The world’s largest commercial drone manufacturer is taking on the Defense Department in a courtroom clash of the titans over a 2022 decision to put Shenzhen DJI Innovation Technology Co., better known as DJI, on the Pentagon’s list of restricted companies with links to China’s military and its communist government.
On Oct. 18, DJI filed a federal lawsuit in U.S. District Court for the District of Columbia to overturn the designation. The company insisted it is neither owned nor controlled by the Chinese military and builds drones only for the consumer and commercial markets.
The Guangdong company claims an eye-popping 90% share of the global consumer market and more than three-fourths of the U.S. commercial drone market. Its drones are used by police departments, first responders and corporate clients.
“After attempting to engage with the [Defense Department] for more than 16 months, DJI determined it had no alternative other than to seek relief in federal court,” DJI officials said in a statement Tuesday to The Washington Times. “DJI is not owned or controlled by the Chinese military, and the [Defense Department] itself acknowledges that DJI makes consumer and commercial drones, not military drones.”
Maj. Gen. Patrick Ryder, a Pentagon spokesman, said Tuesday that he knew of the DJI lawsuit but couldn’t comment on ongoing litigation.
The U.S. government has found it difficult to address the issue of dealing with Chinese technology and manufacturing exporters. Critics say that, under Chinese security laws, Chinese-owned companies such as DJI and TikTok must cooperate with the Communist Party regime in Beijing and thus should be considered effectively arms of the government.
Several companies on the list for suspected ties to the Chinese military include the memory chip maker YMTC and CNOOC, China’s third-largest energy company. The Commerce Department said in September that it had begun seeking public comments on whether to impose an effective ban on Chinese-built drones in the U.S.
The Biden administration added DJI to its list of restricted Chinese government-controlled companies at the end of January. DJI representatives said the Pentagon responded to attempts to address their concerns only after the legal challenge was announced. The Defense Department gave the company a copy of a November 2023 internal report detailing why DJI was added to the list.
In its lawsuit, the company said the Pentagon report “contains a scattershot set of claims that are wholly inadequate to support DJI’s designation. Among numerous deficiencies, the report applies the wrong legal standard, confuses individuals with common Chinese names, and relies on stale alleged facts and attenuated connections that fall far short of demonstrating that DJI is a ‘Chinese Military Company.’”
The Pentagon restriction is only one of the headaches DJI faces in the U.S. market. In September, the House of Representatives voted to bar any of the company’s new drones from operating in the United States. American farm, manufacturing and other groups complained that an outright ban could cripple many of their operations given DJI’s dominance of the market.
“For years, the U.S. government has known that DJI presents unacceptable economic and national security risks, but no one was willing to take the necessary steps to remove Communist Chinese spy drones from our skies,” Rep. Elise Stefanik, New York Republican, said in a statement after the House passed her Countering CCP Drones Act. “It is strategically irresponsible to allow Communist China to be our drone factory.”
The measure faces an uncertain fate in the Senate.
DJI has enlisted high-powered Washington legal talent in its lawsuit. The company is being represented in court by Loretta Lynch, who served as attorney general during the Obama administration. Ms. Stefanik accused Ms. Lynch of turning her back on her own country and “selling out” to communist China.
“Not only is her lawsuit full of factual errors, it is also an obvious effort by DJI to distract from [the U.S. Customs and Border Protection’s] recent halting of DJI imports due to Uyghur slave labor concerns and a futile attempt to disrupt the momentum behind my unanimously-passed Countering CCP Drones Act,” Ms. Stefanik said. “DJI’s time in the United States is rightfully coming to an end and Loretta Lynch’s sham lawsuit is not going to save them.”
The company’s dominance of the drone market isn’t in dispute. According to the research firm Drone Industry Insights, DJI manufactures 76.8% of all the drones in the U.S. Its biggest competitor is Intel, with 3.7% of the U.S. market.
DJI said the Pentagon’s addition of the company to the list of businesses controlled by the government in Beijing unfairly tarred it as a national security threat and caused “significant and ongoing harm to the company.”
“Some customers canceled contracts to purchase DJI products, while many more expressed concern about further business dealings with the company,” the lawsuit said. “The designation stigmatized the company and its employees, including the over 150 employees working in the United States.”
The lawsuit acknowledges that hobbyists and public safety agencies use the company’s drones. DJI insists it doesn’t design its products with an eye toward the military market or permit their use for combat operations.
Some international customers apparently did not get that message. The Ukrainian Defense Ministry announced in May that it had purchased 4,200 DJI Mavic 3 drones for about $26.5 million.
“Drones have evolved into an essential component of modern warfare. They strengthen our defense capabilities, increasing military operations’ effectiveness. Therefore, the procurement of drones is one of the main tasks of the Ministry of Defense,” Deputy Defense Minister Dmytro Klimenkov said after the deal was made. “Our troops must be provided with everything necessary in a timely manner to have the ability to respond to any threats from the enemy.”
The explosive growth of the drone industry in the U.S. and around the world has caused problems for military base security for several years. Officials at Langley Air Force Base near Norfolk, Virginia, are looking for special anti-drone nets to protect their tactical aircraft, including F-22 Raptor stealth fighters, from prying surveillance eyes in the sky.
Pentagon officials said uncrewed aerial systems had swarmed the base. During two months in December, at least a dozen drones regularly overflew the airfield.
“They didn’t appear to exhibit any hostile intent, [but] it’s something that we have kept our eyes on,” Defense Department spokeswoman Sabrina Singh told reporters.
Military officials say they can’t do much to curb private drone use. U.S. law doesn’t allow the military to shoot down drones near a base unless they pose an imminent threat. The government is also wary of using electronic means to disable drones for fear it could interfere with commercial air traffic or emergency services communications.
Sen. Jerry Moran, Kansas Republican, said the reports of unidentified aircraft hovering over a U.S. military base for more than two weeks was not just concerning but “an affront to our national security.”
“As drone technology continues to evolve, the tactics used against the United States grow more alarming each day. This violation of our airspace highlights the threat of below-the-threshold activity that hostile actors can pose to our nation,” Mr. Moran said in a statement. “I am working on legislation to provide the Department of Defense with the necessary authorities to engage drones or unidentified aircraft that breach our military airspace before it is too late to respond.”
• Mike Glenn can be reached at mglenn@washingtontimes.com.
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