Chinese e-commerce giant Alibaba announced on Friday that it has agreed to pay $433.5 million to settle a U.S. class-action lawsuit accusing the company of monopolistic practices. Despite denying any wrongdoing, Alibaba said it opted to settle to avoid the expense and disruption of prolonged litigation.
The proposed settlement, filed in federal court in Manhattan, still awaits approval from U.S. District Judge George Daniels. The lawsuit, initially filed in 2020, claimed Alibaba violated anti-monopoly and unfair competition laws by requiring merchants to choose only one platform for distribution. The settlement covers investors in Alibaba’s American depositary shares from November 13, 2019, to December 23, 2020, and aims to compensate for stock losses suffered after Alibaba’s alleged misleading statements affected its share price.
Plaintiffs’ lawyers praised the proposed deal as “an exceptional result,” noting it far exceeds the median recovery in securities class actions where investor losses topped $10 billion. Had the investors continued with the lawsuit, they could have sought up to $11.63 billion in damages.
The case is titled In re Alibaba Group Holding Ltd Securities Litigation, U.S. District Court, Southern District of New York, No. 20-09568.