Alibaba Files Lawsuit Against U.S. Department of Defense
Alibaba Group, a prominent Chinese tech firm, has initiated legal action against the U.S. Department of Defense, seeking removal from a list that restricts Chinese military companies from obtaining U.S. defense contracts. This designation, according to Alibaba, tarnishes its reputation.
In a legal challenge filed in the U.S. District Court located in San Jose, California, Alibaba contends that the Pentagon’s decision, publicly disclosed on June 8, lacks factual and legal foundation. The company argues that the process leading to the designation was unfair.
This lawsuit adds to the series of legal disputes between Chinese corporations and the Pentagon over national security classifications. In 2021, U.S. lawmakers directed the Department of Defense to identify Chinese companies perceived to be under the control of the Chinese military or contributing to its defense sector.
The current list identifies 188 entities, encompassing state-owned enterprises and private tech firms, including Alibaba and robotics company Unitree. Both the Chinese government and affected companies have expressed objections to these designations.
Recently, Beijing responded by imposing sanctions on ten U.S. military-affiliated companies, potentially escalating tensions as Beijing and Washington strive to stabilize their diplomatic relations.
Another company, WuXi AppTec Co., which offers research and development services to numerous U.S. pharmaceutical firms, is also challenging its inclusion on the list. The Pentagon claims WuXi AppTec is indirectly linked to China’s state-owned Assets Supervision and Administration Commission and is connected to the State Administration of Science, Technology and Industry for National Defense, as well as the People’s Liberation Army.
In WuXi AppTec’s legal filing in the federal district court in Washington, D.C., the company asserts that the designation has already inflicted significant harm and is based on political motives and incorrect information.
Alibaba’s petition highlights the negative impact on its U.S. investor relations, emphasizing the importance of maintaining trust with American partners. The Pentagon’s stance is based on Alibaba’s alleged ties with China’s industrial defense infrastructure.
Alibaba insists that it operates under an independent board and is not involved in military activities, nor does it possess military certifications. The company states that compliance with China’s Ministry of Industry and Information Technology regulations is obligatory for all enterprises in China, including American firms, asserting, “A regulator is not an affiliate.”
In a related case, a U.S. judge previously ruled against DJI Technology, a Chinese drone manufacturer, in its attempt to be delisted from the Pentagon’s compilation. DJI is currently appealing the decision.
AP Business Writer Chan Ho-him in Hong Kong contributed to this report.
