The lawsuit was filed with a federal court in San Jose, California on Tuesday. Alibaba argues that the decision to place them on the so-called 1260H list is incorrect.
The decisions are unsupported by both facts and law, the company states in its lawsuit.
A company spokesperson also adds:
Alibaba is not a Chinese military company and is not part of any civil-military fusion strategy.
The U.S. Department of Defense, the Pentagon, argues that Alibaba contributes to China's defense industry because the company complies with Chinese technology regulations and is affiliated with the country's Ministry of Industry and Information Technology (MIIT). Alibaba counters that it is governed by an independent board of directors with no members having military ties. The company emphasizes that its platforms are built for retail, logistics, cloud services and enterprise technology, not for weapons or intelligence operations.
Alibaba was added to the list on June 8, along with other technology companies such as Baidu, BYD and Nio. As of June 30, the Pentagon is legally prohibited from doing business with the blacklisted companies. The law also covers U.S. subcontractors who share lobbyists or law firms with the blacklisted companies. According to Alibaba, this creates a blockade that forces the company's U.S. advisors to sever ties to protect their own defense contracts. From 2027, the Pentagon will also be prohibited from purchasing goods and services from the companies through third parties.
As early as February Ehandel.se reported on the information that Alibaba risked being placed on the 1260H list, which then caused the company's share to fall by about 5 percent in futures trading on Wall Street.
China's embassy in Washington has criticized the blacklistings and urged the U.S. to create a non-discriminatory environment for Chinese companies. The U.S. Department of Defense has declined to comment on the ongoing legal process.