Alibaba sues Pentagon over China military blacklist

Chinese technology and e-commerce giant Alibaba Group Holding has sued the US Department of Defence, seeking to be removed from a blacklist of companies deemed to support China’s military.
In a lawsuit filed on Tuesday in a district court in San Jose, California, the Hangzhou-based company said the Pentagon had added Alibaba to a list of companies that allegedly aid the People’s Liberation Army without providing substantial evidence or explanation.
The Pentagon’s move violated constitutional due process and the company’s right to free speech, Alibaba said in the filing.
Alibaba owns the South China Morning Post.
On June 9, the Department of Defence added Alibaba, electric vehicle makers BYD and Nio, search engine Baidu, robot maker Unitree Robotics, networking equipment maker TP-Link and other Chinese companies in artificial intelligence, biotechnology and the solar sector to a list of “Chinese military companies”.
The companies are almost all in sectors at the heart of the intense technological competition between China and the US.

The Pentagon’s designation was made under Section 1260H of the National Defence Authorisation Act. While the designation does not automatically trigger sanctions, it could make it more difficult for the companies to access US capital markets and secure government contracts.
An Alibaba spokesperson said that the company “is not a Chinese military company nor part of any military-civil fusion strategy”.
“The decision to place Alibaba on the 1260H list is arbitrary and capricious, and we are filing a lawsuit against the Department of War to demand removal from the list,” the spokesperson added in a statement provided to the SCMP.
The Pentagon said in an email that “we do not comment on ongoing litigation.”
In the complaint filed to the court on Tuesday, Alibaba rejected the Pentagon’s finding indicating it was indirectly affiliated with China’s State-owned Assets Supervision and Administration Commission (SASAC).
It also rejected a Pentagon claim that it was a military-civil fusion contributor because of alleged ties to the Ministry of Industry and Information Technology (MIIT).
The company said it had no relationship with the SASAC and that Alibaba’s interactions with MIIT were limited to routine regulatory compliance required of technology firms operating in China.
Alibaba also said it had met Pentagon officials in January over the potential designation. It submitted a written response in March, but the department still placed the company on the list in June.
On June 11, biotech firm WuXi AppTec filed its complaint in a Washington federal court, calling its inclusion on the list unsupported by the facts and “the product of political pressure”.
Several other companies, including Baidu and BYD, have also strongly opposed the Pentagon’s decision.
The Chinese embassy in the US said earlier that it “firmly opposes” Washington’s overstretched view of national security and its use of “discriminatory lists”.
Alibaba’s lawsuit came a day after Beijing announced its latest countermeasures.
China’s Ministry of Commerce said on Monday that it would add 10 US companies to its export control list, including two rare earth companies.
The 10 US companies added to the export control list are Aveox, Red Cat Holdings, Teal Drones, IMSAR, Jaia Robotics, Ball Aerospace & Technologies, Oshkosh Defense, L3Harris Maritime Services, MP Materials and USA Rare Earth, the ministry said in a statement on Monday.
A ministry spokesperson said the decisions were made in response to “malicious actions” by Washington.
On the same day, China’s Ministry of Finance also issued a statement saying it would restrict 46 US firms from government procurement, excluding those involved in China-based US-Sino joint ventures, with immediate effect.
The list of 46 US companies includes Lockheed Martin, Raytheon Missiles & Defense, General Atomics Aeronautical Systems, BDS (Boeing Defense, Space & Security), General Dynamics Land Systems and Javelin Joint Venture, a 50-50 partnership between Lockheed Martin and Raytheon.