CALIFORNIA — Alibaba filed a lawsuit against the U.S. government in a California federal court seeking removal from the U.S. Department of Defense's 1260H list. The Department of Defense placed Alibaba on the list, designating it as a "military-civil fusion contributor to the Chinese defence industrial base" due to its regulatory ties to Beijing, and stated that the company's compliance with Chinese technology regulators effectively makes it an arm of the military.

In its court filings, Alibaba stated that the Department of Defense's determinations "have no basis in fact or law." The company said it had previously asked for a meeting with the agency to address concerns regarding its potential Chinese military affiliation, but the agency did not raise any concerns or request additional information following its submissions. Alibaba also stated that the Department of Defense "designated Alibaba without notice or a fair hearing."

Alibaba stated that none of the members of its independent board have any military affiliation and that its platforms are built for retail and cloud computing, not weapons or intelligence. "Alibaba is not a Chinese military company nor part of any military-civil fusion strategy," the company said. In its statement regarding the lawsuit, Alibaba referred to the Department of Defense as the "Department of War" and said, "The decision to place Alibaba on the 1260H list is arbitrary and capricious, and we are filing a lawsuit against the Department of War to demand removal from the list."

The Department of Defense stated, "We do not comment on ongoing litigation." The law regarding the 1260H list bans the Pentagon from conducting business with any firm on the blacklist and extends to any U.S. contractor that shares a lobbyist or law firm with a blacklisted entity. Restrictions on doing business with blacklisted firms are scheduled to take effect on June 30.