Huawei preparing lawsuit against FCC after US subsidy ban

FCC chairman Ajit Pai talks to FOX Business' Lou Dobbs about telecom using taxpayer money to buy from companies that pose security risks to the United States

Chinese tech giant Huawei plans to sue the Federal Communications Commission for its recent restrictions against the company's business dealings in the U.S., people familiar with the situation say.

The FCC labeled the company a "national security threat" on Nov. 22 and banned it from a federal subsidy program that would have allowed U.S. businesses to receive subsidies for purchasing telecommunications equipment from Huawei, thus dealing a blow to U.S. Huawei sales.

"When it comes to 5G and America’s security, we can’t afford to take a risk and hope for the best," FCC Chairman Ajit Pai said in a written statement.

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Chinese tech giant Huawei was placed on a blacklist by the U.S.

"We need to make sure our networks won’t harm our national security, threaten our economic security or undermine our values," Pai continued.

Huawei, which has given Apple and Samsung a run for their money -- especially in China, is now crafting a lawsuit that will challenge the FCC's decision, The Wall Street Journal reported, citing people familiar with the matter.

The tech giant initially responded to news of the FCC's decision to label Huawei a national security threat "unlawful" in a statement to FOX Business.

Huawei said the label singles out the company as a national security threat but provides "no evidence" to support the decision, adding that the "FCC simply assumes, based on a mistaken view of Chinese law, that Huawei might come under Chinese government control."

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In this Dec. 11, 2018, file photo, a woman browses her smartphone as she walks by a Huawei store at a shopping mall in Beijing. (AP Photo/Andy Wong)

The FCC's label came after the U.S. charged the tech giant with bank fraud and violating sanctions against Iran. It also comes amid growing concerns with the extent of Chinese surveillance technology.

President Trump in May blacklisted Huawei and issued an executive order barring U.S. companies from buying telecommunications products from the tech giant, citing national security risks, though the administration has loosened its restraints on the company in recent weeks.

Huawei did not immediately respond to FOX Business' request for comment.