Alibaba has agreed to pay $433.5 million to settle a U.S. class-action lawsuit that accused the Chinese e-commerce giant of monopolistic practices.
While Alibaba denied any wrongdoing, the company stated it chose to settle to avoid the financial and operational impact of prolonged litigation.
The settlement, filed in Manhattan federal court, awaits approval from U.S. District Judge George Daniels. Filed in 2020, the lawsuit claimed Alibaba misled investors by allegedly pressuring merchants to use only its platform, violating anti-monopoly laws.
The settlement covers investors in Alibaba’s American depositary shares from November 13, 2019, to December 23, 2020, a period during which plaintiffs allege they faced losses due to a drop in Alibaba’s stock price after these practices came to light.
Plaintiffs’ lawyers praised the settlement as “an exceptional result,” noting it substantially exceeded the typical recovery rate in similar high-stakes securities class actions. Had the case proceeded to trial, plaintiffs could have sought up to $11.63 billion in damages.
The case is registered as “In re Alibaba Group Holding Ltd Securities Litigation,” No. 20-09568, in the Southern District of New York.
