5G Networks: National Security vs Freedom of Commerce
A Glimpse of Recent Legal Challenges in French Law[1]
Dr. Abdelmohsen Sheha
Pre-trial judge at the State Council of Egypt
The roll-out of 5G networks raised a handful of legal quarrels in France. One of these quarrels is related to negative effects of new regulations related to 5G network equipment on fair competition between Mobile network operators (M.N.O.).
As a reminder, in late 2018, the French Government expressed its concerns about backdoors in the 5G mobile network that would eventually allow for hacking into the system, leaving it vulnerable to malicious attacks or acts of espionage. These concerns were fueled by the criticalness of eventual uses of the 5G network. On one hand, the network will potentially be used for civil and military purposes, thanks to the network slicing function. On the other hand, the 5G network is believed to enable large-scaled uses of the Internet of Things (IoTs).
The concerns raised by the French government have to be read in the global tense context between the East and the West. The United States of America has been warning against technical vulnerabilities of the 5G network that would potentially affect national security. The USA pointed the finger expressly to Chinese State-controlled companies, Huawei and ZTE in particular, accusing them of being used strategically by the Chinese Governement to undermine the digital sovereignty of the countries where they are operating. This is why several western countries rushed to take legislative measures to block the entry of Chinese firms into the 5G equipment markets in what is largely known as “Anti-Huawei laws”.
Considering the risks on national security, the French legislator issued law No 2019-810 on August 1st, 2019, aiming at protecting the interests of defense and national security of France (the “Law”)[1].
The new Law places the French MNOs, willing to expand their 5G network, under the legal obligation of requesting administrative authorizations (autorisations administratives) for their active equipment in cellular base stations. That way, French authorities can control the type of equipment used in mobile towers and make sure that it is trustworthy. Interpreted in its context, this can mean the exclusion of Chinese providers of network equipment in favor of European ones, Nokia and Ericsson.
Interpreted as such, the new Law threatened the economic balance between the four MNOs in France by putting extra charges only on some of them. Basically, two out of the four MNOs, namely Bouygues Télécom and SFR, counted largely in their equipment for the 3G and 4G technologies on the Chinese manufacturer, Huawei. Since the equipment of different manufacturers are not interoperable and since the 5G equipment count on installed parts of the network for previous generations, the refusal to authorize Chinese equipment for 5G means that Bouygues Télécom and SFR have no choice but to replace their old equipment with these provided by European manufacturers. This situation contrasts with the one of their counterparts, Orange France and Free Télécom. These operators who will not have to replace their old network as they count already on network equipment provided by European manufacturers.
Unsatisfied with this situation, Bouygues Télécom and SFR challenged the validity of the executive decree of the Law on grounds of the unconstitutionality of the Law. The plaintiffs argued that the Law was not constitutional as it puts unjustified restrictions on their commercial freedom. Besides, the Law, as argued by the plaintiffs, did not respect the equality between the mobile operators in supporting public charges (égalité devant les charges publiques), by putting excessive charges on some of them to protect the whole community. Hence, the legislator should have provided compensation mechanisms for aggrieved operators.
The legal grounds presented by the plaintiffs convinced the judges of the French State Council (Conseil d’État), the administrative supreme court, who stayed the proceedings and transferred the case to the Constitutional Council (Conseil constitutionnel) to rule on the constitutionality of the Law[2].
Before the Constitutional Council, two main questions were raised: can national security justify restrictions on freedom of commerce of the operators? If the answer is yes, should the legislator have provided compensation mechanisms to ensure equality in supporting public charges?
In its ruling of the 5th of February 2021, the French Constitutional Council rejected the arguments presented by the plaintiffs, hence ruling for the constitutionality of the Law[3]. Firstly, the Council recalled his precedents that public interest may justify imposing restrictions on the freedom of commerce as long as these restrictions are proportionate to the objectives of the law[4]. Applied to the case, the Council found that the restrictions imposed by the Law are intended to protect the fundamental interests of the Nation, which is a public interest, and are proportionate to its objectives. Secondly, the Council ruled that if some operators may have to support extra charges to ensure interoperability of their network equipment, this situation stems merely from the commercial choice of the operator and has nothing to do with the State[5]. Besides, the Constitutional Council did not consider the charges of the plaintiffs as public charges that have to be equally distributed between the citizens according to the principle of the equality before the public charges[6].
Resuming the proceedings, the State Council took the ruling of the Constitutional Council into consideration and rejected the case[7]. However, the High Administrative Court confirmed the right of the seriously prejudiced operator, whose authorization has been rejected on grounds of the Law, to ask for compensation[8]. This provision opens the door for future case-law related to the 5G equipment authorizations, in application of the theory of liability without fault (théorie de la responsabilité sans faute). In other words, the question will be less of the lawfulness of the decision rejecting the authorization, and more about the right for compensation for damages based on an established liability theory in administrative law.
[1] This contribution is widely inspired from our article published in Revue Lamy Droit de l’Immatériel (RLDI) in its No. 178 of February 2021 (See, A. Sheha, “Les réseaux 5G: concilier souveraineté numérique et droits et libertés économiques”, REVUE LAMY DROIT DE L’IMMATERIEL, n° 178, Feb. 2021, pp. 25- 28).
Dr. Abdelmohssen Sheha is a pre-trial judge at the State Council of Egypt (Adminsitrative courts). He is currently affiliated to the Center of Judicial Studies and Research.
In early 2021, Dr. Sheha earned his Ph.D. from the Université de Strasbourg, France. He prepared a dissertation on Public Comparative Law, dealing with Telecommunications regulation in European, French, and Egyptian laws. Previously, he obtained a triple Masters’ degrees in Law, Economics and Public Administration. He is also a former fellow of the French National School of Public Administration (ENA).
Dr. Sheha published nomerous articles in English, French, and Arabic, in renowned specialized revues. With regards to Telecoms, he contributed to the Revue Lamy droit de l’immatériel (No 171/2020, Net neutrality in European law, and No 178/2021, 5G, national security and Economic freedom) and to the LexisNexis MENA Business law review (No 2/2020, Legal framework of Interconnection agreements in Egyptian Telecoms Law).
[1] L. n° 2019-810 du 1er août 2019 visant à préserver les intérêts de la défense et de la sécurité nationale de la France dans le cadre de l’exploitation des réseaux radioélectriques mobiles (J.O. 2 août 2019, texte n° 2).
[2] C.E., 2/7 Ch., 18 nov. 2020, Bouygues Télécom et SFR, n° 442120 et 443279.
[3] Cons. Const., Déc. n° 2020-882 QPC du 5 fév. 2021, Sté. Bouygues Télécoms et autre [Autorisation administrative préalable à l’exploitation des équipements de réseaux 5G].
[4] Cons. 18.
[5] Cons. 24 and 26-28.
[6] Cons. 26-28.
[7] C.E., 8 avril 2021, Bouygues Télécom et SFR n° 442120 et 443279.
[8] Cons. 18.
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