The Federal Communications Commission is taking action against eight companies it suspects of acting as front companies for DJI, the Chinese drone maker, in an effort to get around a U.S. ban on foreign drone technology. Each company has been fined $25,000 and given a short deadline to respond to the FCC’s questions before the agency considers further penalties. The fines and orders come after months of reporting and public scrutiny about how DJI products, including popular cameras and drones, continued to reach the U.S. market despite being placed on the FCC’s Covered List.
On July 10, 2026, the FCC announced the fines, giving the companies until Monday, July 20th — just ten calendar days — to answer the agency’s interrogatories. The action is the most significant enforcement step yet in the FCC’s effort to enforce the foreign drone ban that took effect in December. The agency has also signaled that it will deauthorize a Chinese testing laboratory that helped certify some of the devices linked to these companies.
What Happened?
The FCC is fining the following eight companies: Cogito Tech, Fixaxo Technology, Lyno Dynamics, Skyhigh Tech, Spatial Hover, SZ Knowact, WaveGo Tech, and Xtra Technology. All eight are suspected of being part of a network of front companies that allow DJI to continue selling its radio-equipped devices in the United States, bypassing a ban that was designed to address national security concerns.
The fines are not for violating the drone ban directly. Instead, the FCC fined these companies because they failed to respond to letters the agency sent earlier this spring. In those letters, the FCC asked whether the companies were marketing radio equipment in the United States that belonged on the Covered List. According to the FCC, not one of the eight companies replied.
The deadline imposed by the FCC is extremely tight. Companies that fail to answer will face “further action,” which could include device authorization revocations, import bans, and additional financial penalties. Legal experts say the quick deadline is likely intentional, designed to force the companies to either cooperate immediately or risk being shut out of the U.S. market entirely.
The Companies Under Investigation
Some of the companies named in the FCC action have been known to industry watchers for months. Xtra Technology, for example, has been marketing a camera called the Xtra Muse that is virtually identical to the DJI Osmo Pocket 3. Earlier reporting demonstrated that the Xtra Muse was so similar to the DJI camera that it could not reasonably be considered a clone — it appeared to be the same product with a different name and logo.
Skyrover, a brand that appeared to be selling DJI drones in disguise, is also tied to the FCC’s action. Two companies behind Skyrover — SZ Knowact and WaveGo Tech — are among those fined. Skyrover had drawn attention for selling drones that looked and performed exactly like DJI models but carried different branding, raising questions about whether DJI was attempting to circumvent the U.S. ban.
Xtra, meanwhile, has been particularly brazen in its marketing. The company has promoted influencer videos that favorably compare the Xtra Muse to the DJI Osmo Pocket 3, and it has been taking $20 deposits for an “Xtra Muse 2 Pro” that appears to be a DJI Pocket 4 Pro in disguise. The marketing uses catchphrases like “From Pocket to Pro,” a play on DJI’s own product line names, to make the connection obvious to consumers while technically avoiding direct trademark claims.
Why Is the FCC Involved?
The FCC’s role in this dispute stems from its authority over radio frequency devices. Any gadget that uses radio frequencies — including drones, cameras with wireless transmission, and remote controllers — must receive FCC authorization before it can be imported, sold, or marketed in the United States. That authorization process is meant to ensure that devices do not cause harmful interference and otherwise comply with U.S. technical standards.
On December 22nd, the FCC added all foreign drone companies to its Covered List. The Covered List is a designation for companies that pose a national security risk to U.S. communications networks. The FCC cannot issue authorizations for equipment from companies on the list, effectively banning their devices from the U.S. market.
But DJI’s alleged front companies created a loophole. If a company like Xtra submits its own FCC application and lists itself as the manufacturer, the FCC might not immediately recognize that the device is actually made by DJI. That allowed DJI products to continue entering the U.S. under different corporate names, avoiding the Covered List designation.
Last year, the FCC also granted itself the power to retroactively ban products that have already received authorization, even if they only contain components from a banned company. The rule is broad: it does not need to be a drone. If a camera contains a DJI radio transmitter, the FCC can ban it from sale, import, and marketing in the United States. That regulatory change gave the FCC the legal basis to go after products already on store shelves, not just future filings.
A Question of “Front Companies”
The term “front companies” was popularized last year by observers who noticed that several newly created companies were selling products that looked suspiciously like DJI devices. The FCC’s investigation appears to confirm that suspicion, at least for the eight companies now facing fines.
When asked directly, DJI has refused to confirm or deny whether it has relationships with Xtra or Skyrover. The company also did not respond to requests for comment on the FCC’s latest action. That silence is notable, because the FCC’s investigation is already citing public reporting that documented the similarities between the Xtra and DJI products.
For example, tests of the Xtra Muse against the DJI Osmo Pocket 3 found the two devices to be identical in nearly every measurable way. The hardware design, the camera sensor, the gimbal mechanism, and even the software interface were indistinguishable. That level of similarity is almost impossible to achieve without direct collaboration or manufacturing sharing.
Xtra’s latest product, the “Xtra Muse 2 Pro,” is reportedly the same hardware as the DJI Pocket 4 Pro, which DJI managed to get through FCC authorization on November 26th, just before the ban took effect. Xtra’s own FCC documents were filed on June 17th, but now neither set of documents appears in the FCC’s search engine. When users click on Xtra’s filing, a message appears indicating that the authorization has been withdrawn or is under review. The same message has been visible for multiple weeks, suggesting that the FCC is actively revoking or suspending grants.
Testing Labs in the Crosshairs
The FCC’s crackdown extends beyond the suspected front companies. On May 11th, the FCC announced its intent to deauthorize SGS-CTST Standards Technical Services Co., a testing laboratory in China that helped certify several devices linked to this case. SGS Shenzhen, as it is commonly known, is subject to 15% ownership by China Standard Science & Technology Group Company Limited, which itself is wholly-owned by the China National Institute of Standardization. The U.S. Department of Commerce, based on numerous Executive Branch sources, has determined that the People’s Republic of China is a foreign adversary.
Testing labs play a critical role in the FCC certification process. They verify that devices meet FCC technical standards and then submit the results to the FCC for final authorization. If a lab is owned or influenced by a foreign adversary, the FCC cannot be certain that its test results are reliable. Deauthorizing SGS would mean that any device certified through that lab — not just DJI products — would lose its valid FCC grant, affecting many companies that used the lab for certification.
The FCC’s decision to target SGS sends a strong signal that it is no longer willing to accept test reports from labs with ties to entities on the Covered List or to the Chinese government. It also raises the stakes for other labs in China that work with U.S. tech companies, as they may now face additional scrutiny or loss of accreditation.
What Happens Next?
The eight companies have until July 20th to respond to the FCC’s questions. If they fail to do so, the FCC can take a range of actions, including revoking existing equipment authorizations, issuing cease-and-desist orders, and imposing additional fines. Since most of these companies have no physical presence in the U.S., enforcement could be challenging, but the FCC can work with U.S. Customs and Border Protection to block imports at the border.
For consumers, the immediate impact is uncertainty. Anyone who preordered an Xtra Muse 2 Pro or purchased a Skyrover drone may find that the device’s FCC authorization is invalid, which could affect warranty support, resale value, and even the ability to legally operate the device if it uses radio frequencies that require authorization. The FCC’s retroactive ban power means that even products already sold could be subject to enforcement action, though the agency has not yet taken that step.
The broader impact of this crackdown may extend beyond DJI. Many U.S. companies use Chinese manufacturing partners and testing labs. If the FCC begins deauthorizing labs and retroactively banning products that contain components from Covered List companies, the entire supply chain for radio-equipped devices could face disruption. Companies that rely on components from banned vendors may need to redesign their products or find alternative suppliers.
DJI’s future in the U.S. market remains uncertain. The company has not issued a statement about the FCC’s fines or the deauthorization of SGS. Without a response, the FCC is likely to continue moving forward with enforcement. If DJI truly is behind these front companies, it will have to decide whether to fight the FCC in court or abandon the U.S. consumer market altogether. For now, the FCC is showing that it has both the authority and the will to crack down on companies that try to dodge the foreign drone ban.
Source: The Verge News