From geopolitical blacklisting and domestic regulatory crackdowns to intellectual property problems, Alibaba has been the centre of several global controversies.
On Tuesday, the Chinese e-commerce giant filed a lawsuit against the U.S. government over the Pentagon’s decision to put it on a list of “Chinese military companies.”
According to Reuters, Alibaba was placed on a list of businesses from China that the Department of Defence linked to that country’s military.
The tech and e-commerce giant argues that the designation is factually and legally unjustified and seeks to have its name removed from the list.
The lawsuit was filed by the Chinese firm in a federal court in San Jose, California, after the Pentagon added more companies to its list of alleged Chinese military-linked firms on June 8, raising the total number to 188.
The U.S. government says it is concerned that China's military may use private companies to gain access to new technologies and innovations.
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Alibaba Linked to Chinese Military-Civic Fusion Strategy
The Pentagon–U.S. Department of Defence alleged Alibaba had connections that potentially could make it a part of China’s military-civil fusion strategy. This links to the Chinese government's efforts to take advantage of private-sector technology and innovation for military purposes.
Alibaba argues that its commercial business has a central focus on e-commerce, cloud computing, logistics, and related services. Additionally, they have expressed that the Chinese global marketplace is not owned or controlled by the Chinese military.
The firm also claimed that the Pentagon lacks sufficient evidence to justify the designation. The Pentagon’s categorisation of Alibaba harms its reputation and business interests.
The Pentagon also claimed that Alibaba is indirectly affiliated with China's state asset regulator, known as SASAC, according to Reuters.
"The determinations have no basis in fact or law. Alibaba is governed by an independent board, none of whom has any military affiliation,” the Chinese e-commerce company stated. “Its products and services are built for retail, logistics, and enterprise information technology — not weapons, defence, or intelligence."
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Pentagon “1260H list” of Firms Linked to Chinese Military
The U.S. Department of Defence has a “1260H list”, which is a compilation of Chinese firms the Pentagon believes to have ties to the Chinese military.
While the “1260H list” is hailed as a blacklist, it's not an accusation of illicit behaviour or formal sanctions. Instead, under the new US law, the blacklist implies that the Pentagon cannot form contracts with them nor buy products or services via third parties beginning in 2027.
Alibaba was recently added to the Pentagon’s blacklist.
As per Reuters, Chinese companies including Baidu. Automakers BYD, NIO, and biotechnology firm WuXi AppTec were added to the Pentagon’s blacklist this month.
It seems that WuXi AppTec also filed a lawsuit against the Pentagon on June 11, claiming that its official designation as being linked to the list of Chinese military companies is unsupported by facts.
The Chinese biotechnology company filed the complaint in federal court in Washington, D.C. They claimed that the inclusion on the list was arbitrary, capricious, unsupported by the facts and "the product of political pressure."
Alibaba has also claimed that its designation is arbitrary and capricious. They further noted that the designation has already resulted in irreparable harm.
"For many American businesses, Alibaba is the principal gateway to the Chinese market," Alibaba stated.
"To label Alibaba a 'Chinese military company' is to brand it an instrument of the Chinese military and a threat to U.S. national security. That designation ... directly impugns Alibaba’s reputation and casts a shadow over every U.S. relationship the company maintains."
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