Alibaba Group sued the U.S. Department of Defense in federal court in San Jose on June 23, seeking to be removed from the Pentagon’s list of companies designated as Chinese military supporters under Section 1260H of the FY2021 National Defense Authorization Act.
The complaint charges two constitutional violations: the designation denied Alibaba due process because DoD ignored evidence the company says shows no military ties, and the listing restricts its free speech. Alibaba’s board, the company said, has zero military affiliates. Its products serve retail, logistics, and enterprise IT.
DoD added Alibaba to its Section 1260H list on June 8, expanding it to 188 entities. The basis: indirect affiliation with China’s State-Owned Assets Supervision and Administration Commission (SASAC) and affiliation with the Ministry of Industry and Information Technology (MIIT), making Alibaba a “military-civil fusion contributor to China’s defense industrial base.”
The stakes are concrete. DoD can’t execute new contracts with listed entities. The statute also explicitly reserves the right to additional actions beyond Section 1260H.
Alibaba disclosed the lawsuit in a same-day SEC 6-K filing. Its core argument, that DoD failed to engage with submitted evidence, is a procedural due process theory that doesn’t require the court to second-guess national security judgments. If a judge rules in Alibaba’s favor, DoD would need to formalize its evidentiary review process, giving any of the other 187 listed entities a procedural hook for their own challenges.
The government’s response deadline wasn’t set. June 30 is.
— James Okafor