Alibaba sues US for being linked to Chinese military (updated)

Alibaba Holding

Yesterday 18:35

Recasts first paragraph; adds details from complaint, background, paragraphs 2-3, 6-12; adds bylines
Alibaba denies its products are built for defense, intelligence
Alibaba, Baidu, BYD, others added this month to Pentagon blacklist
Pentagon declines to comment
By Jonathan Stempel and Doina Chiacu

    June 23 (Reuters) - Alibaba 9988.HK, the Chinese technology and e-commerce giant, sued the U.S. government on Tuesday over being placed on a list of businesses from China that the Department of Defense linked to that country's military.

    The complaint was filed in the San Jose, California, federal court after the Pentagon 
    expanded
     its blacklist of alleged "Chinese military companies"  on June 8 to 188 entities, reflecting concern that China's military could tap that country's private sector for advancements.
  

    Alibaba was accused of being a "military-civil fusion contributor to the Chinese defense industrial base" through an affiliation with China's Ministry of Industry and Information Technology. The Pentagon also said Alibaba is indirectly affiliated with China's state asset regulator, known as SASAC.
  
"The determinations have no basis in fact or law," Alibaba said.
"Alibaba is governed by an independent board, none of whom has any military affiliation," it continued. "Its products and services are built for retail, logistics, and enterprise information technology — not weapons, defense, or intelligence."

    The lawsuit seeks Alibaba's removal from the list.
  

    A Pentagon spokesperson declined to comment, saying the agency does not discuss pending litigation.
  
     

    BAIDU, BYD ALSO ADDED TO LIST
  

    Under recent U.S. law, the Pentagon cannot contract with companies on the blacklist starting this month, and cannot buy their products or services via third parties beginning in 2027.
  

     Inclusion on the list does not mean formal sanctions.
  

    Other businesses joining the list this month include internet search company Baidu 9888.HK, automakers BYD 002594.SZ and NIO 9866.HK, and biotechnology company WuXi AppTec 603259.SS. WuXi filed a lawsuit similar to Alibaba's on June 11.

    Alibaba called its designation arbitrary and capricious, and said it has already caused irreparable harm.
  

    "For many American businesses, Alibaba is the principal gateway to the Chinese market," it said. "To label Alibaba a 'Chinese military company' is to brand it an instrument of the Chinese military and a threat to U.S. national security. That designation ... directly impugns Alibaba’s reputation and casts a shadow over every U.S. relationship the company maintains."
  

(Reporting by Susan Heavey, Michelle Nichols and Doina Chiacu; Editing by Mark Porter)
((michelle.nichols@tr.com; X: @michellenichols))