Alibaba Resolves $433.5 Million Lawsuit Amid Monopoly Allegations

Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE:BABA) has agreed to pay $433.5 million to resolve a class action lawsuit filed by investors in the U.S. The lawsuit alleged that Alibaba engaged in monopolistic practices and misled investors. The settlement was announced on Friday and awaits approval from U.S. District Judge George Daniels in federal court in Manhattan.

Launched in 2020, the legal proceedings questioned Alibaba's claims of compliance with antitrust laws despite allegations that it forced merchants to sell exclusively on its platform. The agreement aims to compensate investors who held American depositary shares of Alibaba between November 13, 2019, and December 23, 2020. These shareholders reportedly suffered losses due to the drop in the company's stock price following the market's reaction to Alibaba's allegedly misleading statements.

Attorneys representing the plaintiffs described the settlement as an "extraordinary result" in court documents. They highlighted that the settlement amount significantly exceeds the average compensation in securities class actions, particularly since plaintiff losses are expected to exceed $10 billion. If the case had continued, the maximum amount that could have been claimed by Alibaba investors was estimated at $11.63 billion.

Alibaba has denied any wrongdoing in this matter but stated that it decided to settle to avoid further legal costs and delays. The case, officially known as "In re Alibaba Group Holding Ltd Securities Litigation," is being examined in the U.S. District Court for the Southern District of New York under case number 20-09568.