The Week in Tech: London Hands Washington a Loss on Huawei

Each week, we review the week’s news, offering analysis about the most important developments in the tech industry.

Hi, this is David McCabe. I report on tech policy from The Times’s bureau in Washington. But this past week, one of the biggest stories began with an announcement an ocean away.

For weeks, we had been waiting to see whether Prime Minister Boris Johnson would allow Huawei equipment to be used in Britain’s 5G wireless network or follow American officials in shutting the company out. The United States has said for years that the company’s networking gear could give the Chinese government access to key infrastructure.

On Tuesday, Mr. Johnson revealed his decision: Huawei is in. The company’s equipment can be used in a portion of the 5G, or fifth-generation, network.

This is a big setback for the Trump administration’s global anti-Huawei push. The White House had sent top officials to London to try to sway Mr. Johnson, a close ally. Shortly after the British announcement, the European Union told its members to limit but not totally eliminate Huawei’s role in their network.

I messaged Adam Satariano, who covers tech in Europe from The Times’s London bureau, to find out more about the fallout from Mr. Johnson’s choice.

Why did Boris Johnson make the decision to allow Huawei to stay involved in building Britain’s 5G network, despite all the pressure he was under from the Trump administration?

There are a few key reasons. First, a practical one. Huawei has been part of the British telecom network for years. 5G will be built on top of that existing system. To implement a ban now would be extraordinarily costly and delay the rollout of the faster network because a lot of that old kit would have to be ripped out.

Second, British intelligence and cybersecurity officials believe the risks of Huawei can be mitigated. As part of allowing Huawei to be part of its network, British officials years ago required the company to subject its products and code to tests. There’s a lab near Cambridge where this is done. For British officials, this gives them a level of confidence that the problem can be managed. Of course, American officials think this is wishful thinking. With 5G, software plays a much bigger role, meaning it will be harder to keep harmful code from slipping through.

Finally, as Britain exits the European Union, it can’t afford to alienate China, which is a big investor in the country and a growing buyer of British exports. From an economic standpoint, it would be a big risk. Britain also sees 5G as a key to the country’s economic future, and any delays could put it at a disadvantage to other countries.

Here in Washington, Mr. Johnson’s decision set off a paroxysm of concerned statements from the administration and hawkish members of Congress. What has the reaction been like in Britain?

I think it was expected. The statement from the White House was actually quite mild. Secretary of State Mike Pompeo still went forward with a trip to Britain during the week. Perhaps harsher words were shared behind closed doors.

This Huawei decision is also just one example of a split between how tech is regulated in the United States and in Britain. What’s the future of the special relationship when it comes to tech?

Complicated. Like many countries in Europe, Britain is very frustrated with Big Tech. It doesn’t think the companies pay their fair share in taxes. And with Facebook and Google/YouTube, not enough is done to limit the spread of harmful content. Attempts to address taxes and harmful content will gain momentum this year, potentially setting up more tension with the United States.

It’s late in London, so I’ve got just one more: You cover all of Europe, not just Britain. Where does the American campaign to keep Huawei out of 5G networks go next?

Germany is another country where the United States has been applying a lot of pressure. But as our colleagues Katrin Bennhold and Jack Ewing recently reported, it also faces a tough decision. China has threatened to retaliate if Huawei is banned. That is not an insignificant threat for Germany, which sells a lot of BMWs and VWs to China. Chancellor Angela Merkel has signaled she doesn’t want a ban, but she is facing pressure from others in government who want to take a more aggressive approach.

It’s a fascinating issue, touching on tech, trade, politics, foreign policy and national security.

Three stories during the week underscored how the news around the coronavirus that originated in Wuhan, China — and the way the public has responded — is being mediated by online platforms.

  • The Times’s Raymond Zhong reported from Shanghai on the way that anger over the Chinese government’s handling of the outbreak has boiled over on social media.

  • Not surprisingly, the virus has also been the subject of online disinformation. BuzzFeed News’s Jane Lytvynenko had a good roundup, including posts with false statements about how many people are affected and the authorities’ response.

  • But in The Atlantic, Alexis Madrigal noted that it was important to remember that while “out-and-out conspiracies and hoaxes will draw some attention, it’s really the stuff that’s close to the boundaries of discourse that grabs the most eyeballs.”

  • Workers in Amazon or Walmart warehouses often sort through bins of random objects, looking for the right one to send off for packaging and delivery to consumers. Now, the robots are catching up, Adam Satariano and Cade Metz reported.

  • Eduardo Porter filed an article from Portland, Maine, where local officials and a wealthy donor are hoping to build out a greater tech presence.

  • Facebook reported its lowest quarterly growth ever.

  • Lyft is restructuring and will lay off about 90 employees.

  • Apple’s profit grew 11.4 percent to $22.3 billion, thanks to stronger iPhone, wearable and services revenue.

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