Following numerous reports that the U.S. government was seeking to crack down on DJI, the Department of Commerce today will be adding the drone giant to its "Entity List." Reuters and Drone DJ have issued early reporting based on a conference call with a state official. The full list of 77 impacted companies is available here.
The news comes as a pretty massive blow to DJI. The 14-year-old Chinese company has been an utterly dominant force in the drone category. Here in the States, it commands an estimated 77% of the market.
Increased tensions between the U.S. and China have long been a looming concern for DJI’s presence in the States, with surveillance capabilities being a particular sticking point. Along with their wildly successful consumer drones, DJI also has a wide reach in both industrial and governmental applications. In fact, the company specifically offers a government line of products as part of its enterprise offerings.
DJI is one of dozens of companies added to the list. Also of note is chipmaker SMIC. Commerce Secretary Wilbur Ross didn't mince words in a statement issued after the list went public:
China’s corrupt and bullying behavior both inside and outside its borders harms U.S. national security interests, undermines the sovereignty of our allies and partners, and violates the human rights and dignity of ethnic and religious minority groups. Commerce will act to ensure that America’s technology—developed and produced according to open and free-market principles—is not used for malign or abusive purposes.
China actively promotes the reprehensible practices of forced labor, DNA collection and ubiquitous surveillance to repress its citizens in Xinjiang and elsewhere. Over the last two years this administration has added nearly 50 entities to the Entity List for their support for the Chinese Communist Party’s despicable offensive against vulnerable ethnic minorities. With these new additions, we are applying those principles to the rest of China, including in Tibet, and to the authoritarian regimes to which these practices are being exported.
The DOC notably placed Huawei and several of its affiliates on the list last year, a move that has severely hamstrung the hardware giant. Among other things, it’s cut off the company’s access from key U.S. technologies like Google’s Android and other software. Huawei has opted to develop its own operating system, but the landing has been a difficult one to stick.
There’s been a good deal of talk around restricting use of the company’s technology by federal and state departments, but this update could prove even more sweeping. DJI has been bracing for this manner of revelation over the past year and change. The drone maker has spent a lot of time and resources lobbying on Capitol Hill. There's been a good deal of speculation around the shape these bans will take after a new president is sworn in on January 20.
Surprisingly, DJI was flagged as part of the report's focus on "wide-scale human rights abuse." Likely that specifically revolves around issues of "high-technology surveillance":
The ERC determined to add the entities AGCU Scientech; China National Scientific Instruments and Materials (CNSIM); DJI; and Kuang-Chi Group for activities contrary to U.S. foreign policy interests. Specifically, these four entities have enabled wide-scale human rights abuses within China through abusive genetic collection and analysis or high-technology surveillance, and/or facilitated the export of items by China that aid repressive regimes around the world, contrary to U.S. foreign policy interests.
We've reached out to DJI for comment.
Competitor Skydio has offered this rather celebratory response to today's news:
Based apparently on DJI’s support for abhorrent human rights violations, today’s addition of DJI to the entity list sends an unmistakable message: DJI does not share our values and cannot be trusted. DJI had already acknowledged its obligation to share sensitive information collected in the U.S. and around the world with the Chinese Communist Party--a serious security risk. Now we learn that DJI has profited for years by supporting the suppression of the Uighurs in Xinjiang province--the world’s most egregious example of human rights abuses. Today’s news also sends an unmistakable signal to the marketplace: companies should think twice about doing business with a known violator of human rights.”