U.S. District Judge Paul FriedmanEarlier rulingThe U.S. Department of Defense’s decision to include DJI in the list of “Chinese military companies” is well-founded and therefore rejected.DJI previously filed a lawsuit, which means that DJI’s development environment in the United States will continue to be strictly restricted.
Paul Friedman pointed out in the verdict that DJI itself admitted that its technology could indeed be used for military purposes and that it had indeed been put into practical use. Even though the company's internal policy claimed to prohibit military use, this could not change the fact that its products "had significant potential and actual military applications." Therefore, he believed that the US Department of Defense's decision was not improper.
DJI filed a lawsuit in October 2024, arguing that it is "neither owned nor controlled by the Chinese military" and emphasizing the ongoing financial and reputational damage it has suffered from being designated a "Chinese military company." Under US regulations, being designated as a "Chinese military company" prohibits participation in US government grant programs, contracts, loans, or other related collaborations, significantly impacting its operations.
In fact, the relationship between DJI and the US government has long been tense. As early as 2020, the US Department of Commerce added DJI and 77 other companies to the "Entity List," a list of companies prohibited from exporting technology, restricting US businesses from doing business with them.
The following year, the U.S. Treasury Department added DJI to its list of "Chinese military companies" because its technology was implicated in the surveillance of Uighurs in Xinjiang, China. Last year, U.S. Customs even began detaining DJI consumer drones at the border.
In addition to the designation, DJI now faces a more immediate challenge: a potential U.S. import ban. Originally slated for 2024, Congress included a provision in an $8950 billion defense bill giving DJI one year to prove its products do not pose a national security threat.
However, DJI has yet to convince the five major US security agencies (Department of Homeland Security, Department of Defense, Federal Bureau of Investigation, National Security Agency, and Office of the Director of National Intelligence) that it has violated the law. In March of this year, DJI publicly called on the relevant agencies to immediately conduct an investigation, but it seems that the situation has not been reversed.
For DJI, the stagnation in the US market not only impacts its global revenue but also poses a long-term challenge to its brand image. For the US, it demonstrates its increasing national security scrutiny of Chinese technology companies.
