Netgear accused by rival of China smear to fan security fear

[WASHINGTON] California-based TP-Link Systems says it may take a sales hit of more than US$1 billion because of erroneous reports that the networking company’s technology has been used to launch Chinese cyber attacks under Beijing’s control.

In a lawsuit, TP-Link claims its larger rival, Netgear, orchestrated a smear by planting false claims with journalists and Internet influencers with the goal of scaring off customers.

Closely held TP-Link, which makes wireless routers, alleges in a complaint filed on Monday (Nov 17) that Netgear’s campaign “threatens injury to well over a billion dollars in sales” and violates a 2024 settlement of a patent fight. That accord, in which TP-Link agreed to pay Netgear US$135 million, includes a provision that the larger company promises not to disparage its competitor, according to the suit in Delaware federal court.

“Netgear published and caused to have propagated each of these false and misleading statements about TP-Link and TP-Link’s products,” the smaller company’s lawyers said in the 23-page complaint.

A representative of San Jose, California-based Netgear did not immediately respond to a request for comment.

The suit comes as TP-Link faces growing scrutiny in Washington over national-security issues. US lawmakers from both parties have expressed concern that TP-Link’s wireless equipment could be exploited by Chinese hackers following a series of attacks on its routers.

Bloomberg News reported in October that the Trump administration is considering whether to issue an assessment that TP-Link poses a national security threat following an investigation into its China ties that began last year. Such a finding would put TP-Link one step closer to potentially having its US operations restricted or banned.

TP-Link claims Netgear used “its earnings calls as a platform to spread falsehoods” and passed misinformation about its ties to China to purported computer experts and podcasters. TP-Link says it is now a US-based manufacturer that spends millions of US dollars annually safeguarding its products from cyber intruders.

Founded in China nearly three decades ago, TP-Link recently accelerated efforts to distance itself from its origins. The company last year completed a split into two separate entities: an American unit headquartered in Irvine, and a Chinese unit based in Shenzhen. While the US-based entity has pledged to make significant investments in the US, it still has substantial operations in mainland China, a Bloomberg News investigation found in April.

Before the split, TP-Link was the world’s largest provider of consumer Wi-Fi equipment, according to market research firm IDC. Its routers, which relay information from the Internet to devices such as computers and smartphones, are widely sold through retailers including Amazon.com and Best Buy, and can be found in homes and small businesses across the country.

TP-Link is asking a federal judge to bar Netgear from continuing the alleged smear campaign and to award monetary damages for defamatory statements. BLOOMBERG