Germany passes a security bill conditionally permitting the usage of Huawei devices on 5G networks

On Wednesday 17 December, local time, German Chancellor Angela Merkel’s (Angela Merkel) cabinet accepted a protection bill enabling the contractual use of the goods and technology of Huawei and other international firms on 5G networks, but they must recognize oversight and ensure safety.

Network infrastructure manufacturers must, according to the bill, ensure that their equipment can be used properly, which leaves them financially liable for any breaches. This act would also include technological and legal assistance for the surveillance of network security by German security services.

Earlier this month, when the German government unveiled the draft protection law, Interior Minister Horst Seehofer said that the government was attempting to create a legislative framework that would fix cybersecurity problems while retaining the sector. Open to innovations that compete. “We have formulated regulations to enable us to monitor in an appropriate manner, and our security interests have been greatly guaranteed.” he said.

Given that China is Germany’s largest trade partner and for many German firms the largest market, the country has always been hesitant to respond to the U.S. demands for Huawei restrictions. Germany, on the opposite, tries to take a middle ground, that is to say, to encourage Huawei to conduct business in Germany, but to supervise it in order to satisfy American allies.

Although Germany is one of the wealthiest countries in Europe, in terms of high-speed Internet connectivity, it lags behind other countries making the fast and robust introduction of 5G networks much more important for enterprises and households.

Furthermore the full ban on Huawei from operating in Germany might pose legal hurdles, but it also challenges the significant economic interests of Germany in China. One-third of China’s new car sales come from German producers, with China being the biggest single market for the German automakers Volkswagen, Daimler and BMW. In connected vehicles and autonomous vehicle developments, German automotive manufacturers rely on collaboration with Huawei, and Deutsche Telekom has already closely incorporated Huawei’s technology into its 4G and 5G cellular broadband networks.

This bill is said to have to be sent for review to the German Bundestag before it can be officially approved.

Data collected by the market research firm Dell’Oro Group reveals that Huawei’s sales share in the telecom equipment market rose to 30 percent in the first three quarters of 2020, up from 28 percent in the entire year of 2019, despite facing several obstacles as an industry leader. This is motivated by the efforts of China to develop a national 5G network, in which Huawei has played a leading role.