Photo: TP-LINK
On December 18th 2024, The Wall Street Journal reported that the US government is studying the possibility of banning Chinese network router companies from selling TP-Link products in the US for fear that TP-Link might be involved in cyber-attacks by Chinese hackers against U.S.. The news sparked widespread concern and heated debate in the tech and business communities.
As a well-known router brand in China, TP-Link is not only popular domestically, but also occupies a large share of the router market in the U.S. According to relevant data, TP-Link accounts for about 65% of the SOHO router market share in the United States.
The exposure of this incident originated from a key letter obtained by Reuters, which mentioned that in August last year, two U.S. legislators, based on high concern for national security, jointly appealed to the Biden administration, strongly recommending that a comprehensive and in-depth investigation be carried out into TP-Link and its subsidiaries. The U.S. government departments have reacted quickly to this matter, and the Department of Commerce, Department of Defense and Department of Justice have each initiated their own investigative procedures against TP-Link. These investigations aim to find out the truth as soon as possible, and may realize a total ban on the sale of TP-Link routers in the U.S. market as early as in 2025.
In addition to the possible injunctions that TP-Link may be faced with, the company has been challenged and battered in the U.S. market in recent years, which may be related to TP-Link's growing market share in the United States-some U.S. media believe that TP-Link's rising might cause marginalization of its other competitors in the U.S market. Consequently, TP-Link has been target as the defendants in dozens of initiated patent litigation. In recent years, TP-Link has faced anywhere from 5-10 patent litigation disputes per year in the U.S. There are both lawsuits initiated by large network equipment peers, such as Netgear, and patent lawsuits initiated by smaller entities, such as NPE, which means TP-Link has to spend a significant amount of money on litigation fees and compensation to stabilize its U.S. market.
For example, on August 28, 2024, after more than a year of patent disputes and 337 investigations between TP-Link and Netgear, TP-Link paid Netgear $135 million as a part of the agreement signed by both parties to end all legal battles.
And on September 14, 2023, TP-Link lost another patent lawsuit with Atlas Global Technologies, Inc. in the U.S. and was ordered to be award Atlas a one-time compensation of $37.48 million. The dispute between the two sides has even extended to the Unified Patent Court UPC, where Atlas sued TP-Link for infringing its European patents in July this year, and then in response, TP-Link, in November this year, launched an invalidation challenge against the relevant patents. These patent lawsuits have brought TP-Link another major crisis in addition to huge litigation costs: the brand reputation accumulated by TP-Link in the U.S. market might be hit hard.
Nevertheless, for the U.S. government's rhetoric of the “security risk” allegation, which might be currently the hugest crisis for TP-Link, there are also views to question - the U.S.-Israeli cybersecurity company Check Point's research director Itai Cohen told the media in September that his research found the threat described by lawmakers could be malware, which could also affect Cisco or Netgear and other company-branded routers - a technical vulnerability that could exist in any other routers. But as TP-Link was the only one to be “sanctioned”, bringing wonder if the so-called "security concerns" may not be the true reason why the U.S. is proposing the ban.
