The Chinese e-commerce giant is taking legal action in the United States, challenging its designation as a “Chinese military company” by the US Department of Defense.
The Chinese group Alibaba filed a complaint against the Pentagon on Tuesday in federal court in San Jose, California, challenging its inclusion on the US Department of Defense’s blacklist. This legal approach comes as the ministry updated its list of companies accused of working with the Chinese army at the beginning of June, a decision that the e-commerce giant considers unfounded and detrimental to its activities in the United States.
A legal challenge to a decision deemed arbitrary
In its complaint, Alibaba claims that it does not meet the criteria to be included on the US Department of Defense’s blacklist. The group thus contests its designation as a “Chinese military company”, explaining that this decision has no factual or legal basis. The US Department of Defense’s blacklist currently lists 188 entities, including subsidiaries, all accused of collaborating with the Chinese military.
“The decision to include Alibaba on the list is arbitrary and capricious, and we are taking legal action against the Ministry of Defense to demand that the company be removed from this list,” a spokesperson for the Chinese e-commerce giant told AFP on Wednesday. Alibaba “is not a Chinese military company and is not part of any military-civilian merger strategy,” he added.
Alibaba’s inclusion on this blacklist has concrete consequences for the company. As of June 30, the Pentagon can no longer enter into new contracts with designated companies or their controlled subsidiaries. This measure also restricts Alibaba’s ability to use lobbying firms in the United States, which, according to the complaint filed, violates the rights guaranteed by the First Amendment, on fundamental freedoms. “The effects are already being felt: Defenders who have represented Alibaba for years have informed the company that they can no longer do so,” the complaint states.
As part of this legal action, Alibaba presented itself as a publicly traded company, specializing in e-commerce and cloud services, whose shareholder base is diverse and dominated by large American financial institutions, including JPMorgan, Citigroup and BlackRock.
A context of Sino-American tensions
The Pentagon’s decision to add Alibaba to its blacklist comes against a backdrop of persistent trade and technology tensions between the United States and China. Chinese giants Baidu (search engine) and BYD (electric cars) have also been added to this list. On June 11, Chinese pharmaceutical group WuXi AppTec filed a lawsuit against the Pentagon after being added to the same list.
In reaction to these American measures, China announced on Monday that it was sanctioning dozens of American companies, particularly in the defense and rare earths sectors. This episode comes a month after the visit to Beijing by American President Donald Trump, supposed to work for détente between the two powers.
Alibaba’s complaint highlights the economic and legal repercussions of the Sino-U.S. rivalry, as companies from both countries find themselves caught in escalating sanctions and countermeasures.
