This article was first published in the n°31 print magazine of Eyes on Europe.
5G is the next step to advance digitalization. While it could bring many advantages, the fact that there is currently an open door for Huawei to invest in Europe and around the world bears risks. Fears of espionage, lack of data protection and privacy are the most prominent ones. This article aims to clarify the different actors involved, the risks but also the benefits that could result from 5G.
5G is the abbreviation of fifth generation wireless network. It succeeds the fourth generation, called 4G. In our connected world, almost all electronic devices can connect to the Internet cellular network. Smartphones, satellites, computers inter alia, need this “virtual” connection to fully function. To work, this connection requires hardware installations that can be controlled by the company that installed them. This causes geopolitical tensions and security challenges, raising the question of how to win the race for progress while respecting privacy and data protection. The European Union is still seeking a common position on this issue.
The Internet allows us to inform ourselves, watch movies, and buy clothes and flight tickets. But to access the Internet, we need one thing: a connection. The latter can come from a hotspot, a Wi-Fi terminal or 4G. Almost all our smartphones today have a component in their core that allows us to connect wherever we go. The connection rate provided by 4G is today considered good but imperfect. 5G will therefore be widely marketed in the European Union by 2020.
5G is already used in several sectors such as information, logistics, chemical laboratories, medicine, and even in the military. But every technical advance has its advantages and disadvantages. It represents a threat to personal data protection and our privacy but also to sensitive and military information. Why? Because the relays installed and used to make 5G work belong to telecommunications groups such as Huawei, which have not adopted the transparency policies of the European Union (EU) such as the respect of the rights of the private life and data protection.
Internet war: the origin of tensions
As we will see, there is currently a “digital war”, deriving from tensions between the United States and China, placing the EU in an awkward position between the two. Indeed, 5G promises to be 10 to 100 times faster than the current 4G. The EU will have spent about 130 billion euros over the period from 2014 to 2020 for Research, Technological Development and Innovation, and Access to Information and Communication Technologies. The deployment of autonomous car fleets, the automation of ports such as Antwerp, Le Havre or Rotterdam, video surveillance cameras, inter alia, are on the agenda. According to an economic impact analysis by the American company IHS Markit (Information Handling Services) in 2017, 5G will have generated 12.3 trillion dollars in revenue and created 22 million jobs by 2035.
This is where the tensions arise. If a member state wants to benefit from 5G, it is advisable to buy and install relay equipment on its soil. The problem is that the most powerful and advanced companies on the issue come from China and no longer from the United States as it had been the case for a long time. It is Huawei, the Chinese giant, which holds a sort of monopoly. The first tensions between the United States and China arose in 2012 and culminated in late 2018 when the Wall Street Journal revealed that the United States had asked its allies to stop all collaboration with Huawei. Indeed, Australia decided a few months ago to ban Huawei from its soil. To understand the origins of these tensions, it is necessary to look at the presidency of Huawei. Its president, Ren Zhengfei, is a former Chinese army engineer and has been a member of the Chinese Communist Party since 1978. He received the support of the Chinese government, which wants Huawei to encourage its employees to collect ‘sensitive information’ in exchange of a reward. Indeed, it is a copy-paste of the methods used by the Chinese Communist Party on its population.
What worries Europeans and Americans in particular is that the Chinese government has the right to access data from all Chinese companies for “security reasons”. Since 2013, Huawei has implemented a system of financial bonuses for its employees if they provide useful stolen information. In recovered emails from Huawei USA, it says: “You are encouraged and could possibly earn a bonus to collect and transmit to Huawei China confidential information about our competitors.“
What challenges for the European Union?
Certainly, the EU cannot miss the economic benefits it would get from the setting up of 5G. Although it has asked the Beijing government for clarification, forcing Huawei’s president and Chinese Prime Minister Li Keqiang to react publicly to these security concerns, the EU is in a complex situation. The Huawei controversy has a strong political dimension because of the trade war between China and the United States and the various scandals around it. Donald Trump’s speech on April 12th, 2019, forced the EU to choose a side. For now, the latter is rather on the side of the Americans because of the security concerns raised. In its article “Without Naming Huawei, E.U. Warns Against 5G Firms From ‘Hostile’ Powers”, the New York Times writes that if we pull all functions of a 5G network, it could put entire countries at risk. Indeed, no member state wants to endorse a foreign power to establish infrastructure and technologies that could be a security threat.
Having set a date of release for 2020, the EU tries to buy time. First, the EU must respond to pressure coming from operators such as Ericsson, Nokia and Orange. Secondly, different groups such as Apple, Google, LG and Sony are preparing the offensive of the latest 5G-compatible phones on the market, as the latter were exhibited at the CES (Consumer Electronics Show) 2019 in Las Vegas. It is the largest trade fair for technological innovation in consumer electronics.
To sum up, the economic, social and political benefits of 5G are too important for the EU to remain side-lined. It cannot economically afford to be late on its arrival, indirectly ceding its benefits to non-European companies.
The EU should be as tough against Huawei as it has been against Facebook on political and industrial espionage issues. This requires certain safeguards on data security and concrete policies. The contemporary issue of 5G is linked to a broader debate about the trade-offs between progress and security. What is more important? It relies on the member states to choose.
Thomas Rambaud is a second-year master student at the Institute for European Studies.