Judge pauses Pentagon-linked lobbying curb for Alibaba
A federal judge gave Alibaba temporary relief from a lobbying restriction tied to its placement on a Pentagon Chinese military company list.
By Sofia Marchetti · World Affairs Correspondent
3 min read
A federal judge temporarily blocked the Pentagon from applying a lobbying-related restriction to Alibaba Group Holding Ltd. while she reviews the company’s constitutional challenge, Bloomberg reported. The order matters because the case tests how far Washington can go in limiting Chinese companies’ access to U.S. policymakers through rules tied to national security lists.
U.S. District Judge Eumi K. Lee on Sunday ordered the Defense Department not to treat Alibaba as a Chinese military company for purposes of the lobbying restriction, according to Bloomberg. The pause will last until Lee decides Alibaba’s motion on the issue or until 60 days after a hearing on it, whichever comes first, Bloomberg reported.
The dispute stems from Alibaba’s inclusion on the Pentagon’s list of Chinese military companies operating in the United States, known as the 1260H list. Bloomberg reported that the Pentagon added Alibaba on June 8 as part of a broader expansion of the roster, which now includes 188 companies, up from 20 under an earlier statute several years ago.
The list covers companies across sectors including semiconductors, artificial intelligence, robotics and drones, according to Bloomberg. The Defense Department has accused companies on the list of aiding the Chinese People’s Liberation Army, Bloomberg reported.
Alibaba sued the Defense Department on June 23, seeking removal from the list, according to Bloomberg. In court filings cited by Bloomberg, the company said it does not work with the Chinese military.
The immediate fight concerns a new law that took effect last week, Bloomberg reported. The measure bars the Defense Department from doing business with companies represented by lobbyists who also represent entities on the Pentagon blacklist.
Bloomberg reported that the rule pushed major Washington lobbying firms to cut ties with Alibaba and other Chinese technology companies. In filings cited by Bloomberg, Alibaba said more than two dozen registered lobbyists who had represented the company withdrew their registrations in recent weeks.
Alibaba argued in court that the restriction violates its free-speech rights by depriving the company of representation before the federal government on legislation, regulation and policy matters affecting its business, Bloomberg reported. The company also argued that established lobbying firms would not give up access to thousands of Pentagon contractors to keep representing Alibaba, according to Bloomberg.
The Pentagon, in a joint stipulation filed Friday, said the lobbying restriction complies with the U.S. Constitution, Bloomberg reported. Defense officials also said a temporary stipulation would help the parties and the court while Lee reviews the issue, according to Bloomberg.
The Defense Department declined to comment because the case is pending, Bloomberg reported. Alibaba did not immediately respond to a request for comment, according to Bloomberg.
The political pressure around the rule has been visible on Capitol Hill. Bloomberg reported that Rep. John Moolenaar, who chairs the House select committee on China, and Rep. Elise Stefanik, a member of the House intelligence committee, wrote to Defense Secretary Pete Hegseth last month urging strict enforcement of the restriction.
In that letter, the lawmakers said Pentagon contractors should avoid working with firms and lobbyists that also advance the interests of companies they described as supporting the Chinese Communist Party’s military aims, Bloomberg reported.
This story draws on original reporting from Fortune.