Chinese electronics and telecom equipment manufacturer ZTE spent close to $1.4 million lobbying against the denial order the Department of Commerce imposed on it in April, crippling its global operations to the point that bankruptcy seemed like a plausible near-term scenario, The New York Times reports. Whereas a congressional filing showed the firm spent some $510,000 on lobbying efforts throughout 2017, that figure almost tripled over the three months of the denial order being in place, preventing it from buying or licensing American technologies such as Qualcomm-made chips and a Play Store-equipped version of Google’s Android operating system.
The ban ended up being lifted last month, with Congress trying to reinstate it through a defense bill provision shortly thereafter. It only took days for that effort to fail, with the final version of the legislation being purged of anti-ZTE provisions and sources claiming ZTE’s lobbyists boasted about that development as one of their achievements. While the company’s business took what’s understood to be a multi-billion-dollar hit in lost business and negative publicity, ZTE has now been given an opportunity to rebuild, though it’s still unclear whether the firm will do so with a full rebranding. The tech giant was sanctioned due to its failure to comply with a 2017 settlement over violated trade sanctions the U.S. imposed on North Korea and Iran, having also been accused of lying to the Commerce Department’s investigators about being in compliance with the agreement.
ZTE argued its non-compliance was accidental and self-reported, asserting that Washington’s response to the issue was unfairly harsh. The Chinese government also pushed for the denial order to be replaced with a milder set of measures, which ultimately ended up happening, with ZTE agreeing to a $1 billion fine and a range of concessions, including the appointment of new management and board members. The episode also impacted its ability to compete in the 5G race that it’s now expected to lose to other telecom equipment makers in China and abroad.