Alibaba filed a federal lawsuit Tuesday in San Jose, Calif., challenging the Defense Department's designation of the company as a military-linked firm.
Alibaba said the labelling is "arbitrary and capricious." A company spokesperson said, "Alibaba is not a Chinese military company nor part of any military-civil fusion strategy," and added, "The decision to place Alibaba on the ... list is arbitrary and capricious, and we are filing a lawsuit against the Department of War to demand removal from the list."
The complaint said, "The determinations have no basis in fact or law," and it argues the designation's restrictions on companies' ability to retain lobbying firms in the U.S. violate First Amendment rights. "The effect is already being felt: Advocates who have represented Alibaba for years have informed the company that they can no longer do so," the complaint stated.
The Pentagon's list included 80 companies and their subsidiaries, and the article named tech firm Baidu and electric vehicle firm BYD among those on it. Under the designation, beginning June 30, the Pentagon can't enter into new contracts with designated companies or their controlled subsidiaries.
Alibaba said in its suit that it is a publicly traded e-commerce and cloud-services provider with a diverse shareholder base dominated by major American financial institutions including J.P.Morgan, Citigroup, and BlackRock.
China retaliated against the blacklist by imposing export controls on ten U.S. companies involved in defense and rare earths mining. The story said the feud tests bilateral relations after President Trump and Chinese counterpart Xi Jinping met in Beijing last month to stabilize ties.