By Katy Stech Ferek 

A federal judge in Texas dismissed a lawsuit filed by Huawei Technologies Co. challenging a 2018 U.S. law that stopped federal agencies from doing business with the Chinese company.

In a ruling Tuesday, Judge Amos Mazzant of the U.S. District Court in East Texas, said Congress had the power to ban federal agencies from buying products from Huawei. The U.S. contends the telecommunications-equipment maker could be used by Beijing for espionage, a claim Huawei has repeatedly denied.

"Contracting with the federal government is a privilege, not a constitutionally guaranteed right -- at least not as far as this court is aware," the judge said in his 57-page ruling.

Huawei said it was disappointed with the ruling and would consider further legal options.

Huawei's lawsuit, filed in March, challenged the constitutionality of parts of the National Defense Authorization Act, an annual law that authorizes billions of dollars in military spending and blocked federal dollars from going to Huawei and its Chinese rival, ZTE Corp.

Huawei's team of U.S. lawyers have fought against the law for nearly a year, arguing in court that Congress illegally deprived the Chinese telecom giant of its rights by blocking it from bidding on government and private contracts.

"While we understand the paramount significance of national security, the approach taken by the U.S. government in the 2019 NDAA provides a false sense of protection while undermining Huawei's constitutional rights," Huawei said Tuesday.

Judge Mazzant said Huawei is still permitted to "conduct business with every other company and individual in America as well as the remaining 169 countries and regions it currently does business with throughout the world."

Write to Katy Stech Ferek at katherine.stech@wsj.com

(END) Dow Jones Newswires

February 18, 2020 17:40 ET (22:40 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.