Alibaba Group Holding Limited is challenging a federal statute that effectively bans it from hiring lobbyists connected to the Department of Defense, arguing the law violates First Amendment rights.
The Department of Defense describes an entity as a Chinese military company if it is “directly or indirectly owned by, controlled by, or beneficially owned by, affiliated with, or in an official or unofficial capacity acting as an agent of” Chinese military, security and industrial organs. This includes the People’s Liberation Army, the Ministry of Industry and Information Technology, and the State-Owned Assets Supervision and Administration Commission. The designation also applies to entities “identified as a military-civil fusion contributor to the Chinese defense industrial base,” a category that includes organizations managed by the ministry or participating in research partnerships with it.
Officials note that Alibaba falls into this category, along with other major Chinese firms like Baidu and the car manufacturer BYD. The legal dispute centers on a June 30 law that prohibits the department from contracting with any company, parent company, or subsidiary that hires a lobbyist working for a listed Chinese military company.
Related: Baldoni studio ordered to pay Blake Lively $400k
Alibaba argues the law restricts political speech
Alibaba filed a lawsuit challenging both its designation and the statute’s constitutionality. The company asserts that the law infringes on its rights under the Administrative Procedure Act and creates vague standards. At a hearing for a preliminary injunction, attorney Chris Eiswerth argued that the government has not sufficiently proven that a risk exists regarding sensitive information sharing. He noted that the statute prevents Alibaba from choosing its own lobbyists, forcing them to abandon the company in favor of clients not on the blacklist.
Eiswerth pointed out that Alibaba previously employed two dozen lobbyists in the U.S., but now has none. He said this removal causes “irreparable harm” to the company, which relies on access to legislators to handle trade policy, regulations, and taxes. The attorney argued that simply blocking these relationships does not stop information leaks; it merely silences a specific type of political speech.
Alibaba’s legal team contends that the government is restricting speech in a roundabout way, effectively forcing a choice between political advocacy and compliance with the new rules. The company asserts that it connects U.S. suppliers to other businesses through its online storefront and needs a robust presence on Capitol Hill to protect those interests.
Related: California Court Revives Apple Repair Lawsuit
Judge questions the government’s burden
Department of Justice attorney Stephen Tagert defended the statute, stating it does not infringe on speech rights but instead “forecloses a type of relationship” between the government and blacklisted entities. Tagert drew an analogy to a congressional ban on TikTok, citing national security concerns related to foreign ownership and influence.
Eiswerth pushed back on this comparison, noting that TikTok’s issues stemmed from ownership of a social media platform rather than political speech. U.S. District Judge Eumi Lee pressed both sides on the balance of equities. She noted that while national security is important, the government must still show a “real issue or problem” exists.
