UK Intelligence and European Commission Look at Huawei More Closely - IBM as a Partner

British Telcom (BT) has been declining to comment on whether it had received any requests from US officials to stop doing business with Huawei.

Nonetheless, on Friday, a United Kingdom Parliament committee said that it is performing an investigation about  Huawei's business in the UK after governments from Australia and Canada expressed concerns.

The UK Parliament's intelligence and security committee is examining the relationship between Huawei and the UK firm BT.  They are  "reviewing the whole presence of Huawei in regard to our critical national infrastructure and whether that should give rise for concern" according to an article in the Guardian.  Recently, Huawei had announced their intentions of spending almost $2 billion in the UK, including moving into a new 140k square foot building in Reading and plans to increase employment from around eight hundred to about fifteen hundred.  Victor Zhang, chief executive of Huawei Technologies UK, has stated “This move marks the beginning of an exciting new period of development for Huawei in the UK.”  However, this was before the investigation announcement from the intelligence and security committee. 

In March, The Australian Financial Review wrote that Huawei had been banned as a supplier for the $37.4 billion Australia Broadband Network after concerns were raised about the potential security implications.  Huawei, as one would suspect, has been calling this political. 

On the European front, European Trade Commissioner Karel De Gucht has been collecting evidence for a potential anti-dumping or anti-subsidy case against both Huawei and ZTE over subsidies.  The European Commission has suspicions that these two companies have been receiving   receive illegal state subsidies to undercut rivals in Europe. 

Huawei and ZTE are the world’s second and fifth largest manufacturers of wireless telecommunications gear.  Huawei has    many of the biggest telecommunications companies in Europe as it customers.  They include BT and Vodafone in the UK,   Telefónica of Spain, and Everything Everywhere, a partnership between France Télécom and Deutsche Telekom in Britain.  Huawei had European sales of over $3.7 billion last year. They employ about seven thousand people in Europe. 

Huawei spokesperson Roland Sladek   has started, “Europe is almost like a second home market for us.”  Their reception in this is becoming a little chillier.

ZTE is another story.  Cisco terminated a technology relationship with ZTE  in July.  They also  terminated their sales partnership with ZTE  in early October   after an investigation showed  that ZTE had sold Cisco branded networking gear  to Iran.  Iran is under ban from the US government  from  receiving this and other  technologies  from US firms.

IBM as a Key Huawei Partner

An  October 10 Wall Street Journal article,  "Huawei's Ally, IBM", discusses   how IBM has been working closely with Huawei since 1997.  This has included teaching management techniques (R&D, supply chain and financial management),  packaging its technology into Huawei products, a 2000 initiative to jointly develop networking gear, and most recently, advising Huawei on its expansion into selling smartphones and tablets.  Consumer products such as smartphones contributed 21% of Huawei's $32.4 billion in revenues last year. Huawei  announced a strategic partnership with IBM Global Business Services in February. Without IBM, "We could not have had the Huawei of today" stated Charles Ding, Huawei senior vice president for the US. Other companies Huawei has hired as consultants include Accenture, Boston Consulting Group, PrecewaterhouseCoopers, Mercer, and Hay Group.

To read more about Huawei -
 http://kensek.blogspot.com/2012/10/us-intelligence-report-dont-trust-huawei.html

European Commission (EC) Approves Intel Acquisition of McAfee

Five weeks after the FTC gave Intel approval of its $7.68 billion (US) acquisition of McAfee, the European Commission, watchdog for the European Union (EU, ) did the same.

"The commitments submitted by Intel strike the right balance, as they allow preserving both competition and the beneficial effects of the merger. These changes will ensure that vigorous competition is maintained and that consumers get the best result in terms of price, choice and quality of the IT security products," said Commission Vice-President in charge of competition policy Joaquin Almunia.

Among the commitments Intel made to the European Commission:

• McAfee competitors will have access to all necessary information to use functionalities of Intel's CPUs and chipsets in the same way as those functionalities used by McAfee.
• Intel will not to actively impede competitors' security solutions from running on Intel CPUs or chipsets.
• Intel will avoid hampering the operation of McAfee's security solutions when running on personal computers containing CPUs or chipsets sold by Intel's competitors (AMD, etc).

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/70

It will be interesting to read any comments McAfee’s internet security competitors (Symantec, Trend Micro, Kaspersky, Sophos, etc) regarding this decision. They have to be happy that they will have access to the same functionalities on the chip that McAfee will have. Whether McAfee will have any sort of early access is an interesting question.

Intel has had disagreements with the EC before. In 2009, Intel was fined $1.45 billion for engaging in illegal anticompetitive practices to exclude competitors from the market for X86 computer chips.

http://venturebeat.com/2009/05/13/intel-slapped-with-145-billion-fine-for-antitrust-violations/

Let the monitoring begin.

Meanwhile, on Tuesday, Intel’s chief technology officer Justin Rattner announced that scientists at Intel are working on security technology that will stop all zero-day attacks*. The technology could be ready this year. He stated that the technology won’t be signature based. This could mean that heuristic or behavior based capabilities will be put on Intel’s chips. McAfee’s contribution to this project (if any) wasn’t mentioned.

http://www.computerworld.com/s/article/9206366/Intel_developing_security_game_changer_

*One definition of a zero day attack - A zero day attack capitalizes on vulnerabilities right after their discovery. Thus, zero-day attacks occur before the security community or the vendor of the software knows about the vulnerability or has been able to distribute patches to repair it.