DJI has filed a lawsuit against the Department of Defense after being classified as a “Chinese military company” in 2022. The Chinese company argues that this designation is incorrect and has harmed its finances and reputation. Specifically, it says that several of its clients have terminated contracts and are unwilling to sign new agreements.
According to Bloomberg, DJI’s legal action follows nearly a year and a half of efforts by the world’s largest drone manufacturer to have the Pentagon remove it from the document tied to the National Defense Authorization Act. “DJI determined it had no alternative other than to seek relief in federal court,” the company said.
DJI Says It’s Not a Chinese Military Company
In its lawsuit, DJI asserts that it’s not a Chinese military company, a position it has reiterated over the last few months. The company claims it’s not owned by the Chinese military and that it only manufactures commercial and consumer drones, stating explicitly that its product line doesn’t include military equipment. However, these arguments haven’t persuaded U.S. officials.
Recent legislation requires the Department of Defense to identify “Chinese military companies” operating directly or indirectly within the country. The act aims to counteract the strategic blending of civilian and military activities the U.S. believes the Chinese People’s Liberation Army is carrying out.
According to the U.S. government, many of China’s military advancements originate from technologies and expertise developed by companies, universities, and governmental programs that appear to be civilian in nature.
Meanwhile, DJI, which commands more than half of the drone market in the U.S., has faced significant challenges after being added to the list.
Reuters reports that being placed on the list doesn’t immediately result in sanctions. However, it serves as a public warning to companies considering doing business with the listed entity. It could also lead to more serious actions, such as sanctions imposed by the Department of the Treasury.
At the same time, a committee in the House of Representatives is advancing an initiative to ban the use of DJI drones in U.S. airspace. If this measure is enacted, it would pose challenges for DJI and its users. Clearly, consumers will be hesitant to purchase drones they can’t use in their own country.
It’s important to note that the government’s efforts to limit Chinese military development include several other significant measures, including export controls on advanced technologies. These controls prevent companies like Nvidia from providing their most advanced products to the Chinese market.
Image | SLON V KASHE
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