Alibaba Group on Tuesday filed a federal lawsuit challenging the US Defense Department's designation of the Chinese technology giant as a "Chinese military company," arguing the labeling is arbitrary and lacks due process. The lawsuit, filed Tuesday in San Jose federal court, contests the Pentagon's determination that Alibaba qualifies for inclusion on the federal military company list.

Washington doesn’t know how to untangle China’s military-civil fusion.

Chinese technology and e-commerce giant Alibaba Group has sued the U.S. Department of Defense over its designation as a 'Chinese military company,'...