Jan 4, 2022 - Economy & Business

Scoop: Chinese surveillance firm ramps up fight against regulators

Illustration of a camera with a strap made out of barbed wire
Illustration: Sarah Grillo/Axios

Chinese surveillance giant Hikvision is going after its top U.S. media critic as part of a ramped-up policy fight aimed at staving off a federal ban on its products, Axios has learned.

Why it matters: Hikvision's quiet offensive against the surveillance technology trade publication IPVM is a significant escalation in its fight against measures it considers contrary to law. They are aimed at cracking down on what federal regulators have dubbed potential national security threats by Chinese technology companies.

  • IPVM has published a number of key investigations revealing that Hikvision and other tech companies are providing technology and services that power the surveillance state and mass internment camps targeting Uyghurs in Xinjiang.
  • The Federal Communications Commission is moving to revoke equipment authorizations for any company, like Hikvision, it's deemed a national security risk.
  • It's acting under authority granted by the Secure Equipment Act, which President Biden signed into law early last month. But Hikvision maintains its products aren't covered by the law.

What's happening: In a letter sent last year and obtained by Axios, Hikvision asked congressional ethics officials to investigate potential lobbying disclosure violations by IPVM.

  • The letter accused IPVM staff of pushing "punitive measures against Hikvision" in meetings with U.S. policymakers and suggested that was a violation of federal law.
  • "It is our understanding that IPVM’s failure to register after making these contacts is a violation of the" Lobbying Disclosure Act, the company wrote.
  • It came shortly after Hikvision resigned its membership in a leading trade association, citing IPVM's role with the group.

IPVM said in August it had received a letter, based on an anonymous complaint, from House and Senate ethics officers saying it might be required to register.

  • The publication said it had no plans to do so.
  • "IPVM neither employs nor is represented by any lobbyists. Insofar as IPVM’s employees engage in non-exempt lobbying contacts — and none are employed to do so — these activities would account for far less than 20% of the time they spend in our employ," the publication wrote.
  • Its communications with federal officials, IPVM said, are made in the course of normal news-gathering operations or to submit comments on pending federal regulations, as it has in the Hikvision case.
  • In a statement to Axios, IPVM founder John Honovich called Hikvision's letter an effort "to bully us, an independent US small business. We are proud to expose bad actors both in the USA and PRC reinforcing the value of freedom of speech and press."

Go deeper: Hikvision's IPVM letter came as it ramped up its policy operation in Washington in response to potential new FCC restrictions.

  • It's retained the law firm Harris, Wiltshire & Grannis and its chairman, former FCC chief of staff John Nakahata, according to documents filed with the FCC.
  • Hikvision also enlisted FTI Consulting to conduct a cybersecurity audit of its surveillance products, which showed minimal vulnerabilities.

The big picture: Hikvision's aggressive legal and PR efforts could test U.S. efforts to crack down on Chinese companies dubbed potential national security threats.

  • It's argued before the FCC that the commission has no authority to ban the company's products, because they do not operate on wireless networks under the panel's jurisdiction.
  • In Hikvision's telling, the FCC's efforts are a dramatic expansion of regulatory authority. Its legal strategy could determine whether that authority can be used to target other companies as well.

What they're saying: "Hikvision, as a security equipment manufacturer and not a telecommunications or network provider, does not belong on a list of prohibited telecommunication equipment," the company said in a statement emailed to Axios.

  • Commissioner Brendan Carr told Axios the company has "been able to exploit a loophole" in federal law by continuing to sell equipment in spite of the FCC's national security designation.
  • "[T]he FCC should now be poised to close that loophole," Carr said.
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