DJI fights U.S. government classification as 'Chinese military company,' appeals ruling

DJI is continuing to fight the U.S. government's classification of it as a "Chinese military company," filing an appeal in its unsuccessful lawsuit against the Department of Defense (DoD, recently renamed the Department of War).

In a ruling against DJI last month, a U.S. district court allowed the DoD's designation of the Chinese drone manufacturer as a "Chinese military company" to stand. Despite disagreeing with the DoD's allegation that DJI is "indirectly owned by the Chinese Communist Party," the judge determined that there is evidence that the company does contribute to the "Chinese defence industrial base," as drones are of substantial use in military contexts. 

In response, DJI asserts that numerous other commercial technologies can be "misused" for military purposes, and that this doesn't indicate any connection between them and the Chinese military.

"We respect the Court's process but are disappointed that the designation remains in place despite findings that reject the core of the DoD’s allegations," said DJI spokesperson Adam Welsh. "We will continue to defend the integrity of our company as the findings reaffirm what we have maintained all along — that DJI operates independently, has no government or military affiliation, and is committed to the responsible development of drone technology."

DJI states that it has never manufactured military equipment or marketed its drones for combat purposes. The company has also previously pledged not to enable modifications that would allow for such use. However, it isn't uncommon for technology to be misappropriated for uses that they weren't intended for, including military applications. Earlier this year, the European Union banned video game controller sales to Russia, citing their potential use for piloting drones on the battlefield.

"[W]e absolutely deplore any use of our products to cause harm," DJI wrote in a 2022 statement. "DJI has only ever made products for civilian use; they are not designed for military applications…

"Our distributors, resellers, and other business partners…. agree not to sell DJI products to customers who clearly plan to use them for military purposes, or help modify our products for military use, and they understand we will terminate our business relationship with them if they cannot adhere to this commitment."

According to DJI, the DoD's decision to label it a "Chinese military company" has prompted several clients to end their business relationships with it. Even so, the court did not accept DJI's argument that the impact was so severe as to prevent the company from pursuing its chosen business. The matter will now be heard by an appeals court.

DJI has been facing significant challenges conducting business in the U.S. as of late, many of which appear to be posed by the federal government. Earlier this year, customers began reporting that they were unable to purchase DJI products from its website because everything was marked out of stock. This was due to the U.S. Customs and Border Protection hindering importation over claims that DJI used forced labour — an allegation the company emphatically denies.

This incident and the ongoing lawsuit are both unrelated to the national security review that may see DJI drones banned in the U.S. by the end of the year. Under legislation passed last December, the U.S. government must conduct a formal national security review of Chinese-made drones, with failure to do so resulting in a ban on such products. As of July, DJI states it has not received any indication that this review is underway.