Suing your best customers is never a good idea. This is one of the reasons why having only outside corporate counsel is sometimes useful: it stops you from having to keep your lawyers busy.
There is literally no incentive to have customers do well. I've seen a ton of frivolous litigation due to having legal strategy defined by outside counsel.
Internal counsel, charitably, at least, has employment and gets to slack off if there's less work. Outside counsel wants those hours.
There's a complex story about:
1) IANAL disclaimers and why it's often important to consult a lawyer rather than assuming you know the law
2) What NOT to trust lawyers on. This is much more than whether or not to sue; no lawyer ever got in trouble for being too conservative.
Business decisions like this one should not be made by lawyers at all. Lawyers, inside or outside, should explain what the law is, but the decision should be made by someone who can do math on things like risk and ROI, and who understands brand value / impact on the above of any action.
Thw chances of this is not naximised if you are fired. I imagine the person who sent the original letter isn't exactly viewed as 'trusted counsel' at the moment.
The consumer laws in China don't work the same way compare to (say) the one in the US. Chinese user often only permitted to use the product as-is, if you developed and/or published a tool that could change how the product function, and the company produced the product deems the change undesirable (say, it hurts their profit), the company then has all the rights granted by laws to force you to take your tool down, as well as ask you for compensation and/or even escalate it to criminal charges. Company might (likely, actually) choose not to do that, but if they really wants to, they can pursue it to that end.
That's maybe why Haier claimed that the project in question "harms their business model", which is a legal ground often used in lawsuit against Chinese developers. This case is a little bit more trickier since the project calls Haier's private API, because of that, according to Chinese laws, the violation could ranging from copyright infringement all the way to cyber attack (thus Haier claimed "violate copyright laws").
E.g. Haier could claim that the API is a trade secret that the HA integration is using illegally, or that by accessing the API, Haier's domain name is being used without authorization (though I think this is intended to combat impersonation where someone registers a domain with their competitor's name) etc. etc.
Funnily enough, it also outlaws "causing, in bad faith, incompatibility with an internet product or service lawfully provided by another business entity".
Did you miss the 'Europe' bit? They have presence in the UK, Italy, Romania and Turkey (not quite Europe, but close enough). They also have presence in China but Chinese consumer laws do not apply to EU subjects.
China doesn't rate a mention.
What does rate a mention is Haier's own people being on the record that their HON app is such a failure that the bulk of the traffic is generated by the HA plugin, which actually is more economical network wise than Haier's app. Also notable is the fact that they are talking out of both sides of their mouth, they claim they love 'open' and 'API' use but at the same time would like everybody to use their app, but since it is (1) crappy and (2) closed source and so not easily integrated it is logical that the people that need it chose to roll their own.
It's remotely possible that there is an instruction from China to Haier Italy that they needed to take action but you'd expect there to be some mention of this. Finally, from a security perspective you really don't want your appliances to send data to the rest of the world, China or otherwise.
edit: And finally: if they didn't make their appliances cloud connected but instead allowed for a local only version then I'm very sure the HA people would be ecstatic and the whole problem would go away. Why anybody would buy an appliance that requires a cloud connection is beyond me.
By definition, they are using MORE platform/API traffic than the average user and not paying more.
They directly cost more than they bring in. However, they're also:
1) Thought leaders / influencers. How you treat them translates directly into blog / forum / etc. posts.
2) Innovators / bounds-pushers. This can impact future products, market research, etc.
3) Ecosystem builders. Network effects!
It's a complex conversation. Apple courted education for much of its early history, not for direct profits, but so people entering the workforce would be trained on Apple. Balmer said "Developers, developers, developers!" even though developers cost money.
Now this customer was one of those 'you really do not want to make them mad as they will make full page ads kinda companies'. But the fun part it was not even all of their devices (which had a flaw) it was like 10 locations where they had the devices (out of their huge fleet) that was causing us 80% of our traffic. Their device would setup a call squirt the data and hangup. These devices were doing that 20k times per hour. Most other devices we supported were maybe 10-15 per day. Being the 'big co' they were they blamed us. Being another 'big co' though we were like if you do not fix this we will walk on your account. That worked because this thing was a big deal for them. It could have easily gone the other way and damaged our whole product line.
The solve was to properly moderate their calls and batch the data.
Also it is dead easy to get this sort of thing wrong. From a programmers PoV send data. Under all of that could be a queue (hopefully), some sort of ppp connection and all sorts of interesting machinations. Yet the programmer PoV it is just a tcp setup, send, and close out cycle. Then there are things like 'do you really need to send all of that data?' 'does it really need to be human readable json?' 'have you tried this in your target environment and not some developers desktop yet?'
If the company saw it any other way, they wouldn't be sending frivolous legal threats to those trying to bypass their app.