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DJI Loses Bid to Remove Drone Maker From US Defense Department’s Chinese Military Company List
On February 9,2024,US District Judge Paul Friedman in Washington,D.C., ruled against a petition by DJI, the world’s leading drone manufacturer, to be removed from the US Department of Defense’s (DoD) list of companies with ties to the Chinese military. The judge found that the DoD presented “ample evidence” supporting its claim that DJI contributes to China’s defense industrial base. Reuters reported on the ruling.
Background: The DoD’s List and DJI’s Concerns
The DoD first added DJI to the list in December 2021, citing concerns that the company supported surveillance activities directed at uyghur muslims in Xinjiang, China, and that its drones collected sensitive data potentially accessible to the Chinese government. The Department of Defense officially announced the additions at that time. DJI vehemently denied these allegations,arguing that it operates independently and does not share data with the chinese military.
DJI controls an estimated 50-70% of the US commercial drone market,making the designation notably impactful. The Wall Street Journal detailed DJI’s market dominance in a December 2022 article. The company argued that the listing unfairly harms its business and hinders innovation in the US drone industry.
the Court’s Ruling: Substantial Evidence
Judge Friedman’s ruling focused on whether the DoD’s decision was “arbitrary and capricious,” a standard for reviewing agency actions. He determined that the DoD had provided sufficient evidence to support its Also to be considered: that DJI contributes to china’s defense industrial base, even if the connection wasn’t direct military control. The judge acknowledged evidence presented by the DoD regarding DJI’s collaborations with Chinese government entities and its progress of drone technology with potential military applications.
Specifically, the court considered evidence related to DJI’s research and development partnerships with entities linked to the People’s Liberation Army (PLA), and also its provision of drone technology to Chinese security forces. Bloomberg provided further details on the evidence presented in court.
Implications and Future Outlook
The ruling reinforces the US government’s increasingly cautious approach to Chinese technology companies,particularly those operating in sensitive sectors like drone technology. It signals a willingness to restrict access to the US market based on concerns about national security and potential ties to the chinese military, even in the absence of definitive proof of direct control.
This decision could have broader implications for other Chinese tech companies facing similar scrutiny from the US government.It may also prompt increased efforts to develop domestic alternatives to DJI drones,particularly for government and critical infrastructure applications. The US government has been actively promoting the development of a domestic drone industry to reduce reliance on foreign suppliers.
| Year | DJI US Market Share (Estimate) | Total US Drone Imports (USD Millions) |
|---|---|---|
| 2018 | 65% | 450 |
20 |