Alibaba sues Pentagon over US Department of Defense

Chinese tech giant Alibaba has sued the US Department of Defense (Pentagon) over its decision to list it as a “military-related” entity. The company said on Wednesday (June 24) that the designation was based on “arbitrary and capricious” decisions.

The lawsuit was filed in federal court in San Jose, California, on Tuesday. Alibaba alleges that the US Department of Defense included it on a recently published list that suggests the company has ties to the Chinese military. The company said that “these decisions have no factual or legal basis.”

An Alibaba spokesperson said the company is not affiliated with the Chinese military in any way and is not part of the so-called “military-civilian fusion” policy. “The inclusion of Alibaba on this list is a completely arbitrary decision, and we have sued the Department of Defense to have our name removed from this list.”

The list includes a total of 80 companies and their subsidiaries, including another Chinese technology company, Baidu, and electric car maker BYD. According to this classification, the Pentagon will not be able to enter into new contracts with these companies from June 30 and will also have limited business relations with their controlled subsidiaries.

The lawsuit says that the decision also limits the ability of companies to hire lobbying firms in the United States, which is a violation of the First Amendment of the US Constitution.

Alibaba alleges that its long-standing lobbying firm has already said that it will no longer be able to work on its behalf. The lawsuit also says that Alibaba is a publicly listed e-commerce and cloud services company, whose shareholders include major US financial institutions such as JPMorgan Chase, Citigroup and BlackRock.

Meanwhile, in retaliation for the US move, China on Monday imposed export controls on 10 companies involved in the US defense and rare earth mining sectors. The Chinese embassy in the country also responded to the US move. They claim that the US is exaggerating the concept of national security and creating a discriminatory list targeting Chinese companies.’

Source: CBS News