US Federal Court Grants Alibaba Temporary Relief from DOD Lobbying Restrictions
A US federal court has granted Alibaba Group Holding a temporary legal victory after Judge Amy K. Lee ordered the US Department of Defense (DOD) not to treat the company as a "Chinese military company" for the purposes of political lobbying restrictions. This pause will last for up to 60 days pending a ruling on the constitutionality of the law underpinning these constraints.
The decision comes amid a lawsuit filed by Alibaba challenging its inclusion on the DOD's list of companies allegedly linked to the Chinese military—a designation that has triggered sweeping restrictions on the company's operations within the United States.
A US law that took effect last week prohibited the DOD from engaging with lobbying firms that simultaneously represent blacklisted companies. This forced Washington lobbying groups to choose between representing Chinese firms or Defense Department contractors, prompting most to sever their ties with Alibaba.
The current judicial ruling restricts the exemption solely to lobbying restrictions until the company's petition is resolved, or for a period not exceeding 60 days from the court hearing date, whichever comes first.
188 Companies Listed On June 8, the US Department of Defense added Alibaba to its Section 1260H list of Chinese military companies operating in the US, raising the total number of listed entities to 188. These encompass strategic sectors such as semiconductors, artificial intelligence, robotics, and drones.
The company filed a lawsuit on June 23 seeking its removal from the list, asserting that it does not collaborate with the Chinese military. Additionally, on June 30, Alibaba submitted a separate request to suspend the lobbying restrictions immediately upon their implementation.
Alibaba argued that the new restrictions violate its right to free speech and deprive it of the ability to communicate with the US government regarding legislation and policies that impact its business. The company noted that more than 24 of its registered lobbyists have terminated their contracts in recent weeks due to the new legislation.
For its part, the DOD maintained its stance on the constitutionality of the law but agreed to the temporary stay to grant the court an opportunity to review the case, declining to comment further due to ongoing litigation.