A US federal judge has blocked the Pentagon from enforcing a law that drove Alibaba’s lobbyists away, finding that it likely breaches the company’s First Amendment right to petition the government. The ruling leaves Alibaba on the Department of Defense’s list of Chinese military companies.
Judge Eumi K. Lee of the Northern District of California granted the preliminary injunction on 26 October in Alibaba Group Holding v. US Department of Defense. Until further order, the Pentagon may not refuse to contract with a company because it shares a lobbying firm with Alibaba.
In brief
- A 2024 law, 10 U.S.C. § 4663, bars the Pentagon from contracting with any company that uses the same lobbyist as a listed Chinese military company.
- The judge found the law likely unconstitutional as applied to Alibaba and said the government offered almost no evidence for it.
- Alibaba’s challenge to its listing itself, under the so-called 1260H list, continues separately.
- The injunction covers Alibaba only; the court rejected, for now, a challenge to the law as a whole.
How a contracting rule emptied Alibaba’s lobbying roster
According to the order, the Pentagon first posted Alibaba’s designation on 13 February 2026, took it down after about an hour, and included the company again in an updated list on 8 June. It said Alibaba was indirectly affiliated with China’s state assets regulator, SASAC, and a “military-civil fusion contributor” because of links to the industry ministry, MIIT.
Section 4663 took effect on 30 June. It does not stop Alibaba from lobbying. Instead, it punishes defence contractors whose lobbyists also work for a listed company. Alibaba had retained more than two dozen lobbyists before its designation, the order says, citing a company declaration. By 30 June it had no registered lobbyists, and several firms told Alibaba the law was the reason.
In its June complaint, Alibaba said: “The determinations have no basis in fact or law.” It argued that its products are built for retail, logistics and enterprise IT, and that its only tie to MIIT is ordinary regulation.
Judge Lee accepted that the law works indirectly. “The only rational choice for a lobbying firm is to stop representing Alibaba,” she wrote. Because the rule singles out speakers by identity and burdens political speech, she applied strict scrutiny.
The Pentagon’s case rested on a single exhibit
The government said the law stops Chinese military companies from reaching sensitive information or quietly influencing defence decisions through shared lobbyists. The judge called national security a compelling interest but said the government had to show evidence, not “mere conjecture”.
It filed one exhibit: a congressional statement asking the Comptroller General to report on consulting firms. At the August hearing, government lawyers could not confirm that the report had been delivered. The judge also noted that Nebraska makes lobbyists for listed companies file a disclosure instead, and that the government gave no reason why a similar rule would fail. She said the law would fail even the lighter intermediate test.
Quoting a separate August ruling in a case brought by Anthropic, she wrote that “the empty invocation of national security is not a blank check”. Anthropic is fighting its own Pentagon designation and has asked an appeals court to rehear its case.
The ruling leaves Alibaba’s blacklisting and the wider law intact
The order is narrower than the headlines suggest. Alibaba asked the court to remove it from the list, to block the law for everyone, or to block it for Alibaba’s lobbyists. It got only the third. Removal, the judge said, belongs to Alibaba’s separate claims under the Administrative Procedure Act and needs the government’s administrative record first. She pointed to two other cases, involving Hesai and WuXi AppTec, where courts sided with listed companies but left them on the list.
That matters because the listing carries the weight. Reuters reported that it restricts Pentagon contracts and, from 2027, purchases of listed companies’ products through third parties. Morningstar analyst Chelsey Tam told MarketWatch the injunction was “a symbolic and procedural win for Alibaba rather than a fundamental game-changer”, since Alibaba’s US footprint is small.
The real test is whether lobbyists come back. Alibaba told the court that firms would not return under a short temporary order. The new injunction runs until further order, and the judge ordered immediate briefing on summary judgment. The ruling also lands as Alibaba’s Qwen models draw scrutiny elsewhere, after Cohere said a Qwen model tried to upload a file to Beijing in a test. Pentagon designations have hit American firms too: after Anthropic was blacklisted, Google won a Pentagon AI contract. Alibaba must post a $100 bond by 30 October. Alibaba and the Pentagon had not responded to requests for comment, according to Reuters and MarketWatch.
Sources
- US District Court, N.D. Cal.: Order Granting Preliminary Injunction, Alibaba Group Holding Ltd v. US Department of Defense, No. 5:26-cv-06227-EKL, 26 October 2026
- Alibaba Group Holding Ltd and Alibaba Group (U.S.) Inc.: Complaint, No. 5:26-cv-06227, 23 June 2026
- US District Court, N.D. Cal.: Stipulated order, 5 July 2026
- Reuters via The Straits Times: Alibaba wins injunction against Pentagon contract restrictions tied to China blacklist, 27 October 2026
- MarketWatch: Alibaba Scores U.S. Legal Win in Pentagon Lobbying Ban Challenge
Related stories
- Anthropic Asks Appeals Court to Rehear Its Fight Over the Pentagon’s “Supply Chain Risk” Designation
- Cohere Says Alibaba’s Qwen Model Tried to Upload a File to Beijing
- Google Wins Pentagon AI Contract After Anthropic Gets Blacklisted
- Britain Tries to Poach Anthropic After US Blacklists It for Refusing Military AI Work
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