DJI has sued the US Defense Department (DoD) for listing it as a company allegedly linked to the Chinese military. The world’s largest drone maker has claimed that the designation is inaccurate and has caused substantial financial damages to the company. The lawsuit, filed in a US District Court in Washington, seeks the removal of DJI from the Pentagon’s list of “Chinese military companies” (CMC).DJI noted that it is “neither owned nor controlled by the Chinese military” and that the designation has resulted in lost business deals and reputational damage.
How the CMC label is affecting DJI
Being on the list serves as a warning to US firms about potential national security risks associated with doing business with these companies. DJI alleges that the designation has led to contract terminations and a reluctance from customers to engage with the company.
DJI, which sells over half of all commercial drones in the US, argues that the DoD’s decision is “unlawful and misguided” and has significantly impacted its operations and financial standing.
In the filing (seen by The Verge), DJI alleges: “As a result of DoD’s unlawful and misguided decision to place and maintain. DJI on the CMC List, DJI has suffered significant and ongoing financial and reputational harm. Because of the CMC designation, which marks DJI as a national security threat, US and international customers have terminated existing contracts with DJI and refuse to enter into new ones. DJI and its employees now suffer frequent and pervasive stigmatisation. US employees of DJI have been repeatedly harassed and insulted in public places.”
DJI faces mounting pressure in the US
DJI is facing a lot of challenges in the US market. Earlier this week, the country’s Customs and Border Protection (CBP) started blocking imports of some of its drones, citing concerns about potential forced labour violations under the Uyghur Forced Labor Prevention Act.
DJI has already faced scrutiny from US lawmakers over data security and national security risks associated with its drones. The company has denied these allegations and has claimed that no forced labour is used in its manufacturing process.
