Due to one of those rare moments where doing business with China is detrimental to your bottom line, Symantec has exited its joint-venture with Huawei, the Chinese networking and telecommunications giant, for fears of being shelved in the security technology race in the US.
According to the New York Times’ sources, Symantec backed out of the joint venture due to concerns that it would impact its relationship with the US military and homeland security. Symantec and Huawei, who formed the Huawei-Symantec joint venture back in 2008, had sat down and come to a buyout agreement of $530 million, leaving the company solely in Huawei’s hands.
‘Privately-owned’ Huawei, which critics suggest in the People’s Republic of China is a euphemism for ex-military higher-ups and central committee politicians with enough clout to go into business for themselves, may be seen as a security risk for networking and security interests such as Symantec while doing business in the US.
The reason for this is that, in a rather arms-wide-open way, the Department of Homeland Security (DHS) has been pushing for greater public-private information sharing through a programme called the Joint Cybersecurity Services Pilot (JCSP), on the off chance it gets more than it has to dole out. Concerns that Symantec could be removed from the JCSP information sharing list due to its narrow relationship with Huawei has been singled out as the reason for the breakup.
Naturally, having a military contractor like Huawei-Symantec build technology that allows foreign military and intelligence agencies to tap into your own intelligence network does sound like a major no-no.
Huawei-Symantec, as a China-based manufacturer of networking and telecoms equipment, operates under the requirement that their technology be accessed by both the government and military forces (aka the People’s Liberation Army). As more and more technology is sourced from China, fears that these will make their way into the western world security and telecommunications infrastructure has raised concerns with several intelligence outfits including the Australian Security Intelligence Organisation and, more recently, the DHS in the USA.
According to the same report, Huawei had already given up on a bid for 3Com, another network and security equipment contractor for the US military, after a US government panel took issue with connections to the Chinese government.