THE KEY

U.S. officials are waging a fierce campaign to convince European allies to bar the Chinese telecom Huawei from their 5G wireless networks over spying concerns, but they keep running into one big barrier: money.

Because of massive subsidies from the Chinese government, Huawei can afford to offer rates far below any competitor — sometimes as much as 60 percent less, my colleague Ellen Nakashima reported last night.

And those great deals seem to be convincing European governments and companies to look past concerns about the Chinese government spying on their networks.

“You can't compete with someone who gives stuff away for free,” Hosuk Lee-Makiyama, director of a Brussels-based think tank, the European Center for International Political Economy, told Ellen.

For developing nations that would struggle to pay even Huawei’s super-low rates for telecommunications infrastructure, the company can also offer below-market interest rate loans, “drawing on a staggering $100 billion line of credit at state-owned banks,” Ellen reported.

“Huawei's the poster child for China's state capitalism,” said James Lewis, a tech policy expert at the Center for Strategic and International Studies.

That all adds up to a big problem for U.S. officials, who fear that the Chinese government could use Huawei’s foothold in other nations’ telecommunications networks to spy on the information the U.S. government shares with those nations — or even to sabotage Internet-connected devices.

The danger will be even greater with the transition to super-fast 5G networks, which will power everything from self-driving cars to medical devices, officials told Ellen.

The U.S. government is trying to spread that message to allies, Robert Strayer, deputy assistant secretary of state for cyber, told Ellen. But so far, only Australia and Japan have decisively barred Huawei from their networks.

“We're not shying away from articulating what is in our national interests,” Strayer said. “We're trying to bring all countries around the world on this learning path about how important 5G is and what it will mean for our future economic prosperity and how important it is that we secure it.”

U.S. allies are also waiting to see if the Trump administration's tough stand against Huawei eases as he seeks a better trade deal with China, Ellen reported. They are concerned he may offer to water down a Commerce Department order issued this month that bars U.S. companies from supplying Huawei with software and components.

“Europe's biggest fear is that the U.S. will cut a separate deal with China and leave Europe hanging,” Lee-Makiyama said.

Huawei has consistently denied spying for the Chinese government and Chinese leaders have said they’d never ask a company to build spying back doors into its products.

The firm did acknowledge, however, that state-owned Chinese banks have made a $100 billion line of credit available to Huawei customers, Ellen reported.

“Less than 10 percent has been used, a spokesman said, but even $10 billion dwarfs the $200 million in new loans the U.S. Export-Import Bank granted to all customers in 2017,” Ellen reported.

The company also received $222 million in Chinese government grants last year, according to an annual report.

PINGED, PATCHED, PWNED

PINGED: Fake social media accounts impersonated Republican congressional candidates before the 2018 midterm elections and spread messages opposing President Trump and supporting Iran, the cybersecurity company FireEye reported Tuesday.

Facebook and Twitter also announced Tuesday they’d taken down Iran-based accounts spreading that disinformation.

“Neither company attributed the information operations directly to the Iranian government, though FireEye said the actors appeared to be advocating for Iranian interests while Facebook and Twitter both said the nefarious activity originated in that country,” Cyberscoop’s Shannon Vavra reported.

Some of the fake accounts also masqueraded as journalists, according to FireEye, and many accounts spread anti-Israeli and pro-Palestinian messages.

“Facebook said it removed 51 bogus Facebook accounts, 36 pages followed by 21,000 users, seven groups joined by 1,900 users and three Instagram accounts followed by 2,600 people [while] Twitter said it removed 2,800 accounts,” Politico’s Tim Starks reported.

“The revelations from the cybersecurity firm and Facebook's actions serve as a reminder that other governments and foreign adversaries are taking a page from the Russian playbook that disrupted the 2016 presidential election,” Tim noted.

PATCHED: Huawei on Tuesday struck back against another U.S. effort to rein in its influence – a ban on all Huawei software and hardware at federal government agencies.

That ban “disrupts Huawei’s existing contracts; stigmatizes Huawei and its employees as supposed tools of the Chinese government…and seriously threatens Huawei’s continued ability to do business in the United States,” the company argues in a new legal motion.

Huawei has argued that the ban, which was imposed by Congress last year, also violates the U.S. constitution by singling the company out for punishment. Legal scholars have called that claim dubious and the Russian anti-virus company Kaspersky lost a case that made similar arguments against the U.S. government in November.

Huawei’s chief legal officer Song Liuping said during a news conference in Shenzhen, China, that the ban will not improve cybersecurity and that "politicians in the U.S. are using the strength of an entire nation to come after a private company,” the Associated Press’s Yanan Wang reported.

Huawei first sued the government to halt the ban in March.

PWNED: The London-based YouTube comic and Saudi dissident Ghanem Almasarir was one target of a highly powerful and mysterious hacking tool called Pegasus, Forbes’s Thomas Brewster reported.

The Pegasus malware — allegedly developed by the Israeli spyware company NSO Group — made headlines this month because it could invade users’ smartphones via WhatsApp without the users doing anything to allow it in such as clicking on a suspicious link.

After the hacking tool was discovered, WhatsApp urged its 1.5 billion users to update their apps. But the tool’s intended victims appear to be pretty limited. Those revealed so far were all critics of the Saudi regime, Brewster reports.

“Human rights defenders are now raising the alarm over cross-border hacking of activists’ devices via NSO’s software,” Brewster reported.

“We have example after example after example of this software being used to harass and threaten activists around the world,” Danna Ingleton, deputy program director for the technology division of Amnesty International, which employed some of the Pegasus victims, said. 

PUBLIC KEY

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PRIVATE KEY

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