Chinese e-commerce giant Alibaba has filed a lawsuit against the US government seeking removal from a Pentagon blacklist that labels the company as having ties to China's military, according to a report by the BBC. The lawsuit, filed in a California federal court, challenges the US Department of Defense's decision to place Alibaba on its "1260H list" — a roster of companies that Washington believes support China's military-industrial complex through the country's military-civil fusion strategy.
Alibaba has strongly denied the allegations, arguing that the designation is "arbitrary and capricious" and has "no basis in fact or law", the BBC reported.
The legal challenge comes after the Pentagon expanded the blacklist to include several major Chinese companies, including Baidu, BYD and Nio. The Defense Department contends that Alibaba's compliance with Chinese technology regulations effectively makes it a contributor to China's defence industrial base.
Alibaba disputes that reasoning. The company told the BBC that it is "not a Chinese military company nor part of any military-civil fusion strategy," adding that multinational firms operating in China, including American companies, are subject to the same regulatory requirements.
The company also emphasised that its core businesses are focused on e-commerce, cloud computing and digital services rather than military or intelligence activities. It further noted that none of its independent board members have military affiliations.
While inclusion on the Pentagon's blacklist does not trigger immediate sanctions, it carries significant operational consequences. From June 30, the US military will be prohibited from doing business with blacklisted firms.
According to the lawsuit, the restrictions could also indirectly affect Alibaba's access to legal and lobbying representation in Washington. The company argues that US contractors may avoid working with advisers who also represent blacklisted entities, potentially limiting Alibaba's ability to engage with policymakers.
Alibaba further alleges that it was denied a fair process before being designated. The company said it had sought meetings with US officials and submitted information addressing concerns over military links, but was ultimately added to the list without notice or an opportunity to respond.
The Pentagon declined to comment on the case, saying that it does not comment on ongoing litigation.
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