DJI Files Lawsuit Against the Department of Defense Over Its Designation as a Chinese Military Company.

Drone-maker DJI is suing the U.S. Department of Defense to get off a DoD list of "Chinese military companies."
DJI Files Lawsuit Against the Department of Defense Over Its Designation as a Chinese Military Company.

Drone-maker DJI is suing the U.S. Department of Defense to get off a DoD list of "Chinese military companies."

A spokesperson for DJI said the company filed the suit after "attempting to engage with the DoD for more than sixteen months" and deciding "it had no alternative other than to seek relief in federal court.".

DJI is not owned or controlled by the Chinese military, and the DoD itself acknowledges that DJI makes consumer and commercial drones, not military drones," the spokesperson said.

In 2022, it gained a place on the DoD's list as well. It was part of a broader range of steps the government had taken against it; in 2020, DJI had been placed on the Department of Commerce's Entity List, which blocked US companies from selling to it, and it landed on the Treasury Department's investment blocklist the following year, accused of monitoring Uyghur Muslims. (The company said it had "nothing to do with treatment of Uyghurs in Xinjiang.")

In the complaint, DJI says the listing has "caused ongoing financial and reputational harm, including lost business, and employees have been stigmatized and harassed."

The company states the DoD report to justify the listing is "a scattershot set of claims that are wholly inadequate to support DJI's designation.".

The lawsuit argues: "Among many flaws, the Report applies the wrong legal standard, confuses people with common Chinese names, and relies on stale facts and attenuated connections that fail to establish that DJI is [a Chinese military company]. It also points out that founder and CEO Frank Wang and three early-stage investors "together hold 99 percent of the company's voting rights and roughly 87.4 percent of its shares.".

No comment from the Department of Defense yet in response to TechCrunch on the issue.

A spokesperson for DJI said the company filed the suit after "attempting to engage with the DoD for more than sixteen months" and deciding "it had no alternative other than to seek relief in federal court.".

DJI is not owned or controlled by the Chinese military, and the DoD itself acknowledges that DJI makes consumer and commercial drones, not military drones," the spokesperson said.

In 2022, it gained a place on the DoD's list as well. It was part of a broader range of steps the government had taken against it; in 2020, DJI had been placed on the Department of Commerce's Entity List, which blocked US companies from selling to it, and it landed on the Treasury Department's investment blocklist the following year, accused of monitoring Uyghur Muslims. (The company said it had "nothing to do with treatment of Uyghurs in Xinjiang.")

In the complaint, DJI says the listing has "caused ongoing financial and reputational harm, including lost business, and employees have been stigmatized and harassed."

The company states the DoD report to justify the listing is "a scattershot set of claims that are wholly inadequate to support DJI's designation.".

The lawsuit argues: "Among many flaws, the Report applies the wrong legal standard, confuses people with common Chinese names, and relies on stale facts and attenuated connections that fail to establish that DJI is [a Chinese military company]. It also points out that founder and CEO Frank Wang and three early-stage investors "together hold 99 percent of the company's voting rights and roughly 87.4 percent of its shares.".

No comment from the Department of Defense yet in response to TechCrunch on the issue.

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2024-10-20 17:36:49