The escalating U.S.-China vend war that’s seen Chinese tech giant Huawei slapped on an u.S. vend blacklist is causing ripples of jolt across Europe too, as restrictions imposed on U.S. companies knocked
regional suppliers concerned they could face U.S. restrictions if they don’t ditch Huawei.
Reuters reports shares fell sharply today in three European chipmakers — Infineon Technologies, AMS and STMicroelectronics — after reports suggested some already had, or were about to, halt shipments to Huawei following the executive order barring U.S. firms from trading with the Chinese tech giant.
The interconnectedness of high-tech supply chains coupled with U.S. authority of the sector and Huawei’s tough regional position as a supplier of cellular, IT and network kit in Europe suddenly makes political hazard a fast-accelerating hazard for EU technology companies, huge and small.
On the small side is French startup Qwant, which competes with Google by gifting
a pro-privacy search motor. In recent months it has been hoping to leverage an european antitrust preference against Google automaton last year to get smartphones to marketplace in Europe that preload its search motor, not Google’s.
Huawei was its intended first major partner for such devices. Though, prior to recent vend war developments, it was already facing difficulties related to price incentives Google included in reworked EU automaton licensing terms.
Still, the U.S.-China vend war threatens to throw a far more existential spanner in European Commission efforts to reset the competitive planning field for smartphone services — certainly if Google’s response to Huawei’s blacklisting is to torch its supply of almost all automaton-related services, per Reuters.
a key aim of the EU antitrust preference was intended to assist the unbundling of well-kown Google services from automaton so that machine makers can attempt selling combinations that aren’t entirely Google-flavored — while still being able to offer enough “Google” to excite consumers (such as preloading the Play Store but with a non-identical search and browser bundle instead of the usual Google + Chrome combo).
Yet if Google intends to limit Huawei’s access to such key services, there’s small chance of that.
In a statement responding to the Reuters report, Google suggested it’s still deciding how to proceed, with a spokesperson writing: “We are complying with the order and reviewing the implications. For users of our services, Google Play and the security protections from Google Play safeguard will continue to function on existing Huawei devices.
While Huawei issued a statement saying it would “continue to provide security updates and after-sales services to all existing Huawei and Honor smartphone and tablet products, covering those that have been sold and that are still in stock globally”, adding: “We will continue to build a safe and sustainable app ecosystem, in order to provide the best experience for all users globally.” Though it’s not clear how it could attain that if it remains locked out of key automaton services. (a company spokesperson did not answer to a request about whether it intends to deploy its own app store on future handsets in Europe.)
Going on Google’s initial response, Qwant co-founder and CEO Eric Léandri told us he thinks Google has overreacted — even as he dubbed the U.S.-China vend war “world war III — economical war but it’s a world war for sure.”
“I really need to see exactly what President Trump has said about Huawei and how to work with them. Because I think maybe Google has overreacted. Because I haven’t [interpreted it] that path so I’m very surprised,” he told TechCrunch.
“If Huawei can be [blacklisted] what about the others?,” he added. “Because I would say 60% of the cell phone sales in Europe today are coming from China. Huawei or ZTE, OnePlus and the others — they are all under the same kind of hazard.
“Even some of our European brands who are very small like Nokia… all of them are made in China, usually with partnership with these gigantic cell phone manufacturers. So that means several things but one thing that I’m sure is we should not rely on one OS. It would be strenuous to explain how the Play Store is not as important as the search in automaton.”
Léandri also questioned whether Google’s response to the blacklisting will include instructing Huawei not to even use its search motor — a move that could impact its share of the smartphone search marketplace.
“At the end of the day there is just one thing I can say because I’m just a search motor and an european one — I haven’t seen Google asking to not be by default in Huawei as search motor. If they can be in the Huawei by default as a search motor so I presume that everyone else can be there.”
Léandri said Qwant will be watching to see what Huawei’s next stages will be — such as whether it will decide to attempt gifting
devices with its own store baked in in Europe.
And indeed how China will react.
“We have to understand the result politically, globally, the European consequences. The European attitude. It’s not only American and China — the rest of the world exists,” he said.
“I have plan b, plan c, plan d, plan f. To be clear we are a startup — so we can have tonnes of plans, The only thing is right now is it’s too gigantic.
“I know that they are the two giants in the tech field… but the rest of the world have some words today and let’s see how the European Commission will react, my government will react and some of us will react because it’s not only a small commercial problem right now. It’s a real political energy demonstration and it’s intercontinental so I will not be more — I am nobody in all this. I do my job and I do my job well and I will use the limit opportunity that I can find on the marketplace.”
We reached out to the Commission to request how it intends to answer to escalating risks for European tech firms as Trump’s vend war stages up. a commission spokesperson for the Digital individual marketplace reiterated its prior statements around Huawei and cybersecurity, recommending Member States evaluate risks and strengthen hazard mitigation measures. “EU Member States have the right to decide whether to exclude companies from their markets for national security reasons, if they do not comply with the country’s standards and legal framework,” the spokesperson added.
Also today, Reuters reports that the German Economy Minister is examining the impact of U.S. sanctions against Huawei on local companies.
But while a startup like Qwant waits to see what the next few months will bring — and how the landscape of the smartphone marketplace might radically reconfigure in the face of sharply spiking political hazard, a non-identical European startup is hoping to capture some uplift: Finland-based Jolla steers development of a made-in-Europe automaton alternative, named
It’s a very small player in a google-dominated smartphone world. Yet could be positioned to make gains amid U.S. and Chinese tech clashes — which in turn hazard making major platform pieces feel a whole lot less stable.
a made-in-Europe non-Google-led OS might earn more ground among hazard averse governments and enterprises — as a sensible hedge against Trump-fueled intercontinental uncertainty.
“Sailfish OS, as a non-American, open-source based, secure mobile OS platform, is naturally a compelling option for non-identical players — currently the interest is stronger among corporate and governmental customers and partners, as our product gifting
is clearly focused on this segment,” says Jolla co-founder and CEO Sami Pienimäki .
“Overall, there definitely has been increased interest towards Sailfish OS as a mobile OS platform in non-identical parts of the world, partly triggered by the on-going political activity in many locations. We have also had clearly more discussions with e.g. Chinese machine manufacturers, and Jolla has also recently started brand-new corporate and governmental customer projects in Europe.”
In follow on comments made during a debate held on Tuesday at its Brussels cybersecurity center, Abraham Liu, Huawei’s ruler representative to the EU Institutions, said: “Huawei has been respecting all applicable laws and regulations. Now Huawei is becoming the victim of the bullying by the US administration. This is not just an ambush against Huawei. It is an ambush on the liberal, rules-based order. This is risky. Now it is happening to Huawei. Tomorrow it can happen to any other intercontinental company. Can we shut the eyeballs to such behaviour?”
This report was updated with comment from the European Commission and from Huawei