment company.

The newspaper reported that a large part of the assistance, roughly $46 billion, came from loans, credit lines and other state support. Additionally, it saved as much as $25 billion in taxes between 2008 and 2018 with state incentives and received $1.6 billion in grants and $2 billion in land discounts, the Journal reported.

“The fact is there are lines of credit issued between 2005 and 2011,” Purdy said. He added that a “tiny fraction” was ever used was from loans from customers.

“To take the gross figure of the credit lines is really not fair to talk about that as being assistance from the government,” he said.

Purdy added that credit lines shouldn’t be considered government assistance for the company, since they were made available by banks to customers.

“We didn’t get the lines of credit from the government. The lines of credit were made available by the banks to the customers. Then the question was, are customers going to take advantage of the lines of credit to buy our equipment?” Purdy said. “What we’re saying is a tiny fraction of the 40-some billion they’re talking about was used to buy our equipment.”

“The point is, it’s a tiny amount, when you look at the investment in our company over that period of time, it was less than, like, $3 billion was used to purchase our products,” he added. “When you are looking at $175 billion in purchases, $3 billion in purchases supported by credit is a minor issue.”

The Wall Street Journal did not immediately respond to a request for comment on Purdy’s remarks.