E-commerce giant Alibaba sues US government over defence blacklist
Alibaba Group filed a lawsuit in Washington federal court to challenge its addition to the US Department of Defense's Chinese military companies list. The company called the designation « an erroneous, factually unsupported and unfair interpretation. »
In an 87-page filing submitted to the District of Columbia Federal Court on Tuesday, Alibaba argued that the inclusion of its name on the Pentagon's Chinese Military Company (CMC) list « violates the requirements of administrative due process. » Company lawyers stressed that the « Loongson processor contracts and cloud partnerships » cited by the Pentagon are commercial in nature and not directed at military use.
The CMC listing bars Alibaba from any direct or indirect investment by US public funds and requires federal agencies to terminate existing contracts within 60 days. The company said its New York-listed shares fell 5.4 percent after the listing, with US institutional investor holdings facing roughly 9 billion dollars in erosion.
Pentagon spokesperson Sabrina Singh said « the Department of Defense supports each designation with the necessary evidence under national-security criteria. » The first hearing in the case is scheduled before Judge Amit Mehta on August 18. JPMorgan analysts assessed the probability of legal success priced into shares at about 35 percent.
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