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Introduced by drone maker DJI lawsuit Friday against the US Department of Defense regarding its inclusion on List of Ministry of Defense From “Chinese military companies”.
A DJI spokesperson said the company filed the lawsuit after “trying to engage with the Department of Defense for over sixteen months” and deciding it had “no alternative but to seek compensation in federal court.”
“DJI is not owned or controlled by the Chinese military, and the Department of Defense itself acknowledges that DJI makes consumer and commercial drones, not military drones,” the spokesperson said.
The Chinese company was added to the Ministry of Defense list in 2022, after similar actions from other government agencies – in 2020, DJI was placed on the list List of entities of the Ministry of Commerce This essentially banned US companies from selling to it, and it was placed on the Treasury Department’s investment ban list the following year, due to DJI’s alleged involvement in surveilling Uyghur Muslims. (The company said “It has nothing to do with the treatment of Uyghurs in Xinjiang.”)
In its lawsuit, DJI says that as a result of the listing, it has “suffered ongoing financial and reputational harm, including loss of business, and employees have been subjected to stigma and harassment.”
The company claims that the Department of Defense report justifying the listing “contains a scattering of claims that are woefully inadequate to support DJI’s designation.”
“Among its many deficiencies, the report applies the wrong legal standard, conflates individuals with common Chinese names, and relies on outdated facts and diluted links that fall short of proving that DJI is a ‘Chinese military company,’” the lawsuit says. It also says that founder and CEO Frank Wang and three early-stage investors “together own 99% of the company’s voting rights and approximately 87.4% of its shares.”
The Department of Defense did not immediately respond to TechCrunch’s request for comment.
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