19-10-2024 (WASHINGTON) The world’s largest drone manufacturer, DJI, has launched a legal battle against the US Defense Department. The China-based company filed a lawsuit on Friday, contesting its inclusion on a list of firms allegedly working with Beijing’s military apparatus.
DJI, which dominates the US commercial drone market with over 50% market share, is seeking a court order to remove its name from the Pentagon’s roster of “Chinese military companies”. The drone maker vehemently denies any ownership or control by the Chinese military, arguing that its designation is both erroneous and financially damaging.
The lawsuit, filed in a US district court in Washington, details the severe repercussions DJI has faced since being added to the list. The company claims to have lost significant business deals, suffered reputational damage as a perceived national security threat, and been barred from contracting with multiple federal government agencies. Furthermore, DJI reports that both US and international customers have terminated existing contracts and are refusing to enter into new agreements.
This legal action comes after what DJI describes as a 16-month period of unresponsiveness from the US Defense Department regarding the designation. The company states that it exhausted all other avenues before resorting to litigation.
The case highlights the broader context of strained Sino-American relations, with the US government taking increasingly stringent measures to restrict Chinese companies it believes may bolster Beijing’s military capabilities. DJI joins a roster of major Chinese firms on the Pentagon’s list, including aviation giant AVIC, memory chip producer YMTC, and energy conglomerate CNOOC.
This lawsuit is not an isolated incident in the tech sector’s pushback against such designations. In May, lidar manufacturer Hesai Group filed a similar suit, which resulted in its temporary removal from the list, only to be immediately relisted on national security grounds.
DJI’s challenges in the US market extend beyond this lawsuit. The company recently disclosed that US Customs and Border Protection is impeding imports of some DJI drones, citing concerns over forced labour practices – an allegation DJI firmly denies.
The drone maker has also faced scrutiny from US lawmakers who have raised alarms about potential data transmission, surveillance, and national security risks associated with DJI products. These concerns have culminated in a recent House vote to prohibit new DJI drones from operating in the US, with the bill currently awaiting Senate consideration.
Adding to the company’s woes, the US Commerce Department is exploring potential restrictions on Chinese drones that could effectively ban them from American skies.
