Alibaba sues Pentagon over blacklist designation

WASHINGTON: Alibaba Group on Monday filed a federal lawsuit challenging the US defence department’s designation of the Chinese technology giant as a “Chinese military company,” arguing the labelling is arbitrary and lacks due process.

The lawsuit, filed Monday in San Francisco federal court, contests the Pentagon’s determination that Alibaba qualifies for inclusion on the federal military company list.

“The determinations have no basis in fact or law,” the complaint states.

The Pentagon on June 8 released the new blacklist of 80 companies and their subsidiaries it said were aiding the Chinese military.

The list saw tech giants Alibaba and Baidu added, as well as electric vehicle giant BYD.

Under the designation, beginning June 30, the Pentagon cannot enter into new contracts with designated companies or their controlled subsidiaries.

The designation also restricts the company’s ability to retain lobbying firms in the United States, which the lawsuit argues violates First Amendment rights.

“The effect is already being felt: advocates who have represented Alibaba for years have informed the company that they can no longer do so,” the complaint states.

In the lawsuit, Alibaba said it is a publicly traded e-commerce and cloud-services provider with a diverse shareholder base dominated by major American financial institutions including JPMorgan, Citigroup, and BlackRock.

China on Monday imposed export controls on 10 US companies involved in defense and rare earths mining in response to Washington’s blacklist.

The feud tests bilateral relations after US President Donald Trump and Chinese counterpart Xi Jinping met in Beijing last month to stabilise ties.