The hard drives manufacturer Seagate was found to be in violation of US export control laws as it became the sole provider of hard drives to the Chinese company Huawei. The penalty has been imposed for the drives sold between August 2020 and September 2021. In August 2020, the US restricted the sale of items made with American technologies to China. Huawei was blacklisted in 2019 following disputes with China over duplication of technology.
The ban on the sale or sharing of US technologies was considered to be a major part of the country’s trade war with China.
Western Digital Corp and Toshiba Corp, the two competitors of Seagate, both complied with the new regulations and stopped selling hard drives to Huawei. Seagate used this opportunity to consolidate its position further as the sole supplier of hard drives to Huawei.
The company spokesperson said that they believed the law was applicable only to parts manufactured within the United States. Since they had production units all over the world they were not in direct violation of the law.
The Department of Commerce clarified its stance by saying that this interpretation of the law was facetious as the law prohibited sales of technologies that were being developed in the USA.
Seagate decided to pay the dues and settle the case while maintaining its stance that it had done nothing illegal. The company will pay a fine of $300 million in installments of $15 million each quarter over the next five years. This is the largest penalty imposed by the DOC so far.
