Alibaba Group has agreed to pay $433.5 million to resolve a class-action lawsuit filed by shareholders, which alleged that the company misled investors regarding its exclusivity practices and antitrust issues, causing inflated stock prices and subsequent financial losses. Although Alibaba denies any wrongdoing or liability, the company opted for the settlement to avoid further litigation costs and disruptions.
The lawsuit, filed in March 2023 in the U.S. District Court for the Southern District of New York, accused Alibaba of violating securities laws by misrepresenting its platform practices. The legal action targeted the company and certain executives on behalf of all investors who purchased Alibaba’s American depositary shares between July 9, 2020, and December 23, 2020. During this period, Alibaba allegedly pressured merchants to sell only on its platforms, which contravened a prior agreement with China’s State Administration for Market Regulation and imposed penalties on those who sold through competitors.
While Judge George B. Daniels dismissed claims regarding the canceled Ant Group IPO, he allowed the antitrust allegations to proceed. This settlement is one of the 50 largest securities class-action payouts in the U.S. since 1995 and still requires court approval.
