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Drone-maker DJI filed a lawsuit Friday against the US Department of Defense over its inclusion on a DoD list of “Chinese military companies.”
A DJI spokesperson 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.
The Chinese company was added to the DoD’s list in 2022, following similar actions from other government agencies — in 2020, DJI was placed on Department of Commerce’s Entity List that essentially blocked US companies from selling to it, and it was placed on the Treasury Department’s investment blocklist the following year, due to DJI’s alleged involvement in the surveillance of Uyghur Muslims. (The company said it had “nothing to do with 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 lost business, and employees have been stigmatized and harassed.”
The company claims that the DoD report justifying the listing “contains a scattershot set of claims that are wholly inadequate to support DJI’s designation.”
The lawsuit argues, “Among numerous deficiencies, the Report applies the wrong legal standard, confuses individuals with common Chinese names, and relies on stale facts and attenuated connections that fall short of establishing that DJI is [a Chinese military company].” It also says that founder and CEO Frank Wang and three early-stage investors “together hold 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.
Anthony Ha is TechCrunch’s weekend editor. Previously, he worked as a tech reporter at Adweek, a senior editor at VentureBeat, a local government reporter at the Hollister Free Lance, and vice president of content at a VC firm. He lives in New York City.
