Chinese technology group Alibaba filed a lawsuit in federal court on Tuesday challenging the U.S. Defense Department's (Pentagon) decision to include it on a list designating it as a "Chinese military company."
The lawsuit, filed in the San Jose Federal Court, contests the Pentagon's decision to add Alibaba to the federal list of military companies. The complaint states, "These decisions lack any basis in fact or law."
An Alibaba spokesperson told French news agency AFP on Wednesday, "Alibaba is not a Chinese military company and is not part of any military-civilian integration strategy."
Other giants added to the list
On June 8, the U.S. released an updated list naming companies believed to assist the Chinese military. Alongside Alibaba, the list included search engine provider Baidu and electric vehicle manufacturer BYD.
According to data from the Companies Market Cap platform, Alibaba's current market value stands at $246 billion. The company's market value peaked at $838 billion in October 2020.
New contract ban and lobbying restrictions
Under this classification, the Pentagon will be prohibited from signing new contracts with companies on the list or their controlled affiliates starting June 30. The decision also limits the company's ability to utilize lobbying groups in the U.S.
In its lawsuit, Alibaba argued that this restriction violates rights guaranteed by the First Amendment of the U.S. Constitution.
The company emphasized that it is a publicly traded corporation specializing in e-commerce and cloud computing services, with a diversified shareholder base dominated by major American financial institutions such as J.P. Morgan, Citigroup, and BlackRock.
Retaliation from Beijing
Last Monday, China imposed export restrictions on 10 American companies operating in the defense and rare metals sectors in response to Washington's blacklisting of Chinese firms. Chinese authorities also banned state agencies from purchasing products from dozens of other American companies.
In a previous statement, China's Ministry of Commerce said the new export restrictions were "a response to the U.S. government's disgraceful act of adding entities to the so-called list of Chinese military companies" and added that the move also aimed to "protect national security."
The ministry also stated that the U.S. sanctions against Chinese companies contradict the agreement reached between Chinese President Xi Jinping and his U.S. counterpart Donald Trump during Trump's visit to China last May.
