- Legislative Actions and Industry Maneuvers: U.S. legislation aims to ban Chinese-made drones, but Chinese manufacturers like DJI are partnering with U.S. companies to maintain market access. Despite these efforts, seven states have already banned Chinese drones for state use.
- Economic and Security Concerns: Chinese drones, sold at lower prices, risk undermining U.S. drone industries and raise data privacy issues, especially with their use near sensitive U.S. military sites. Legislation is being proposed to impose tariffs and ban the use of Chinese components in drones by 2030.
- Market and Consumer Impact: While security concerns are acknowledged, critics argue that a blanket ban on Chinese drones could harm consumers due to a lack of alternatives. Some speculate that new market entrants like Cogito might still be using DJI technology, raising questions about the effectiveness of the ban.
Both the House and Senate are advocating for legislation aiming to ban the entry of drones made in China into the United States. However, the prominent Chinese drone manufacturers are taking a step ahead of them.
Da Jiang Innovations (DJI), one of China’s largest drone manufacturers, has already begun collaborating with the U.S.-based company Anzu Robotics to license its technology for sale in the American market.
As well as in August 2023, a Hong Kong-based Cogito Tech Company Limited registered through the Federal Communications Commission (FCC), to enter the U.S. market for drone sales, where two of the approved drone products for sale in the U.S., the Specta Air and Specta Mini, are closely identical to the ones DJI produced.
China’s leading drone companies are planning to ensure their products reach American consumers despite the Congress imposing a ban.
Seven states have already prohibited the utilization of Chinese-manufactured drones by state entities, including law enforcement.
What are the concerns?
Chinese drones are being marketed at prices lower than their U.S. counterparts, raising concerns that any U.S. industry in this sector could be severely undermined. With DJI already holding approximately 70 percent of the global commercial drone market and around 80 percent of the U.S. market, these worries are amplified.
Derek Scissors, a senior fellow at the American Enterprise Institute specializing in China’s economy and U.S. economic relations with Asia, highlighted the data privacy issue associated with drones, emphasizing that data can be actively collected during flights.
“If you [fly] enough of them, you might get something useful. And if U.S. government offices are buying them, which they have been, you definitely could get something useful,” he said. “U.S. government offices should not be using Chinese drones, because both the data collection in the field and with regard to the use [it] could be sensitive.”
Since DJI and another prominent Chinese drone company, Autel, are intimately tied to Chinese Communist Party and China’s military, the Pentagon has expressed their concerns with these companies. Legislation prevents the Defense Department from using Chinese drones
At the heart of drone technology lie cameras and thermal imaging sensors, transmitting data via servers. DJI and other drone manufacturers also utilize default data-capturing apps. Concerns arise regarding Chinese-manufactured drones equipped with cameras flying in proximity to sensitive U.S. military installations.
Anzu Robotics asserts that all data captured by its drones undergo encryption, collaborating with the U.S.-based cybersecurity consultancy firm, White Knight Labs, to ensure safety. Despite being manufactured abroad, Anzu emphasizes that their drones operate on U.S. servers and are otherwise fully integrated with American services.
Actions Taken to Help the U.S. Industry
Representative Elise Stefanik (R-N.Y.) has introduced the Countering CCP Drones Act. This legislation aims to include DJI on the Federal Communications Commission (FCC) covered list, effectively banning its operations in the United States by prohibiting its use of U.S. communications infrastructure. The bill has received approval from the House Energy and Commerce Committee.
Stefanik is also directing attention towards DJI with the Drones for First Responders Act, which proposes imposing tariffs on Chinese drones, starting at 30 percent and increasing annually by 5 percent. Currently, the U.S. imposes a 25 percent tariff on Chinese drones. Additionally, the bill aims to mandate that drones imported into the U.S. do not contain components from China by 2030.
While this bill’s provisions do not explicitly restrict the sale of drones in the U.S. market by Cogito or Anzu, Stefanik’s legislation encompasses affiliates of DJI. This means they would fall under the ban if identified by the FCC as affiliates. It also aims to support the U.S. commercial and enterprise drone sector, which has faced ongoing challenges in competing with DJI and Autel in the market. The bill proposes offering grant funding to specific U.S. consumers for acquiring secure drones.
Negative Impacts on Consumers
Jack Towne, a drone influencer, raised doubts about whether DJI has access to any significant data and expressed concerns that prohibiting the company would affect thousands of customers seeking reasonably priced commercial drones. “There just aren’t good alternatives,” he said.
Haye Kesteloo, who manages a website and blog dedicated to drones, asserting that while national security concerns should be tackled, a blanket ban solely based on the product’s country of origin is not the solution. “They’re using the threats of cybersecurity to go after Chinese-made drones. I think that is wrong if you use it in a way to eliminate competition.” he remarked.
Digging for the Secret
Cogito, the manufacturer behind the Specta line of drones, claimed that they have no connection with DJI. The company’s spokesperson responded in an email: “SPECTA is a proud independent innovator in the industry and has no relationship with other drone companies.”
Jack Towne, a teacher who runs a YouTube channel and website focusing on drones called Half Chrome, highlighted the similarities between Cogito and DJI drones. He noted identical features such as flight time, camera, range and software, suggesting that they share nearly identical components. Additionally, both devices operate on similar radio frequencies, leading experts to speculate that they may share technology. Towne proposed a scenario where DJI manufactures these drones in Malaysia and licenses them to Cogito.
Furthermore, FCC records reveal that Specta drones share radio frequencies with both DJI and Anzu Robotics drones. The only other company on those frequencies is Skycatch, a California-based geospatial data software company with a prior partnership with DJI.
A former DJI employee, speaking anonymously, asserted that Cogito sharing the same frequency would be impossible without utilizing technology from DJI, specifically mentioning OcuSync, a proprietary radio system developed by DJI.
Ian Lewis, a drone and technology enthusiast who runs a YouTube channel called Mads Tech, and other investigators suspect that Specta drones have unique chipsets patented by DJI and unavailable from any other sources.
