Alibaba Sues Pentagon Over Chinese Military Company List

Alibaba Group Holding Limited sued the U.S. Department of Defense on Tuesday, seeking removal from a federal list of companies the Pentagon labels “Chinese military companies,” according to court records.

Alibaba filed the complaint in the U.S. District Court for the Northern District of California, in San Jose.

The public docket lists the case as Alibaba Group Holding Limited v. United States Department of Defense, according to CourtListener.

Alibaba argued that the Pentagon added it to the list without substantial evidence or explanation, and that the designation violates constitutional due process and the company’s right to free speech, according to Reuters.

The company called the designation arbitrary and capricious and said it has already caused irreparable harm.

The determinations have no basis in fact or law. — Alibaba, in the lawsuit

Alibaba said its board is independent and that none of its directors has any military affiliation. Its products and services serve retail, logistics and enterprise information technology, not weapons, defense or intelligence, the lawsuit said.

A Pentagon spokesperson declined to comment, saying the agency does not discuss pending litigation, Reuters reported.

The Defense Department’s Section 1260H list identifies companies it considers linked to China’s military or defense industrial base. The Pentagon’s latest update brought the list to 188 entities and removed 10 previously listed companies.

A Federal Register notice dated June 10 says the deputy secretary of defense determined that the listed entities qualify as “Chinese military companies.”

The notice says Alibaba is indirectly affiliated with China’s state asset regulator, known as SASAC. It also calls the company a military-civil fusion contributor tied to China’s Ministry of Industry and Information Technology.

Inclusion on the list does not impose sanctions. Under recent U.S. law, the Defense Department cannot contract with listed companies starting June 30 and cannot buy their products or services through third parties beginning in 2027.

Alibaba had rejected the designation before suing. In a June 9 filing with the U.S. Securities and Exchange Commission, the company said its inclusion is a mistake and that it is not a Chinese military company or part of any military-civil fusion strategy.

The company said the listing would not affect its ability to do business in the United States or elsewhere because it does no business related to U.S. military procurement. The filing said the list does not impose export controls or sanctions, nor does it bar anyone other than the Defense Department from dealing with the company or trading its securities.

Alibaba said it would make further announcements when appropriate.

The Pentagon also added Baidu, automakers BYD and NIO, and biotechnology firm WuXi AppTec this month. WuXi filed a similar lawsuit on June 11.