A Danish court has ordered the state to pay 80 million Danish kroner (US$12 million) in compensation to TDC NET, the country’s largest digital-infrastructure operator, after authorities forced it to strip Huawei equipment from its fibre network.

The Eastern High Court in Copenhagen ruled on Wednesday that a 2023 order by the Centre for Cybersecurity directing TDC NET to remove Huawei gear from its dense wavelength-division multiplexing (DWDM) network – a technology used to expand the capacity of fibre networks – constituted an expropriatory intervention, entitling the company to full compensation under the Danish Constitution.

Court documents showed that Huawei Technologies first supplied equipment for the Danish firm’s DWDM network in 2011, with a new agreement signed in 2020 to extend the partnership.

But a telecommunications security law that took effect in 2021 gave authorities the power to prohibit such agreements as well as the use of critical equipment deemed a national security risk.

“The High Court emphasised, among other things, that TDC NET had since 2011 in good faith built and maintained an extensive DWDM network based on Huawei equipment, and that the ban in practice necessitated a total replacement of this network,” the court said in a statement. “The intervention was specifically directed at TDC NET and went beyond ordinary regulation.”

TDC NET had sought 195 million kroner in compensation, but the court awarded 80 million kroner and ordered the Danish state to bear most of the legal costs.