Alibaba Sues US Government Over Inclusion on Pentagon Blacklist

Alibaba has filed a lawsuit against the US government after the Department of Defense added it to the updated list of companies it believes are connected to the Chinese People's Liberation Army. According to Bloomberg and the BBC, the Chinese e-commerce giant is suing to be removed from the Pentagon blacklist, arguing that its inclusion in it has no "basis in fact or law" and is a violation of its right to free speech, as well as of constitutional due process.

The Defense Department released the updated 1260H list earlier this month, which now also includes internet services provider Baidu. You can think of Baidu as Google's counterpart in China. It said that Alibaba was a "military-civil fusion contributor to the Chinese defense industrial base," due to its regulatory ties to Beijing.

While being included in the 1260H list doesn't automatically place sanctions on the company, it means the Defense Department will no longer be able to do business with it or use its products and services through third parties. Other companies could also take it as a red flag, as they could face trade restrictions from the US government, among other repercussions, if they do business with the firms in the list. According to Alibaba, the designation is preventing it from retaining lawyers that could help it challenge the label, as well.

Alibaba apparently opened dialogue with the US government about the designation after the Pentagon briefly posted and then pulled a version of the blacklist with its company included back in February. It presented evidence that it wasn't supporting the Chinese military, Bloomberg said, but the agency never replied. It denied that any of its board members has military affiliation and stressed that its platforms were created for e-commerce and cloud computing only, not for weapons or intelligence operations. "Alibaba is not a Chinese military company nor part of any military-civil fusion strategy," it told the BBC. "The decision to place Alibaba on the 1260H list is arbitrary and capricious, and we are filing a lawsuit against the Department of War to demand removal from the list."