Chinese drone maker DJI sues DoD: we’ve been stigmatized

DJI, the world’s largest drone maker, is determined to show that it’s not a tool of the Chinese government and military. The company is suing the US Department of Defense (DoD) for labeling it precisely that.

In the lawsuit, DJI, a tech company based in Shenzhen, says it wants the DoD to delete its name from a list of “Chinese Military Companies,” claiming it has no such relationship to government authorities and that it has suffered unfairly because of the designation.

DJI was added to the list in 2022, which the DoD says is “an important continuing effort in highlighting and countering the People’s Republic of China’s Military-Civil Fusion strategy."

Sales are declining in the US

As a result, DJI says, it has “lost business deals, been stigmatized as a national security threat, and been banned from contracting with multiple federal government agencies.” Moreover, the firm’s employees are allegedly “repeatedly harassed and insulted in public places.”

“DJI is the largest privately owned seller of consumer and commercial drones, which are used by police departments, fire departments, other first responders, large and small companies, and hobbyists throughout the United States and the world,” the company claims in the lawsuit.

“DJI is neither owned nor controlled by the Chinese military, and, as DoD acknowledges, sells only consumer and commercial – not military – drones.”

In its complaint (PDF), the company says it was forced to file the suit after “attempting to engage with the DoD for more than sixteen months” and deciding “it had no alternative other than to seek relief in federal court.”

In 2021, DJI controlled almost 90% of the US commercial market, but that number is now down to around 54%.

The DoD is far from the only US government entity restricting DJI’s operations in the country. The Army stopped using DJI drones in 2017, and the US Interior Department grounded its fleet of DJI drones over spying risks in 2017.

The firm is suffering. Once it was added to the US federal blacklist by the Treasury Department in 2021, sales of its drones began shrinking in America. In 2021, DJI controlled almost 90% of the US commercial market, but that number is now down to around 54%.

Imports are held up

Experts say the data collected by drones – especially when federal agencies use them – could be extremely useful to China’s government and military and might be weaponized when needed.

“Concerns with purchasing Chinese drones stem from the justified fear of spying mechanisms in them. The drones might also be hijacked by Chinese authorities to cause damage,” Irina Tsukerman, a US national security lawyer and geopolitical analyst, told Cybernews last year.

There’s no reason to buy weapons or advanced technology from an openly adversarial state – except to reverse engineer it.”

To be clear, DJI drones are not currently banned in the US – but it’s problematic. Just last week, DJI sent a letter to distributors, saying the firm currently cannot freely import all of its drones in the US.

In the letter (PDF), the company said that the US Customs and Border Protection is citing the Uyghur Forced Labor Prevention Act as justification for blocking the imports, even though, according to DJI, it “does not and has never operated manufacturing facilities in the Xinjiang province of China.”

Washington is claiming that the Chinese government is systematically repressing Uyghurs in the Xinjiang Autonomous Region, and the Treasury said back in 2021 that DJI had provided drones to the government so it could conduct surveillance of Uyghurs.

Beijing denies the accusations, and some experts point out that US efforts to restrict the rise of Chinese tech are unfair – America likes a bogeyman, after all.

“China does have significant technological capability and may indeed be a popular vendor for other nations,” Patricia Muoio, a cyber expert at venture capital firm SineWave who previously worked at the US Department of Defense for 30 years, told Cybernews in 2023.

“The best way to win this race, though, is to make the US tech better, not to make the Chinese tech harder to get.”