The Chinese e-commerce and technology giant Alibaba is suing the U.S. government, arguing its inclusion in a Pentagon blacklist that designates it as linked to the Chinese military is “arbitrary and capricious.”

According to BBC News, the U.S. Department of Defense (DoD) has said that because Alibaba complies with Chinese technology regulators, it is effectively an arm of the military.

Alibaba has brought a lawsuit in a California federal court, claiming the determinations "have no basis in fact or law."

Earlier in June, the U.S. added Alibaba, Chinese automaker BYD and several others to the list, known as Section 1260H, which aims to alert U.S. organizations to the risks of doing business with the Chinese firms, but does not go as far as imposing sanctions on working with them.

Many of the listed companies compete directly with major American companies in industries such as electric vehicles and artificial intelligence. Starting next week, the Pentagon is legally banned from doing business with any blacklisted firm.

In its legal complaint, Alibaba said it had previously asked to meet with the DoD to address the Chinese military affiliation concerns, which included presenting evidence of its U.S. economic contributions. But, even after Alibaba’s submissions, the agency did not raise any concerns with the firm, nor did it request additional information. Rather, it "designated Alibaba without notice or a fair hearing", the compliant notes.

The DoD declined to comment.