Washington: China-based drone manufacturer DJI filed a lawsuit against the U.S. Defense Department on Friday, contesting its designation as a company allegedly collaborating with Beijing’s military. DJI argues that the designation is inaccurate and has resulted in significant financial harm to the company.
As the world’s largest drone manufacturer, DJI sells more than half of all commercial drones in the U.S. The company has requested a U.S. District Judge in Washington to order its removal from the Pentagon’s list of “Chinese military companies,” asserting that it “is neither owned nor controlled by the Chinese military.”
Being placed on this list serves as a warning to U.S. entities regarding the national security risks associated with doing business with these companies. According to DJI’s lawsuit, the Defense Department’s “unlawful and misguided decision” has led to lost business deals, stigmatization as a national security threat, and a ban from contracting with multiple federal agencies.
“U.S. and international customers have terminated existing contracts with DJI and refuse to enter into new ones,” the company stated.
The Defense Department did not immediately respond to requests for comment. DJI indicated that it pursued legal action after more than 16 months of the Pentagon not engaging with the company regarding the designation, stating it “had no alternative other than to seek relief in federal court.”
Amid deteriorating relations between the world’s two largest economies, the updated list is part of broader actions taken by Washington in recent years to highlight and restrict Chinese companies that it believes may bolster Beijing’s military capabilities. Other major Chinese firms on the list include aviation company AVIC, memory chip maker YMTC, China Mobile, and energy giant CNOOC.
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In May, lidar manufacturer Hesai Group filed a suit against the Pentagon’s designation as a Chinese military company. Although the Pentagon removed Hesai from the list, it announced plans to relist the company on national security grounds.
DJI is facing increasing scrutiny in the United States. Earlier this week, the company informed Reuters that Customs and Border Protection had halted imports of certain DJI drones, citing the Uyghur Forced Labor Prevention Act. DJI has denied any involvement with forced labor in its manufacturing processes.
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U.S. lawmakers have frequently raised concerns that DJI drones pose risks related to data transmission, surveillance, and national security, claims that the company disputes. Last month, the U.S. House of Representatives voted to prohibit the operation of new DJI drones in the U.S., with the bill currently awaiting Senate action. Additionally, the Commerce Department is seeking public comments on the potential imposition of restrictions on Chinese drones, akin to proposed bans on Chinese vehicles.
