Two representatives from the U.S. House of Representatives have sent a letter to Department of Commerce Secretary Gina Raimondo, asking that drone manufacturer DJI remain on the Department of Commerce Entity List.
The full text of the letter is linked above. Jan Schakowsky, Chair of the Consumer Protection and Commerce Subcommittee, House Committee on Energy and Commerce; and Gus M. Bilirakis, Ranking Member of the Consumer Protection and Commerce Subcommittee on the House Energy and Commerce Committee wrote the letter, which asks U.S. Secretary of Commerce Gina Raimondo to keep DJI on the department’s entity list and investigate the company’s pricing tactics:
DJI deserves additional scrutiny by the Department of Commerce for its history of complicity with human rights abuses and its market tactics. We ask that DJI remain on the Department’s Entity List and that the Department investigate its pricing of consumer drones which has harmed American consumers.
At the time the Department placed DJI on the Department of Commerce Entity List – along with 76 other companies – DJI and other Chinese companies were accused of participating in human rights abuses, as it appeared that DJI drones were used for surveillance by Chinese government agencies.
The current letter claims that DJI’s low pricing represent unfair market tactics.
… DJI was able to attain its monopoly through extremely low pricing. Reports indicate that DJI dropped its prices for consumer drones by as much as 70% in 2015. Since then, three of their largest competitors stopped production of consumer drones. The result has been a dramatic loss of domestic production capability, according to an official from the Department of Defense.
These tactics have harmed consumer choice while making DJI the default consumer drone provider in the United States. We respectfully request that the Department of Commerce investigate DJI’s pricing of its consumer drone products and its successful effort to drive competitors out of the market.
DJI denies the allegations about price gouging, and a U.S. federal court ruled that DJI’s U.S. sales practices were fair in 2019 during an anti-trust case. In a blog post clarifying some common misconceptions about the company, DJI says:
DJI leads the drone industry because we deliver what customers want – the most innovative technology at competitive prices. We were the first to develop many popular features, our design and manufacturing expertise allows us to retool and introduce new products quickly, and we have met the technical challenges of drone development and production better than our competitors.
Long-time market observers know that DJI has never sold the least expensive drones available, but instead has provided premium products at reasonable prices. A U.S. federal court rejected allegations of unfair pricing last year, ruling that DJI’s American sales practices have been “fully consistent with robust competition in a growing market.”
What DJI Inclusion on the Department of Commerce Entity List Means
Inclusion on the Entity list does not impact DJI’s ability to sell drones in the U.S. and is not a ban on the purchase of DJI drones. The Entity list is part of the U.S. export control protocol, and could make it more difficult for U.S. companies to export parts to DJI.
Miriam McNabb is the Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a professional drone services marketplace, and a fascinated observer of the emerging drone industry and the regulatory environment for drones. Miriam has penned over 3,000 articles focused on the commercial drone space and is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and over 20 years of experience in high tech sales and marketing for new technologies.
For drone industry consulting or writing, Email Miriam.
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